It’s tough to talk local dollars and cents when people in and around Houston have lost their lives, livelihoods or everything they own.
But there’s real, broad economic fallout from Hurricane Harvey’s horrific rain wind and flooding that hit eastern Texas and nearby regions. The storm’s monetary impact will flow all the way to Southern Californian.
Thanks to the monster storm, Southern Californians will pay more for gasoline. The only question is how much and for how long.
While it’s too early to predict Harvey’s financial pain, the near-biblical flooding created obvious changes to supplies, production and demand for critical goods like gas.
The Gulf Coast has roughly half of the nation’s refinery capacity, and Houston-area facilities closed by the storm account for roughly 1-in-8 gallons of gas made. And Southern Californians know all too well what the loss of just one local refinery does to prices at the pump.
This is an awkward time for local refineries as the end of summer also means the impending end of mandated cleaner-burning, pricier-to-make fuel.
I tossed some gas price data into my trusty spreadsheet to see what history may tell us. Price patterns are mixed in the week’s surrounding Labor Day: Since 2000, prices rose in 10 years and fell in seven.
But the one ominous fact: The worst jump was in 2005, a quick rise of 25 cents per gallon — 9 percent — amid the Hurricane Katrina debacle.
One bit of monetary comfort for drivers could be that autumn is typically a season of declining gas prices. There’s the switch back to winter gas (cheaper to make) and demand falls as we drive less when the kids are back in school. So, gas prices have risen in in only three years — 2007, 1020 and 2016 — after Labor Day through New Years since 2010.
And if we’re guessing what happens, post-Harvey, note that after the initial Katrina spike, gas prices plunged 80 cents a gallon — 26 percent — to finish 2005.
Pump prices are not the only way you’ll pay for the Houston tragedy.
In a business world where inventories are typically kept as lean as possible, a shock to the system – like the overnight demand created by Harvey – isn’t easily or cheaply corrected. So here are five other examples of how the storm might hit the budgets of local consumers and corporations.
Houston is the nation’s fifth-largest economy, so even having one business community offline for multiple days adds up.
That means national…