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Economic Consequences of and Resilience to a Disruption of Petroleum Trade:

The Role of Seaports in U.S. Energy Security

Adam Rose and Dan Wei

Sol Price School of Public Policy

and Center for Risk and Economic Analysis of Terrorism Events (CREATE)

University of Southern California

Los Angeles, California, USA

Donald Paul

Viterbi School of Engineering

and Energy Institute


Los Angeles, California, USA

(Draft; Not for Quotation)

July 9, 2017

Abstract

Despite increased domestic production, the U.S. is still importing more than one-third of its crude oil

needs, the vast majority via ocean tankers. At the same time, there are increasing concerns about the

vulnerability of ports and terminals to man-made and natural disasters. This paper advances a

methodology for estimating the total economic consequences of and resilience to a disruption of crude

oil and refined petroleum product trade at a major seaport. The methodology is able to estimate not

only the direct impacts of such disruptions but also the supply-chain effects. It also estimates the effects

of muting the impacts by various resilience tactics such as ship re-routing, drawing inventories from

storage, accessing the Strategic Petroleum Reserve, geographic shifting of petroleum refining, and

production rescheduling. We apply the methodology to a 90-day disruption of petroleum trade at the

twin seaports of Beaumont and Port Arthur, Texas. The results indicate that port region and national

economic activity could decline by billions of dollars, but that resilience can reduce these consequences

significantly. We also conclude that factors associated with the recent surge in the extraction of shale

and tight oil resources has significantly enhanced the potential effectiveness of some resilience tactics.

Keywords

Energy Security; National Security; Petroleum Imports and Exports; Seaport Disruption; Resilience

Highlights

Seaports are increasingly vulnerable to disruptions from man-made and natural threats

Petroleum import and export disruptions are transmitted up and down supply chains

Resilience tactics can significantly dampen regional and national economic impacts

Not all seaports may be critical to regional and national energy security

The recent shale-oil boom has contributed to the resilience of the US energy system

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Economic Consequences of and Resilience to a Disruption of Petroleum Trade:

The Role of Seaports in U.S. Energy Security

by

Adam Rose, Dan Wei, and Donald Paul1


1. Introduction

Most studies of energy security focus on a nation’s vulnerability to supply shortages, and some studies address

strategies to reduce it. The analyses typically focus on geopolitical crises as the major source of disruptions.

Studies on reducing vulnerability have nearly always emphasized pre-disruption mitigation, i.e., ways to reduce the

frequency and magnitude of disruptions in the first place. Thus, most studies to date overlook two key

considerations. The first pertains to vulnerabilities of regions, delineated by the ports and the areas surrounding

them that are dependent on trade, within large countries such as the U.S. The second pertains to reducing

vulnerability by post-disruption resilience, i.e., ways to dampen economic consequences by various tactics that

utilize existing resources more efficiently after the disruption has begun.

A major example of an energy security issue is the disruption of a seaport that is the unloading point for tankers

carrying both imported and domestic crude oil and refined oil products, as well as serving as the loading point for

exports of these same commodities. The impact of the disruption quickly ripples through the regional economy,

first by disrupting the key input into downstream processing operations located near the ports, such as oil

refineries and chemical manufacturers, or affecting business consumers and residential customers of refinery

products. Prime examples are the Port Arthur/Port Beaumont petrochemical complex, which produces

approximately 22 percent of the refined oil and 9 percent of chemicals produced in Texas, and the Port of

Providence, Rhode Island, which is the port of embarkation for the majority of the heating oil used in the New

England states. Disruptions of such ports can have further ripple effects down-stream in the supply-chain by

causing shortages of goods that directly and indirectly use raw or refined petroleum products. Furthermore,

upstream ripple effects will emanate from the inability to ship exported crude oil or refined products.

Seaports are considered prime terrorist targets and are a major example of critical infrastructure that has been

given priority by the US Department of Homeland Security. In addition to terrorist attacks, disruptions can be

caused by technological accidents and natural disasters, not just at the port site but also as a ramification of

damage to nearby offshore drilling platforms or pipeline breakages, and ship accidents, as well as destruction of

transportation arteries that are used to transport goods from the ports to inland locations.

Many recent studies have estimated the economic consequences of port disruptions following labor strikes,

technological accidents and simulated or actual natural disasters (Park et al., 2008; Rose and Wei, 2013; Rose et

al., 2016; Wei et al. 2017). However, only studies by the authors have included consideration of major types of

1 The authors are, respectively, Research Professor and Research Assistant Professor, Price School of Public Policy, and Faculty Affiliates, Center for Risk and Economic Analysis of Terrorism Events (CREATE), University of Southern California (USC); and Professor, Viterbi School of Engineering, and Director, Energy Institute, USC. We thank Chris Covino for his research assistance.

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economic resilience. Our studies indicate that these resilience tactics have the potential to reduce regional and

national GDP and employment losses by more than 75%.

The purpose of this paper is to estimate the direct and indirect regional and national economic consequences of a

90-day disruption of petroleum trade at Port Arthur and Beaumont, Texas. These twin ports are surrounded by

major oil refineries and petrochemical complexes. We use regional and national input-output models for the

analysis, justifying their application even though this modeling approach is often not considered state-of-the-art.

We explain how the major determinants of the bottom-line economic impacts are not the size of the standard

multiplier or general equilibrium effects, but rather the extent of the efficacy of various resilience tactics, which

can be effectively modeled by our methodology.

This paper advances the literature in several ways. It extends the authors’ methodology for estimating the impacts

of a port disruption in general and oil trade disruptions in particular. It also provides the most accurate estimates

to date of likely resilient responses. Most importantly, it presents a reference point for assessing the regional and

national vulnerability of a petroleum trade disruption. Our study finds that the disrupted regional economy is only

likely to be minimally affected because of the offsetting influences of such resilient features as the existence of

nearby ports and refinery complexes to where ships can be rerouted, excess capacity at those locations, the

existence of inventories at Beaumont/Port Arthur and neighboring areas, and the ability to recapture lost

production when import flows are restored. The impacts are even smaller at the national level in both absolute

and relative terms, as oil extraction and refining are shifted to areas outside the directly impacted region.

However, for some level of port activity or some locations, an oil import disruption would be significant, at least at

the regional level, i.e., it could severely disrupt motor vehicle travel and strain heating supplies causing price spikes

and/or shortages. The methodology presented here can be used to evaluate the vulnerability of other ports or

combinations thereof.2 This could significantly help improve resource allocation decisions regarding US critical

infrastructure. It raises the issue that all seaports may not really be “critical” to regional and national energy and

economic security.

In Section 2, we present a brief review of the literature on the topic of seaport disruptions. In Section 3 we present

an overview of the modeling approach. In Section 4, we present a discussion of our measurement of resilience. In

Section 5, we present our estimates of the regional and national impacts of the 90-day disruption at Port

Arthur/Beaumont. In this Section 6, we present our estimates of these impacts with the inclusion of resilience. We

conclude with a brief summary and discussion of future research.

2. Literature Review

Numerous studies have been undertaken of seaport disruptions. Increasingly, these studies include downstream

supply-side effects. However, most neglect the fact that the same port disruption will also reduce the flow of

exports, a phenomenon that causes upstream supply-chain ripples. Also, few studies consider resilience in their

assessment, and even fewer consider the broad range of resilience tactics. Even fewer studies have focused on

petroleum trade disruptions. Below, we summarize literature focusing on more recent studies that have been

relatively more comprehensive than earlier ones in terms of incorporating considerations of resilience. However,

we do include some major studies that examine port disruptions dominated by petroleum trade and related

activities.

2 In the case of significant price increases, further I-O methods need to be invoked. In addition, the resilience analysis presented

here is more generally applicable, such as its ability to be incorporated into CGE models.

3

Smythe (2013) assessed the impacts of Hurricane Sandy on the Ports of New York and New Jersey through

interviews with respondents to the disruption. The author found that cooperation between the public and private

sectors, as well as the need for an increase in fuel reserves and personnel management, were greatly facilitated

thanks to the formal port governance system. However, the loss of electricity, while temporarily handled by

generators, led to a series of negative consequences, such as a loss of communication, security concerns, and the

shutting down of oil terminals. The loss of petroleum product then exacerbated the situation not only in the port

area, but also its surrounding communities. The author also highlighted the problems that arose from personnel

that were evacuated from the area and those that did not have transportation to the port.

Rice and Trepte (2012) also surveyed a number of port practitioners regarding different types of disruptions they

experienced, as well as which processes and improvements would most lead to increased resiliency. They found

that, while ports are generally successful in handling and quickly recovering from small, frequent disruptions

(which are most common), most ports are much less resilient to large, extended disruptions. While the survey also

found that there is no absolute consensus among port stakeholders on which actions are most important towards

resilience of the port system, flexible labor agreements and improved communication and information services

were the most desired measures based on the survey respondents’ experience in small scale port delays or

disruptions.

Southworth et al. (2014) conducted case studies of the Ports of New York and New Jersey following Hurricane

Sandy in addition to the closing of marine ports along the Columbia River in the Pacific Northwest due to the river

system rehabilitation project. Following interviews with a number of experts involved with these events, the

authors found that a successful communication and an uninterrupted flow of information are considered as the

most important factors in returning to a normal level of operation. The authors also highlighted several other

actions that would assist in recovery including coordination with landside operators to divert cargo following a

disaster, prioritizing incoming vessels by importance of assisting with recovery, and arranging on-site housing for

critical staff, emergency responders, and relief workers.

Trepte and Rice (2014) analyzed the entire port system within the United States in order to estimate the capacity

of the system to absorb the cargo from a disrupted port. This was done by identifying the commodity types and

total volume that major ports take in as a baseline and then measuring how much capacity is needed to absorb

surrounding ports’ volume by commodity type. The report emphasized the need for ports to cooperate with each

other to assist not only the recovery of disrupted ports, but also surrounding ports that would see a sudden

increase in demand.

Gordon et al. (2010) analyzed the economic impacts of the sharp decrease in petroleum production in the Gulf

Coast Region in the year after Hurricanes Katrina and Rita. The difference between the actual and predicted levels

of petroleum refining output was used as the direct impacts of 4.5 billion. Two versions of a 47-region and 47-

sector National Interstate Economic Output Model (NIEMO), including FlexNIEMO, which allows for interindustry

substitutions by modifying the input coefficients in the underlying I-O model, were used to estimate total

impacts. The total output impacts were estimated to be $8.3 billion using the standard NIEMO model, and fell to

$4.85 billion when FlexNIEMO was used. More than 92 percent of the impacts occurred in the Gulf Coast states,

and about 98 percent of the impacts were confined to the Petroleum Refining sector, which is surprising given the

many forward linkages from this sector.

Rose and Wei (2013) developed a refined I-O methodology to estimate the effects of a wide range of resilience

tactics on the economic consequences stemming from a 90-day disruption at the twin seaports of Beaumont and

Port Arthur, Texas. The resilience tactics examined are ship re-routing, export diversion, conservation, use of

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inventories, and production recapture. The authors found that when the potential of several major resilience

tactics is taken into account, the initial total economic loss of $13 billion can be reduced by over two-thirds.

Production recapture and ship re-routing were found to be the most effective resilience tactics.

Finally, the literature mentioned a number of different actions to enhance the management of ports during a

disruption, such as increased training, regularly planned exercises, alternatives for communication, and plans with

relevant stakeholders both within and outside the port. However, most of these tactics are not applicable to our

study, because they focus on supplier-side resilience, which would accelerate the restoration of capacity and the

port. We assume a fixed 90-day disruption and focus mostly on customer-side resilience tactics to cope with the

shortfall of petroleum imports and the stifling of petroleum exports.3

3. Background

3.1. The U.S. and Regional Petroleum Systems

To facilitate our interpretation of the economic consequences of the disruptions to major seaports, it is useful to

understand the unique overall structure of the U.S. petroleum system and the major trends which have shaped it

in recent years. The U.S. petroleum system includes fully-developed upstream (exploration / production),

midstream (transportation / storage), and downstream (refining, petrochemicals, marketing) segments. In total, it

is by far the world’s largest petroleum supply-chain.

Specific world-scale dimensions of today’s U.S. system are directly relevant to our analysis:

- Third largest crude oil producer (along with Saudi Arabia and Russia) - Largest refining system - Largest pipeline and storage system - Largest importer and exporter of crude oil and refined products.

A long history of oil development, private ownership of industry assets, and the world’s largest demand market

have shaped this system. In addition, two key periods impacted the structure of the industry we see today:

Production peaks and imports rise: Even as U.S. crude production reached an historical high in 1970 (9.64 million

barrels per day) (EIA, 2017a), the midstream and downstream components of the system were expanding import

capabilities to feed a growing U.S. demand for fuels and other refined products. This trend continued essentially

unabated until reaching an historical peak of almost 14 million barrels per day of imported crude and petroleum

products in 2005/2006 (EIA, 2017b). Of particular note was the expansion of the specialized capacity of the

PADD34 Gulf Coast regional refineries to process imported heavy and extra-heavy feed stock. These supplies were

3 The literature has, however, identified a number of resilience tactics that could lead to increased port competitiveness and could indirectly promote resilience on both the supplier-and customer-sides. For instance, Trepte and Rice (2014) found that increased port capacity for the entire US system would help absorb extra cargo following a possible disruption.

4 “PADD” is the abbreviation for “Petroleum Administration for Defense District”. The Petroleum Administration for Defense was established by Congress in the Defense Production Act of 1950. It divided the U.S. petroleum system into five districts for federal oil administration purposes, incorporating reporting information on production, transport, storage, and refining capabilities and activities, PADD3 representing the Gulf Coast.

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anticipated to increase over time with production growth from the world-scale heavy oil resources in Venezuela

and Canada. Ultimately, the flexibility created by these world-scale complex processing capabilities would create

new opportunities from an unexpected source.

New resources and abundant supply: The unexpected and unprecedented growth in production from U.S. shale

and tight oil resources has completely altered the crude oil supply balance for both U.S. and global markets in less

than a decade. Production is now approximately 4.9 million barrels per day, representing more than 50% of U.S.

total crude oil output, and has raised domestic production to near its 1970 all-time high (EIA, 2017c). Essentially all

this new production is high-value light crude, and approximately 75% is produced from resource trends feeding the

PADD3 pipeline, storage, and refining infrastructure. Two additional trends have also emerged from the new

production boom:

- The largest expansion in the crude pipelines and storage capacity in decades (more than 12,000 miles of crude pipelines added between 2010 and 2014 (a 20% increase); an increase of approximately 25% of PADD3 + Cushing, OK crude storage capacity.

- The rapid growth in U.S. exports of crude oil and refined products from 1.3 million barrels per day in 2006 to 5.2 million barrels per day in 2016 (3.9 million barrels per day from PADD3) and has reduced net U.S. crude and product imports from a 2005/2006 peak of 12.5 million barrels per day to less than 5 million barrels per day in 2016 (EIA, 2017b; EIA, 2017d).

Taken in combination, these trends have created a new set of dynamics in the PADD3 crude supply and refining

system. There are opportunities for variations in the crude supply balance (such as between abundant domestic

light production and tanker-supplied imported heavy crude) and further opportunities for selling refined products

to both domestic and export markets. These shifts can be expected to produce changes in the risk and resilience

profile for the PADD3 system and Gulf Coast supporting infrastructure and are incorporated into our port

disruption impact study.

3.2. The Role of the Port Arthur/Beaumont Petroleum Sectors in the Regional and National Economies

The Port Arthur/Beaumont Metropolitan Statistical Area includes three counties in southeastern Texas: Jefferson,

Orange, and Hardin. In 2015, the total gross output of all sectors in this Port Region was about $81 billion dollars.

The Petroleum Refining sector accounted for 33% of this total. However, 92.5% of the region’s refined petroleum

products are shipped to elsewhere in the U.S. or abroad, with the domestic shipment accounting for nearly 90% of

the total. Total demand for refined petroleum in the Port Region was $3.4 billion, with a split of 88%, 7%, 4%, and

1% for industrial, commercial, residential, and government customers. About 58% of the total regional demand for

refined petroleum is satisfied by regional suppliers (IMPLAN, 2016).

