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1 1 (August 25, 2017)

handle is hein.crs/govciut0001 and id is 1 raw text is: Rese rch Sevice Hurricanes and Gasoline Prices August 25, 2017 The Gulf of Mexico, especially the coastlines of Texas and Louisiana, have borne the brunt of many of the most severe hurricanes to hit the United States in recent years. The high winds, heavy rains, and storm surges that constitute a hurricane have resulted in loss of life, flooding, property damage, and economic disruption. In addition, this area includes important oil industry resources including offshore production facilities, refineries, and transportation infrastructure including import and export shipping facilities and pipelines. Hurricanes Ike, which made landfall in Texas on September 13, 2008; Rita, which made landfall in Texas on September 24, 2005; and Katrina, which made landfall in Louisiana on August 29, 2005, all affected the oil industry. Currently, Hurricane Harvey, which made landfall on August 26, 2017, in Texas, threatens similar disruptions as a result of oil production curtailment, refinery closures, and damaged facilities. Other variables, including wind speed, specific location, and flooding, determine the damage a hurricane might cause. Location is of key importance with respect to specific facilities like oil refineries because hurricane conditions can vary widely over a relatively limited area. Flooding is important because some large refineries are located on, or near, the water to facilitate access to ship-borne crude oil deliveries. Workforce issues also are important to facility closure decisions. Gulf Coast Refineries In 2017, Texas is home to 30 oil refineries, of which 29 are in operation. These refineries have a calendar- day capacity of about 5.7 million barrels per day (mmb/d), or about 30% of total U.S. refinery capacity. Louisiana has 18 refineries, all operating, with a calendar-day capacity of about 3.3 mmb/d, about 18% of total U.S. refinery capacity. These refineries are important because they not only supply gasoline and other petroleum products to their local markets and adjacent states, but they are linked to other major consuming areas in the nation by pipelines and other transportation modes. As a result, supply disruptions in Texas can, and likely will, have observable price effects in other regions, including the Northeast and Mid-Atlantic. Gasoline Prices While each of the four hurricanes identified in this Insight has unique characteristics with respect to their effects on gasoline prices, they also exhibit similarities. The most basic similarity between the hurricanes is that they all caused disruptions in gasoline production, reducing available supply. A reduction in supply suggests that gasoline prices may increase. This behavior was observed with respect to each storm, but CRS INSIGHT Prepared for Members and cornnitees o4 Congress ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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