Tropical Storm Ida to impact logistics and energy facilities in southern Louisiana

Tropical Storm Ida to impact logistics and energy facilities in southern Louisiana

On August 27, hurricane watches have been implemented from southwestern Louisiana across the border into Mississippi as Tropical Storm Ida continues to strengthen over the Gulf of Mexico. Ida formed into a tropical storm in the western Caribbean south of Cuba on August 26 and is expected to strengthen into a major hurricane by the time it makes landfall on August 29 and into August 30. The system is expected to strengthen into a Category 2 or 3 hurricane and has the potential to develop into a Category 4 or 5 given the current oceanic conditions in the Gulf of Mexico.

Louisiana Governor declared a state of emergency on August 26 due to the potential impacts from the storm. On the morning of August 27, the storm was moving to the northwest at a speed of 15 mph and had maximum sustained winds of 60 mph. Tropical storm watches are in effect from the Alabama and Mississippi state line to the border between Alabama and Florida. Storm surge watches have been issued from Sabine Pass in Texas to the border between Alabama and Florida. Tropical storm warnings were also issued for the Cayman Islands and parts of Cuba.

A storm surge of 6-10 feet is forecast from the central Louisiana coast to the barrier islands south of mainland Mississippi. Additionally, the ports of Biloxi, Gulf Intercoastal Waterway, Gulfport, Mobile, Panama City, Pascagoula, Pensacola, Bienville, St. Joe, Alabama River, have all implemented Port Condition Whiskey ahead of the storm, indicating that the port remains open with restrictions and gale force winds are predicted to arrive within 72 hours.

Logistics and intermodal hubs susceptible to hurricane impacts

Given the forecast track and intensity of Tropical Storm Ida, there is a high risk of major supply chain impacts in and around the southern region of Louisiana.  Businesses with supply chain networks within the region should consider taking preparatory action in advance of the storm on August 29 and into August 30. Major supply chain nodes and logistics centers that are likely to experience significant disruptions include the Louis Armstrong New Orleans International Airport, the Port of New Orleans, and intermodal hubs in New Orleans and the Mobile Bay area.

There is a high risk of significant disruptions, including flight cancellations and airport closure, at the Louis Armstrong New Orleans International Airport. The Port of New Orleans is a critical supply chain hub for the agriculture industry, with about 65 percent of exports at the port being agricultural products. The port is a significant import destination for coffee and handles a large volume of freight. The intermodal hubs in New Orleans and the Mobile Bay area include the freight rail lines CSX Transportation, Canadian National Railway, Norfolk Southern Railway, and Kansas City Southern Railway. These rail lines are tied to port operations in southern Louisiana area. The duration of the disruptions at these facilities will depend on the extent of infrastructure damage. Following the passage of Hurricane Laura in 2020, the Lake Charles, Cameron, and Calcasieu parishes areas in Louisiana faced weeks without electrical power.

Energy industry impacts expected due to high concentration of oil refineries and offshore facilities

The energy industry will likely be significantly impacted by the passage of Ida as there is a high concentration of liquified natural gas (LNG), oil refineries, and offshore oil facilities in southern Louisiana. A major risk to these facilities is widespread power outages which will likely be long in duration given the severity of the storm’s hurricane force winds. LNG facilities will likely remain closed for about a day or two in the Lake Charles and Mobile Bay areas. There are about 15 oil refineries in the storms projected path, most of which are in New Orleans and are likely to close. As previously mentioned, the duration of the closures will depend on any infrastructure damage, power outages, wind speed, and flooding. Most of the offshore oil and gas platforms will be shut for several days, as was the case with Hurricane Laura in 2020 which had a similar track and intensity to Ida. Everstream Analytics will continue to monitor the supply impacts of hurricane Ida and will issue a forecast special edition on August 29.

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