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Now that we've entered into hurricane season, you may be inclined to ask yourself, "It's been awhile since the last hurricane. How badly would natural gas production be curtailed if another hurricane hit the coast?" The short answer is not that much.
Now, you may be thinking to yourself, “how is that possible? When Hurricane Rita came through in 2005, the price of natural gas spiked from $9 to $15!” Well, the natural gas landscape is vastly different than in 2005 - not only is the price of natural gas not $9, but the production landscape in which we extract natural gas is different.
So, in short, a supply disruption of the offshore production would have much less of an impact today than it did in 2005. Even if it temporarily took off all the offshore production (approximately 4 bcf), the effect would be short lived, and would definitely not be on the scale of a $6 increase in prices like with Hurricane Rita, the last hurricane to impact prices.
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Posted: June 11, 2015