Harvey’s second act could drive up economic damage for Texas

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As Harvey’s winds die down, trouble for Texas may have just begun with forecasts for unprecedented flooding across the heart of US energy production and in Houston, the nation’s fourth-largest city.
Harvey smashed ashore as a Category 4 hurricane on Friday near Rockport, Texas. Two deaths have been attributed to the storm, which has also halted about one quarter of oil production in the Gulf of Mexico and 5 percent of US refining capacity. Its second act could be worse as Harvey stalls and promises to dump more than 3 feet of rain onto Texas for the next few days.
“This is catastrophic,” said Greg Waller, a service coordination hydrologist with the National Weather Service’s West Gulf River Forecast Center in Fort Worth. “When we say record setting it means you cannot use history on your side because the rivers have never been this high before.”
Damage from the initial strike won’t tell the whole story, said Chuck Watson, director of research and development, at Enki Holdings LLC in Savannah, Georgia. “If it was a traditional hurricane it would be a $2 billion storm, maybe $3 billion, but that is not what this storm is about,” Watson said.
Harvey was the strongest storm to hit the US since 2004. After making landfall, it was downgraded to a tropical storm and came to a near-standstill near the town of Victoria, Texas. At least two deaths have been reported, a toll that’s expected to rise as emergency crews were yet to reach some of the hardest-hit areas, the Associated Press reported.
Harvey is flooding a region that has a cluster of refineries that process 5 million barrels of oil a day. About 1 million barrels a day of crude and condensate refining capacity in Texas have been shut by companies including Valero Energy Corp., according to company statements, government releases etc. Its path through the Gulf shuttered 24 percent of oil production, along with the port of Corpus Christi, which ships the largest amount of US crude overseas.
In addition to the energy threat, crops and livestock may struggle to cope with rising waters, while airlines have cancelled flights at multiple Texas airports. At least 1,140 flights were cancelled Saturday from Texas airports in Houston, Dallas, Corpus Christi, Austin etc.

Houston hotels set to feel pinch of Harvey
Bloomberg

Houston’s hotel market, already the worst-performing in the US, is poised to take a further beating from Hurricane Harvey as the natural disaster creates chaos in a city that’s been reeling from low oil prices for a while.
Some area hotels are offering discounts to alleviate the temporary housing emergency, and Texas Governor Greg Abbott on Friday suspended the state and local hotel and motel occupancy tax for relief-effort personnel and storm victims. The suspension will last 14 days, according to the governor’s website.
The area’s hotels may be filled at first by first responders, Federal Emergency Management Agency workers, insurance adjusters and others dealing with Harvey’s aftermath—and there may be fewer available rooms as some properties suffer damage. The longer-term impact for lodging is likely to be negative, said Carter Wilson, vice president of consulting and analytics at STR, a data provider for the industry.