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

Harvey may have spared the Texas oil and gas industry.
(Image credit: Erich Schlegel/Getty Images)

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.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

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.

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us