The total regional output of the Oil and Gas Extraction sector was $222 million in 2015 (IMPLAN, 2016). If we apply

the Texas average output split of oil and gas, total output of crude oil is about $158 million in the Port Region, of

which more than 40% was exported to elsewhere in the U.S. or abroad, with the domestic shipment accounting for

nearly 83% of the total. More than 99% of the crude oil demand of the Port Region was satisfied by imports, with

a total amount of $14.9 billion in 2015. Total demand for crude oil by the Port Region Petroleum Refineries

accounted for 93.4% of total regional demand, and Chemical Manufacturing for another 5.4% (IMPLAN, 2016).

In 2015, total output of crude oil in the Port Region accounted for 0.14% of the national total output; total output

of Refined Petroleum in the Port Region accounted for 6.7% of the national total (IMPLAN, 2016). Imports and

exports of crude oil through Port Arthur/Beaumont accounted for 8.2% and 9.1%, respectively, of the national

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total in 2016; while imports and exports of Refined Petroleum Products through the twin ports accounted for 2.0%

and 10.2%, respectively, of the national total (Census Bureau, 2017).

4. Modeling Approach

4.1. Basic Considerations

To perform our economic impact analyses, we employ the methodology of regional and national input-output (I-O)

analysis. I-O is a static, linear model of all purchases and sales between sectors of the economy, based on the

technological relationships of production (Rose and Miernyk, 1989; Miller and Blair, 2009). The basic version of

the I-O model is typically not considered a state-of-the-art tool because of its linearity and associated lack of input

and import substitution possibilities, as well as the absence of behavioral considerations and resource constraints

(Rose, 1995). However, input and import substitution are limited in short-run contexts such as a 90-day disruption.

Another standard criticism of I-O applies to its use to perform downstream supply-chain analyses using its “supply-

side” variant (Oosterhaven, 1988; Dietzenbacher, 1997). However, the authors have previously overcome this

criticism by pointing out this much of this criticism is not applicable in the case of a supply shortage, and have also

remedied a computational limitation of the approach (Rose and Wei, 2013).

Computable general equilibrium (CGE) modeling has become the state-of-the-art tool of economic consequence

analysis (Rose, 2015; Dixon et al., 2016; Rose et al., 2017). It is especially powerful when examining lengthy

disruptions that also have long-term effects, such as, a nuclear accident or a terrorist attack using a biological or

chemical weapon. The measurement of indirect effects is considered more accurate when using CGE models than

using I-O models, because of the inherent input and import substitution possibilities, two forms of resilience, and

the fact that price changes, which motivate resilience, often offset quantity changes. However, we contend that

such substitutions are unrealistic for short-duration disruptions and that the major determinant of the bottom-line

outcome is most dependent on the effectiveness of various other resilience tactics. Moreover, CGE is not superior

to I-O in incorporating these other resilience tactics.

In our study, we have gone to extensive lengths to measure resilience tactics more accurately than has previously

been accomplished, in part by using site-specific and region-specific data and subject matter expert judgement on

the following tactics, some of which are unique to port disruptions:

- inventories

- excess capacity

- ship re-routing

- export diversion

- relocation

- production recapture

4.2. Model Framework

Figure 1 displays the major linkages in tracing port disruptions from closure and damages beginning with direct

economic impacts through short-run and longer-run impacts across five analytical time stages of a Tsunami

scenario in the case study. The scenario begins with an event (it can be natural disasters, technical incidents, or

terrorist attacks) that causes the initial disruption of the port. This initial event first translates into a risk of a port

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Figure 1. Analytical Framework for Estimating Total Economic Impacts of a Port Disruption

Supply-side Resilience Options

Natural

Disaster;

Technical

Incident;

Terrorist

Attack

Longer-term

Facility

Downtime

at Individual

Terminals

after Port

Re-opens

Disruption of Imports and Domestic Commodity Flows

Shortage of Intermediate

Inputs to Producing Sectors

Shortage of Final Consumption and Investment Goods

Damage to Exported

Commodities

Macroeconomic

Impacts

Macro Impacts:

Port Region,

National

Reduction in Final Demand

Disruption of Port On-Site

Activities & Operations

Initial

Cause of Port

Disruption

Impacts at

Port

Microeconomic

Impacts

Long-run

Impacts:

Permanent Loss

of Port Business

Ship-rerouting, Port Excess Capacity,

Recapture Post-Reopening

Drawdown of Inventories, Input Conservation, Input Substitution, Input Importance,

Export Diversion for Import Use, Production Recapture

Diversion of Exports to Replace Imports,

Production Recapture

Commodity Substitution, Export Diversion for Import Use

Total

Impacts

Effective Management, Production Recapture

Closure of

Entire Port

Cargo

Damages

Disruption of Export Commodity Flows

Damage to Imported and Domestic Commodities

Limited resilience tactics at port-side

Customer-side Resilience Options

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shutdown, cargo damage, and isolated terminal downtime for extended periods of time. Various general supplier-

side resilience tactics that can facilitate more speedy recovery of the commodity flows at the ports are shown in

the blue rounded boxes. At the macroeconomic level, port disruptions lead to intermediate production inputs

(such as crude oil and refined petroleum products) and final goods (such as petroleum products) shortfalls, and

reduction in final demand associated with reduction in exports of such commodities. Relevant customer-side

resilience tactics that can be utilized by the general businesses as well as final users to reduce their potential losses

from disruptions of trade flows of these commodities are depicted in orange rounded boxes.

4.3. Formal Model

Both the demand-driven and supply-driven I-O models are well-known, and extensive details need not be

presented here (Rose and Miernyk, 1989; Miller and Blair, 2009). Following Rose and Wei (2013), we do, however,

provide a discussion of how we overcome some of the criticisms of the use of the supply-side (or Ghoshian) model.

There are three categories of such criticisms.

The first criticism pertains to the implication of applying the supply-side model directly. The supply-side model

interprets the basic flow I-O table in terms of marketing (or allocation) coefficients rather than production

coefficients. That is, they reflect a fixed, proportional pattern of supplies of each good.

In the ordinary application of the supply-side I-O model, both the direct and the successive rounds of indirect

effects are underestimated based on the fixed input coefficient Leontief production function. The model

proposed by Oosterhaven is a very complex calculation framework to rectify this problem. Rose and Wei (2013)

made sure that the impact of an import disruption on the direct import-using sectors is computed in accordance

with the Leontief production function requirements as emphasized by Oosterhaven. Specifically, again in this

study, we compute the direct output effects of the supply disruption of each major consuming sector of imported

crude oil or petroleum products. Given the fact that the Port Arthur/Beaumont Region is heavily involved in the

first stage of refining raw material imports but then ships the vast majority of the processed products elsewhere in

the U.S., our calculation of the first-round adjustment is sufficient to capture nearly all the impacts that are

underestimated in the ordinary supply-side model.

The second criticism relates to its economic rationale. Several authors characterize this model as being based on

the discredited Say’s Law that supply creates its own demand. This is surely the case in a positive stimulus

application. However, there is an important asymmetry in the case of a negative stimulus, such as a port

disruption. Here the application is in spirit much more like the conventional demand-side model, where a material

input shortage will reasonably lead to a chain of direct and indirect reductions of output—it has no relationship to

Say’s Law. In the supply-side case, these multiplier effects are downstream, however, rather than upstream.

The third criticism is that, when the supply-driven I-O model is applied, the technical coefficients of the demand-

driven model are altered (Chen and Rose, 1991; de Mesnard, 1997). Rose and Allison (1989) examined the

relationship between the demand-driven and supply-driven models in terms of this “joint stability” of their

respective coefficients for the case of a supply disruption simulation on the Washington State economy. They

found the variation between the technical and allocation coefficients to be very small because of an inherent

“dampening effect” in the application of the two versions of the I-O model.

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4.4. Adjustment of Supply-Side and Demand-Side Double-Counting

The first type of double-counting is illustrated in Figure 2. When we calculate the impact of import disruption of

crude oil, we first translate percentage crude oil impact shortage into percentage crude oil input reduction for all

the major consuming sectors. Petroleum Refineries is the major consuming sector of import crude oil. After

calculating the direct output losses for the Petroleum Refineries sector (and other major imported crude oil

consuming sectors), total impacts on both the supply-side and demand-side are calculated. There is a potential

double-counting pertaining to the demand-side impacts of export disruption of Refined Petroleum and the

demand-side impact of reduced output of Petroleum Refineries stemming from disrupted production input of

imported crude oil. In order to eliminate this double-counting, we only simulate the demand-side impacts of

export disruption of Refined Petroleum that is produced from regional produced crude oil.

When we compute the supply-side impacts of multiple import commodity disruptions, there may be double-

counting if one sector experiences input disruptions of more than one import commodity. Figure 3 presents an

example for Petrochemical Manufacturing sector. In Figure 3, imported crude oil and refined petroleum products

are both production inputs of the Petrochemical Manufacturing sector. The impacts to the Petrochemical

Manufacturing sector are not the sum of the impacts of the two disrupted inputs separately, since adding the

impacts of shortages of these two inputs due to the supply-chain interruption would amount to shutting down the

Petrochemical Manufacturing sector twice. Rather, the output impacts should be computed based on the more

constrained input between the two. Therefore, for each sector, we only count the input disruption that represents

the largest production constraint in percentage terms.

5. Resilience

5.1. Basic Considerations

There are many definitions of resilience, but Rose (2009) and others have found more commonalities than

differences. We offer the following general definitions of resilience, which capture the essence of the concept,

and then follow them up with definitions that capture the essence of economic considerations. Following Rose

(2004, 2017), we distinguish two major categories of resilience:

In general, Static Resilience refers to the ability of the system to maintain a high level of functioning when shocked

(Holling, 1973). Static Economic Resilience is the efficient use of remaining resources at a given point in time. It

refers to the core economic concept of coping with resource scarcity, which is exacerbated under disaster

conditions.

In general, Dynamic Resilience refers to the ability and speed of the system to recover (Pimm, 1984). Dynamic

Economic Resilience is the efficient use of resources over time for investment in repair and reconstruction.

Investment is a time-related phenomena—the act of setting aside resources that could potentially be used for

current consumption in order to re-establish productivity in the future. Static Economic Resilience does not

completely restore damaged capacity and is therefore not likely to lead to complete recovery.

Another important delineation in economic resilience, and resilience in general, is the distinction between

inherent and adaptive resilience (Tierney, 2007; Cutter, 2016). Inherent resilience refers to resilience capacity

already built into the system, such as the ability to utilize more than one fuel in an electricity generating unit, the

workings of the market system in offering price signals to identify scarcity and value, and established government

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Figure 2. Double-Counting Adjustment of Export Disruption of Refined Petroleum

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Figure 3. Double-Counting Adjustment of Crude Oil and Refined Petroleum

Import Disruptions for the Petrochemical Manufacturing Sector

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policy levers. Adaptive resilience is exemplified by undertaking conservation that was not previously thought

possible, changing technology, devising market mechanisms where they might not previously existed (e.g.,

reliability premiums for electricity or water delivery), or devising new government post-disaster assistance

programs. It is important to realize that a good amount of resilience is already embodied in the economy at

various levels (e.g., a firm’s ability to substitute inputs, market signals for reallocating resources), and that policies

should be designed to capitalize rather than obstruct or duplicate this capacity. At the same time, policy should

also be geared to rewarding both types of resilience

The next step is to translate these definitions into something we can measure. For static resilience, this can be

done in terms of the amount of business interruption, typically measured in terms of gross output, or (sales

revenue) or GDP) that is prevented by the implementation of a given resilience tactic or set of tactics comprising a

resilience strategy. For dynamic resilience, the metric would be the reduction in recovery time in addition to the

reduction in BI, though obviously the former influences the latter.. Several studies have measured resilience using

this and related metrics. Rose et al. (2009) found that potential BI losses were reduced by 72% by the rapid

relocation of businesses following the September 11, 2001 terrorist attacks on the World Trade Center.

5.2. Empirical Estimation of Resilience to Port Arthur/Beaumont Disruptions

1. Use of inventories. This refers to stockpiling critical inputs for the production of goods and services by

firms. In the port disruption context, this resilience tactic pertains to various types of stockpiles not only

for the ports themselves but also for the direct and indirect customers of ports down the supply chain.

Note that the cost of inventories is not the actual value of the goods themselves, but simply the carrying

costs. The goods themselves are simply replacement for the ordinary supplies.

2. Strategic Petroleum Reserve. This is a special case of inventories from the official U.S. Government

stockpile of oil reserves in locations nearby PA/PB and accessible by pipeline. The cost in this case is both

the carrying cost and political capital associated with using the stockpile for reasons other than pure

national defense.

3. Conservation. This pertains to finding ways to utilize less of disrupted imported goods in production

processes that are potentially disrupted by the curtailment of imports directly, as well as conserving

critical inputs whose production is curtailed indirectly. Examples include reducing nonessential usage,

improving productivity, and promoting recycling.

4. Ship re-routing. This strategy is usually applied for prolonged port disruptions. It pertains to both imports

and exports, and requires a sophisticated assessment of alternative locations, ship and cargo type, and

transportation costs. One needs also consider the extent to which some of the cargo can eventually be

re-routed to the disrupted port area through land surface or sub-surface (pipeline) transportation.

5. Export Diversion. This refers to sequestering goods that were intended for export to substitute for lack of

availability of imports. This option has the added benefit of opening up some shipping capacity at ports to

which the export diversion is being channeled. Care needs to be taken, however, to ensure that the

goods diverted from exports are legitimate replacements for those goods that are in shortfall.

13

6. Production Recapture (Rescheduling). This refers to making up lost production by working extra shifts or

over time after the port and disrupted businesses re-open once the supply of critical inputs resumes. This

is a viable option for short-run disruptions, where customers are less likely to have cancelled orders.5

5.3. Measurement of Resilience for the Case Study

Table 1 summarizes our estimates of major types of resilience tactic direct effectiveness based primarily on site-

specific industry and government data, as well as expert judgment. The reader is referred to Appendix B for a

detailed presentation and discussion of underlying data. Further discussion of the resilience estimates and their

influence on the economic impacts are discussed below in Section 7.

6. Simulation Results without Resilience

6.1. Basic Results at the Regional Level

6.1.1. Crude Oil

6.1.1.1. Import Disruption

The analysis begins with the calculation of the percentage reduction of crude oil input by each consuming sector

when the Port Arthur and Beaumont ports are disrupted for 90 days. Table C1 in Appendix C presents this

calculation linked to our model’s “Oil and Gas Extraction” sector.6 Each sector uses oil from a combination of

regional producers and importers. Note that Petroleum Refining consumes 93.5% of total crude oil inputs and

93.4% of crude oil imports into the region. Next we identify the major users of crude oil imports as those that

import more than $1 million of this commodity as an input. The percentage of input disruption to these sectors is

computed as the ratio of import disruption and total input used in each sector. The percentage input disruption of

Oil and Gas Extraction is then translated into direct output loss for these major crude oil consuming sectors based

on the (linear) Leontief Production Function (i.e., an X% reduction of a production input leads to an X% reduction

of the sectoral output).

The total (direct and indirect) impacts of the crude oil import disruption are displayed in the last column of Table

C2. The direct output losses for all the sectors are $6.6 billion, which results in total supply-side impacts of $6.7

billion and total demand-side impacts of $7.4 billion. The total impacts are the sum of supply-side and demand-

side impacts, net of the double-counted direct output losses. In addition, we cap the total losses of a sector as its

total production output in the 90-day period. The total output impacts of crude oil import disruption are thus

estimated to be $7.7 billion, which represents a reduction of 9.5 percent of economic activity in the Port Arthur

MSA. This implies an overall multiplier effect of 1.16 ($7.7B / $6.6B).

5 Note that we have omitted resilience tactics such as input and import substation, management effectiveness, and

technological change because they are not really applicable to our case study (see Rose, 2009 and Wei et al., 2016 for a discussion of these alternatives, as well as discussion of resilience tactics on the supplier-side). 6 IMPLAN combines Extraction of Natural Gas and Crude Petroleum as one aggregated sector. This does not pose a

problem for the analysis because our calculations involve changes, and only changes in oil extraction are relevant, and hence only they are included in the computations.

