The director of the Indiana Business Research Center at Indiana University’s Kelley School of Business says, while loss of life and property are the worst effects of Hurricane Harvey, the economic impact will be felt in Indiana. Jerry Conover says a disruption in oil drilling and refining will not only affect fuel prices, but also the production of components like plastics and fibers that use petroleum as a raw ingredient.
Conover says a large portion of the United States’ refinery capability is along the Gulf Coast in Texas and Louisiana, and the effects of disrupting those operations could come into play "fairly quickly." In addition, the area also houses multiple offshore oil wells, meaning the damage could stop the "actual pumping of oil out of the ground."
In addition, he says petroleum is a "key feedstock" for plastics and fibers, such as nylon, that go into products people use every day. Conover says, if the supply of petroleum is impacted, companies may have a harder time getting what they need to manufacture various goods.
Harvey, now a tropical storm, has been blamed for two deaths in Texas. First responders on the ground have made hundreds of water rescues over the past few days. Local crews are also in the area. The Indiana Region of the American Red Cross says it has deployed 42 people and six Indiana Region Emergency Response Vehicles to the area. The local organization’s fundraising team says it has also made more than $200,000 worth of Harvey asks.
Conover says the economic impacts could be felt for months.