Watching the widespread devastations in Houston due to what was Hurricane Harvey, has been gut wrenching and now that this storm has regenerated and made a second landfall in Louisiana, just west of the town of Cameron, its impact on lives and property is just starting to be measured. Ordinary citizens in Houston have been heroically rescuing their neighbors with their own boats reminds me of the beach rescue in Dunkirk when ordinary citizens, with their boats, saved the British army and changed the course of history. Despite the challenges and devastation in Houston and the pain, this will prove to be their finest hours.

The impact on energy and the economy is also just beginning to be felt as the fall out from the storm damage is just beginning to be measured. Right now, the market focus is the impact on US refineries and the shutting down of transportation pipelines. Yet they will also have to deal with the very real possibility of considerable damage to oil and natural gas producing infrastructure as well as damage caused to Eagle Ford Shale fields.

RBOB gasoline futures are on the rise for the seventh day in a row as it has been confirmed that the Colonial Pipeline is running at reduced rates, raising the real possibility of gas and diesel and even jet fuel shortages. Colonial Pipeline Co. said Tropical Storm Harvey affected its Houston origin, which includes Pasadena, Houston, and Cedar Bayou. Service from those locations was interrupted during the storm and its aftermath, although the company is working to restore service and minimize the impact. Still, reports that flow was down by as much as 60% is feeding into that gas and diesel rally.

The Wall Street Journal says that the ”Colonial is the biggest fuel pipeline in the U.S., stretching 5,500 miles through 12 states. Analysts have likened it to “a Mississippi River of fuel.” It can transport up to 2.5 million barrels a day of gasoline, diesel and jet fuel, and is directly connected to several airports, including Nashville, Charlotte and Dulles International Airport in Washington, D.C. The pipeline, which was built in 1963, is a main source of fuel for the Southeast, including offshoots to parts of northern Florida. It ends in New Jersey and is also a massive supplier of fuel to the greater New York City metro area.