14

Table 1. Port Resilience Metrics

Resilience Tactic

Resilience Level

Explanation

Source

Inventories

59.5 million barrels of crude

Assumes excess crude oil stocks at tank farms and pipelines in PADD 3 Region in Year 2016 that exceed the 10-year average stock level can be readily accessed and utilized by PA/PB refineries

EIA (2017e)

Ship Re-routing

Up to 95% of the ships

Assumes up to 95% of the ships can be re-routed to other ports in the Gulf Coast Region. Further assumes none of the rerouted crude oil will be transported back to Port Arthur MSA via pipelines, but rather will be used in refineries close to the diverted ports

Communication with USCG

Strategic Petroleum Reserve

20.8 million barrels

Assumes same amount of SPR release as during Hurricane Katrina

DOE (2017)

Export Diversion

Import disruption reduced by 6% Export disruption reduced by 58%

Assumes export diversion can only take place within each crude type (light/medium/heavy)

U.S. Census Bureau (2017)

Relocation

31.8% of refining activities at PA/PB

Represents excess and absorption capacity of refineries in some other parts of PADD 3

EIA (2017f)

Production Recapture

15 to 49 %

Adjusts HAZUS recapture factors to account for actual, as opposed to potential, recapture capability 49% applicable to petroleum refining and other manufacturing sectors)

FEMA (2015)

15

6.1.1.2. Export Disruption

Based on the IMPLAN Port Arthur MSA I-O Table, total crude oil exports from the Port Region that are extracted

from within the Region to the Rest of U.S. and foreign countries are $97 million.7 This translates into a final

demand reduction of $24 million for the 90-day period disruption. The demand-side impacts of the export

disruption of crude oil to the Port Region are presented in Table C3. The total output impacts are $33.7 million,

which represents a reduction of 0.04% of total annual Port Region gross output.

6.1.2. Refined Petroleum


The calculation of the direct output losses for the major consuming sectors of refined petroleum products is

presented in Appendix Table C4. The total $242.4 million of disrupted refined petroleum imports (linked to our

model’s “Petroleum Refineries” sector) are distributed to each sector based on the IMPLAN Industry Import

Matrix. We then used the same $1 million import cutoff level to identify the major users of refined petroleum

product imports. The same approach as in the import disruption case of crude oil is used to calculate the direct

output loss for these major refined petroleum consuming sectors.

The total (direct and indirect) impacts of the refined petroleum products import disruption are computed in Table

C5. The direct output losses of for all these sectors are $4.2 billion, which results in total supply-side impacts of

$4.3 billion and total demand-side impacts of $4.8 billion. The total output impacts of crude oil import disruption

are estimated to be $4.9 billion (after netting out the double-counted direct output losses), which represents a

reduction of 6.1 percent of economic activity in the Port Arthur MSA. This implies an overall multiplier effect of

1.18 ($4.9B / $4.2B).


As discussed in Section 4.3, demand-side impacts of an export disruption of refined petroleum products partly

overlap with the demand-side impacts of reduced output of Petroleum Refineries stemming from the disruption of

crude oil imports. In order to eliminate the potential double-counting, in Appendix Table C6, we calculate the total

impacts of export disruption of refined petroleum products using regionally produced crude oil (which is only

about 1.4% of the total output of refined petroleum products in Port Arthur MSA). The double-counting adjusted

final demand reduction is $51.1 million for the 90-day period disruption. The total output impacts are $56.1

million, which represents a reduction of 0.07% of total annual Port Region gross output.

6.1.3. Total Regional Economic Impacts (Base Case)

Table 2 presents the summary total regional impact results for the 90-day disruption of trade flows of crude oil and

refined petroleum products through Port Arthur and Beaumont for the Base Case. For both the disruptions on the

import-side and export-side, stand-alone impacts for crude oil and refined petroleum disruptions are presented

first, followed by their simple summation. The total impacts after eliminating double-counting on the import-side

and export-side are presented next in the last row of the table. The direct output losses of a 90-day disruption of

7 Exports of crude oil through Port Arthur/Beaumont extracted in the Rest of the U.S. are simulated with the

National I-O Model below.

16

Table 2. Summary Results of Port Region Impacts for the Base Case (No Resilience)

Impact Category Direct Output

Change ($ millions)

Direct Output Change

(%)

Total Output Change

($ millions)

Total Output Change

(%)

Import Disruption

crude oil 6,586 8.17% 7,661 9.50%

refined petroleum 4,154 5.15% 4,920 6.10%

sub-total (simple sum) 10,741 13.32% 12,581 15.60%

sub-total (eliminating double-counting) 7,055 8.75% 8,350 10.35%

Export Disruption

crude oil 24 0.03% 34 0.04%



sub-total (eliminating double-counting) 74.7 0.09% 89.3 0.11%

Grand Total (simple sum) 14,458 17.93% 16,669 20.67%

Grand Total (eliminating double-counting) 7,130 8.84% 8,439 10.46%

crude oil and refined petroleum imports and exports through the twin ports are estimated to be $7.1 billion. The

total gross output losses are $8.4 billion, or a reduction of 10.47% of the baseline total annual gross output of the

Port Region.

6.2. Basic Results at the National Level

6.2.1. Crude Oil


The total impacts of the crude oil import disruption on the U.S. economy are presented in Table D1. The direct

output losses are $6.9 billion, which then ripples throughout the national economy to generate total supply-side

impacts of $23.3 billion and total demand-side impacts of $14.4 billion. The total impacts are estimated to be

$31.1 billion, which is a reduction of 0.095 percent of economic activity in the U.S. This implies an overall national

multiplier effect of 4.52 ($31.1B / $6.9B).


We calculate the total impacts of 90-day export disruptions for crude oil through Port Arthur/Beaumont using the

national I-O Table. The demand-side impacts of the export disruption of crude oil on the U.S. economy are

presented in Appendix Table D2. Total output impacts are $567.4 million, which represents a reduction of 0.002%

of total U.S. gross output in the 90-day period.

17



Appendix Table D3 presents the total impacts of the refined petroleum import disruption on the U.S. economy.

The direct output losses are $4.2 billion, which then ripples throughout the national economy to generate total

supply-side impacts of $13.4 billion and total demand-side impacts of $9.2 billion. The total impacts are estimated

to be $18.4 billion, which is a reduction of 0.056 percent of economic activity in the U.S. This implies an overall

national multiplier effect of 4.34 ($18.4B / $4.2B).


We next use the national I-O Table to calculate the total impacts of the 90-day export disruption of refined

petroleum that is produced both within the Port Region and in the Rest of the U.S. and is exported through Port

Arthur/Beaumont. The demand-side impacts of the export disruption of refined petroleum on the U.S. economy

are presented in Table D4. Total output impacts are $2.05 billion, which represents a reduction of 0.006% of total

U.S. gross output in the 90-day period.

6.2.3. Total National Economic Impacts (Base Case)

Table 3 presents the summary results of the national impacts for the 90-day disruption of petroleum trade flows

through Port Arthur and Beaumont for the Base Case. The direct output losses of a 90-day disruption of crude oil

and refined petroleum imports and exports through the twin ports are estimated to be $8.6 billion. The total gross

output losses are $36.5 billion, but this represents a reduction of only 0.11% of the baseline total annual gross

output of the U.S.

Table 3. Summary Results of National Impacts for the Base Case (No Resilience)

Impact Category Direct Output

Change ($ millions)

Direct Output Change

(%)

Total Output Change

($ millions)

Total Output Change

(%)

Import Disruption

crude oil 6,881 0.02% 31,093 0.09%




Export Disruption

crude oil 212 0.00% 567 0.00%




Grand Total (simple sum) 15,019 0.05% 57,950 0.18%

Grand Total (eliminating double-counting) 8,598 0.03% 36,454 0.11%

18

7. Simulation Results with Resilience

7.1. Resilience Analysis Results at the Regional Level

7.1.1. Crude Oil


Table 4 presents the total economic impacts on the Port Region for a 90-day crude oil import disruption at Ports of

Port Arthur and Beaumont for both the Base Case and various resilience cases presented in this Section.

a. Inventory use. We assume that the excess crude oil stocks at tank farms and pipelines in Gulf Coast (PADD

3) Region relative to the 10-year average level, which amounted to 59.5 million barrels, can readily be

available for the refineries in the PA/PB Region to use in the case of 90-day disruption. This helps reduce

the direct output loss of the Petroleum Refineries sector to only 1.4% during the disruption period. For all

the other major crude oil consuming sectors, we apply the percentage of on-site inventory that are

Materials and Supplies with respect to annual sale (the average percentage is 4.5% for manufacturing

sectors) obtained from BEA (2017) to adjust for the percentage of crude oil input disruptions. In sum, the

utilization of the crude oil stocks can reduce the direct output losses of the Port Region from $6.6 billion

to $3.3 billion. Total output losses are reduced to $3.9 billion, representing a 4.9% reduction of regional

total gross output.

b. Re-routing tankers carrying crude oil imports. For the 3-month period, we assume that 95% of the ships

carrying imports would be diverted to other ports, with the rest returning to their port of origin.

However, we also assume that none of the re-routed crude oil will be transported back through pipelines

to the Port Region. Rather the re-routed crude oil will be refined close to the diverted ports. Therefore,

re-routing does not mute the Port Region economic losses for the crude oil import disruption case. The

effects of this resilience tactic are simulated in the national impact analysis in the next section.

c. Release of crude oil supplies from the SPR. We assume that 20.8 million barrels of SPR (the same amount

of SPR drawdown in the aftermath of Hurricane Katrina) will be released to the Port Region to ensure the

minimum level operation of the key refineries in the region. The release of SPR can reduce the direct

output losses from $6.6 billion to $5.1 billion. The total output losses are reduced to $6.0 billion, or a

reduction of 7.5 percent of baseline total gross output.

d. Export diversion. To determine the amount of the exported crude oil that can be diverted for import use,

we further disaggregate the total imported and exported crude oil amounts into light/medium/heavy

crude based on API gravity. We assume that export diversion can only take place within each crude type.

Export diversion is estimated to reduce import disruption of crude oil by about 6%. Gross output impacts

are only slightly reduced to $7.2 billion, or a reduction of 8.9 percent of total gross output in the region.

e. Relocation of petroleum refining activities. Excess capacities in the refineries in some other parts of the

Gulf Coast (PADD 3) Region can be readily utilized to compensate for some of the refining activities

disrupted in the Port Arthur MSA. However, this resilience tactic has no effect on reducing the economic

impacts on the Port Region. Its effect is simulated in the national impact analysis.

f. Production recapture. This refers to the ability of businesses to make up (recapture) lost production at a

later date. The recapture factors range from 15 to 49 percent, with the latter level being applicable to

petroleum refining. Although refineries operate 24/7, there is excess capacity that would enable them to

make up the lost production, though not necessarily within just three months. Total net impacts for this

resilience adjustment result in total gross output losses of only $4.0 billion, or 4.9 percent of total

economic activity in the region.

19

Table 4. Regional Economic Impacts of a 90-Day Disruption of Crude Oil Supplies at Port Arthur-Beaumont (with Resilience) (in million 2016 dollars or otherwise specified)

Resilience Case

Direct

Output

Loss

(1)

Direct

Value-Added

Change

(2)

Final

Demand

Impacts

(3)

Total

Supply

Impacts

(4)

Total

Demand

Impacts

(5)

Total

Net S+D

Impacts

(6=4+5-1)

Total

Net S+D

Impacts

(%)

Resilience

Effectiveness

(%)

A. Crude Oil Disruption

(No Resilience) $6,586 $6,466 $6,467 $6,864 $7,388 $7,661 9.5% n.a.

B. Inventory $3,257 $3,176 $3,176 $3,416 $3,775 $3,934 4.9% 48.6

C. Re-routing Re-routing has no effect on the impacts of crude oil disruption in the Port Region since we assume the re-routed

crude oil will be used in refineries close to the alternative ports.

D. SPR $5,139 $5,036 $5,037 $5,366 $5,818 $6,044 7.5% 21.1

E. Export Diversion $6,170 $6,057 $6,058 $6,427 $6,916 $7,172 8.9% 6.4

F. Relocation Relocation has no effect on the impacts of crude oil disruption in the Port Region since this resilience tactic relates to

utilizing excess capacity in refineries in other regions of the Gulf Coast.

G. Production Rescheduling a a a a a $3,964 4.9% 48.3

H. All Resilience Adj b b b b b $1,699 2.1% 77.8

a

This resilience adjustment is applied to the Total Supply + Demand Impacts. b

Total is non-additive of B, C, D, E, F, G adjusted for overlaps.

20

g. Combined resilience adjustments. Note, however, that the individual tactic impacts are not additive

because of overlaps. Inventories and release of SPR are applied first, followed by export diversions.

Production rescheduling is applied directly to overall losses after all the other resilience adjustments have

taken place. The total prevention of losses from all resilience adjustments leads to output losses of $1.7

billion, or a reduction of only 2.1 percent of regional economic activity in the Port Arthur MSA. Thus, for

the case of an input disruption, resilience has the potential to reduce the economic disruption of the

curtailment of crude oil supplies to Port Arthur MSA by 78 percent. Among the five resilience tactics, uses

of crude oil stocks and inventories have the greatest potential to reduce losses, followed by production

recapture. The former is primarily due to the surge in crude oil stocks in the PADD 3 Region because of

the sharp increase of domestic production of crude oil from shale and tight oil resources.


The export diversion resilience tactic can reduce losses on both the import and export sides. When we take the

export diversion adjustment into account, total gross output impacts of an export disruption of crude oil decrease

from $33.7 million to $14.1 million, or from 0.042% to 0.017% of the baseline total annual gross output in the Port

Region.



Table 5 presents the total economic impacts on the Port Region for a 90-day refined petroleum import disruption

at Port Arthur and Beaumont for both the Base Case and various resilience cases.

a. Inventory use. We apply the percentage of on-site inventory that are Materials and Supplies with respect

to annual sales (an average of 4.5% for manufacturing sectors) obtained from BEA (2017) to adjust for the

percentage of refined petroleum input disruptions. This resilience tactic reduces the direct output losses

of the Port Region from $4.2 billion to $3.3 billion. The total output losses are reduced to $3.9 billion, or a

4.8% reduction of regional total gross output.

b. Re-routing of tankers carrying crude oil imports. We assume that 95% of the ships carrying imports would

be diverted to other ports. For the refined petroleum products, we assume that the re-routed refined

petroleum that was originally used in the Port Region will be transported back through pipelines to the

Region. Therefore, this resilience tactic can greatly reduce the direct output losses to $106 million, and

total output losses to $120 million, or less than only 0.1, percent of total gross output in the region.

c. Export diversion. We again considered the diversion of export refined petroleum products to importers of

the same commodities to reduce the potential losses on both the import and export sides. We use the

trade data at 6-digit HS codes (see Table A1 in Appendix A) to match the exports of refined petroleum

products with import commodities, so that we are diverting the same refined petroleum commodity type

whose importation is being stifled. Export diversion is estimated to reduce the direct output losses to

only $31 million, leading to gross output losses of $44 million, or a reduction of 0.05 percent of total gross

output in the region.

d. Production recapture. Total net impacts for this resilience adjustment result in total gross output losses

of $2.6 billion, or 3.2 percent of total economic activity in the region.

21

Table 5. Regional Economic Impacts of a 90-day Disruption of Refined Petroleum Products at Port Arthur-Beaumont (with Resilience) (in million 2016 dollars or otherwise specified)

Case

Direct

Output

Loss

(1)

Direct

Value-Added

Change

(2)

Final

Demand

Impacts

(3)

Total

Supply

Impacts

(4)

Total

Demand

Impacts

(5)

Total

Net S+D

Impacts

(6=4+5-1)

Total

Net S+D

Impacts

(%)

Resilience

Effectiveness

(%)

A. Refined Petroleum

Disruption (No Resilience) $4,154 $4,067 $4,068 $4,281 $4,794 $4,920 6.1% n.a.

B. Inventory $3,347 $3,271 $3,272 $3,421 $3,829 $3,903 4.8% 20.7

C. Re-routing $106 $102 $102 $107 $119 $120 0.1% 97.6

D. Export Diversion $31 $30 $30 $37 $37 $44 0.1% 99.1

E. Production Rescheduling a a a a a $2,553 3.2% 48.1

F. All Resilience Adjustments b b b b b $0.6 0.0007% 100.0

a


Total is non-additive of B, C, D, E adjusted for overlaps.

