May 2024 Industry Report
Hurricane Season is Upon Us: What’s the Outlook?
The 2024 Atlantic hurricane season is expected to start off quietly, with neutral conditions predicted for the early months. However, as La Niña conditions strengthen by August, the latter part of the season, particularly around the peak in September, is likely to see increased hurricane activity due to reduced wind shear in the Atlantic basin. This heightened activity could disrupt energy infrastructure, leading to potential supply chain interruptions and price fluctuations in the energy market.
Published: May 24, 2024
The outlook for this year’s hurricane season has been talked about for many months as we anticipate a return of La Niña conditions in the equatorial Pacific. Hurricane season officially begins on June 1, and currently, the Climate Prediction Center (CPC) predicts that we’ll be in neutral conditions within the next month.
Therefore, it’s not expected to start the 2024 Atlantic hurricane season with a bang. By the time we approach the peak of hurricane season, which is around September 10, the Atlantic basin should be more active, as the CPC places us predominantly in La Niña by August.
Progression of ENSO
The CFSv2, one of the many models used by meteorologists, shows the progression of the expected El Niño Southern Oscillation (ENSO) cycle through the beginning of winter.
Image Source: Climate Prediction Center
Diving into La Niña
Negative numbers <-0.5 correlate to cooler than average sea surface temperatures (La Niña) and the blue shading in the individual pictures to the right. Positive numbers >0.5 correlate to warmer than average sea surface temperatures (El Niño), and the red/orange shadings in the pictures. Between those two, or essentially either side of zero, is considered neutral.
It’s clear we are quickly diving into La Niña, peaking in the fall, before gradually weakening into the depths of winter. Because of this, the end of the 2024 hurricane season is sure to be much busier than the beginning.
The main reason why we see increased activity during La Niña seasons is related to the lack of wind shear in the Atlantic basin. Wind shear is the change in wind direction or speed in the middle to upper levels of the troposphere (where we live and have weather). Wind shear can rip hurricanes apart and destroy their structure, therefore a lack of wind shear allows tropical systems to thrive. The lack of wind shear in La Niña seasons stems back to the Hadley and Walker circulations and their effect on trade winds and atmospheric stability.
The Hadley circulation is a global atmospheric circulation where air rises near the equator, up to about 8 miles above the Earth’s surface (near the tropopause, or the end of the troposphere) moving poleward. It begins to descend at around 25° latitude and moves back toward the equator at the surface.
The Pacific Walker circulation is characterized by air rising above eastern Asia in the tropical western Pacific, traveling eastward in the upper atmosphere, before sinking back to the surface over the eastern Pacific Ocean. Surface winds then flow back toward the west. The Hadley circulation is more north/south, whereas the Walker circulation is more east/west.
Typical La Niña Influence
Image Source: climate.gov
During La Niña, the area of tropical convection and its Hadley circulation is retracted westward to the western Pacific and Indonesia, and the equatorial Walker circulation is enhanced. This diminishes storm activity across the eastern half of the equatorial Pacific.
In the upper atmosphere, these conditions create lower pressures (known as a trough) over the subtropical Pacific in the area north of the absentee storm activity, and higher pressures (known as a ridge) downstream over the Caribbean Sea and western tropical Atlantic. The Pacific trough is associated with stronger upper-level winds and stronger vertical wind shear, suppressing hurricane activity in the Pacific. Over the Atlantic basin, the ridge is associated with weaker upper- and lower-level winds, reducing the vertical wind shear, and decreasing the amount of sinking motion, thus decreasing the atmospheric stability.
With all those lower and upper atmospheric motions in play, it signals a busy Atlantic hurricane season ahead as La Niña returns after only a one-year break.
Typical La Niña pattern
SOURCE NOAA, © Mapcreator.io | © OSM.org; GRAPHIC Janet Loehrke/USA TODAY
Energy Industry Commentary by Howard Plante
Let’s explore the potential implications of the upcoming hurricane season and La Niña conditions on the energy industry, business, and energy prices.
Energy Infrastructure Vulnerability:
During hurricane season, energy infrastructure (i.e., power plants, refineries, and pipelines) may be at risk due to severe weather events. Hurricanes can disrupt operations, damage facilities, and lead to power outages. Preparation for potential disruptions by reinforcing infrastructure, securing backup power sources, and having contingency plans in place are important.
Fuel Supply and Distribution:
Hurricanes can impact fuel supply and distribution. Ports may close, affecting oil and gas imports and exports; and refineries including those along the Gulf Coast, a major energy hub, may face shutdowns. As a result of disruptions in fuel supply chains, it can impart price fluctuations that affect both consumers and businesses.
Electricity Generation and Grid Resilience:
Storms can disrupt electricity generation, especially if power plants are in the hurricane’s path. Wind turbines and solar panels may also be damaged. Grid resilience is crucial during extreme weather events. Utilities must ensure backup power, grid stability, and quick restoration after outages.
Natural Gas and LNG Facilities:
Natural gas production and LNG facilities can be impacted by hurricanes. Pipelines, storage tanks, and export terminals may face damage. Supply disruptions can affect natural gas prices, impacting both residential and industrial consumers.
Renewable Energy Considerations:
Wind and solar facilities may temporarily shut down during storms to prevent damage. Renewable energy sources, however, can play a critical role in post-hurricane recovery. Microgrids, solar panels, and battery storage can provide localized power.
Market Volatility and Price Fluctuations:
Uncertainty surrounding hurricane impacts can lead to market volatility. Investors may react to storm forecasts, affecting energy stocks and commodities. Energy prices including oil, natural gas, and electricity may experience short-term spikes due to supply disruption.
Insurance Costs and Risk Management:
Hurricanes can result in significant financial losses. Remember Hurricane Sandy in 2012, Hurricane Katrina in 2005, and Hurricane Harvey in 2017? Superstorm Katrina was the fifth largest in history in the US and caused more than $70B in damages that in today’s dollars equates to more like $93B. Effective risk management strategies are essential to mitigate potential damage.
The energy industry closely monitors hurricane developments, works to enhance resilience, and to be prepared for potential disruptions. Consumers may see short-term price fluctuations, but long-term impacts depend on the severity of the season and the overall industry response.
Meet the Writers
Mallory Brooke
Certified Consulting Meteorologist
Nor’easter Weather Consulting
Mallory Brooke, Freedom Energy’s Meteorologist and Certified Consulting Meteorologist from Nor’easter Weather Consulting, contributes her expertise in forecasting winter trends.
Mallory Brooke, a Certified Consulting Meteorologist and Penn State graduate, began her career in Virginia before moving to Maine in 2011, where she specialized in ski area forecasting. She founded Nor’easter Weather Consulting in 2017 and has been the Official Meteorologist for the Audi FIS World Cup at Killington since 2016. Alongside her meteorological career, Mallory contributes to outdoor recreation media in Portland, ME, and holds an MBA with a concentration in Business Analytics from the University of Maine.
Howard Plante
Freedom Energy Logistics
Vice President of Procurement
Howard Plante is a seasoned professional in the energy industry with a comprehensive background in environmental and energy engineering. As Vice President of Procurement at Freedom Energy Logistics, he brings a wealth of experience in regulatory compliance, technical analysis, and strategic planning to his role, where he is dedicated to advocating for clients and advancing the company’s enterprise efforts on their behalf. Click here to read Howard’s full bio.
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