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Home » Texas Strong

Texas Strong

Hurricanes Harvey and Irma unleashed their wrath on the south, but wholesalers and manufacturers are still going strong.

October 8, 2017
Stephen Letko and Tom M. Brown
No Comments
October - 2017- PVF

Tom M. Brown:  Steve, the big story this month is Hurricane Harvey hitting Houston and the greater Texas and Louisiana Gulf Coast.  With this region being responsible for over 60 percent of the U.S. energy sector, how will this affect our PVF market and all of our Roundtable friends operating businesses in the area? 

Steve Letko: Since Hurricane Katrina in 2005, a wide range of changes have been implemented that have clearly improved.  The recovery since Hurricane/Tropical Storm Harvey plummeted Texas and Louisiana is where 44 percent (8.25 million barrels per day) of the nation’s refining capacity is located.  As of this writing, 13.4 percent of refining capacity remains offline along with 10 percent of ethylene capacity.

Harvey hit all sectors, from the production side, where as much as 400,000 barrels per day was taken offline, to refineries and gas processing operations.  Ports and terminals are now mostly open, with some restrictions.  The U.S. is now a major exporter of crude oil and products, and open ports are crucial more so now than after Katrina.

Electricity is a key factor for all energy segments during a weather emergency.  There have been fewer outages during Harvey than there was for Katrina along with less wind damage.  Not so with Irma.  The restoration of electric power is still underway as of this writing.   Restoration is being made at a surprising pace although much work needs to be accomplished and need for fuel is critical for the recovery operations.

Every member of the Roundtable has been effected by Harvey and now Irma without exception.  Several suppliers in the affected areas have been impacted while demand for pipe, fittings, flanges and valves have dramatically increased. 

The labor force has been impacted by the inability of labor to get to the jobsites as needed have slowed delivery schedules for suppliers and recovery efforts of the refineries, gas processing facilities, engineering companies and pipeline operators.

The industry, along with federal and state governments, is doing everything in its power to make sure the supply system can deliver fuel to the communities in need.

TMB:  As a result of Harvey, gasoline shortages have occurred, which have pushed prices upward at the pump.  Will these be temporary and how high will they go? 

SL:  Colonial Pipeline shut down the key line that supplies gasoline to the South due to storm related shutdowns and Harvey impact on its Lake Charles, Louisiana facilities.

This pipeline is a critical artery in the nation’s fuel supply that provides nearly 40 percent of the south’s gasoline.

Gasoline prices have been on the rise even before the Harvey event.  Harvey’s impact on the Gulf Coast prompted one of the summer’s largest one-week price surges, as reported by  AAA.

Colonial is now almost back to full capacity, as is the Explorer Pipeline, which supplies product up to Tulsa.

Pricing for regular grade gasoline is around $2.75 / $2.79 a gallon on the East Coast vs. the national average of $2.66 a gallon and has remained at this level for approximately two weeks.  With the advent of Irma, pricing pressure will likely keep the pricing at current levels for the near future. 

How high and for how long pricing will go, or remain at this level, is dependent on the pace of the recovery effort and restoration of production and delivery services.

TMB:  The PVF Roundtable will be meeting on Oct. 17th at the Houston Westchase Marriott…a very exciting program is scheduled.

SL:  Based on the recovery efforts in Houston from the ravages of Harvey, the October meeting of the PVF Roundtable will be held as scheduled at the same venue, The Marriott Westchase hotel.

Rob Braig, vice president of Wolseley Industrial Group, will be formally inducted into the “Hall of Fame” honoring him for his contributions to the industry.

Hall of Fame Quarterback Terry Bradshaw, four-time Supper Bowl Champion, formally of the Pittsburg Steelers, will be our keynote speaker at the October meeting.

Ferguson has Terry Bradshaw under contract to do promotional appearances at various Ferguson sponsored events.  Through the efforts of Joe Costanzo, Ferguson’s management team agreed with Joe that this event is worthy of the investment.

The October meeting will be held on Tuesday, Oct. 17, 2017, at the Marriott Westchase, at 2900 Briarpark Drive, Houston, Texas.  Networking will begin at 4:30 P.M. followed by a sit down dinner and program. 

The Board anticipates that this will be a major event and urge everyone to register early using the PVF Roundtable website at www.pvf.org.

TMB:  See you in Houston!  

Distributor PVF Wholesalers & Distributors
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