22

e. Combined resilience adjustments. If we combine all the four resilience adjustment together (eliminating

the overlaps), the total gross output losses of the region of the refined petroleum import disruption can

be greatly reduced to just $1.1 million. Among the four resilience measures, export diversion has the

greatest potential to reduce losses, followed by ship-rerouting. The former is primarily due to the recent

significant growth of U.S. exports of various types of refined petroleum produced from a combination of

domestic and imported crude oil. This greatly enhances the possibility of diverting refined petroleum

products that are originally targeted for the international market. The latter is driven by the assumption

that up to 95% of the vessels would be re-routed to alternative ports in the Gulf Coast Region for a 90-day

disruption at Port Arthur-Beaumont.


When we take the export diversion adjustment into account, total gross output impacts of the export disruption of

refined petroleum decrease from $56.1 million to just $0.3 million.

7.1.3. Total Regional Economic Impacts (Combining All Resilience Adjustments)

Table 6 presents the summary results for the 90-day disruption of trade flows of crude oil and refined petroleum

products through Port Arthur and Beaumont after the adjustments of all resilience tactics considered in this study.

The results are presented for total gross output impacts, in both level and percentage terms. For both the

disruptions on the import-side and export-side, stand-alone impacts for crude oil and refined petroleum

disruptions are first presented, followed by a simple summation of the stand-alone impacts. The total impacts

after eliminating double-counting of the import-side and export-side calculations are presented next. The total

output losses of a 90-day disruption of crude oil and refined petroleum imports and exports through the twin ports

are estimated to be $1.7 billion after resilience, or a reduction of 2.1% of the baseline total annual gross output of

the Port Region. All the resilience tactics considered in the analysis are estimated to have the potential to reduce

the total regional total output losses by about 80%.

Table 6. Summary Results of Port Regional Impacts for the Resilience Case

Impact Category Total Output

Change ($ millions)

Total Output Change

(%)

Import Disruption

crude oil 1,698.9 2.1%

refined petroleum 0.6 0.0%

sub-total (simple sum) 1,699.5 2.1%

sub-total (eliminating double-counting) 1,699.1 2.1%

Export Disruption

crude oil 14.1 0.0%


sub-total (simple sum) 37.6 0.0%

sub-total (eliminating double-counting) 14.4 0.0%

Grand Total (simple sum) 1,737 2.2%

Grand Total (eliminating double-counting) 1,714 2.1%

23

7.2. Resilience Analysis Results at the National Level

7.2.1. Crude Oil


Table D5 presents the total economic impacts on the U.S. for a 90-day crude oil import disruption at Port Arthur

and Beaumont for both the Base Case and various resilience cases.

a. Inventory use. Utilization of the crude oil stocks can reduce the direct output losses to $2.9 billion. The

total output losses are reduced to $12.1 billion, representing a 0.04% reduction of the annual national

total gross output.

b. Re-routing of tankers carrying crude oil imports. For the 90-day period, we assume that 95% of the ships

carrying imports can be diverted to other ports in Gulf Coast Region. We further assume that none of the

re-routed crude oil will be transported back through pipelines to the Port Region, but rather be refined in

refineries close to those diverted ports. In addition, we take into consideration the total excess capacity of

the refineries in some other parts of the PADD 3 Region (including Texas Gulf Coast, Louisiana Gulf Coast,

North Louisiana and Arkansas) that can absorb the disrupted petroleum refining activities in the Port

Arthur MSA. The combination of ship-rerouting and refining activity relocation can help reduce the direct

output losses to the U.S. to $2.7 billion. The total output losses are reduced to $13.1 billion, which

represent a reduction of only 0.04% of the total gross output.

c. Release of crude oil supplies from the Strategic Petroleum Reserve (SPR). We also analyze the effect of

SPR release of 20.8 million barrels to the refineries in the Port Region. The SPR release can reduce the

direct output losses to the U.S. to $5.4 billion. The total output losses are reduced to $23.8 billion, or a

reduction of 0.07 percent of the annual total gross output.

d. Export diversion. The export diversion helps reduce the direct output to $5.7 billion. Gross output

impacts are reduced to $25.6 billion, or a reduction of 0.08 percent of total annual gross output.

e. Production recapture. This resilience tactic can reduce the total gross output loss in the U.S. from $31.1

billion to $17.0 billion, or from 0.09% to 0.05% of the annual total gross output.

f. Combination of the five resilience tactics. Applying all of the five resilience adjustments (in the same

sequencing order as in the Port Region analysis) can reduce the output losses of crude oil import

disruption to only $261 million, or a reduction of only 0.001 percent of total national economic activity.

Therefore, resilience measures to import disruption have the potential to reduce the economic disruption

to the U.S. by over 99 percent. Among the five resilience measures, use of inventory has the greatest

potential to reduce the losses, followed by ship re-routing plus relocation of refining activities to

refineries close to the diverted ports. For the latter, although each refinery in other places in PADD 3 only

has limited excess capacity, all refineries combined have considerable potential to absorb the lost

productions of the refineries in Port Arthur-Beaumont Region.


When we take the export diversion adjustment into account, total gross output impacts of an export disruption of

crude oil decrease from $567.4 million to $237.5 million, or from 0.002% to 0.001% of the baseline total annual

gross output in the Port Region.

24



Table D6 presents the total national economic impacts for a 90-day disruption of refined petroleum products at

Port Arthur and Beaumont for both the Base Case and various resilience cases.

a. Inventory use. We again apply the percentage of on-site inventory that are Materials and Supplies with

respect to annual sales (an average of 4.5% for manufacturing sectors) obtained from BEA (2017) to adjust

for the percentage of refined petroleum input disruptions. This resilience tactic reduces the direct output

losses of the U.S. from $4.2 billion to $3.6 billion. The total output losses are reduced to $15.7 billion, or a

0.05% reduction of national total annual gross output.

b. Re-routing of tankers carrying crude oil imports. We assume that 95% of the ships carrying imports would

be diverted to other ports. Therefore, this resilience tactic can greatly reduce the total output losses to

$918 million, or less than only 0.003 percent of national total gross output.

c. Export diversion. Export diversion is estimated to reduce the direct output losses to only $39 million,

leading to gross output losses of $179 million at the national level.

d. Production recapture. Total net impacts for this resilience adjustment result in total gross output losses of

$10.0 billion, or 0.031 percent of national total annual gross output.

e. Combined resilience adjustments. If we combine all the four resilience adjustment together (eliminating

the overlaps), the total gross output losses of the U.S. of the refined petroleum import disruption at Port

Arthur-Beaumont can be greatly reduced to just $2.5 million. Among the four resilience measures, export

diversion has the greatest potential to reduce losses, followed by ship rerouting.


When we take the export diversion adjustment into account, total gross output impacts of the export disruption of

refined petroleum decrease to just $12.7 million.

7.2.3. Total National Economic Impacts (Combining All Resilience Adjustments)

Table 7 presents the national economic impact summary results for the 90-day disruption of petroleum trade flows

through Port Arthur and Beaumont after the adjustments for all resilience tactics considered in this study. The

total output losses of a 90-day disruption of crude oil and refined petroleum imports and exports through the twin

ports are estimated to be $512.7 million after resilience, or a reduction of only 0.002% of the baseline national

total annual gross output. The total national impacts with resilience are even lower than the impacts on the Port

Region. This is mainly because resilience tactics, such as ship-rerouting, divert refining activities from the port

region to other regions in the country, offset the negative impacts stemming from the Port Region. All the

resilience tactics considered in the analysis are estimated to have the potential to reduce the national total output

losses by about 98%.

25

Table 7. Summary Results of National Impacts for the Resilience Case

Impact Category Total Output

Change ($ millions)

Total Output Change

(%)

Import Disruption

crude oil 261.3 0.001%




Export Disruption

crude oil 237.5 0.001%




Grand Total (simple sum) 547.2 0.002%

Grand Total (eliminating double-counting) 512.7 0.002%

The estimated total output loss at the national level for the Base Case in our study is about 4 times larger than the

estimate in Gordon et al. (2010), which analyzed the economic impacts of production reduction in the Oil Refinery

Sector in the Gulf Coast Region in the year after Hurricanes Katrina and Rita. There are three major reasons for the

difference. First, Gordon et al. only focused on the total impact of production reduction in the Oil Refinery Sector.

In contrast, import disruptions of both crude oil and refined petroleum products analyzed in this study affect

productions of many sectors in the economy. Second, although Gordon et al. (2010) analyzed the impacts for the

entire year after Hurricanes Katrina and Rita, the estimated production reductions in the Oil Refinery Sector only

ranged between 0 and 14% during the year. Our analysis is a complete cessation of petroleum trade through

PA/PB over a 90-day period. Third, Gordon et al. only focused on the demand-side impacts, with an implicit

multiplier of 1.8 for the Oil Refinery Sector at the national level. Our analysis includes both demand-side and

supply-side impacts, with an implicit multiplier of 4.2 for the U.S. Our estimates of impacts when resilience is

included are much lower than those of all other comparable studies, which do not include resilience at all or do so

in a very limited way. For example, the only resilience adjustment conducted in Gordon et al.) was interindustry

substitution, which has the potential to reduce the total estimated losses by 41%. This compares to a nearly 98%

loss reduction potential at the national level we estimated for all the relevant resilience tactics combined.

The estimated regional economic impacts in the current study is about 65% of the estimate in Rose and Wei

(2013), who analyzed a disruption of trade of all commodities through Beaumont and Port Arthur. However, our

current study indicates a higher percentage loss reduction potential of about 80% at the regional level, largely due

to the use of different types of resilience and different estimates of their direct effectiveness on the basis of better

site-specific and region-specific data.

26

8. Conclusion

We refined and applied our methodology for estimating the total regional and national economic impacts of the

disruption of a major seaport. The application focuses on the petroleum sector supply-chain during a 90-day

closing of the ports at Beaumont and Port Arthur, Texas. The major emphasis of the analysis was the use of

primary data and expert judgments to estimate key parameters of various types of resilience tactics, i.e., actions

taken by shipping companies, petroleum refineries and various crude oil and refined petroleum product customers

to reduce their business interruption.

Our analysis indicates that resilience is especially high at the national level, such as to almost totally eliminate the

possibility of any significant disruption, by virtue of such tactics as rerouting tankers, using inventories at the

directly affected ports, and shifting refining activity to nearby locations. Resilience tactics varied significantly at

the regional level depending on their application to crude oil and refined petroleum product imports and exports.

Our analysis also indicates that some of the improvement in system robustness and resilience arises from two

major changes in the U.S. crude oil and refined product supply chain. The first is the unprecedented reversal of the

decline in U.S. oil and gas production driven from development of previously non-productive shale and tight oil

resources. These new resources have added more than 4 million barrels per day of onshore light crude oil supplies.

The scale of the impact is such that U.S. crude oil production volumes are now forecasted by the EIA to set an all-

time record of 10 million barrels per day in 2018 (surpassing the previous 1970 peak). To accommodate this

massive injection of new crude supplies, significant expansions have been required in the U.S. crude pipeline and

storage infrastructure. U.S. crude inventories are now at elevated levels over historical norms. The majority of

these expansions have taken place in areas directly impacting PADD3. The second important change in the U.S.

crude oil and refined product system is the continued and significant growth of U.S. exports of both high-value

light crude oil and of finished hydrocarbon products refined from a combination of domestic and imported crude

supplies. As with domestic supply growth, this export growth has also generated material investments in

expansion of product pipeline and storage facilities, the majority of which has occurred in PADD3 as well. Taken

together, these expansions provide added flexibility and capacity to address crude oil or product supply

disruptions.

Although the example presented in this paper does not appear to represent a major challenge to U.S. national

security, it is likely that a similar disruption and at a much larger port, such as that at Houston, Texas, would in fact

represent such a threat. Our methodology is intended to be able to estimate the total economic impacts of such a

case, as well as a more widespread disruption of several seaports by a major natural disaster or a series of terrorist

acts.

27

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30

Appendix A. Trade Data

Table A1 presents the import and export data for crude oil and petroleum products at the 6-digit HTS code level for

Ports of Port Arthur and Beaumont (Census Bureau, 2017).

Table A1. Imports and Exports of Crude Oil and Petroleum Products through Port Arthur and Beaumont, 2016 (in 2016$)

Commodity Import Export

Port Arthur Beaumont Total Port Arthur Beaumont Total

270900 Crude Oil From Petroleum And

Bituminous Minerals 7,360,416,169 1,020,426,259 8,380,842,428 67,441,110 790,775,278 858,216,388

271011 Light Oils& Prep (not Crude) From Petrol &Bitum

271012 Lt Oils, Preps Gt=70% Petroleum/bitumNt Biodiesel 29,945,294 29,945,294 727,243,561 1,386,543,009 2,113,786,570

271019 Petrol Oil Bitum Mineral (nt Crud) EtcNtBiodiesl 787,035,029 142,974,871 930,009,900 3,171,823,323 1,143,787,111 4,315,610,434

271020 Petroleum Oils And Preps Containing Biodiesel, Etc 430,977 430,977

271091 Waste Oil Cont.polychlorina.biphenyl (pcb)/pct/pbb

271099 Waste Oils, Nesoi 63,506 63,506

271111 Natural Gas, Liquefied

271112 Propane, Liquefied 158,438,030 836,110,368 994,548,398

271113 Butanes, Liquefied 20,056,646 197,426,375 217,483,021

271114 Ethylene, Propylene, Butylene,

Butadiene Liquefied 5,639,102 5,639,102

271119 Petroleum Gases Etc., Liquefied, Nesoi

271121 Natural Gas, Gaseous

271129 Petroleum Gases Etc., In Gaseous State, Nesoi

271210 Petroleum Jelly

271220 Paraffin Wax Less Than 0.75% Oil By Weight

271290 Other Mineral Waxes, Nesoi

271311 Petroleum Coke, Not Calcined 12,069,717 12,069,717 242,345,111 36,539,234 278,884,345

271312 Petroleum Coke, Calcined 5,215,590 5,215,590 87,364,795 87,364,795

271320 Petroleum Bitumen 1,956,041 1,956,041

271390 Residue Of Pet Oils Or Bitumin Oils

Nesoi

271410 Bituminous Or Oil Shale And Tar Sands

271490 Bitumen A Asphalt, Asphaltites And Asphaltic Rocks

271500 Bit Mix Fr Nat Asph, Nat Bit,petBit,min Tar Or Pt

Source: Census Bureau (2017).

31

Appendix B. Analysis of Individual Resilience Tactics

B-I. Inventories (crude & refinery products)

Table B1 presents the crude oil and petroleum products stocks at refineries in the Texas Gulf Coast Refining District

for each individual year in the last 10 years. The 5-year and 10-year average levels of stocks are calculated in the

right partition of the table. Table B2 presents the crude oil stocks at tank farms and pipelines in the Gulf Coast

(PADD 3) Region. We assume that the other refineries will not release their own inventories to PA/PB refineries in

case of port disruptions. However, for a 90-day pot disruption, it is reasonable to assume that the excess crude oil

stocks in Year 2016 (182,473 thousand barrels) that exceeds the 10-year average level (123,004.5 thousand

barrels) can be readily accessed and utilized by the PA/PB refineries.

Table B1. Refining District Texas Gulf Coast Crude Oil and Petroleum Products Stocks at Refineries

(thousand barrels)

Year Avg. Avg.

2007 83,519.5 2016 82,171.8

2008 83,650.5 5-year (2012-2016) 81,270.2

2009 81,309.3 10-year (2007-2016) 81,616.2

2010 81,144.9

2011 80,186.7

2012 80,981.8

2013 80,028.7

2014 80,242.6

2015 82,926.0

2016 82,171.8 Source: EIA (2017a).

Table B2. Gulf Coast (PADD 3) Crude Oil Stocks at Tank Farms and Pipelines (thousand barrels)

Year Avg. Avg.

2007 111,858.0 2016 182,473.0

2008 100,821.5 5 Year 133,940.9

2009 119,257.3 10 Year 123,004.5

2010 119,400.4

2011 109,002.8

2012 102,575.0

2013 106,727.0

2014 112,359.0

2015 165,570.7

2016 182,473.0 Source: EIA (2017a).

32

B-II. Strategic Petroleum Reserve Table B3 presents the historical releases of strategic petroleum reserve. In this study, we assume that in a case of

a 90-day disruption at PA/PB, the same amount of SPR withdrawal that was released during Hurricane Katrina can

be released to help maintain the minimum level of operations at the refineries in PA/PB.

