August 31st, 2012

Update: Tropical Depression Isaac

Posted at 2:51 PM ET

isaac6-smallTropical depression Isaac was downgraded from tropical storm status as of the 5PM EDT advisory Thursday. Isaac was and still is a large feature. Isaac trailed feeder bands as far as 750 miles (1,200 km) east of New Orleans, causing 5 inches of rain as far away as Charleston, South Carolina. Tropical storm force winds spanned at least 400 miles during the storm. Central pressure during landfall was about 968 mb, consistent with some category-3 hurricanes.

Isaac, a category-1 hurricane at landfall, imposed storm surge, significant inland flooding, excessive rainfall, several observed tornadoes, and sustained tropical storm force winds over a very larger area for a very long period of time. Isaac’s storm surge was powerful enough to make the Mississippi River flow backward for nearly 24 hours. Surge levels remained in place well after Isaac made landfall, preventing watershed drainage during the period of excessive rainfall.

isaac6-big

Hazard data illustrated in the CAT-i map was taken from i-aXs®, Guy Carpenter’s web-based risk management platform. i-aXs users can view impacted areas on any map as well as see how their portfolios were affected. Please contact your broker or GC Analytics (SM) representative for assistance or go to www.i-axs.info for further information.

The U.S. Bureau of Safety and Environmental Enforcement said that about 95 percent of oil and 73 percent of natural gas production was disrupted. The U.S. Department of Energy has estimated some 879,500 barrels per day of oil refining capacity was taken offline on the Gulf Coast. Little to no discernible damage was noted to offshore interests, and staff have already begun redeployment for some companies. Market oil prices remain largely unaffected.

AIR in its public statement indicated onshore expected losses on the order of USD1.2 billion, while Eqecat indicated losses of a similar magnitude, with onshore insured losses between USD500 million to USD1.5 billion.

The forecast reasoning for Isaac remains unchanged. The depression will continue to drift northward before a turn to the east or northeast Saturday night with a mid-latitude frontal boundary. The storm should increase in speed by this point. Extratropical transition should occur within the next 72 hours.

Hazards, Watches, and Warnings

Flooding. The ongoing threat with Isaac is inland flooding. Excessive rainfall is expected to continue with Isaac’s remnants, although to a lesser degree than found in Louisiana yesterday. Additional amounts of 3-5 inches can be expected for the lower and middle Mississippi Valley, with local amounts as high as 8 inches. Similar amounts can be expected in the Ohio Valley into Sunday, and then into the Central Appalachians into early next week.

Flood and flash-flood watches and warnings have been posted for broad areas of Arkansas, Central and Southern Mississippi, and Southeastern Louisiana. Coastal flood warnings remain active for affected areas of the Louisiana and Mississippi coastlines.

Tornadoes. The tornado risk will continue today with daytime heating. The tornado risk will be highest throughout most of the state of Mississippi, and the Mississippi Delta areas of Louisiana and Arkansas. A tornado watch has been posted for potentially affected areas.

Impacts

Isaac, a category-1 hurricane at landfall, imposed storm surge, significant inland flooding, excessive rainfall, several observed tornadoes, and sustained tropical storm force winds over a very large area for a very long period of time. Isaac’s storm surge was powerful enough to make the Mississippi River flow backward for nearly 24 hours. Surge levels remained in place well after Isaac made landfall, preventing watershed drainage during the period of excessive rainfall.

Some levees outside of the federal improvement system were overtopped, leading to significant flooding in areas adjacent to New Orleans. Other levees were intentionally breached in order to relieve pressure.

Several fatalities were reported. Downed trees and power lines were reported across the affected area. Numerous reports of structural damage were also reported, primarily damaged roofs. More than 827,000 customers were without power across Arkansas, Alabama, Louisiana and Mississippi as of late Thursday.

According to AIR in its public statement, “onshore expected mean insured industry losses to U.S. property exposures are on the order of USD1.2 billion, 90 percent confidence intervals between USD700 million to USD2 billion.” Eqecat indicated losses of a similar magnitude, with onshore insured losses between USD500 million to USD1.5 billion. State Farm indicated on Thursday it had already received about 1,100 claims. Losses due to Hurricane Irene, which hit the U.S. east coast in 2011, were reported on the order of USD4.3 billion.

Alabama

At least 750 customers were without power. More than 800 people remain in shelters. Evacuations were ordered by the Governor in parts of Baldwin and Mobile counties due to flooding concerns. Many roads remain closed in coastal communities.

Arkansas

More than 13,100 customers were without power.

Louisiana

Cargo terminals within the Port of New Orleans have suspended operations. Portions of the Intracoastal Waterway, Port Allen Route and the Atchafalaya River are open to commercial traffic, but the Coast Guard has ordered all other waterways affected by Isaac to remain closed. The Coast Guard said it had rescued 17 people and two pets as of Thursday. The Department of Wildlife and Fisheries rescued over 1,500 people as of Thursday morning. Schools and universities remained closed, as well as business and government offices across 16 parishes.

