F. Carter Smith | Bloomberg | Getty Images
An oil refinery in Texas City, Texas.
Hurricane Harvey is expected to hit the Texas Gulf Coast by Friday, with nearly one-third of U.S. refining capacity possibly in Harvey’s path on the Texas and western Louisiana coastlines.
Winds of up to 75 mph and as much as 15 inches of rain were forecast, the National Weather Service said Thursday. That does not include the storm surge, which could bring even more water.
The consequences could be devastating for the oil industry. It could take 18 to 36 months for refineries to return to full production capacity if they sustain 2 feet of flooding, Bob Mitchell, president of the Bay Area Houston Economic Partnership, told CNBC’s “Power Lunch” on Thursday.
Refineries in the Houston area are responsible for significant portions of the nation’s gas, military grade fuel and jet aviation fuel. Any decrease in production could have ripple effects on manufacturing.
“Oh I will tell you it’s worse than (a slowdown),” Mitchell said. “It’s a shutdown, not a slowdown. I can assure you of that.”
The issue is not local, it’s national, Mitchell said.
— Reuters contributed to this story.