Hurricane Dean will enter the Gulf of Mexico is some form next week, which doesn't bode well for the nation's energy supply or for Texas Gulf Coast cities bailing out from record rain and flooding.
The now Category 3 storm is likely to be fast-moving, powerful and devastating, especially if it hooks north of Mexico's Yucatan Peninsula, which the latest tracking estimates forecast. The more the storm remains over the warm open waters of the Gulf, the greater likelihood of continued strength.
For those in the Brownsville-Galveston, Texas region, close attention should be paid to hurricane forecasts. New Orleans, Houston and inland areas should be on alert as well.
Monday futures markets will begin to speculate on Dean's impact on the national energy prices and supply. The true impact not be known mid-week, when Dean comes ashore on the northeast mainland of Mexico or on the the US Gulf Coast. Oil and natural gas production facilities in the Gulf, in refineries lining the coast, or in Houston, where petrochemical centers are based, may suffer damages that would either be difficult to quickly access or assess.
Besides filling up that car this weekend, if you hang your hat with state or local government agencies, consider the impacts of fossil fuel scarcity on the budgets and operations of state and local government agencies.
Hopefully, next week won't prove to be a baseline event akin to Katrina and Rita in 2005, but it may prove to be a very real energy risk model.
Image credit The Oil Drum