Oil Companies, Wireless Carriers Rush to Restore Service After Ida
Hurricane Ida Leaves Destruction in Its Wake
Hurricane Ida left devastating destruction in its wake. While doing so, it also upended the oil and telecommunication industries, which are now rushing to bring their operations back online. The Category 4 hurricane is estimated to have caused between $15 and $20 billion in damages.
Take the refiners Valero Energy (VLO), Marathon Petroleum (MPC), and Royal Dutch Shell (RDSA) for starters. They have oil refineries along the Mississippi River and are now figuring out the damages and how long it will take to get them back online. The refiners, which supply close to one quarter of the oil-refining capacity in the Gulf Coast, have to wait until power in the area is restored. All told it could take days to assess the damages and weeks to make the necessary fixes.
Impact at the Pump Muted
So far the impact to the oil and gas markets has been negligible, with US gas prices up less than one cent and gasoline futures unchanged earlier this week. It is expected to remain that way given inventories of gas were already up in preparation for the Labor Day weekend.
There is a risk if outages last long it could add to fuel-supply shortages in the regions hit by Ida. The day after the storm, close to 35% of gas stations in Baton Rouge and 30% in New Orleans were out of gas.
Wireless Carriers Aim to Restore Service
The telecommunications industry including Verizon (VZ), AT&T (T), and T-Mobile (TMUS) are rushing to get their cell towers fixed and internet service running again. As of Tuesday, about 15% of Verizon and AT&T cell sites remained offline, while T-Mobile said cell sites in areas hit hard by the storm were not operational. Road closures, debris, widespread flooding, and other obstructions are making it more difficult for the wireless carriers to restore service.
Hurricane Ida destroyed lives and property in its path. Oil and telecommunications companies have to move quickly to get power and gas back to the millions of people suffering from Ida’s damage.
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