Tropical Storm Barry Cuts 70% Of US Gulf of Mexico Oil Production

A federal agency revealed over the weekend that Tropical Storm Barry has cut crude oil production in the U.S.-regulated areas of the Gulf of Mexico by more than 70 percent.

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) said that about 73 percent of the current oil output in the area has been shut in due to the effects of Barry, which made landfall Saturday. The loss is equivalent to 1.38 million barrels of oil per day.

The BSEE also said that the storm cut nearly 62 percent of natural gas production in the Gulf region.

Chevron and Anadarko Petroleum shut down oil platforms and stopped production as a precaution in anticipation of the storm.

Personnel were evacuated from 283 production platforms, which comprise 42.3 percent of the manned platforms in the Gulf of Mexico. Personnel were also evacuated from 10 non-dynamically positioned “DP” rigs, which make up nearly half of the rigs of the type that operate in the region.

Bloomberg Intelligence senior energy analyst Vincent Piazza said that while roughly half of both the oil output and gas output in the Gulf is shut in, the United States no longer depends on the region for its supply of oil and gas as it did a dozen years ago.

The Gulf now accounts for only about 3 percent of the total gas output in the United States. It still accounts for 16 percent of oil output, but this is down from 30 percent a decade ago.

“The most important impact in our view is to the refining capacity. The Gulf Coast is home to about 40 percent of refining capacity in the U.S.,” Piazza said. “If you think about the path of the storm mostly going through Louisiana, that’s roughly 20-25 percent of the capacity... so the refining complex is at risk.”

Barry made landfall as a Category 1 hurricane at Intercostal City, Louisiana, on Saturday, and was shortly after downgraded to a tropical storm. The National Hurricane Center, nonetheless warned there is still high risk of flash flooding from the storm.

The U.S. Coast Guard has so far rescued at least a dozen people amid floodwaters in Louisiana. The storm also left about 70,000 people in Louisiana and Mississippi without power.