Table B3. Historical SPR Releases

(in million barrels)

Year Event Amount

Exchange

2012 Hurricane Isaac 1

2008 Hurricane Gustav and Ike 5.389

2006 Ship Channel Closure 0.75

2006 Barge Accident 0.767

2004 Hurricane Ivan 5.4

2002 Hurricane Lili 0.394

2000 Heating Oil Shortage 32.836

2000 Ship Channel Closure 1

1999 Maya Exchange 11

1996 Pipeline Blockage 0.9

Drawdowns/Releases/Sales

Emergency Drawdowns

2005 Hurricane Katrina 20.8

Non-emergency releases

2011 IEA Coordinated Releases 30

1996 Weeks Island Sale 5.1

1996-97

Sales to Reduce Federal Budget Deficit (second and third

sales of Weeks Island crude oil) 23

Test Sales

2014 Test Sale 5

1990 Desert Shield Test Sale 4

1985 Test Sale 1

Source: DOE (2017).

33

B-III. Excess Capacity of other Refineries in PADD 3 Region

The excess capacity was calculated by subtracting the gross input of crude from 96.5% of the operable capacity.

Gross input and operable capacity for each region was obtained from EIA (2017b). Refineries could not operate at

100% of operable refining capacity for an extended period. Therefore, based on historical data for PADD 3 Region,

we assume 96.5% as the maximum utilization rate of the refineries in the calculations presented in Tables A4 to

A6.

In order to calculate the excess capacity of refineries in areas of the Texas Gulf Coast region other than Port

Arthur/Beaumont, we need to subtract the Port Arthur/Beaumont gross input and operable capacity from the total

input and capacity of the Texas Gulf Coast region. Gross input and operable capacity data are not available for the

specific Port Arthur/Beaumont region. However, EIA (2016) did provide operable capacity of individual refineries in

the two regions, and these were added up to a total operable capacity of 1,498,100 bbl/d . To determine gross

input for Port Arthur/ Beaumont, the Texas Gulf Coast utilization rate of 87.7% was multiplied by the total

operable capacity of the Port Arthur/ Beaumont refineries for an estimated gross input for this region of 1,313,834

bbl/d. The Port Arthur/Beaumont gross input and operable capacity was then subtracted from the total Texas Gulf

Coast gross input and operable capacity to determine the input and capacity of the remaining Texas Gulf Coast

refineries.

Table B4. Texas Gulf Coast* 2016 Excess Capacity (bbl/d)

Gross Input (GI) 2,902,166

Operable capacity (OC) at 96.5% 3,188,264

Operating Utilization rate ( GI/OC) (%) 91.0%

Total Excess Capacity (OC-GI) 286,097

Total Excess Capacity (%) 9.0%

Source: EIA (2017b).

*Not including PA/B

Table B5. Louisiana Gulf Coast 2016 Excess Capacity (bbl/d)


Operable capacity (OC) at 96.5% 3,566,640

Operating Utilization rate ( GI/OC) (%) 97%


Total Excess Capacity (%) 2.7% Source: EIA (2017b).

Table B6. North Louisiana and Arkansas Excess Capacity 2016 (bbl/d)

Gross Input (GI) 199,000

Operable capacity (OC) at96.5% 234,495



Total Excess Capacity (%) 15.1% Source: EIA (2017b).

34

B-IV. Export Diversion (crude & refinery products)

Table A1 presents that total crude oil imports and exports through the twin ports. To further estimate the

potential of export diversion, we obtained information on the light/medium/heavy breakout for imported crude.

Table B7 presents the percentages of 2016 U.S. total imported crude oil by API gravity. We further aggregate the

percentages into three broad API gravity levels: Light (API>=35˚), Medium (25˚<API<35˚), and Heavy (API <= 25˚).8

Table B8 presents the split of 2016 imported crude by API gravity for the PADD3 (Gulf Coast) processing area. In

2016, the split is roughly 3:32:65 for light, medium, and heavy crude. Compared to the national average level,

PADD3 imported about 9% more heavy crude and 8% less light crude. On the export side, currently EIA does not

provide export crude data by API gravity. So we gather data on US oil production by API gravity (presented in

Table B9). According to the 2016 trade data, total imported and exported crude through PA/PB are $8.38 and

$0.85 billion, respectively. In Table B10, we apply the light/medium/heavy crude percentages of the imported

crude for PADD3 (calculated in Table B8) and the light/medium/heavy crude percentages of the U.S. produced

crude (calculated in Table B9) to the import and export data, respectively. In the last column of Table B10, we

calculate the export diversion potentials after taking into consideration different types of crude. The formula used

is as follow:

Export Diversion = min (exported, imported) (B1)

Table B7. Percentages of U.S. Total Imported Crude Oil by API Gravity, 2016

API Gravity Percentage

20.0˚ or Less 16.82

20.1˚ to 25.0˚ 39.17

25.1˚ to 30.0˚ 8.15

30.1˚ to 35.0˚ 24.67

35.1˚ to 40.0˚ 8.51

40.1˚ to 45.0˚ 1.45

45.1˚ or Greater 1.23

Light (API>=35˚) 11.19

Medium (25˚<API<35˚) 32.82

Heavy (API <= 25˚) 55.99

Source: EIA (2017c).

8 The classification of crudes in Table 1 is used in the EIA Crude Oil Import Tracking Tool. A more widely used

classification is as follows: Light API > 31.1; Med 23.3 to 31.1; Heavy API < 23.3; X-Heavy API < 10.0.

35

Table B8. Crude Oil Imports by API Gravity for PADD3, 2016

Type Thousand Barrels Percent

Light 36,784 3.0%

Medium 391,392 31.9%

Heavy 800,121 65.1%


Table B9. U.S Crude Oil Production by API Gravity, 2016

API Gravity Thousand

Barrels Percent

<=20.0 4,839 4.8%

20.1-25.0 2,077 2.1%

25.1-30.0 8,476 8.4%

30.1-35.0 14,065 14.0%

35.1-40.0 18,726 18.6%

40.1-45.0 30,182 30.0%

45.1-50.0 11,366 11.3%

50.1-55.0 4,908 4.9%

>55.0 5,453 5.4%

Unknown 530 0.5%

Total 100,620 100.0%

Light (API>=35˚) 70,635 70.6%

Medium (25˚<API<35˚) 22,541 22.5%

Heavy (API <= 25˚) 6,916 6.9%


Table B10. Import and Export of Crude Oil through Port Arthur and Beaumont by API Gravity, 2016 (in 2016$)

Type Import Export

Amount of Export

Diversion

Light (API>=35˚) $0.25 $0.61 $0.25

Medium (25˚<API<35˚) $2.67 $0.19 $0.19

Heavy (API <= 25˚) $5.46 $0.06 $0.06

Total $8.38 $0.86 $0.50

The potential of export diversion of petroleum products is analyzed using equation B1 based on the trade data presented in Table A1.

36

B-V. Import Diversion (shifting crude intended for chemical plants)

Import diversion refers to diverting imported crude oil originally purchased as production inputs by other economic sectors to petroleum refineries in case of emergency crude oil import disruption. Table B11 presents the top 10 crude oil consuming sectors in the Port MSA Region. However, we decided not to pursue this resilience tactic because, when the port is disrupted, the imported crude to all the users is disrupted. Therefore, no imported crude can be shifted from chemical plants to refineries.

Table B11. Top 10 Crude Oil Using Sectors in the Port MSA Region

(in million 2016$)

Industry Code

Description Crude Oil

Input (locally produced)

Crude Oil Input

(imported)

Total Crude Oil Input (imported + locally produced)

156 Petroleum refineries $118.7 $14,221.6 $14,340.3

161 Petrochemical manufacturing $6.3 $748.3 $754.7

42 Electric power generation - Fossil fuel $0.5 $53.8 $54.2

165 Other basic organic chemical manufacturing $0.4 $44.8 $45.2

50 Natural gas distribution $0.4 $44.8 $45.2

413 Pipeline transportation $0.3 $38.5 $38.8

20 Extraction of natural gas and crude petroleum $0.2 $22.2 $22.3

160 All other petroleum and coal products manufacturing $0.2 $20.2

$20.3

164 Other basic inorganic chemical manufacturing $0.1 $9.3 $9.4

526 Other local government enterprises $0.1 $8.5 $8.6

Source: IMPLAN (2017)

37

B-VI. Relocation (Regional Refinery Capacity)

PADD 3 Absorption Capacity

Other refineries along the Gulf Coast can reasonably be assumed to access diverted “over the water” crude

supplies; However, inland PADD3 refineries will likely being using different crude slates and supply chains, and thus

would be difficult to utilize the diverted crude from PA/PB. We assume that the refineries in the following three

sub-regions of PADD 3 can absorb some of the refining activities of the Port Arthur/Beaumont refineries when

there is disruption at PA/PB: Texas Gulf Coast, Louisiana Gulf Coast, and North Louisiana/Arkansas.

Absorption capacity as a percent was calculated by dividing the excess capacity of each of the three PADD 3 sub-

regions calculated in section BII by the 2016 estimated Port Author and Beaumont gross crude input (1,313,834

bbl/d). Remaining Texas Gulf Coast refineries had a calculated excess capacity of 286,097 bbl/d, with the capacity

to absorb 21.8% of the Port Arthur/ Beaumont gross input. Louisiana Gulf Coast refineries had a calculated excess

capacity of 96,640 bbl/d, with the capacity to absorb 7.4% of the Port Arthur/ Beaumont gross input. North

Louisiana and Arkansas refineries had a calculated excess capacity of 35,495 bbl/d, with the capacity to absorb

2.7% of the Port Arthur/ Beaumont gross input. These three PADD 3 sub-regions have a combined total excess

capacity of 418,232 bbl/d, having the total capacity to absorb 31.8% of the Port Arthur/ Beaumont gross input.

Table B12. PADD 3 Excess and Absorption Capacities (Assuming Refineries work at 96.5%)

Texas Gulf Coast

Texas Gulf Coast - Port Arthur/Beaumont Calculations (bbl/d)

TX GC Gross Input 4,216,000

PA/B Gross Input 1,313,834

TX GC - PA/B GI 2,902,166

TX GC Operable Capacity 4,802,000

PA/B Operable Capacity 1,498,100

TX GC - PA/B Capacity 3,303,900 Source: EIA (2017b) and EIA (2016)

Texas Gulf Coast* 2016 Excess Capacity (bbl/d)


Operable capacity (OC) @ 96.5% 3,188,264

Operating Utilization rate ( GI/OC) (%) 91.0%


Total Excess Capacity (%) 9.0% Source: EIA (2017b)

TX Gulf Coast* Absorption Capacity (2016)

Estimated Beaumont/ Port Arthur Gross Input (bbl/d) 1,313,834

TX Gulf Coast Excess Capacity (bbl/d) 286,097

TX Gulf Coast Absorption Capacity 21.8% Source: EIA (2017b)

*Not including PA/B

38

Louisiana Gulf Coast

Louisiana Gulf Coast 2016 Excess Capacity (bbl/d)


Operable capacity (OC) @ 96.5% 3,566,640




LA Gulf Coast Absorption Capacity (2016)


LA Gulf Coast Excess Capacity (bbl/d) 96,640

LA Gulf Coast Absorption Capacity 7.4% Source: EIA (2017b)

North Louisiana and Arkansas

North Louisiana and Arkansas Excess Capacity 2016 (bbl/d)

Gross Input (GI) 199,000

Operable capacity (OC) @96.5% 234,495




North Louisiana and Arkansas Absorption Capacity (2016)


NLA & AR Operating Excess (bbl/d) 35,495

NLA & AR Gulf Coast Absorption Capacity* 2.7% Source: EIA (2017b).

Table B13. Excess and Absorption Capacity of Select PADD 3 Refineries Working at 96.5% of Capacity

PADD 3 Region Excess Capacity (bbl/d) Absorption Capacity of

PA/B Gross Input**

Texas Gulf Coast* 286,097 21.8%

Louisiana Gulf Coast 96,640 7.4%

North Louisiana and Arkansas 35,495 2.7%

Total 418,232 31.8%

* Not including PA/B **Estimated PA/B Gross Input =1,313,834 bbl/d

39

B-VII. Production Recapture (Recapture Factors – 90 days or less)

Production recapture refers to the ability to make up lost production by working overtime or extra shifts after the

ports re-open and the supply-chain resumes, in order to recoup losses. Table B14 presents the production

recapture factors (the percentage of output losses that can be recouped by production rescheduling by HAZUS

occupancy class). Since the HAZUS recapture factors pertain to the maximum potential recapture capability, in the

analysis we cut these percentages in half in order to account for obstacles to implementation.

Table B14. Production Recapture Factors

HAZUS Occupancy Class HAZUS Recapture Factor

RES4 Temporary Lodging 0.60

RES5 Institutional Dormitory 0.60

RES6 Nursing Home 0.60

COM1 Retail Trade 0.87

COM2 Wholesale Trade 0.87

COM3 Personal and Repair Services 0.51

COM4 Professional/Technical Services 0.90

COM5 Banks 0.90

COM6 Hospital 0.60

COM7 Medical Office/Clinic 0.60

COM8 Entertainment & Recreation 0.60

COM9 Theaters 0.60

COM10 Parking 0.60

IND1 Heavy 0.98

IND2 Light 0.98

IND3 Food/Drugs/Chemicals 0.98

IND4 Metals/Minerals Processing 0.98

IND5 High Technology 0.98

IND6 Construction 0.95

AGR1 Agriculture 0.75

REL1 Church/Non-Profit 0.60

GOV1 General Services 0.80

GOV2 Emergency Response 0.00

EDU1 Grade Schools 0.60

EDU2 Colleges/Universities 0.60 Source: FEMA (2015).

40

B-VIII. Other Considerations

A. PA/PB Refinery Capacity (including a description of crude oil utilization by type)

Port Arthur Refineries Motiva Motiva Enterprises LLC 2555 Savannah Avenue Port Arthur, TX 77640 This refinery is operated by Motiva and owned by both Shell and Saudi Aramco (50/50). According to Shell the refinery can handle most grades of crude oil, including the lowest quality crude (Motiva, 2017). The facility has the highest crude refining capacity in the United States with a capacity of approximately 600,000 barrels per day (EIA, 2016). The refinery produces gasoline, diesel, kerosene and jet fuel delivered to the East Coast, Midwest and Central and Southeast Texas (Motiva, 2017).

Total SA Highway 366 & 32nd St. Port Arthur, TX 77642 This Refinery is owned and operated by Total SA. The facility can refine both heavy (hard to process) crude oil and lighter (domestic) crude oil (Total SA, 2017). The capacity of the refinery is approximately 225,000 barrels per day (EIA, 2016). The facility also operates a 1 million metric ton/year steam cracker in a joint-venture with BASF, 80% of the steam cracker feedstock needs are met with ethane, butane and propane from shale gas. Other petroleum products that the facility produces include transportation fuels, aromatics and liquefied petroleum gas (Total SA, 2017).

Valero 1801 South Gulfway Drive Port Arthur, TX 77640 The Valero Port Arthur refinery facility can process 100% heavy sour crude oil (Valero, 2017). The company did not go into detail on the other types of crude the facility can handle. The facility also produces conventional, premium and reformulated gasoline before oxygenate blending, as well as diesel, jet fuel, petrochemicals, petroleum coke and sulfur (Valero, 2017). The refinery capacity of the facility is approximately 335,000 barrels per day (EIA, 2016).

Beaumont Refineries

Exxon Mobil

Sycamore St, Beaumont, TX 77701

Exxon owns and operates this facility with a capacity of 334,600 barrels per day as of Jan 2016 (EIA, 2016) with a possible expansion of 40,00 bbl/day in 2016 or 2017 (ExxonMobil, 2017). The facility produces gasoline, jet fuel, diesel, polyethylene, benzene, lubricants, greases, wax stock, Mobil1.It is part of a large Exxon complex that includes chemical, lube and polyethylene plants. The type of crude oil that this facility processes was unable to be found at the current time.

41

Table B15. Port Arthur/Port Beaumont Refinery Products and Capacity

Sources: EIA(2016), Motiva Enterprises LLC (2017), Total SA (2017), Valero (2017), ExxonMobil (2017).

