Should NOAA's Atlantic Hurricane Forecast Worry GOM Oil Producers?

In a statement posted on its website back in May, the National Oceanic and Atmospheric Administration (NOAA) warned that its National Weather Service forecasters at the Climate Prediction Center predict above normal hurricane activity in the Atlantic basin this year.

The organization revealed in the statement that its outlook for the 2024 Atlantic hurricane season predicts an 85 percent chance of an above normal season. NOAA highlighted in the statement that it is forecasting a range of 17 to 25 total named storms, including four to seven major hurricanes.

In an exclusive interview, Rigzone asked Aaron Roth - a principal and head of federal strategy at the Chertoff Group, who has led maritime interdiction operations in the Persian Gulf and Red Sea as a member of U.S. Coast Guard Deployable Specialized Forces - if NOAA’s Atlantic hurricane forecast should worry Gulf of Mexico oil and gas producers.

“NOAA recently predicted the highest number of anticipated named storms and hurricanes it has ever released,” Roth told Rigzone, responding to the question. 

“Regardless of the year, hurricane season demands the increased attention of those who work in the maritime environ, especially the oil and gas industry in and around the Gulf of Mexico,” he added. 

“The Gulf is the primary offshore oil and gas source for the U.S., generating over 95 percent of all outer continental shelf oil and gas. Needless to say, it is vital to the United States. Impacts to this industry from major storms and hurricanes can have massive repercussions for the U.S. and global energy market,” he went on to state.

The good news is that the Gulf of Mexico maritime energy sector is experienced regarding storm and hurricane preparations, Roth told Rigzone.

“This geographical area is no stranger to major storms and hurricanes,” he said. 

“Additionally, state governments around the Gulf have gained tremendous experience over the years preparing for storms and protecting communities,” he added.

Regardless of this experience, however, Roth noted that a few points “remain vital to overcoming complacency and remaining vigilant”.

“One - understand the risk - industry leaders must understand the inherent business and operational risk posed by major storms and hurricanes,” he told Rigzone.

“This risk calculus must consider all infrastructure, and specifically, those most susceptible to damage given their location and age,” he added.

“Two - plan and execute – with the risks understood, planning then ensures companies effectively secure infrastructure and outline communication requirements in advance of and during major storms and hurricanes,” he continued.

Plans must also be exercised so employees perform in crisis as intended, Roth pointed out.

“As major storms and hurricanes approach, companies must perform,” Roth said. 

“Protecting infrastructure and safeguarding personnel occurs when businesses execute their well-designed plans and appropriately adapt to events as they occur,” he added.

Outlining a third and final point, Roth highlighted recovering and learning.

“Post-storm and hurricane recovery is essential for business continuity and minimizing losses,” he said.

“Resiliency is defined by how quickly businesses can recover and learn from incidents to enhance planning and execution in the future,” Roth added.

Rigzone asked industry body the American Petroleum Institute (API) and NOAA itself if NOAA’s Atlantic hurricane forecast should worry Gulf of Mexico oil and gas producers. At the time of writing, the API and NOAA have not yet responded to Rigzone.

Atlantic weather systems have severely affected oil and gas operations in the Gulf of Mexico in the past. For example, at its peak, Hurricane Ida shut in 95.65 percent of Gulf of Mexico oil production on August 29, 2021, and 94.47 percent of Gulf of Mexico gas production on August 31, 2021, Bureau of Safety and Environmental Enforcement (BSEE) figures show.

In October 2020, the BSEE estimated at one point that approximately 84.8 percent of oil production and 57.6 percent of natural gas production in the U.S. Gulf of Mexico had been shut-in as a result of Storm Zeta. Several other storms affected U.S. oil and gas production in 2020, including Hurricane Delta, Hurricane Sally, Hurricane Laura, and Tropical Storm Cristobal. 

To contact the author, email andreas.exarheas@rigzone.com