Texas is now thawing out from the deep freeze that hit nearly the entire state just days before Christmas. While the ground is warming up, it will take longer to measure the full costs of the event and its impact on the state’s economy. “We will have some damage to crops and some lingering physical damage that took place, but it’s clearly not even in the same ballpark as what happened back in 2021, which was really an historic situation,” says Ray Perryman, economist with the Perryman Group.
The Perryman Group estimated the February 2021 winter storm cost the state between $197 billion and $296 billion in total economic impact. “The impact of this one remains to be seen,” says Perryman. “But I’m sure on balance the effect will be negative, because of the impact to our agricultural production and things like that will be lingering.”
While this storm wasn’t nearly as intense or as long-lasting as the 2021 storm, the timing so close to Christmas means some sectors could be hit worse. “You may have a bigger impact on the transportation industry this time around, because of all the canceled flights, the trips that didn’t happen, those kinds of things,” Perryman tells KTRH.
Another area of impact will be in fuel and energy costs. The surge in demand in recent days will drive up power bills, at the same time Texans are already paying more to cover the costs of shoring up the grid following the 2021 storm. Some refinery outages that took place in the Houston Ship Channel and Port Arthur last week could also lead to higher fuel prices. Crude oil prices and gas prices both rose in recent days after the freeze hit.
At the same time, there could be some positive economic impact due to the pre-storm rush of people buying food and supplies. “You always have some of those things that offset certain losses in a natural disaster like this,” says Perryman.
The final cost of this pre-Christmas freeze will take months or years to determine. But Perryman reminds us to keep it in perspective. “It’s natural to want to compare this to the big freeze (in 2021),” he says. “But this one was simply not on the same order of magnitude.”