Hurricane Harvey Closes Texas Airports, Could Spike Jet Fuel Prices

Hurricane Harvey, which made landfall in south Texas on August 25, has both local and national implications for aviation in the U.S. The storm caused temporary airport closures and significant disruption to Houston-area airports’ navigation and lighting systems due to widespread flooding. Nationally, there could be a spike in jet-A fuel prices since production of up to half of jet-A has been interrupted at multiple refineries shut down by the storm, as well as the terminals that service those refineries. The Houston Ship Canal, the major gateway for shipping refined petroleum products, has also been adversely affected.

Virtually all of the Houston area's airports issued warnings regarding airport and signage lighting out of service, as well as some runway, taxiway, and ramp closures due to flooding as the downgraded storm continued to dump rainfall reaching over 50 inches. Lighting on construction, broadcast, and cell towers throughout the region's airspace had also failed.

The FAA issued a strong warning to drone operators to keep their aircraft on the ground during rescue and recovery operations. “Flying a drone without authorization in or near the disaster area may violate federal, state, or local laws and ordinances, even if a Temporary Flight Restriction (TFR) is not in place,” the FAA noted on its website.

Refineries that hadn't shut down before Harvey made landfall began doing so the day after the storm hit. Among them: ExxonMobil's massive Baytown, ConocoPhillips' Sweeny, Shell's Deer Park, and Corpus Christi refineries belonging to Citgo, Flint Hills, and Valero. Collectively the closed refineries are responsible for 20 percent of the nation's gasoline output and 50 percent of its jet-A production. Even if refinery damage is minimal, it might be some time before they will return to pre-storm capacity due to a potentially large number of displaced workers.

Even before the hurricane hit, jet-A prices were moving higher last week in anticipation of the storm. Jet fuel differentials increased last Thursday to levels not seen in three years. Last April, Tom Kloza, global head of energy analysis for the Oil Price Information Service, told BJT that a hurricane hit in the area “could temporarily send prices sky high.”