6,000 people were registered in emergency shelters, with 3000 from St. John the Baptist Parish. Fifty-six parishes have issued emergency declarations. Seven parishes announced mandatory evacuations in their jurisdictions. President Obama signed a disaster declaration for the state, enabling federal aid. The Federal Emergency Management Agency is in charge of recovery operations, and more than 5,000 National Guard troops have been activated.

Crews intentionally breached some levees strained by pressure due to excessive surge levels. Significant flooding occurred in Plaquemines Parish, outside the federal levee system, after a nearby levee was overtopped. Many homes in the area were under 12-14 feet of water (over 3.6 meters) as a result. In Louisiana alone, the storm cut power to at least 901,000 homes and businesses, or about 47 percent of the state. Water was reported in some areas to rise from 0 to 6 feet of water in five minutes. Two people were found dead in 7 feet (2.3 m) of water in one home. Slidell, Louisiana also experienced significant flooding, with some neighborhoods under 1 foot (30 cm) of water. Waters also inundated LaPlace and the surrounding area.

New Orleans was largely spared major damage. Curfews have been lifted. The Port of New Orleans and the city’s airport were ready to reopen on Friday.

Mississippi

Thirty-four counties are considered federal disaster areas, according to the office of emergency management. Gulfport authorities ordered the port cleared of cargo vessels. Thirty-one shelters remain open, housing more than 2,100 people. Mandatory evacuations have been ordered in parts of Hancock and Jackson counties. About 1,500 National Guard troops have been deployed. More than 76,000 customers are without power, according to utility companies. President Obama signed a disaster declaration for Mississippi on Thursday and ordered federal aid.

All low-lying areas in Hancock County are flooding, according to local emergency management officials. Flooding has also been reported in Pass Christian, according to Harrison County emergency management. In Pascagoula, a large portion of the city flooded. The dam on Lake Tangipahoa could be intentionally punctured to prevent catastrophic failure under water pressure near Pike County, Miss. Mandatory evacuations were thus ordered for low-lying areas along the Tangipahoa River. High water levels prevented more than 800 people from returning to their homes in Bay St. Louis. A tow truck driver was killed after being struck by a falling tree as he was clearing debris off the road.

Florida

Isaac caused relatively minor damage as the tropical-storm force windfield crossed South Florida.

Energy Impacts

The U.S. Bureau of Safety and Environmental Enforcement said that about 95 percent of oil and 73 percent of natural gas production was disrupted. The U.S. Department of Energy has estimated some 879,500 barrels per day of oil refining capacity was taken offline on the Gulf Coast. About 85 percent of oil and 50 percent of natural gas production platforms or drilling rigs in the Gulf of Mexico were closed during storm passage, with startup expected to resume following mandatory safety inspections and staff redeployment, which began for some companies as early as yesterday. Discernible damage had not been observed to offshore oil and gas platforms.

The ports of New Orleans and Morgan City in Louisiana and Mobile Bay in Alabama remained closed on Thursday. The Louisiana Offshore Oil Port (LOOP), which handles about 13 percent of foreign crude shipped to the United States, was expected to resume operations Thursday evening, and resume tanker offloading by Saturday.

The smallest of six Louisiana oil refineries began to power back up on Thursday and most other oil and gas companies in the U.S. Gulf Coast region were preparing to restart. Phillips 66 saw some flooding at the Alliance refinery in Belle Chasse, Louisiana, which remains closed. Chevron started deploying personnel to its offshore facilities on Thursday but said its 330,000 barrel-per-day (bpd) Pascagoula, Mississippi refinery still operates at reduced rates.

Benchmark crude oil prices slipped on Thursday after major oil facilities on the Gulf of Mexico made it through Isaac mostly unscathed. The Gulf of Mexico accounts for about 23 percent of U.S. oil production and 7 percent of natural gas output, according to the U.S. Energy Information Administration. About 30 percent of U.S. natural gas processing plant capacity and 44 percent of the country’s oil refining capacity lies along the Gulf Coast, the EIA said.

Sources: National Hurricane Center (NOAA), Storm Prediction Center (NOAA), National Weather Service (NOAA), Hydrometeorological Prediction Center (HPA/NCEP/NOAA), Associated Press, Agence France, Reuters, Intelligence Press Inc., EQECAT, AIR.

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Guy Carpenter publishes CAT-i reports for major natural catastrophes worldwide. These reports cover catastrophes including worldwide tropical cyclones, earthquakes, major UK and European floods and any other natural event that is likely to incur a significant loss to the (re)insurance industry. Please email CAT.i@guycarp.com if you wish to be added to the free email distribution list.

Guy Carpenter compiles RISK-i reports for major technological or man-made events worldwide. These reports cover risks to property, transport and life including explosions, fires, crashes, engineering disasters and terrorist attacks that are likely to incur a significant loss to the (re)insurance industry. Please email RISK.i@guycarp.com if you wish to be added to the free email distribution list.

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