(Bloomberg) -- As Harvey’s winds die down, trouble for Texas has just begun as days of flooding rains across the heart of U.S. energy production threaten the country’s fourth-largest city and leave farmers struggling to save horses, cows and crops.

Harvey smashed ashore as a Category 4 hurricane Friday near Rockport, Texas, a town left devastated.

It was the strongest storm to hit the U.S. since 2004 and broke a 12-year record span in which the nation avoided being hit by a system ranked Category 3 or higher on the five-step Saffir Simpson scale.

Since making landfall, Harvey has been downgraded to a tropical storm and come to a near-standstill over the town of Victoria.

|

Insured losses may be over $1B


The storm may spur $1.59 billion in damages, according to catastrophe model results from Kinetic Analysis Corp., which said insured losses may be $1.11 billion.

“This will shift away from a wind concern and more into a flood concern,” said Dan Pydynowski, a meteorologist with AccuWeather Inc. in State College, Pennsylvania. “The heavy rain and flood threat will continue right into the middle of next week; we could still be talking about this thing by Tuesday, Wednesday and Thursday of next week.”

The storm is striking 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 and people familiar with the situation. About 24% of Gulf of Mexico oil production had also been shuttered, along with the port of Corpus Christi, which ships the largest amount of U.S. crude overseas.

|

Crops, livestock & canceled flights


In addition to the energy threat, crops and livestock may struggle to cope with rising waters, while airlines have canceled flights at multiple Texas airports. Because of where the storm has stalled, the Houston area could be in for days of torrential downpours and tornadoes.

Texas A&M University’s AgriLife Extension Service is helping to set up animal sheltering sites around the state in case ranchers need to relocate cattle or other animals, said Andy Vestal, a professor and extension specialist. Some livestock owners that are closest to the coast have already been working to move animals to higher ground, away from low-lying areas and tributaries, he said.

“We’ve never experienced 20 to 30 inches of rainfall in a 48-hour period,” Vestal said by phone from College Station, Texas.

|

Roofs blown away


At least 100 modules storing cotton blew away in the Gregory area, said farmer Jeff McKamey, who owns a cotton gin that suffered minor damage when part of the piping and roof blew away. A storage tank containing sorghum at a local grain elevator in the town of Odem is completely gone and at least three other sorghum tanks collapsed at an elevator between Taft and Gregory, he said.

“We’ve had the most cotton ever in storage in the history of San Patricio County when the hurricane hit,” said McKamey, noting some cotton in the remaining storage modules may be too wet to process. “It’s just the worst possible time.”

At least 780 inbound and outbound flights were canceled at Houston’s two airports Saturday, with another 187 in Austin, San Antonio and Dallas, according to Houston-based FlightAware, an airline tracking service. Close to 400 flights in and out of Texas for Sunday were also scrubbed.

A drives moves through flood waters left behind by Hurricane Harvey

A driver moves through flood waters left behind by Hurricane Harvey, Saturday, Aug. 26, 2017, in Aransas Pass, Texas. (AP Photo/Eric Gay)

|

Power outages & heavy rain


At least 254,785 customers had lost power across the state, according to a Bloomberg survey of electric utility outage maps. The hardest-hit region, with about 200,000 knocked out, was from Brownsville to Bay City, served by a unit of American Electric Power Co.

The outages will lead to a drop in electricity demand that could cut into natural gas prices.

Pydynowski said Harvey’s position is allowing it to pull moisture-laden air off the Gulf, called a feeder band, which will help keep it alive and promises more moisture for already-saturated Houston.

“That feeder band is going to remain in the general vicinity of Houston perhaps through Monday or even beyond,” Pydynowski said. “This is going to flood areas the don’t typically flood. It is going to have a tremendous impact on businesses, homes, property and the ability to travel in the entire Houston area.”

As of 9 a.m. local time, Houston Southwest Airport had received 6.4 inches of rain, according to the U.S. Weather Prediction Center in College Park, Maryland. From 15 to 30 inches of rain is forecast across the entire region, with some areas getting as much as 40 inches, the hurricane center said.

White Oak Bayou in Houston climbed nearly 16 feet since Friday and was forecast to rise another 25 feet by Sunday, according to the National Weather Service. The Buffalo Bayou at Piney Point Village, just west of central Houston, is forecast to set a record, while the waterway is expected to rise by more than 30 feet near Shepherd Drive in the city itself.

|

Sustained winds of 70 miles per hour


Harvey had maximum sustained winds of 70 miles (113 kilometers) per hour, the hurricane center said in an advisory at 1 p.m. local time.

The current track forecast shows the storm meandering around southeastern Texas gradually weakening to a tropical depression early next week. While the track means heavy rains will fall unabated, there is a glimmer of good news in the forecast if it holds — Harvey won’t drift into the Gulf and restrengthen.

“It still might re-intensify to a Category 1 again later this week, but the nightmare scenario of another Category 3 landfall looks highly unlikely now,” said Todd Crawford, chief meteorologist at The Weather Company in Andover, Massachusetts. “The big story going forward will be the epic amounts of rainfall in a large area.”

|

Forecasters watching system over Florida


In addition to Harvey, hurricane center forecasters are watching a low pressure system over Florida that could develop into a tropical or sub-tropical storm early next week. The system will likely be short lived, but could bring heavy rain to Florida.

In addition to its economic impact, Harvey prompted thousands of residents along the Texas coast to flee their homes and caused Governor Greg Abbott to declare an emergency. It was the first Category 4 storm to hit Texas since 1961 and the first to hit the U.S. since 2004. Katrina, the most costly hurricane in U.S. history, came ashore as a Category 3 storm in 2005.

|

Trump approved major disaster declaration


If the storm does significant damage to the refineries in the region, or causes the Colonial pipeline to go offline, the effects could ripple to other parts of the country that rely heavily on the Gulf Coast for fuel supplies. Gasoline futures settled at a three-week high Friday as the storm approached.

President Donald Trump approved a major disaster declaration, making federal assistance available to supplement state and local recovery efforts. The U.S. Environmental Protection Agency waived certain fuel requirements for gasoline and diesel in eastern parts of the state to allay concerns of fuel shortages.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.