On August 27, Arkema announced a somewhat unusual adaptation plan. The French chemical giant will install retention basins at its Crosby, Texas site, reinforce its buildings, raise its generators, and review its fire safety protocols. It will also pay $1.1 million to Harris County to fund local safety measures. Exactly 7 years after the Hurricane Harvey caused a chemical fire at the industrial site, these measures are part of a settlement between the chemist and the county.
Beyond its Crosby site, Arkema now recognizes that the 2017 hurricane accelerated its awareness of climate risks and its adaptation efforts. And it is certainly not the only one in the petrochemical industry in this case:
TotalEnergies, ExxonMobil, Shell, Saudi Aramco... have also suffered significant damage. Almost 10 years later, Harvey remains a textbook case of the consequences that a climatic event can have on poorly prepared organizations.
This article explores the consequences of climate risks in the oil industry through some significant feedback from Hurricane Harvey. It shows how underestimating or neglecting a climate risk can undermine the design of technical systems, the organization of security in a sensitive industry or even an entire business strategy.
Shell and Exxon's floating roof tanks: the importance of extremes in technical design
Formed on August 17, 2017 in the Lesser Antilles, Hurricane Harvey hit the Texas coast on August 26 after becoming a Category 4. It lost intensity as it headed toward Austin. But as it was just downgraded to a tropical storm, it turned around to return over the ocean and follow the coast past Houston and Port Arthur. It made landfall again on August 30 in Louisiana, 50 km east of Port Arthur. It finished dissipating as it headed north and the alert was finally lifted late in the day on the 30th.
Harvey's unusual trajectory kept it close to Houston for five days. This particularity led to exceptional rainfall. In a region with many industrial sites, particularly petrochemicals, the accumulation of rainfall often exceeded the design limits of hydrocarbon extraction, transportation and refining facilities. One of the most visible consequences of these exceedances was the collapse of floating roof tanks.
The storage of liquid hydrocarbons is a major challenge for the oil sector. Tanks are often designed to minimize the formation of vapors that cause losses and explosion risks. One solution is to use a floating roof that rests on the liquid hydrocarbons and prevents them from coming into contact with the air. A fixed roof can be added above the tank, in this case we speak of an internal floating roof - obviously this system represents an additional cost compared to an external floating roof.
Precipitation can accumulate on the external floating roof to the point of deforming or sinking it. In its standard 650, the American Petroleum Institute stipulates that external floating roofs must be able to support the accumulation of 10 inches (254 mm) of water. The roof must therefore be equipped with a drainage system that guarantees that this level will not be exceeded even in the event of heavy rain. The design is therefore fundamentally based on assumptions of intensity and maximum duration of precipitation.
During Hurricane Harvey, these assumptions were often proven wrong. At least fifteen floating roof tanks were damaged , including on sites operated by Shell, Exxon Mobil, Marathon Petroleum, Phillips 66, Valero... This damage led to numerous leaks of hydrocarbons and chemicals.
As is often the case when discussing this type of assessment, the use of empirical maxima based on past weather observations is a recipe for disaster. The design of systems must take into account projections of future climate and rely on statistical models adapted to the analysis of extreme values .
Arkema: a meteorological event as a trigger for a chain of catastrophic incidents
Arkema's Crosby site also experienced problems caused by extreme rainfall, with two retention ponds overflowing. But it was another accident that left its mark and perfectly illustrates the complexity of physical climate risks in an industrial environment.
The plant manufactures organic peroxides in particular. These chemical compounds have the particularity of being involved in a self-accelerating decomposition reaction : they self-oxidize, this reaction is exothermic, if it is not dissipated the heat released accelerates the reaction, and so on...
To prevent this reaction from running wild, peroxide storage temperatures must be controlled. The level of refrigeration required varies depending on the compound and its self-accelerating decomposition temperature: it can range from room temperature for peroxides with a SADT above 50°C to very negative temperatures. Arkema's Crosby site, for example, has low-temperature warehouses with refrigeration at -30°C.
Given the instability of peroxides, the cooling systems benefited from multiple redundancies : conventional mechanical refrigeration powered by the electrical network, back-up generators, a liquid nitrogen tank allowing emergency cooling without electricity and, as a last resort, refrigerated trucks capable of storing peroxides at temperature for several days with a full tank.
