Speed Reads

hurricane harvey

Economists say Harvey will cost billions — but still significantly less than Katrina

While it is still too early to fully assess the damage from Hurricane Harvey, immediate concerns about costly damage to the Gulf's gas and oil industry were somewhat reduced Monday as they "[do] not appear to have been seriously compromised," The New York Times writes.

Moody's Analytics told The Wall Street Journal that "about two million barrels a day of refining capacity — about 10 percent of the nation's overall refining capacity — is now offline." While gas prices are expected to spike as they historically do after major storms, costs could go back to normal after a few weeks. In sum, "economists were predicting that the storm's cost would be less than half that of [2005's Hurricane] Katrina's," the Times writes.

Katrina caused more than $100 billion in damage, a number that was exacerbated by the failure of levees. Moody's estimates that Harvey will cost several billion, with around $30 to $40 billion in property damage.

Despite the Gulf's oil hub managing to scrape by without crippling damage, the storm's toll on other industries, like freight, will be felt throughout the country. The chief economist of Truckstop.com, Noël Perry, told The Wall Street Journal that "the storm affected up to 10 percent of the U.S,'s trucking capacity" and "shipping costs could rise anywhere from 5 percent to 22 percent."

"This may be unprecedented when all is said and done," said Mark Rourke, the chief shipping officer of Wisconsin's Schneider National Inc. trucking company, echoing a sentiment held by experts in many different fields.