B. Cushing, OK Oil Storage Area

Cushing Oklahoma is a major crude oil storage area and pipeline hub. It receives crude oil from various

drilling regions in the US and Canada via 13 pipelines and then stores or transports the crude to refineries

throughout the US (Bloomberg, 2012) Storage facilities are operated by nine different firms and have an

approximate combined storage capacity of 63.8 Million barrels of crude oil.

Two of the fourteen pipelines that deliver crude from Cushing can supply the Beaumont/Port Arthur area. The first

is the 487 mile Gulf coast portion of the Keystone pipeline, which has the capacity to deliver 830,000 bbl/day

directly to the Beaumont/Port Arthur region via a terminal in Nederland, Texas (TransCanada Corp). The second, is

the Seaway pipeline system which has a capacity of 850,000 bbl/day and delivers crude directly to the Houston

area and then to the Beaumont/Port Arthur region via two short connecting pipelines (Seaway Pipeline Project).

Location Refinery Crude Oil Processing

Ability Products

Capacity bbl/day

Port Arthur

Motiva

Can handle most grades of crude oil, including the lowest quality crude

Refinery produces and transports gasoline, diesel, kerosene and jet fuel

603,000

Total SA

Can refine both heavy (hard to process) crude oil and lighter (domestic) crude oil.

Facility operates a 1 million metric ton/year steam cracker in a joint-venture with BASF, producing 80% of ethane, butane and propane from shale gas. Also produces transportation fuels, aromatics and liquefied petroleum gas.

225,500

Valero (Premcor Refining Group)

Can process 100% heavy sour crude oil according to Valero.

Production includes conventional, premium and reformulated gasoline before oxygenate blending, as well as diesel, jet fuel, petrochemicals, petroleum coke and sulfur.

335,000

Beaumont Exxon Mobil No Data Found

Facility produces gasoline, jet fuel, diesel, polyethylene, benzene, lubricants, greases, wax sock, Mobil1 Itis part of a large Exxon complex that includes a chemical, lube and polyethylene plants

334,600

Total 1,498,100

42

Table B16. Cushing, OK: Storage Facilities and Capacity

Storage Facility Storage Capacity (MMbbl)

Rose Rock Midstream, LP (Cushing) 7.6

Plains All American Pipeline, LP (Cushing) 3.8

Blueknight Energy Partners, LP (Cushing) 7.4

Enbridge Energy Partners, LP (Cushing) 20.1

Enterprise Products Operating, LLC (East & West Cushing) 3.5

NGL Energy Partners, LP (Cushing) 7.6

Magellan Midstream Partners, LP (Cushing) 12

Kinder Morgan Terminals, Inc. (Cushing) 1.8

TransCanada Corp. (Cushing) 6.2- 20*

Total 63.8

Source: Tank Terminals.com (2017)

* Not included in the total.

Sources: Seaway Pipeline Project (2017), TransCanada Corporation (2017)

Pipelines Connecting Cushing to Beaumont/ Port Arthur

Pipeline Capacity (bbl/d) Connection to Beaumont/ Port Arthur

Keystone (Gulf Coast Project) 830,000 Directly to Beaumont/Port Arthur area via Nederland,

Texas

Seaway 850,000 Via ECHO to Beaumont/Port Arthur Lateral connector

43

Pipelines

Two oil pipelines service Port Arthur and Beaumont, the Keystone (Gulf Coast Project) and the Seaway via the

Houston connection. The Keystone pipeline is a direct line from Cushing, OK with the capacity to deliver 830,000

bbl/day directly to the Beaumont/Port Arthur region via a terminal in Nederland, Texas. The second is a

connecting line of the Seaway pipeline, which connects the Enterprise Crude Houston (ECHO) oil terminal; with al

has a storage capacity of 6.4 million barrels directly to Port Arthur/Beaumont.

Sources: Seaway pipeline Project (2017)

44

Appendix C. Regional Impact Analysis Results

Table C1. Regional Direct Output Impacts Due to a 90-day Import Disruption of Crude Oil

at Port Arthur and Beaumont

(in million 2016$ or otherwise specified)

Sector

Imported Crude Oil

Disruption

Input of Oil and Gas

Extraction (Imported)

Input of Oil and Gas

Extraction (Regionally Produced )

Total Oil and Gas

Input

Percent Oil and

Gas Extraction

Input Reduction

Total Sectoral Output

Direct Output

Reduction

01. Agriculture, Forestry, Fishing 0.0 0.0 0.0 0.0 0.0% 139.8 0.0

02. Oil & Gas Extraction 3.0 21.7 0.2 21.8 13.8% 222.7 30.7

03. Other Mining 0.0 0.3 0.0 0.3 0.0% 208.0 0.0

04. Electric Power Generation from Fossil Fuels 7.3 52.6 0.4 53.0 13.8% 253.7 34.9

05. Other Electric Power Generation 0.0 0.0 0.0 0.0 0.0% 899.4 0.0

06. Natural Gas Distribution 6.1 43.8 0.4 44.2 13.8% 126.7 17.4

07. Water, Sewage and Other Systems 0.0 0.0 0.0 0.0 0.0% 43.9 0.0

08. Construction of New Power and Manufacturing Structures 0.0 0.0 0.0 0.0 0.0% 227.7 0.0

09. Construction of New Highways and Streets 0.0 0.0 0.0 0.0 0.0% 242.3 0.0

10. Construction of Other Non-Residential Structures 0.0 0.0 0.0 0.0 0.0% 1,385.3 0.0

11. Construction of Residential Structures 0.0 0.0 0.0 0.0 0.0% 1,083.3 0.0

12. Maintenance and Repair Construction 0.0 0.0 0.0 0.0 0.0% 1,006.1 0.0

13. Food, Beverage & Tobacco Products 0.0 0.0 0.0 0.0 0.0% 375.5 0.0

14. Textile, Leather & Allied Products 0.0 0.0 0.0 0.0 0.0% 22.6 0.0

15. Wood Products 0.0 0.0 0.0 0.0 0.0% 105.8 0.0

16. Paper and Printing 0.0 0.0 0.0 0.0 0.0% 427.6 0.0

17. Petroleum Refineries 1,931.1 13,903.4 116.2 14,019.5 13.8% 26,814.8 3,693.5

18. Other Petroleum & Coal Products 1.0 7.5 0.1 7.5 13.8% 179.5 24.7

19. Petrochemical Manufacturing 101.6 731.6 6.2 737.8 13.8% 16,345.3 2,251.1

20. Industrial Gas Manufacturing 1.0 7.1 0.1 7.2 0.0% 710.7 0.0

21. Synthetic Dye and Pigment Manufacturing 0.1 0.7 0.0 0.7 0.0% 164.0 0.0

22. Other Basic Inorganic Chemical Mfg 1.3 9.1 0.1 9.2 13.8% 535.2 73.6

23. Other Basic Organic Chemical Mfg 6.1 43.8 0.4 44.2 13.8% 3,257.1 448.3

24. Plastics Material and Resin Manufacturing 0.6 4.4 0.1 4.5 0.0% 2,072.1 0.0

25. Synthetic Rubber Manufacturing 0.3 1.9 0.0 2.0 0.0% 750.5 0.0

26. Other Chemical Manufacturing 0.1 0.6 0.0 0.6 0.0% 762.5 0.0

27. Plastics & Rubber Products 0.0 0.0 0.0 0.0 0.0% 142.2 0.0

28. Nonmetal Mineral Products 0.0 0.0 0.0 0.0 0.0% 70.9 0.0

29. Primary Metal Manufacturing 0.0 0.1 0.0 0.1 0.0% 561.1 0.0

30. Fabricated Metal Products 0.0 0.0 0.0 0.0 0.0% 1,086.4 0.0

31. Machinery Manufacturing 0.0 0.0 0.0 0.0 0.0% 1,397.1 0.0

32. Computer & Other Electronic Product 0.0 0.0 0.0 0.0 0.0% 227.6 0.0

45

33. Electrical Equipment & Appliances 0.0 0.0 0.0 0.0 0.0% 50.2 0.0

34. Transportation Equipment 0.0 0.0 0.0 0.0 0.0% 334.7 0.0

35. Furniture & Related Product 0.0 0.0 0.0 0.0 0.0% 13.8 0.0

36. Miscellaneous Manufacturing 0.0 0.0 0.0 0.0 0.0% 24.7 0.0

37. Wholesale Trade 0.0 0.1 0.0 0.1 0.0% 1,680.8 0.0

38. Retail Trade 0.0 0.2 0.0 0.2 0.0% 1,814.8 0.0

39. Air Transportation 0.0 0.0 0.0 0.0 0.0% 35.9 0.0

40. Rail Transportation 0.0 0.0 0.0 0.0 0.0% 231.7 0.0

41. Water Transportation 0.0 0.0 0.0 0.0 0.0% 67.3 0.0

42. Truck Transportation 0.0 0.0 0.0 0.0 0.0% 270.8 0.0

43. Transit & Ground Passengers 0.0 0.0 0.0 0.0 0.0% 50.5 0.0

44. Pipeline Transportation 5.2 37.6 0.3 37.9 13.8% 86.8 11.9

45. Sightseeing Transportation 0.0 0.0 0.0 0.0 0.0% 332.2 0.0

46. Couriers & Messengers 0.0 0.0 0.0 0.0 0.0% 59.2 0.0

47. Warehousing & Storage 0.0 0.0 0.0 0.0 0.0% 83.1 0.0

48. Information 0.0 0.0 0.0 0.0 0.0% 722.0 0.0

49. Finance and Insurance 0.0 0.0 0.0 0.0 0.0% 1,410.2 0.0

50. Real Estate 0.0 0.0 0.0 0.0 0.0% 722.8 0.0

51. Owner-occupied Dwellings 0.0 0.0 0.0 0.0 0.0% 1,498.6 0.0

52. Rental and Leasing 0.0 0.1 0.0 0.1 0.0% 289.2 0.0

53. Professional, Scientific Services, Management & Admin Services 0.0 0.3 0.0 0.3 0.0% 2,703.5 0.0

54. Educational Services 0.0 0.0 0.0 0.0 0.0% 74.5 0.0

55. Health Care and Social Assistance 0.1 0.4 0.0 0.4 0.0% 2,078.4 0.0

56. Arts, Entertainment, and Recreation 0.0 0.0 0.0 0.0 0.0% 123.1 0.0

57. Accommodation and Food Services 0.1 0.4 0.0 0.4 0.0% 1,051.0 0.0

58. Other Services 0.0 0.1 0.0 0.1 0.0% 909.6 0.0

59. Government & Non-NAICs 0.8 5.9 0.1 5.9 0.0% 2,079.1 0.0

Total 2,066.5 14,873.8 124.6 14,998.4 13.8% 80,645.9 6,586.3

46

Table C2. Base Case Total Regional Economic Impacts of a 90-Day Import Disruption of Crude Oil



I-O Model Sector Direct

Output Loss

Supply-

Side bjj

Direct

Value-

Added Change

Total Supply-

Side Output

Change

Demand-

Side bjj

Final

Demand Change

Total Demand-

Side Output

Change

Total

Import Disruption

Impacts (net

double-counting)

Capped

Total

Import Disruption

Impact

Output change

(annual basis)

(%)

1 2 3 (=1/2) 4 5 6 (=1/5) 7 8 (=4+7-1)

