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Quiet Hurricane Prediction Signals Relief for Oil, Gas Producers

June 10, 2014 By Leon Walker

EIAFollowing the quietest hurricane season in the past two decades last year, the National Oceanic and Atmospheric Administration is predicting a relatively inactive June-November hurricane season this year, meaning a potentially beneficial season for Gulf Coast crude oil and natural gas producers. NOAA projects a 70 percent probability of 8-13 named storms this hurricane season, of which 3-6 will strengthen to hurricanes, with 1-2 becoming major hurricanes.

Over the past 10 years (2004-13), the Atlantic hurricane season has averaged 16.3 named storms, 7.7 hurricanes, and 3.2 major hurricanes. The effects that named storms this year in the Atlantic will have on Gulf Coast crude oil and natural gas production will depend on their trajectory and strength. Last year, only one named storm—Tropical Storm Andrea—made landfall in the United States, and it did not cause any disruptions to crude oil or natural gas production, according to the EIA.

The US Department of Interior Bureau of Safety and Environmental Enforcement reported only one instance of shut-in oil and natural gas production last year, during Tropical Storm Karen in October. The last year that the United States experienced significant shut-ins was 2008, when two significant hurricanes affected oil and natural gas production: Hurricane Gustav, which made landfall in Cocodrie, La., on September 1, and Hurricane Ike, which made landfall in Galveston, Texas, on September 13.

The effect of hurricanes on oil and natural gas production has been reduced in part by an increasing portion of US production coming from fracking at inland basins such as the Bakken Shale play in North Dakota, the Williston Basin in Montana, and the Marcellus Shale play in the Appalachian Basin.

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