The economic impact of Texas’ weeklong freeze and power outages could rival the damage caused by some of the most destructive hurricanes ever to hit the U.S., according to an estimate from economists in the state.
As winter storms swept across much of the country last week, they shuttered oil and gas production, food processing facilities, and manufacturing plants while plunging millions of people into darkness for days on end. Now many homeowners are dealing with burst pipes and other property damage from the unprecedented snow and cold, according to CBS News.
The Perryman Group, a Texas-based economic research firm, projected that Winter Storm Uri could end up costing a total of $195 billion on the low end and as much as $295 billion. Those figures include lost income as well as the long-term reduction in economic output stemming from factories and businesses that closed during the storm.
“In a worst-case scenario, it could be a little worse than Harvey. Best-case scenario, it’s almost as bad as Ike,” Ray Perryman, president and CEO of the Perryman Group, told CBS MoneyWatch.
Hurricane Harvey, which slammed Houston in the summer of 2017, ranks with Hurricane Katrina in 2005 as the most destructive storm in U.S. history, causing $125 billion of physical damage in Texas and Louisiana. Hurricane Ike, which hit nine years earlier, was the second-most destructive, causing $30 billion in damage in Texas and Louisiana.
Perryman cautioned that the estimates, based on conversations with insurance companies and economic models, were preliminary. Still, they highlight the unique nature of the storm, which blanketed the entire state for several days.
“What we usually have is a lot of damage in a small area. Here it’s spread all over the state,” he said.
Over Valentine’s Day weekend, all of Texas’ 254 counties were under a winter storm warning, a first. The storm froze gas fields and wind turbines in West Texas, shut down coal plants and idled oil refineries. Fuel and power shortages also caused some factories and food-processing plants to close, representing lost activity that can’t be made up even after the plants are back up and running.
The storm’s damage to the large agriculture sector in Texas also could last for several seasons, with crops freezing over as temperatures stayed below zero for several days. Produce farmers in South Texas’ Rio Grande Valley, dubbed the state’s “salad bowl,” lost tons of vegetables. The storm also destroyed about half of the state’s citrus harvest, according to the Texas Farm Bureau.