01. Agriculture, Forestry, Fishing 0.0 1.030 0.0 0.5 1.029 0.0 3.3 3.8 3.8 2.7%

02. Oil & Gas Extraction 30.7 1.001 30.6 31.3 1.001 30.6 48.1 48.8 48.8 21.9%

03. Other Mining 0.0 1.030 0.0 1.0 1.030 0.0 8.7 9.7 9.7 4.6%

04. Electric Power Generation from Fossil Fuels 34.9 1.002 34.9 35.8 1.002 34.9 44.8 45.7 45.7 18.0%

05. Other Electric Power Generation 0.0 1.450 0.0 18.1 1.448 0.0 35.3 53.4 53.4 5.9%

06. Natural Gas Distribution 17.4 1.000 17.4 17.9 1.000 17.4 32.1 32.6 31.2 24.7%

07. Water, Sewage and Other Systems 0.0 1.005 0.0 0.3 1.005 0.0 2.2 2.5 2.5 5.7%

08. Construction of New Power and Manufacturing Structures 0.0 1.000 0.0 1.0 1.000 0.0 0.0 1.0 1.0 0.4%

09. Construction of New Highways and Streets 0.0 1.000 0.0 2.4 1.000 0.0 0.0 2.4 2.4 1.0%

10. Construction of Other Non-Residential Structures 0.0 1.000 0.0 6.4 1.000 0.0 0.0 6.4 6.4 0.5%

11. Construction of Residential Structures 0.0 1.000 0.0 4.9 1.000 0.0 0.0 4.9 4.9 0.5%

12. Maintenance and Repair Construction 0.0 1.010 0.0 6.6 1.007 0.0 57.8 64.5 64.5 6.4%

13. Food, Beverage & Tobacco Products 0.0 1.005 0.0 0.7 1.005 0.0 0.7 1.4 1.4 0.4%

14. Textile, Leather & Allied Products 0.0 1.001 0.0 0.1 1.001 0.0 0.0 0.1 0.1 0.3%

15. Wood Products 0.0 1.016 0.0 0.4 1.016 0.0 0.3 0.6 0.6 0.6%

16. Paper and Printing 0.0 1.003 0.0 1.7 1.003 0.0 0.9 2.6 2.6 0.6%

17. Petroleum Refineries 3,693.5 1.012 3649.8 3728.7 1.012 3650.9 3746.7 3781.9 3781.9 14.1%

18. Other Petroleum & Coal Products 24.7 1.002 24.6 27.5 1.002 24.6 26.2 29.0 29.0 16.2%

19. Petrochemical Manufacturing 2,251.1 1.035 2176.0 2311.7 1.035 2176.0 2265.3 2325.8 2325.8 14.2%

20. Industrial Gas Manufacturing 0.0 1.021 0.0 9.0 1.021 0.0 8.8 17.8 17.8 2.5%

21. Synthetic Dye and Pigment Manufacturing 0.0 1.001 0.0 2.6 1.001 0.0 0.3 2.9 2.9 1.8%

22. Other Basic Inorganic Chemical Mfg 73.6 1.006 73.1 79.0 1.006 73.1 75.3 80.7 80.7 15.1%

23. Other Basic Organic Chemical Mfg 448.3 1.002 447.4 474.3 1.002 447.4 453.9 479.9 479.9 14.7%

24. Plastics Material and Resin Manufacturing 0.0 1.003 0.0 15.3 1.003 0.0 0.5 15.8 15.8 0.8%

25. Synthetic Rubber Manufacturing 0.0 1.000 0.0 7.9 1.000 0.0 0.1 8.0 8.0 1.1%

26. Other Chemical Manufacturing 0.0 1.003 0.0 2.4 1.003 0.0 0.9 3.2 3.2 0.4%

27. Plastics & Rubber Products 0.0 1.001 0.0 0.5 1.001 0.0 0.1 0.6 0.6 0.4%

28. Nonmetal Mineral Products 0.0 1.013 0.0 0.3 1.013 0.0 0.4 0.7 0.7 0.9%

29. Primary Metal Manufacturing 0.0 1.014 0.0 1.7 1.014 0.0 0.2 1.8 1.8 0.3%

30. Fabricated Metal Products 0.0 1.006 0.0 2.2 1.006 0.0 0.9 3.1 3.1 0.3%

31. Machinery Manufacturing 0.0 1.008 0.0 2.4 1.008 0.0 0.7 3.2 3.2 0.2%

47

32. Computer & Other Electronic Product 0.0 1.001 0.0 0.4 1.001 0.0 0.0 0.4 0.4 0.2%

33. Electrical Equipment & Appliances 0.0 1.000 0.0 0.1 1.000 0.0 0.0 0.1 0.1 0.3%

34. Transportation Equipment 0.0 1.009 0.0 0.5 1.009 0.0 0.6 1.0 1.0 0.3%

35. Furniture & Related Product 0.0 1.000 0.0 0.0 1.000 0.0 0.0 0.0 0.0 0.3%

36. Miscellaneous Manufacturing 0.0 1.000 0.0 0.1 1.000 0.0 0.0 0.1 0.1 0.3%

37. Wholesale Trade 0.0 1.027 0.0 3.7 1.022 0.0 95.6 99.3 99.3 5.9%

38. Retail Trade 0.0 1.069 0.0 5.0 1.045 0.0 55.8 60.8 60.8 3.3%

39. Air Transportation 0.0 1.001 0.0 0.8 1.001 0.0 1.2 2.0 2.0 5.6%

40. Rail Transportation 0.0 1.002 0.0 3.3 1.002 0.0 20.9 24.2 24.2 10.4%

41. Water Transportation 0.0 1.001 0.0 1.1 1.001 0.0 2.4 3.6 3.6 5.3%

42. Truck Transportation 0.0 1.008 0.0 3.7 1.007 0.0 18.1 21.8 21.8 8.1%

43. Transit & Ground Passengers 0.0 1.002 0.0 0.4 1.001 0.0 1.3 1.7 1.7 3.4%

44. Pipeline Transportation 11.9 1.002 11.9 13.4 1.002 11.9 23.3 24.8 21.4 24.7%

45. Sightseeing Transportation 0.0 1.105 0.0 1.5 1.104 0.0 5.6 7.0 7.0 2.1%

46. Couriers & Messengers 0.0 1.024 0.0 0.5 1.024 0.0 1.9 2.4 2.4 4.1%

47. Warehousing & Storage 0.0 1.035 0.0 0.3 1.034 0.0 2.9 3.2 3.2 3.8%

48. Information 0.0 1.102 0.0 1.0 1.099 0.0 15.7 16.7 16.7 2.3%

49. Finance and Insurance 0.0 1.332 0.0 2.2 1.319 0.0 40.0 42.3 42.3 3.0%

50. Real Estate 0.0 1.046 0.0 2.6 1.042 0.0 18.8 21.3 21.3 2.9%

51. Owner-occupied Dwellings 0.0 1.012 0.0 1.2 1.008 0.0 45.7 46.9 46.9 3.1%

52. Rental and Leasing 0.0 1.009 0.0 0.5 1.008 0.0 8.5 9.1 9.1 3.1%

53. Professional, Scientific Services, Management and Admin Services 0.0 1.134 0.0 7.2 1.121 0.0 67.6 74.8 74.8 2.8%

54. Educational Services 0.0 1.006 0.0 0.3 1.005 0.0 2.2 2.5 2.5 3.3%

55. Health Care and Social Assistance 0.0 1.148 0.0 6.4 1.097 0.0 58.2 64.6 64.6 3.1%

56. Arts, Entertainment, and Recreation 0.0 1.033 0.0 0.3 1.032 0.0 3.6 3.9 3.9 3.2%

57. Accommodation and Food Services 0.0 1.036 0.0 2.9 1.025 0.0 24.8 27.7 27.7 2.6%

58. Other Services 0.0 1.042 0.0 2.5 1.029 0.0 23.4 25.9 25.9 2.8%

59. Government & Non NAICs 0.0 1.030 0.0 8.0 1.020 0.0 35.2 43.1 43.1 2.1%

Total 6,586.3

6,465.9 6,864.4

6,467.1 7,387.9 7,666.1 7,661.3 9.5%

48

Table C3. Base Case Regional Impacts of a 90-Day Export Disruption of Crude Oil



I-O Model Sector Final Demand Change

Demand-Side Impacts of Export

Disruption Output Change

(%)

01. Agriculture, Forestry, Fishing 0.00 0.01 0.008%

02. Oil & Gas Extraction 23.99 24.01 10.785%

03. Other Mining 0.00 0.83 0.397%

04. Electric Power Generation from Fossil Fuels 0.00 0.08 0.030%

05. Other Electric Power Generation 0.00 0.27 0.030%

06. Natural Gas Distribution 0.00 0.01 0.011%

07. Water, Sewage and Other Systems 0.00 0.03 0.058%

08. Construction of New Power and Manufacturing Structures 0.00 0.00 0.000%

09. Construction of New Highways and Streets 0.00 0.00 0.000%

10. Construction of Other Non-Residential Structures 0.00 0.00 0.000%

11. Construction of Residential Structures 0.00 0.00 0.000%

12. Maintenance and Repair Construction 0.00 0.67 0.067%

13. Food, Beverage & Tobacco Products 0.00 0.01 0.003%

14. Textile, Leather & Allied Products 0.00 0.00 0.003%

15. Wood Products 0.00 0.00 0.003%

16. Paper and Printing 0.00 0.01 0.002%

17. Petroleum Refineries 0.00 0.19 0.001%

18. Other Petroleum & Coal Products 0.00 0.02 0.011%

19. Petrochemical Manufacturing 0.00 0.03 0.000%

20. Industrial Gas Manufacturing 0.00 0.04 0.006%

21. Synthetic Dye and Pigment Manufacturing 0.00 0.00 0.000%

22. Other Basic Inorganic Chemical Manufacturing 0.00 0.00 0.000%

23. Other Basic Organic Chemical Manufacturing 0.00 0.00 0.000%

24. Plastics Material and Resin Manufacturing 0.00 0.00 0.000%

25. Synthetic Rubber Manufacturing 0.00 0.00 0.000%

26. Other Chemical Manufacturing 0.00 0.01 0.001%

27. Plastics & Rubber Products 0.00 0.00 0.000%

28. Nonmetal Mineral Products 0.00 0.01 0.008%

29. Primary Metal Manufacturing 0.00 0.00 0.001%

30. Fabricated Metal Products 0.00 0.01 0.001%

31. Machinery Manufacturing 0.00 0.02 0.002%

32. Computer & Other Electronic Product 0.00 0.00 0.000%

33. Electrical Equipment & Appliances 0.00 0.00 0.000%

34. Transportation Equipment 0.00 0.01 0.003%

35. Furniture & Related Product 0.00 0.00 0.001%

36. Miscellaneous Manufacturing 0.00 0.00 0.001%

49

37. Wholesale Trade 0.00 0.29 0.017%

38. Retail Trade 0.00 0.88 0.048%

39. Air Transportation 0.00 0.01 0.031%

40. Rail Transportation 0.00 0.02 0.007%

41. Water Transportation 0.00 0.02 0.033%

42. Truck Transportation 0.00 0.04 0.016%

43. Transit & Ground Passengers 0.00 0.02 0.042%

44. Pipeline Transportation 0.00 0.09 0.106%

45. Sightseeing Transportation 0.00 0.03 0.010%

46. Couriers & Messengers 0.00 0.01 0.021%

47. Warehousing & Storage 0.00 0.02 0.027%

48. Information 0.00 0.27 0.037%

49. Finance and Insurance 0.00 0.71 0.050%

50. Real Estate 0.00 0.34 0.047%

51. Owner-occupied Dwellings 0.00 1.05 0.070%

52. Rental and Leasing 0.00 0.16 0.055%

53. Professional, Scientific Services, Management, and Admin Services 0.00 0.77 0.029%

54. Educational Services 0.00 0.05 0.067%

55. Health Care and Social Assistance 0.00 1.34 0.064%

56. Arts, Entertainment, and Recreation 0.00 0.08 0.061%

57. Accommodation and Food Services 0.00 0.49 0.046%

58. Other Services 0.00 0.41 0.045%

59. Government & Non NAICs 0.00 0.29 0.014%

Total 23.99 33.68 0.042%

50

Table C4. Regional Direct Output Impacts Due to a 90-day Import Disruption of Refined Petroleum Products

at PA/PB


Sector

Imported Refined

Petroleum Products

Disruption

Input of Refined

Petroleum Products

(Imported)

Input of Refined

Petroleum Products

(Regionally Produced )

Total Refined

Petroleum Products

Input

Percent Refined

Petroleum Products

Input Reduction

Total Sectoral Output

Direct Output

Reduction

01. Agriculture, Forestry, Fishing 0.1 0.6 2.2 2.7 0.0% 139.8 0.0

02. Oil & Gas Extraction 0.1 0.5 0.5 1.0 0.0% 222.7 0.0

03. Other Mining 0.2 1.1 3.3 4.4 0.0% 208.0 0.0

04. Electric Power Generation from Fossil Fuels 0.1 0.8 3.3 4.2 0.0% 253.7 0.0

05. Other Electric Power Generation 0.2 1.5 5.7 7.1 0.0% 899.4 0.0

06. Natural Gas Distribution 0.0 0.0 0.0 0.0 0.0% 126.7 0.0

07. Water, Sewage and Other Systems 0.0 0.2 0.6 0.7 0.0% 43.9 0.0

08. Construction of New Power and Manufacturing Structures 0.2 1.1 4.0 5.1 0.0% 227.7 0.0

09. Construction of New Highways and Streets 0.9 5.5 11.5 17.0 0.0% 242.3 0.0

10. Construction of Other Non-Residential Structures 1.3 7.9 25.1 33.0 4.0% 1,385.3 56.1

11. Construction of Residential Structures 1.3 7.5 19.0 26.5 4.8% 1,083.3 51.8

12. Maintenance and Repair Construction 2.0 11.6 28.8 40.5 4.9% 1,006.1 49.1

13. Food, Beverage & Tobacco Products 0.1 0.4 0.7 1.2 0.0% 375.5 0.0

14. Textile, Leather & Allied Products 0.0 0.0 0.0 0.0 0.0% 22.6 0.0

15. Wood Products 0.0 0.2 0.6 0.8 0.0% 105.8 0.0

16. Paper and Printing 0.2 1.0 3.7 4.7 0.0% 427.6 0.0

17. Petroleum Refineries 16.1 94.9 271.6 366.5 4.4% 26,814.8 1,178.4

18. Other Petroleum & Coal Products 0.9 5.6 17.7 23.2 0.0% 179.5 0.0

19. Petrochemical Manufacturing 123.1 724.9 223.7 948.6 13.0% 16,345.3 2,120.6

20. Industrial Gas Manufacturing 1.6 9.7 34.9 44.6 3.7% 710.7 26.1

21. Synthetic Dye and Pigment Manufacturing 0.7 3.9 15.3 19.2 0.0% 164.0 0.0

22. Other Basic Inorganic Chemical Mfg 1.2 7.2 23.4 30.6 4.0% 535.2 21.3

23. Other Basic Organic Chemical Mfg 19.3 113.6 58.2 171.8 11.2% 3,257.1 365.6

24. Plastics Material and Resin Manufacturing 8.8 51.6 35.3 86.9 10.1% 2,072.1 209.0

25. Synthetic Rubber Manufacturing 5.7 33.4 22.2 55.6 10.2% 750.5 76.5

26. Other Chemical Manufacturing 0.4 2.5 7.3 9.7 0.0% 762.5 0.0

27. Plastics & Rubber Products 0.0 0.2 0.4 0.6 0.0% 142.2 0.0

28. Nonmetal Mineral Products 0.0 0.2 0.5 0.7 0.0% 70.9 0.0

29. Primary Metal Manufacturing 0.2 1.0 1.8 2.8 0.0% 561.1 0.0

30. Fabricated Metal Products 0.1 0.7 1.7 2.4 0.0% 1,086.4 0.0

31. Machinery Manufacturing 0.3 1.6 4.2 5.8 0.0% 1,397.1 0.0

32. Computer & Other Electronic Product 0.0 0.1 0.2 0.3 0.0% 227.6 0.0

33. Electrical Equipment & Appliances 0.0 0.2 0.2 0.4 0.0% 50.2 0.0

34. Transportation Equipment 0.0 0.1 0.2 0.2 0.0% 334.7 0.0

51

35. Furniture & Related Product 0.0 0.0 0.0 0.0 0.0% 13.8 0.0

36. Miscellaneous Manufacturing 0.0 0.0 0.0 0.1 0.0% 24.7 0.0

37. Wholesale Trade 0.2 1.1 4.1 5.2 0.0% 1,680.8 0.0

38. Retail Trade 0.1 0.8 2.6 3.4 0.0% 1,814.8 0.0

39. Air Transportation 0.2 1.3 5.2 6.5 0.0% 35.9 0.0

40. Rail Transportation 0.9 5.3 20.8 26.1 0.0% 231.7 0.0

41. Water Transportation 0.3 1.8 7.1 8.9 0.0% 67.3 0.0

42. Truck Transportation 1.0 5.6 21.5 27.1 0.0% 270.8 0.0

43. Transit & Ground Passengers 0.1 0.5 2.0 2.6 0.0% 50.5 0.0

44. Pipeline Transportation 0.3 1.6 6.5 8.1 0.0% 86.8 0.0

45. Sightseeing Transportation 0.2 0.9 3.3 4.3 0.0% 332.2 0.0

46. Couriers & Messengers 0.1 0.7 2.8 3.5 0.0% 59.2 0.0

47. Warehousing & Storage 0.0 0.1 0.3 0.4 0.0% 83.1 0.0

48. Information 0.0 0.1 0.4 0.5 0.0% 722.0 0.0

49. Finance and Insurance 0.0 0.2 0.7 0.9 0.0% 1,410.2 0.0

50. Real Estate 0.0 0.1 0.4 0.5 0.0% 722.8 0.0

51. Owner-occupied Dwellings 0.2 1.0 0.9 1.9 0.0% 1,498.6 0.0

52. Rental and Leasing 0.0 0.2 0.7 0.8 0.0% 289.2 0.0

53. Professional, Scientific Services, Management & Admin Services 0.2 1.2 4.4 5.6 0.0% 2,703.5 0.0

54. Educational Services 0.0 0.0 0.1 0.2 0.0% 74.5 0.0

55. Health Care and Social Assistance 0.2 1.2 3.9 5.1 0.0% 2,078.4 0.0

56. Arts, Entertainment, and Recreation 0.0 0.1 0.4 0.5 0.0% 123.1 0.0

57. Accommodation and Food Services 0.2 1.0 3.5 4.4 0.0% 1,051.0 0.0

58. Other Services 0.1 0.5 1.8 2.3 0.0% 909.6 0.0

59. Government & Non-NAICs 0.3 2.0 7.6 9.6 0.0% 2,079.1 0.0

Total 242.4 1,118.5 928.7 2,047.2 11.8% 80,645.9 4,154.4

52

Table C5. Base Case Regional Impacts of a 90-Day Import Disruption of Refined Petroleum Products




Output Loss

Supply-

Side bjj

Direct

Value-

Added Change

Total Supply-

Side Output

Change

Demand-

Side bjj

Final

Demand Change

Total Demand-

Side Output

Change

Total

Import Disruption

Impacts (net

double-counting)

Capped

Total

Import Disruption

Impact

Output change

(annual basis)

(%)

1 2 3 (=1/2) 4 5 6 (=1/5) 7 8 (=4+7-1)



03. Other Mining 0.0 1.030 0.0 0.5 1.030 0.0 3.6 4.1 4.1 2.0%












15. Wood Products 0.0 1.016 0.0 0.2 1.016 0.0 0.5 0.7 0.7 0.7%







22. Other Basic Inorganic Chemical Manufacturing 21.3 1.006 21.1 23.3 1.006 21.1 23.2 25.2 25.2 4.7%

23. Other Basic Organic Chemical Manufacturing 365.6 1.002 364.8 381.9 1.002 364.8 371.6 388.0 388.0 11.9%









53






37. Wholesale Trade 0.0 1.027 0.0 1.7 1.022 0.0 74.9 76.6 76.6 4.6%

38. Retail Trade 0.0 1.069 0.0 2.3 1.045 0.0 53.9 56.2 56.2 3.1%










48. Information 0.0 1.102 0.0 0.6 1.099 0.0 12.6 13.2 13.2 1.8%


50. Real Estate 0.0 1.046 0.0 2.9 1.042 0.0 15.1 17.9 17.9 2.5%



53. Professional, Scientific Services, Management and Admin Services 0.0 1.134 0.0 3.4 1.121 0.0 57.5 60.9 60.9 2.3%





58. Other Services 0.0 1.042 0.0 1.7 1.029 0.0 18.4 20.1 20.1 2.2%


Total 4,154.4

4,067.2 4,281.0

4,067.7 4,793.5 4,920.1 4,920.1 6.1%

54

Table C6. Base Case Total Regional Impacts of a 90-Day Export Disruption of Refined Petroleum



I-O Model Sector Final Demand Change


Disruption Output Change

(%)

