Hurricane Harvey is not heading for Florida, but its effects will likely be felt in the "sunshine state" in the form of higher gas prices. Harvey is forecast to intensify into a category 3 hurricane before reaching the Texas and western Louisiana coastlines. Nearly half of U.S. refining capacity sits on the U.S. Gulf Coast; nearly one-third of it appears to be in Harvey's path.
"This could be a big deal especially for Florida motorists," said Mark Jenkins, spokesman, AAA - The Auto Club Group. "Florida pumps are primarily supplied by gasoline that sails over from refineries in Texas, Louisiana and Mississippi. Prices were already climbing due to pre-existing refinery issues in the region. This storm could cause more refinery closures and prevent tankers from moving fuel in-and-out of Texas ports, which would cause gas prices to surge from 10-30 cents."
Harvey is forecast to make landfall near Corpus Christi, where there are three gasoline refineries, representing about 4.2 percent of U.S. capacity. The Houston refining market could also be impacted by the storm. The Houston/Texas City/Baytown region has 11 refineries, representing 14 percent of total U.S. processing capacity. If the storm makes landfall further east of its current path, the impact on refineries could be even greater.
Where Harvey goes after making landfall is important. If the storm lingers near the coast, it could cause extended closures in shipping channels, which would interrupt deliveries to Florida. Extreme flooding and loss of electricity would impact pipeline operations, interrupting the supply chain for states along the eastern seaboard.
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