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In Port Arthur, Texas ‘Energy City' USA, Hurricane Harvey's fury is still lingering


Harvey Hits Heart of Texas Energy Industry. Gasoline has surged as oil platforms, pipelines and refineries were shut in Texas due to Tropical Storm Harvey. Bloomberg's Dan Murtaugh reports on "Bloomberg Markets: Asia." (Source: Bloomberg) -Watch video

By Laura Blewitt

HOUSTON
Petroleumworld 10 20 2017

It took five weeks for the largest U.S. oil refinery to get back to normal after Hurricane Harvey.

It's taking Port Arthur, Texas, a lot longer.

Nearly two months after Harvey inundated Port Arthur, a crucial hub of the global energy industry, the city of 55,000 is struggling to recover.

As attention shifted to Puerto Rico, where the devastation from Hurricane Maria is far worse, water-logged debris still lines the city's streets. The mess of furniture, carpets and appliances will take months to clear, Mayor Derrick Freeman said. Zika, mold, hepatitis and other health threats are a big concern.

“You're picking up moldy sheet rock and refrigerators that have flies all over,” Freeman said.

The 2017 hurricane season unleashed its deadly torrents on industries and communities alike, but the ability to clean up and move on separates them. That's been true not only for Puerto Rico, where most of the island is without power a month after landfall, but to a lesser extent in Port Arthur, also known as Energy City, whose facilities are responsible for 6.3 percent of American oil refining.

Even in Houston, the fourth-largest U.S. city, which received $50 million in recovery funds from the state's $12 billion disaster-relief fund, clearing mounds of trash will take months, according to a statement from the city.  

Though problems persist, the Motiva Enterprises refinery, owned by Saudi Arabian Oil Co. , and other Port Arthur facilities, run by Valero Energy Corp. and Total SA , had the resources to return to near-normal relatively quickly. On the other side of the razor wire, it will cost Port Arthur $25 million to cart away all the garbage, according to Freeman. The city received $10 million from the state fund, said Chris Bryan, spokesman for the Texas comptroller. The legislature won't decide on further appropriations until its next session in 2019, he said.

Census Data

Port Arthur, 90 miles east of Houston, wasn't a beacon of financial wellness before Hurricane Harvey, according to the latest census data . In 2015, 27 percent of residents lived below the poverty line, compared with 17 percent in the state of Texas and 11 percent in the U.S. Median household income in Port Arthur is $32,863, more than 35 percent lower than in Texas and the country in general. The town has roughly triple the percentage of black residents as Texas and the U.S.

The economic disadvantages translate into health concerns. Locals have started complaining about “weird” health concerns, including breathing problems and rashes, most likely from homes infested with black mold, said Dr. Marsha Thigpen, the executive director of the town's Gulf Coast Health Center. 

Thigpen said she's seeing 10 percent more patients than she did this time last year. The center is giving away hepatitis A vaccines and insect repellent to prevent Zika virus, she said.

Prolonged contact with mold can lead to neurological disorders, according to Dr. Claudia S. Miller at University of Texas Health Science Center at San Antonio. Symptoms such as headaches, fatigue, memory loss and difficulty concentrating might appear to be from post-traumatic stress, but those problems also arise from toxic exposure, she said.

Trade Zone

Port Arthur's three oil refineries are part of a peculiar jurisdictional setup. They aren't sitting on city land. Like the embassies of foreign countries, they're not technically on U.S. soil either. They're in foreign trade zones, which allow the refineries an array of federal and local tax breaks.

The refineries are doing well financially. Motiva spent $7 billion on a 2012 expansion that more than doubled the facility's capacity, to 605,000 barrels a day. The move set up the company to more efficiently process a range of crudes, including oil from Venezuela and Canada's tar sands.

Saudi Aramco plans to invest $12 billion into another refinery expansion, and $18 billion total into Motiva by 2023.

Total said it's pouring $1.7 billion into expansion at its Port Arthur plant.

For America

Getting the facilities running after the storm was a priority for more than simply business reasons, said Dan Misko, who works at Exxon Mobil Corp. 's refinery in Beaumont, Texas, 20 miles northwest of Port Arthur.

“They don't work just for Exxon Mobil, they work for the American people,” Misko said. “It's important to the U.S. to make sure that we can provide fuel.”

The Port Arthur-based refiners have been generous to their afflicted neighbors. Motiva said it donated $500,000 to the American Red Cross; Total gave $250,000 and Valero $1 million. 

Motiva said it gave away fuel and food, supplied as many as 900 meals a day for 10 days to emergency responders and evacuees staying at a local middle school. The company is matching employee contributions to the Red Cross, spokeswoman Angela Goodwin said.

Homes of one of every five Total employees in Port Arthur experienced flooding, and the company helped more than 200 employees with hotel stays, rental vehicles, onsite meals and fuel, said Tricia Fuller, a Total spokeswoman.

They Never Left

Valero delivered hundreds of meals to Catholic Charities Hospitality Center, donated towels to the humane society, blankets to shelters and food to the United Steelworkers union, which represents refinery workers, said Valero spokeswoman Lillian Riojas. 

Between Port Arthur and Beaumont, 900 union members were affected by the storm, and more than 500 “lost just about everything,” said Richard “Hoot” Landry, the district staff representative.

“Most of our people never left” the refinery, Landry said last week.  

Shifts are returning to normal this week, but refinery employees were working long days, Landry said, so they didn't have a lot of time to work on their homes, many of which were damaged by the water.

“They're living with family and friends,” he said. “It's really a nightmare trying to find good contractors that won't rip them off, so they're really stressed right now.”


Story by Laura Blewitt; With assistance by Joe Carroll, and Barbara J Powell from Bloomberg.

bloomberg.com 10 19 2017

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