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CASE STUDIES Hurricane & Energy Modeling

The Situation

In the event of a commercial petroleum supply disruption, the United States can turn to the emergency stockpiles of petroleum products managed by the Department of Energy's Office of Petroleum Reserves (OPR). The mission of the OPR is to protect the United States from severe petroleum supply interruptions through the acquisition, storage, distribution and management of emergency petroleum stocks and to carry out U.S. obligations under the International Energy Program.

The OPR manages three stockpiles: the Strategic Petroleum Reserve, the Northeast Home Heating Oil Reserve, and the Northeast Gasoline Supply Reserve. OPR also manages the Naval Petroleum and Oil Shale Reserves.

The Problem

When a hurricane strikes in the Gulf Coast (between Corpus Christi, TX and Pensacola, FL), the United States' energy supply becomes threatened - As the probability of landfall is assumed, the affected refineries shut down and pipelines slow down the flow of refined gasoline. The Strategic Petroleum Reserve requires a predictable method of forecasting how the nation's energy infrastructure will be affected by wildly unpredictable weather events - even before a storm makes landfall.

The Solution

Business Science Associates helps the Strategic Petroleum Reserve (SPR) update and maintain a complex statistical model - which utilizes geographic, meteorological, and statistical analysis to predict how the nation's energy supply will become affected by a storm. Our statistical analysis uses past hurricane events, as well as a fundamentals (bottom-up) approach to determine what the shortfall in production will be.

This is used by SPR leadership to determine, if any, how much oil should be released from the reserves, to ensure consistent supply and provide a powerful response option to shortages in crude.