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Petroleum-Refining Industry Business Interruption Losses due to Hurricane Katrina

Author

Listed:
  • Kirgiz Kivanc

    (Cornerstone Research)

  • Burtis Michelle

    (Cornerstone Research)

  • Lunin David A

    (Cornerstone Research)

Abstract

Hurricane Katrina had a significant destructive effect on the Gulf Coast's petroleum-refining industry. In many cases, refineries sustained considerable damage and had to suspend operations for extended periods of time. Multiple Gulf Coast refineries filed substantial business interruption loss insurance claims following Hurricane Katrina's disruption of their production. This paper presents a methodology to calculate refinery business interruption losses taking into account the effect of Hurricane Katrina on input and output market prices during the period of restoration. Our results indicate that adjusting for Hurricane Katrina's effects on crude oil and petroleum product market prices significantly changes the magnitude of refinery business interruption loss claims.

Suggested Citation

  • Kirgiz Kivanc & Burtis Michelle & Lunin David A, 2009. "Petroleum-Refining Industry Business Interruption Losses due to Hurricane Katrina," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 4(2), pages 1-13, April.
    • Handle: RePEc:bpj:jbvela:v:4:y:2009:i:2:n:3
    DOI: 10.2202/1932-9156.1045
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    References listed on IDEAS

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    1. Robert S. Pindyck, 1994. "Inventories and the Short-Run Dynamics of Commodity Prices," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 141-159, Spring.
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    Cited by:

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