01. Agriculture, Forestry, Fishing 0 0.0 0.003%

02. Oil & Gas Extraction 0 0.2 0.101%

03. Other Mining 0 0.0 0.021%

04. Electric Power Generation from Fossil Fuels 0 0.0 0.014%

05. Other Electric Power Generation 0 0.1 0.014%

06. Natural Gas Distribution 0 0.0 0.016%

07. Water, Sewage and Other Systems 0 0.0 0.016%

08. Construction of New Power and Manufacturing Structures 0 0.0 0.000%

09. Construction of New Highways and Streets 0 0.0 0.000%

10. Construction of Other Non-Residential Structures 0 0.0 0.000%

11. Construction of Residential Structures 0 0.0 0.000%

12. Maintenance and Repair Construction 0 0.6 0.057%

13. Food, Beverage & Tobacco Products 0 0.0 0.001%

14. Textile, Leather & Allied Products 0 0.0 0.001%

15. Wood Products 0 0.0 0.002%

16. Paper and Printing 0 0.0 0.001%


18. Other Petroleum & Coal Products 0 0.0 0.007%

19. Petrochemical Manufacturing 0 0.0 0.000%

20. Industrial Gas Manufacturing 0 0.0 0.000%

21. Synthetic Dye and Pigment Manufacturing 0 0.0 0.000%

22. Other Basic Inorganic Chemical Manufacturing 0 0.0 0.001%

23. Other Basic Organic Chemical Manufacturing 0 0.0 0.000%

24. Plastics Material and Resin Manufacturing 0 0.0 0.000%

25. Synthetic Rubber Manufacturing 0 0.0 0.000%

26. Other Chemical Manufacturing 0 0.0 0.000%

27. Plastics & Rubber Products 0 0.0 0.000%

28. Nonmetal Mineral Products 0 0.0 0.003%

29. Primary Metal Manufacturing 0 0.0 0.000%

30. Fabricated Metal Products 0 0.0 0.000%

31. Machinery Manufacturing 0 0.0 0.000%

32. Computer & Other Electronic Product 0 0.0 0.000%

33. Electrical Equipment & Appliances 0 0.0 0.000%

34. Transportation Equipment 0 0.0 0.001%

35. Furniture & Related Product 0 0.0 0.000%

36. Miscellaneous Manufacturing 0 0.0 0.000%

55

37. Wholesale Trade 0 0.5 0.030%

38. Retail Trade 0 0.3 0.016%

39. Air Transportation 0 0.0 0.014%

40. Rail Transportation 0 0.0 0.010%

41. Water Transportation 0 0.0 0.014%

42. Truck Transportation 0 0.1 0.047%

43. Transit & Ground Passengers 0 0.0 0.016%

44. Pipeline Transportation 0 0.1 0.159%

45. Sightseeing Transportation 0 0.0 0.010%

46. Couriers & Messengers 0 0.0 0.019%

47. Warehousing & Storage 0 0.0 0.017%

48. Information 0 0.1 0.013%

49. Finance and Insurance 0 0.2 0.017%

50. Real Estate 0 0.1 0.016%

51. Owner-occupied Dwellings 0 0.3 0.021%

52. Rental and Leasing 0 0.0 0.012%

53. Professional, Scientific Services, Management, and Admin Services 0 0.3 0.012%

54. Educational Services 0 0.0 0.020%

55. Health Care and Social Assistance 0 0.4 0.019%

56. Arts, Entertainment, and Recreation 0 0.0 0.020%

57. Accommodation and Food Services 0 0.2 0.016%

58. Other Services 0 0.1 0.016%

59. Government & Non NAICs 0 0.2 0.010%

Total 51.1 56.1 0.070%

56

Appendix D. National Impact Analysis Results

In this Appendix, we present detailed analysis results by sector at the national level for both the import and export

disruptions of crude oil and refined petroleum products through Ports of Port Arthur and Beaumont for 90-days.

A. Base Case

a. Crude Oil

Table D1. Total National Economic Impacts of a 90-Day Import Disruption of Crude Oil at Port Arthur and

Beaumont, 2016



Output Loss

Supply-

Side bjj

Direct

Value-Added

Change

Total Supply-

Side Output

Change

Demand-

Side bjj

Final

Demand Change

Total Demand-

Side Output

Change

Total Import

Disruption Impacts

(net double-counting)

Capped

Total Import

Disruption Impact

Output change

(annual basis)

(%)

1 2 3 (=1/2) 4 5 6 (=1/5) 7 8 (=4+7-1)



03. Other Mining 0.0 1.141 0.0 144.9 1.137 0.0 396.4 541.3 541.3 0.21%












15. Wood Products 0.0 1.193 0.0 68.6 1.191 0.0 12.9 81.5 81.5 0.08%









57














37. Wholesale Trade 0.0 1.131 0.0 583.0 1.081 0.0 407.3 990.2 990.2 0.06%

38. Retail Trade 0.0 1.166 0.0 538.7 1.082 0.0 263.4 802.1 802.1 0.05%










48. Information 0.0 1.299 0.0 504.0 1.247 0.0 219.6 723.6 723.6 0.04%


50. Real Estate 0.0 1.111 0.0 272.7 1.080 0.0 237.6 510.3 510.3 0.03%



53. Professional, Scientific Services, Management, and Admin Services 0.0 1.481 0.0 1653.1 1.342 0.0 569.6 2222.8 2222.8 0.06%





58. Other Services 0.0 1.146 0.0 446.0 1.077 0.0 182.4 628.3 628.3 0.06%


Total 6,881.3

5,540.2 23,555.6

5,564.4 14,419.2 31,093.5 31,093.5 0.09%

58

Table D2. National Economic Impacts of a 90-Day Export Disruption of Crude Oil



I-O Model Sector Final Demand

Change


Disruption

Output Change

(%)



03. Other Mining 0 25.0 0.009%







10. Construction of Other Non-Residential

Structures 0 0.0 0.000%







17. Petroleum Refineries 0 4.2 0.001%



















59



38. Retail Trade 0 19.1 0.001%










48. Information 0 15.3 0.001%


50. Real Estate 0 16.9 0.001%



53. Professional, Scientific Services, Management of Companies, and Admin Services 0 33.2 0.001%







Total 211.6 567.4 0.002%

b. Refined Petroleum

Table D3. Total National Economic Impacts of a 90-Day Import Disruption of Refined Petroleum at Port Arthur

and Beaumont, 2016



Output Loss

Supply-

Side bjj

Direct

Value-Added

Change

Total

Supply-

Side Output

Change

Demand-

Side bjj

Final

Demand Change

Total

Demand-

Side Output

Change

Total Import

Disruption Impacts

(net double-counting)

Capped

Total Import

Disruption Impact

Output

change

(annual basis)

(%)

1 2 3 (=1/2) 4 5 6 (=1/5) 7 8 (=4+7-1)



60

03. Other Mining 0.0 1.141 0.0 71.0 1.137 0.0 165.9 236.9 236.9 0.09%












15. Wood Products 0.0 1.193 0.0 41.2 1.191 0.0 13.5 54.7 54.7 0.05%






















37. Wholesale Trade 0.0 1.131 0.0 291.0 1.081 0.0 300.3 591.3 591.3 0.04%

38. Retail Trade 0.0 1.166 0.0 269.0 1.082 0.0 178.2 447.3 447.3 0.03%




61







48. Information 0.0 1.299 0.0 260.5 1.247 0.0 140.5 401.0 401.0 0.02%


50. Real Estate 0.0 1.111 0.0 141.4 1.080 0.0 150.1 291.5 291.5 0.02%



53. Professional, Scientific Services, Management, and Admin Services 0.0 1.481 0.0 838.6 1.342 0.0 394.9 1233.5 1233.5 0.03%





58. Other Services 0.0 1.146 0.0 230.1 1.077 0.0 112.8 342.9 342.9 0.03%


Total 4,232.3

3,067.6 13,355.4

3,077.7 9,243.2 18,366.3 18,366.3 0.06%

Table D4. National Economic Impacts of a 90-Day Export Disruption of Refined Petroleum



I-O Model Sector Final Demand

Change


Disruption

Output Change (%)



03. Other Mining 0 79.0 0.030%







10. Construction of Other Non-Residential Structures 0 0.0 0.000%



62


























38. Retail Trade 0 38.5 0.003%










48. Information 0 32.0 0.002%


50. Real Estate 0 35.2 0.002%



53. Professional, Scientific Services, Management of Companies, and Admin Services 0 75.1 0.002%

63







Total 957.2 2,053.3 0.006%

B. Resilience Analysis Results

a. Crude Oil

Table D5. National Economic Impacts of a 3-Month Disruption of Crude Oil Supplies at Port Arthur and Beaumont

(in million 2016 dollars or otherwise specified)

Case

Direct

Output

Loss

(1)

Direct

Value-

Added

Change

(2)

Final

Demand

Change

(3)

Total

Supply

Change

(4)

Total

Demand

Change

(5)

Total

Net S+D

Change

(6=4+5-1)

Total

Net S+D

Change

(%)

Resilience

Effective-

ness (%)

A. Crude Oil Disruption

(No Resilience) $6,881 $5,540 $5,564 $23,556 $14,419 $31,093 0.09% n.a.

B. Inventory $2,877 $1,851 $1,856 $8,988 $6,020 $12,131 0.04% 61.0

C. Re-routing + Relocation of

Refining Activities $2,742 $2,612 $2,626 $10,115 $5,718 $13,092 0.04% 57.9

D. SPR $5,373 $4,072 $4,088 $17,923 $11,253 $23,804 0.07% 23.4

E. Export Diversion $5,729 $4,487 $4,506 $19,380 $11,991 $25,642 0.08% 17.5

F. Production Rescheduling a a a a a $17,025 0.05% 45.2

G. All Resilience Adjustments b b b b b $261 0.001% 99.2

a


Total is non-additive of B, C, D, E, F to adjust for overlaps

64

b. Refined Petroleum

Table D6. National Economic Impacts of a 90-day Disruption of Refined Petroleum Products at Port Arthur-Beaumont

(in million 2016 dollars or otherwise specified)

Case

Direct

Output

Loss

(1)

Direct

Value-

Added

Change

(2)

Final

Demand

Change

(3)

Total

Supply

Change

(4)

Total

Demand

Change

(5)

Total

Net S+D

Change

(6=4+5-1)

Total

Net S+D

Change

(%)

Resilience

Effective-

ness (%)

A. Refine Petroleum Disruption

(No Resilience) $4,232 $3,068 $3,078 $13,355 $9,243 $18,366 0.056% n.a.

B. Inventory $3,600 $2,641 $2,650 $11,435 $7,851 $15,686 0.048% 14.6

C. Re-routing $212 $153 $154 $668 $462 $918 0.003% 95.0

D. Export Diversion $39 $31 $31 $133 $85 $179 0.001% 99.0

E. Production Rescheduling a a a a a $9,997 0.031% 45.6

F. All Resilience Adjustments b b b b b $2.5 0.000% 100.0

a


Total is non-additive of B, C, D, E adjusted for overlaps.

65

Appendix References

Bloomberg.com, 27 Sept. 2012. "In the Pipeline” https://www.bloomberg.com/news/articles/2012-09-27/in-the-pipeline (accessed 19 Apr. 2017.) Blueknight Energy Partners. http://www.bkep.com/ (accessed 18 Apr. 2017.) U.S. Census Bureau. 2017. USA Trade Online. https://usatrade.census.gov/. (accessed 2 Mar. 2017). Enterprise Products. Crude Oil Pipelines & Services. http://www.enterpriseproducts.com/operations/onshore-crude-oil-pipelines-services (accessed 18 Apr. 2017.) Enbridge Partners. https://www.enbridgepartners.com/Delivering-Energy/Storage.aspx (accessed 18 Apr. 2017.) ExxonMobil. ExxonMobil, 2017. http://corporate.exxonmobil.com/en/company/worldwide-operations/locations/united-states/us-refineries/beaumont (accessed 18 Apr. 2017.) Google Maps. https://www.google.com/maps (accessed 18 Apr. 2017.) Magellan Midstream Partners, L.P. https://www.magellanlp.com/Investors/~/media/94BBB3DAC6D5456093E944E867AF9223.ashx?db=master (accessed 18 Apr. 2017.) IMPLAN. 2016. Impact Analysis for Planning (IMPLAN) System, Huntersville, NC.

Motiva Enterprises LLC, 2017. http://www.motivaenterprises.com/terminals.html (accessed 18 Apr. 2017.) NLG Energy. http://www.nglenergypartners.com/segments/crude-oil-logistics/ (accessed 18 Apr. 2017.) Plains All American. http://ir.paalp.com/profiles/investor/ResLibraryView.asp?ResLibraryID=41379&GoTopage=8&Category=117&BzID=789&G=549 (accessed 18 Apr. 2017.) Seaway Pipeline Project. http://seawaypipeline.com/ (accessed 18 Apr. 2017.)

https://www.bloomberg.com/news/articles/2012-09-27/in-the-pipeline

http://www.bkep.com/

https://usatrade.census.gov/

http://www.enterpriseproducts.com/operations/onshore-crude-oil-pipelines-services

https://www.enbridgepartners.com/Delivering-Energy/Storage.aspx

https://www.google.com/maps

https://www.magellanlp.com/Investors/~/media/94BBB3DAC6D5456093E944E867AF9223.ashx?db=master

http://www.nglenergypartners.com/segments/crude-oil-logistics/

http://ir.paalp.com/profiles/investor/ResLibraryView.asp?ResLibraryID=41379&GoTopage=8&Category=117&BzID=789&G=549

http://ir.paalp.com/profiles/investor/ResLibraryView.asp?ResLibraryID=41379&GoTopage=8&Category=117&BzID=789&G=549

66

SemGroup Corporation. http://www.semgroupcorp.com/Operations/RoseRock/Facilities/Storage.aspx (accessed 18 Apr. 2017.) Shell Global, 2017. http://www.shell.com/about-us/major-projects/port-arthur-refinery.html (accessed 18 Apr. 2017.) TankTerminals.com, 2017. Bulk Petroleum Storage Terminals, Oil Storage Terminals, Chemical Storage Terminals, Gas and Liquid Storage Terminals. https://www.tankterminals.com/index_auth.php (accessed 18 Apr. 2017.) Total SA, 2017. http://www.total.com/en/energy-expertise/projects/refining-petrochemical-platform/port-arthur-sustainable-platform (accessed 18 Apr. 2017.) TransCanada, M2 to Build New Crude Storage Facility in Cushing. Reuters. 15 Mar. 2017 http://www.reuters.com/article/transcanada-contract-idUSL3N1GS4LL?rpc=401& (accessed 18 Apr. 2017.) TransCanada Corporation http://www.gulf-coast-pipeline.com/ (accessed 18 Apr. 2017.) U.S. Energy Information Administration, 2017- Gulf Coast (PADD 3) Crude Oil Stocks at Tank Farms and Pipelines. EIA 2017a. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrsfp31&f=a (accessed 18 Apr. 2017.) U.S. Energy Information Administration, 2017. Refinery Utilization and Capacity Statistics for PADD 3. EIA, 2017b. https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_r30_a.htm (accessed 18 Apr. 2017.) U.S. Energy Information Administration - EIA - Independent Statistics and Analysis. Refinery Capacity Report. EIA, 2016. https://www.eia.gov/petroleum/refinerycapacity/ (accessed 18 Apr. 2017.) U.S. Energy Information Administration – EIA 2017c EIA. 2017. Petroleum & Other Liquids. https://www.eia.gov/dnav/pet/pet_move_ipct_k_a.htm (accessed 18 Apr. 2017.) U.S. Energy Information Administration – EIA 2017d EIA. 2017. U.S. Crude Oil Production. https://www.eia.gov/petroleum/production/ (accessed 18 Apr. 2017.) Valero, 2017. https://www.valero.com/en-us/Pages/PortArthur.aspx (accessed 18 Apr. 2017.)

http://www.semgroupcorp.com/Operations/RoseRock/Facilities/Storage.aspx

http://www.total.com/en/energy-expertise/projects/refining-petrochemical-platform/port-arthur-sustainable-platform

http://www.total.com/en/energy-expertise/projects/refining-petrochemical-platform/port-arthur-sustainable-platform

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrsfp31&f=a

https://www.eia.gov/petroleum/refinerycapacity/

https://www.eia.gov/petroleum/production/

https://www.valero.com/en-us/Pages/PortArthur.aspx

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