Hurricane Laura to cause $25 billion to $30 billion in economic damage

The United States economy, already battered by the ongoing coronavirus pandemic, could absorb another severe blow this week as the Gulf Coast prepares for a potentially catastrophic strike from Hurricane Laura. The economic impact from the storm could run as high as $30 billion, depending on precisely where the storm strikes, AccuWeather founder and CEO Joel N. Myers said.

AccuWeather meteorologists expect the storm to rapidly become a major hurricane (Category 3 strength or higher) and make landfall along the Texas-Louisiana border late Wednesday night.

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If Laura does make landfall as Category 3 storm with winds of 111 mph, it would become the first major hurricane to strike the mainland United States since Michael in October 2018. There is the potential the storm could potentially achieve Category 4 status if it keeps intensifying right up until landfall. On Tuesday afternoon, forecasters said Laura is expected to encounter enough wind shear to keep it below Category 4 strength.

Hundreds of thousands have been ordered to flee Texas and Louisiana as states of emergency have been declared in both states.

AccuWeather estimates the total damage and economic loss caused by Laura will be $25-30 billion, according to Myers, who founded the company in 1962 and has studied the impacts of powerful hurricanes for decades.

Myers said the economic impact could be greater if the storm tracks farther to the west toward the Houston metropolitan area, the fourth-largest city by population in the U.S., a scenario AccuWeather forecasters remain concerned about.

The estimate is based on an analysis incorporating independent methods to evaluate all direct and indirect impacts of the storm and is based on a variety of sources, statistics and unique techniques
AccuWeather uses to estimate damage.

AccuWeather’s estimate includes damage to homes and businesses as well as their contents and cars, job and wage losses, infrastructure damage, auxiliary business losses, medical expenses and closures. The estimates also account for the costs of power outages to businesses and individuals and for economic losses because of highway closures and evacuations, as well as extraordinary government expenses for cleanup operations.

The storm is rated a 3 on the AccuWeather RealImpact Scale for Hurricanes, a new method the company introduced in 2019 to better assess the overall potential damage a storm could cause than the Saffir-Simpson Hurricane Wind Scale, which only factors in wind impacts.

In comparison to the Saffir-Simpson scale, which has been used by meteorologists for decades and classifies storms by wind speed only, the AccuWeather RI is based on a broad range of important factors. The scale covers wind speed, flooding rain, storm surge, and economic damage and loss.

AccuWeather meteorologists arrived at this rating based on the anticipated flooding rainfall, damaging winds, dangerous storm surge, and a number of other economic factors. A storm surge of 15 feet will be possible in some coastal areas of Louisiana.

The AccuWeather RI categorizes hurricanes and tropical storms on a six-point scale. Similar to the Saffir-Simpson scale, the AccuWeather RI uses the 1 to 5 rating, but also includes an additional rating of “Less than 1.” The “Less than 1” score provides insight on tropical storms that don’t rise to a Category 1 on the Saffir-Simpson scale but may still cause substantial destruction, injury or loss of life. Hurricane Barry, which made landfall on the Gulf Coast in July 2019, was the first storm for which the RI scale was used.

The heaviest rainfall totals of 4-8 inches with an AccuWeather Local StormMax™ of 12 inches will occur from western and central Louisiana and far eastern Texas into central Arkansas. Wind gusts of 100-120 mph with an AccuWeather Local StormMax™ of 130 mph will occur at the coast near the landfall point and lead to extensive damage.

The U.S. energy industry has already begun taking steps to prepare for Laura. According to Reuters, oil refining at plants along the Texas and Louisiana coast has been halted and crude oil production has been cut at a rate not seen since Katrina threatened the Gulf Coast region in 2005.

Laura had shut 1.5 million barrels per day of crude oil output on Monday, Reuters reported, which is 82% of the Gulf of Mexico’s offshore production and close to the 90% outage that Katrina brought 15 years ago.

Laura is taking a similar track to Hurricane Rita, which also developed in the historic 2005 season, just about one month after Katrina. Rita is the last major hurricane to strike near the Texas-Louisiana border and the most recent Category 3 storm to make landfall in Louisiana.

This image shows the track of Hurricane Rita in 2005. (Image/AccuWeather)

Rita caused $18.5 billion in economic damage, according to a NOAA report, and was rated as a Category 3 on the Saffir-Simpson scale. According to AccuWeather’s RealImpact Scale, Rita would’ve been classified as a 4. Adjusted for inflation, Rita’s economic impact would’ve been $24.6 billion in damages in 2020.

Louisiana Gov. John Bel Edwards drew a comparison to Rita when urging residents to prepare at a Monday press conference.

“Every storm is unique; I can tell you. We’re only going to dodge the bullet so many times, and the current forecast for Laura has it focused intently on Louisiana,” Edwards said, according to WWLTV. “Understand right now, the strength of this hurricane is going to be akin to Rita. Not to Marco or any of the other storms, and that’s why we need to continue to prepare and continue to pray.

Keep checking back on AccuWeather.com and stay tuned to the AccuWeather Network on DirecTV, Frontier and Verizon Fios.

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