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Hurricane Ida and North Dakota’s oil patch

Published: Sep. 2, 2021 at 5:17 PM CDT
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BISMARCK, N.D. (KFYR) - For those of you who plan on doing some traveling for Labor Day, you can expect increased prices at the pump. Not only because of the increased demand, but because of the economic butterfly effect from Hurricane Ida.

A significant chunk of the nation’s capacity is off-line. The state’s industry leaders say North Dakota’s pipelines are maxed out.

As a precautionary measure, some companies closed pipelines and abandoned other infrastructure when Hurricane Ida rolled in.

But the issue with getting oil and gas to consumers is the product of a different problem.

According to the U.S. Department of Energy, 41% of Louisiana is without power. Some estimates say that nearly 10% of all of the United States’ refining capacity has stopped purely because of the storm. That drop in production and transmission means other states must step up to meet demand.

“Down in that area, it’s the power to the gas stations that’s causing the big impacts for availability of fuel supply. I think it’s something to keep any eye on here,” said ND Petroleum Council President Ron Ness.

And that’s having impacts creeping back to North Dakota’s oil and gas markets. While the state’s pipeline infrastructure is still able to move product to other parts of the South, this back-up in the refineries could backlog back up to the north if they stay shut down for long enough.

Now the question is, how will the companies restart?

One option companies have is taking their workers out of North Dakota and sending them where they’re needed. “Those folks will be available for restarting offshore platforms.

A lot of them aren’t trained, but some of them do have experience in that realm. So, companies will be looking to their employee rosters to see who they might be able to put to work in the Gulf of Mexico,” said Lynn Helms, Department of Mineral Resources director.

There’s increased pressure on North Dakota’s rail system, too.

Not only is there increasing demand to move oil by rail, but those tracks also run east and west, and areas on the Atlantic coast are under water. Experts say we can see 5 - 15 cent increases per gallon over the next few weeks.

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