Hurricane Ida Strengthens: How This Storm Will Impact Economy

Vehicles damaged in Hurricane Ida.
Gettyimages | Scott Olson
News

Hurricane Ida made landfall in Louisiana on Sunday afternoon, flooding roads, tearing roofs from homes, and causing tremendous damage.

Ida could wreck the Gulf Coast economy, which would have a major impact on the United States and, in some ways, the world at large.

Louisiana’s 17 oil refineries, which can process more than 3.4 million barrels of crude oil a day, are vulnerable to flooding. The petrochemical plants in the state could also suffer major damage.

More than 80 percent of oil and gas production in the Gulf has already been halted, according to ABC News.

Experts Sound Alarms

Chevron, Shell, Marathon and Valero have all closed down their refineries.

The industry is not concerned about the winds, since plants are built to withstand them, but about flooding, according to energy analyst at Third Bridge Peter McNally.

"The industry has been through this maybe too many times over the last few decades," McNally said.

"Louisiana is low so you are prone to the flooding. These things are built to withstand winds but it’s flooding you have tougher time dealing with," he noted.

According to meteorologist Jeff Masters, Ida is forecast to move through "the just absolute worst place for a hurricane."

Damage To Economy

Some experts are not as pessimistic.

Mark Zandi, chief economist at Moody’s Analytics, told The Associated Press that he believes Ida will have a "modest" impact on the economy.

"The key channel for Ida to impact the broader economy is through energy prices," Zandi said.

"The worst-case scenario is Ida might add 10 cents to 20 cents to the price of a gallon of gas through September. That would be consistent with what has happened in the past when we have had bad storms blow through Louisiana," he explained.

According to Zandi, the spread of the highly-contagious Delta variant of coronavirus is more concerning than Ida.

Global Impact

Will Hurricane Ida have an impact on the world?

As Forbes reported, climate scientists believe hurricanes like Ida will be more common in the future due to global warming.

Climate change is causing extreme weather events in the U.S. and around the world, which in turn is causing billions of dollars in damage.

In fact, according to data scientists at USAFacts, the world is "seeing more of these destructive disasters each year."

So, what is the U.S. government doing to halt global warming?

Biden Administration

President Joe Biden delivers a speech.
Shutterstock | 270483732

When Democrat Joe Biden defeated Republican Donald Trump in the 2020 presidential election, he vowed to rejoin the landmark Paris Agreement and tackle climate change in an unprecedented way.

The U.S. rejoined the Paris Agreement as soon as Biden took office, but some of his moves have angered progressives and climate activists.

Notably, days after the United Nations Intergovernmental Panel on Climate Change (IPCC) released a damning report on global warming earlier this month, Biden urged the Organization of the Petroleum Exporting Countries (OPEC) to pump more oil.