Hurricane Harvey disruptions reveal key to Texas winning America’s next civil war

Monday, September 4, 2017
By Paul Martin

by: JD Heyes
NaturalNews.comSunday, September 03, 2017

Most people know that Texas is home to the bulk of America’s oil and gas industry, and in the wake of Hurricane Harvey, we’re all finding out just how vital the Lone Star State is.

The storm has knocked out a sizable portion of Texas’ refining capacity, resulting in far less gasoline, diesel fuel and other products refined from oil. Gas prices are already starting to go up, and it’s no telling where they’ll top out because at this juncture, no one’s quite sure yet when Texas refining will once again be at full capacity.

But Texas is also home to another invaluable commodity in today’s world: chemicals. And Harvey has knocked out much of the state’s chemical manufacturing base as well — and again, for how long, no one knows.

As reported by Bloomberg, the devastating impact Harvey has had on Texas chemical manufacturing is already creating problems and shortages up and down the supply chain as factories struggle to find the chemicals required to produce plastics and other components that are used to make everything from car parts to jugs for milk:

Few Americans care about ethylene. Many have probably never heard of it.

As it turns out, this colorless, flammable gas is arguably the most important petrochemical on the planet — and much of it comes from the hurricane-stricken Gulf Coast. Ethylene is one of the big reasons the damage wrought by Hurricane Harvey in the chemical communities along the Gulf of Mexico is likely to ripple through U.S. manufacturing of essential items from milk jugs to mattresses.

“Ethylene really is the major petrochemical that impacts the entire industry,” Chirag Kothari, an analyst at Nexant, a consulting firm, told Bloomberg.

The Lone Star State produces almost 75 percent of ethylene, a basic chemical element, for the entire country. It is the primary chemical ingredient in the manufacture of plastics that are pervasive in U.S. consumer goods. And Harvey just shuttered nearly all of Texas’ plants and with them, 61 percent of the country’s ethylene production capacity. Some analysts think it will be November, at the soonest, before all of those plants will be back online.

As reported by Zero Hedge, the U.S. Gulf Coast “is a crucial player in the global market: U.S. production accounts for one of every five tons on the market. International ethylene plants were running nearly full out to meet rising demand” before the storm hit.

“The combination of Harvey’s path, duration, and rainfall is wreaking havoc with the supply side of the U.S. chemicals industry on an unprecedented scale,” Kevin McCarthy, an equity analyst at Vertical Research Partners, told Bloomberg. “We certainly haven’t seen anything quite like it in our 18 years of following chemical stocks on Wall Street.”

In addition to ethylene, another widely employed chemical — polypropylene — has also been largely taken offline, with analysts claiming that Harvey has caused a 60 percent manufacturing reduction.

The Rest…HERE

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