Brace for Impact: The Cost of Hurricane Season
On June 28 Tropical Storm Beryl formed just east of the Caribbean. Later that same day, it became a Category 1 hurricane.
That wasn't supposed to happen – at least, not that early in the hurricane season.
You see, the official hurricane season in the Atlantic basin runs from June 1 through November 30. And strong hurricanes don't typically form until much later in the summer.
Storms usually peter out because they don't have enough warm water to strengthen them.
But the water was warmer than usual this year. In some parts of the North Atlantic, experts reported that water temperatures averaged nine degrees above normal.
Beryl gathered so much strength so quickly that it became a Category 4 storm the following day.
The storm's "eye" barreled through the northern island of Carriacou. It damaged 95% of the homes and many businesses on Carriacou and the neighboring island of Petite Martinique.
Then, on July 2, it grew into a Category 5 hurricane, making it the earliest storm in history to reach this level in the Atlantic basin.
Beryl brushed past the coast of Jamaica a day after that. The Caribbean island nation endured significant damage to homes, crops, and infrastructure.
The storm weakened on its way to the U.S. Gulf Coast. However, it still made landfall near Houston on July 8 as a Category 1 hurricane. And it caused an incredible amount of damage...
More than 2.2 million homes, businesses, and schools in the Houston area lost electricity. That's roughly 80% of the service area.
Even worse, it took up to nine days to fully restore power in some areas. Some waited even longer.
For more than a week, millions of Texans didn't have electricity.
A lack of power and a massive heat wave created a very dangerous situation...
The heat index in Texas climbed to more than 100 degrees that week. But people couldn't turn on their air conditioners. And roughly three dozen Texans died from heat-related causes.
Get Ready for an Active Hurricane Season
Beryl wasn't the strongest hurricane to ever hit Texas. But it proved one point yet again...
The National Oceanic and Atmospheric Administration ("NOAA") is one of the go-to sources for hurricane forecasting.
NOAA's outlook now calls for a 90% chance of above-normal activity this hurricane season. The other 10% is for near-normal activity. And NOAA says there's almost no chance for below-normal activity.
The 2024 hurricane season is shaping up to be a real doozy. NOAA expects up to 24 named storms this year. And the agency projects that as many as 13 of these storms could develop into hurricanes.
To put that in perspective, a normal hurricane season involves a lot less wind and rain. The average Atlantic hurricane season includes 12 named storms and six hurricanes.
NOAA is using a series of new, state-of-the-art forecasting tools this year. And it believes these tools will help improve hurricane forecasting in the 2024 season and beyond.
NOAA has already predicted an active hurricane season. And with the new forecasting tools, we should get a better idea of what to expect from each storm.
However, you should constantly be looking around for investment and trading ideas. They can even come from what's happening with the weather.
Hurricane Beryl is just the latest example of what can go wrong in extreme weather...
America's Aging Infrastructure Is Leaving You Vulnerable
America's power grid is old. It's frail and vulnerable to threats like extreme weather.
You see, the national power grid is one of the oldest pieces of public infrastructure still in use today. It dates back to 1882 when Thomas Edison introduced the first power plant.
Most of the current power grid came online in the 1960s and 1970s. It's made up of around 120,000 miles of power lines. And a large chunk of it is nearing the end of its life...
The expected life cycle for a power line is 50 to 80 years. But, according to the U.S. Department of Energy, 70% of power lines are large transformers that are now more than 25 years old.
As the pieces of infrastructure get older, they're more susceptible to breakdowns. They're extremely vulnerable to hurricanes, tornadoes, and even just severe thunderstorms.
It doesn't take much... One toppled electricity post, a landslide burying a substation, or an uprooted tree landing on a high-voltage line could knock out power for millions of homes.
According to the U.S. Energy Information Administration, Americans averaged 5.5 hours of power interruptions in 2022. And extreme weather led to a lot of those blackouts.
The situation is likely to get worse before it gets better. Crippling weather-related blackouts will become more frequent in the years ahead. They will put millions of Americans at risk.
Energy anxiety is sweeping across America. Folks don't want to be stuck without power – especially not for days or weeks at a time. So, they're taking matters into their own hands.
Hurricane season is just getting started. Don't miss the opportunity in this market. To hear more from the Chaikin Analytics team, click here.
Good investing,
The Chaikin Analytics Team
