Journal article

The value of hurricane forecasts to oil and gas producers in the Gulf of Mexico

TJ Considine, C Jablonowski, B Posner, CH Bishop

Journal of Applied Meteorology (1988-2005) | AMER METEOROLOGICAL SOC | Published : 2004

Abstract

The threat of hurricanes often forces producers of crude oil and natural gas in the Gulf of Mexico to evacuate offshore drilling rigs and temporarily to cease production. More accurate hurricane forecasts would result in fewer false alarms, thereby preventing these unnecessary evacuations and disruptions in production. This study estimates the value of both existing and more accurate hurricane forecast information. A probabilistic cost–loss model is used to estimate the incremental value of hurricane forecast information for oil and gas leases in the Gulf of Mexico over the past two decades. Detailed computations of hurricane forecasting accuracy are performed using records from the National..

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