As the largest storm to hit the United States in over a century continues to threaten to unleash heavy rains and flooding in major cities across the Northeast and Pacific Northwest, natural gas prices are expected to remain rather stable or increase for the remainder of the year. The threat of a major hurricane that is now threatening to deliver heavy rain and wind speeds in excess of 60 miles per hour to the coast is being taken very seriously by electric and natural utility companies, which have already seen record increases in calls relating to outages and emergency preparedness. With millions of households already without electricity due to a combination of high energy demand and low supply, and with many more installations still waiting for approval, the potential for a disastrous situation is very real. In fact, as this major storm nears its final destination, more than one-third of the nation’s electricity generation is already on the fritz.
With escalating fuel costs, increasing home energy costs and uncertainty regarding the future of the fossil fuel industry, utilities have been forced to implement contingency plans that include a wider range of natural disaster preparedness that will also cover natural disasters of a different kind, namely fires. Many areas have already been confirmed as likely targets of large-scale fires during this summer’s big storm. Multiple power outages, which can last for days or even weeks, coupled with the threat of smoke damage from smoke filled fires that break out after burning out can wreak havoc on the infrastructure of electric grids and communications systems. Not only can such an event lead to massive power outages that are crippling to daily operations, they can also be used as the excuse for theft and burglary in preparation for the next big fire outbreak. As natural gas and electricity use increases during the months of August and September, so too does the risk of theft and burglary related to these appliances.
The potential for widespread power outages, massive electrical failures, and the possibility of smoke damage is not the only threat associated with this summer’s approaching storm. High winds, torrential rains and snow storms have also been shown to have the same effect as storms and floods do, when strong winds blow tree limbs into the air and the falling ice leads to ice dams that can freeze transmission lines. When these conditions combine the effects of natural gas and electricity use at a level that is currently unprecedented, it is easy to see why utility companies are being highly prepared for what could be months-long outages. This is also why natural gas prices are expected to soar higher in the coming days and weeks as a direct result of this weather catastrophe.
Natural Gas and Electricity are by far the two most used fuels in large portions of the United States. More than two-thirds of all U.S. electricity comes from gas, and almost half of all domestic heating comes from oil. In an emergency situation, utilities can no longer rely on fossil fuels to provide the level of reliability and availability that is necessary in order to effectively service the communities in which they are located. This is why utility companies are taking extreme measures to protect themselves and their customers. The potential loss of business due to outages caused by hurricanes and other extreme weather events is one of the concerns that have led to preparations for weather-related disasters.
For decades, companies both large and small have made contingency plans in case of severe weather and other weather related events. For example, if there was to be a major hurricane or tornado in the United States, it is common for businesses large and small to have their own disaster kits designed to handle the disruption that such weather conditions would bring to their communities. Today, with the threat of a major hurricane or tornado being felt in the Gulf Coast region of the United States, many utility companies and oil refineries are taking extreme precautions in order to keep their businesses running smoothly during this potentially devastating time. In fact, major banks have already begun to issue credit delays and layoffs in response to the uncertainty that is being associated with weather-related problems across the nation.
With so much riding on the success of storm prevention and relief efforts, it is not a surprise that natural gas prices have been affected in such a way. One of the most noticeable effects has been an increase in the number of people who have begun shopping for pre-made emergency kits. There has been a definite increase in the flood response teams who have been deployed in the areas that are expected to be worst hit by storms. Many emergency kits contain bottled water and other non-perishables in order to help customers and families conserve precious resources in an emergency situation. This in turn has helped to raise the demand for the