Despite multiple redundancies and backup systems, the flooding of the site led to the explosion of stocks of unstable chemicals.
On August 25, the plant's emergency team was activated to stay on site in case the access roads were cut off. In the hours that followed, the site was gradually flooded, and power cuts were necessary to avoid the risk of electrocution. The emergency liquid nitrogen cooling system proved inoperable as the pipes had been submerged by the rising water. On the 27th, the team began transferring the peroxide stocks to refrigerated trucks.
On the 28th, the electricity network was cut off. One of the two emergency generators was under water, and the refrigeration of the warehouses was now dependent on a single generator. The transfer of peroxides to the refrigerated trucks was completed, but three trailers were trapped by the progression of the flood and could no longer be moved to higher ground.
The next day, the team discovered that a trailer was unstable, a fire now seemed inevitable. The site was evacuated and a security perimeter of more than 2km was set up. The chronology is not exactly known from this point on, but between August 30 and September 2, several refrigerated trailers caught fire, causing gas emissions and hospitalizations. On September 3, the authorities decided to deliberately set fire to the remaining stocks.
As the US Chemical Safety Board accident report notes, the flood successively caused the power supply to the facility to be cut off, the emergency generators and liquid nitrogen refrigeration system to become inoperable, and finally the refrigerated trailers to fail. The safety provided by these different layers of protection was illusory because a single event could cause them all to fail.
Motiva refinery: how a climate risk ended the U.S. ambitions of the world's largest oil company
Created more than a century ago, the Motiva refinery in Port Arthur was, in 2017, the largest in the United States. From the 1980s, it was operated by a joint venture between the Saudi national oil company Saudi Aramco and, through acquisitions and resales, Texaco, Chevron and finally Shell. In 2016, Aramco decided to take over the entire activity as part of an agreement worth more than 2 billion dollars .
On May 1, 2017, Aramco became the sole owner of the refinery and announced huge investments : a first firm tranche of 12 billion, followed by a second of 18 billion planned before 2023. The objective was to increase production by 150%, which would make it the largest refinery on the planet, with nearly 15,000 jobs created! The project was presented as crucial both for the region, the refining industry in the United States, the political and economic strategy of the Saudi government and the relationship between the two countries.
Yet barely a year later, in June 2018, the expansion of the Motiva refinery was quietly abandoned. What happened in between?
In May 2017, Aramco announced a 30 billion investment in the Motiva refinery. A year later, in June 2018, the project was abandoned. In between: Port Arthur was flooded by Hurricane Harvey.
On August 30, as Hurricane Harvey approached, the refinery was shut down completely. It was not the only one: Exxon, Shell, Valero, Petrobras, Total and many other oil and gas refineries in the Gulf of Mexico were also shut down. But Port Arthur's situation is unique: while the elevation is almost everywhere below than 3 meters, the levee system proved insufficient to protect the city from Hurricane Harvey. With the storm surge (the temporary rise in sea level caused by the depression that accompanies hurricanes), Port Arthur was almost completely submerged . The Motiva refinery was no exception.
Suddenly realizing that its flagship US project was at the mercy of a hurricane, Saudi Aramco made the only sensible decision: not to put all its eggs in one basket. According to a source quoted by Reuters at the time : "They don't want all of their capacity shut like it was during Harvey." At the time, there was talk of investing in other sites instead, but seven years later Port Arthur is still the only US refinery operated by Aramco and its capacity has not changed significantly. In effect, Hurricane Harvey put an end to Saudi Aramco's ambitions in US refining.
The incidents during Hurricane Harvey illustrate how extreme events can reveal systemic vulnerabilities in infrastructures so far considered to be robust. These experiences underscore the importance of taking a proactive approach, particularly in the context of climate change, by integrating climate projections into design criteria, risk management, and business strategy.
In practice, however, accessing this data can be impractical because it is too time-consuming, costly and complex. This is why Callendar has developed tools to facilitate climate risk assessment and accelerate adaptation . Designed with and for the industry, our solutions have already been used in oil and gas projects in Europe, the Middle East, Africa and America. Want to know more? Contact us!