Established 1874.

The Oberlin Review

Harvey Hits Both Texas, Economy

Jackie Brant, Opinions Editor

On Aug. 26, I watched from Oberlin as Hurricane Harvey — a storm that would go down as one of the most devastating natural disasters in Texan history — destroyed my hometown of Houston. Harvey was so destructive because it was slow-moving; the Category 4 hurricane remained a storm up to 117 hours after landfall, a state record, and hovered over Texas for four days straight. The total damage is currently predicted to be between $70 and $90 billion; however, estimates have climbed as high as $190 billion.

The destruction Harvey has caused to residents of Texas is devastating. Millions of people’s homes have been irreversibly destroyed, thousands of people are injured, and many roads and bridges are in desperate need of maintenance. However, the world still has yet to experience the full impact of Harvey on the international economy.

It may seem heartless to discuss Harvey’s economic implications while so many people in the region are suffering. However, the storm’s economic consequences, if left unaddressed and underreported, have the potential to be as devastating as the physical and emotional damage Texas is currently experiencing.

The refineries on the coast of Texas provide one-third of the nation’s crude oil. This in turn makes up a large percentage of the oil and gas that is both bought by U.S. consumers and exported to foreign countries. Because these refineries and liquid fuel pipelines were forced to shut down or were destroyed in Harvey’s wake, Texas is in a full-fledged gas crisis. Many gas stations have run dry, leaving millions without transportation.

The shortage has also affected other regions of the country through the days-long shutdown of the Colonial Pipeline, which connects Houston to New York. The gas shortage was so bad that the EPA temporarily suspended gas regulations in Texas in order for gas to be supplied more quickly. Furthermore, the gas price per gallon in North Texas rose from $2.14 to anywhere between $2.35 and $2.45 in just a week.

Goldman Sachs reports that it will take months for refineries to begin producing at their pre-Harvey levels. This will have a huge impact on the nation’s GDP, as both exports and consumption will dip from the shortage of oil and gas.

Moreover, if Harvey follows the trends of Hurricanes Katrina, Rita, and Sandy, Houston will see a major spike in unemployment, and hours worked by citizens of Houston will take a dive. The insurance industry will take a hit as well. Nearly 200,000 cars will have insurance claims, and millions of homeowners will file claims for damage caused by floods, fire, winds, and falling objects.

The city of Houston is still in a state of emergency — physically, emotionally, and economically. Homes, cars, and livelihoods have been lost. People have died, and pets have perished or been left homeless. Infrastructure is collapsing. It is taking days to drive somewhere that normally takes 20 minutes. Gas shortages are stopping people from commuting to work. All these problems are being directly experienced and can be photographed.

What cannot be photographed is the distress families will face from looming unemployment and the financial burdens those caught without flood or car insurance will have to bear. The fate of the oil and gas industry — the basis of Houston’s economy — is in question. The economic implications of business closures associated with the oil and gas industry are virtually invisible, but have the potential to drastically affect not only Houston’s job market but the national economy in general.

It is easy to get caught up in the pictures dispersed across various social media sites. However, the damage from Harvey will affect people in more ways than meet the eye, and it will have lasting impact beyond Texas’ borders.

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Established 1874.
Harvey Hits Both Texas, Economy