What to know about the pipeline fire burning for a third day in Houston's suburbs

DEER PARK, Texas (AP) — A pipeline fire that forced hundreds of people to flee their homes in the Houston suburbs burned for a third day Wednesday, with no official timeline for when it might be extinguished.

Authorities have offered few details about what prompted the driver of an SUV to hit an aboveground valve on the pipeline on Monday, sparking the blaze.

Here are some things to know about the situation with the pipeline fire:

Officials say the underground pipeline, which runs under high-voltage power lines in a grassy corridor between a Walmart and a residential neighborhood in Deer Park, was damaged when the SUV driver left the store's parking lot, entered the wide grassy area and went through a fence surrounding the valve equipment.

Authorities have offered few details on what caused the vehicle to hit the pipeline valve, the identity of the driver or what happened to them. The pipeline company on Wednesday called it an accident. Deer Park officials said preliminary investigations by police and FBI agents found no evidence of a terrorist attack.

Deer Park police won't be able to reach the burned-out vehicle until the flame has been extinguished. Once the area is safe, the department will be able to continue its investigation and confirm specifics, city spokesperson Kaitlyn Bluejacket said in an email Wednesday.

The valve equipment appears to have been protected by a chain-link fence topped with barbed wire. The pipeline's operator has not responded to questions about any other safety protections that were in place.

Energy Transfer is the Dallas-based owner of the pipeline, a 20-inch-wide (50-centemeter-wide) conduit that runs for miles through the Houston area.

It carries natural gas liquids through the suburbs of Deer Park and La Porte, both of which are southeast of Houston. Energy Transfer said the fire had diminished overnight and was continuing to “safely burn itself out” on Wednesday.

Energy Transfer also built the Dakota Access Pipeline, which has been at the center of protests and legal battles. The company’s executive chairman, Kelcy Warren, has given millions of dollars in campaign contributions to Republican Texas Gov. Greg Abbott.

Energy Transfer said its crews were working Wednesday to install specialized isolation equipment on both sides of the damaged section that will help extinguish the fire.

Once the equipment is installed, which could take several hours of welding, the isolated section of the pipeline will be purged with nitrogen, which will extinguish the fire, company and local officials said. After that, damaged components can be repaired.

“The safest way to manage this process is to let the products burn off,” Energy Transfer said.

Authorities evacuated nearly 1,000 homes at one point and ordered people in nearby schools to shelter in place. Hundreds of customers lost power. Officials said Wednesday afternoon that only two customers remained without electricity in the Deer Park and La Porte area. Repairs to all of the power distribution lines affected by the fire had been completed.

Deer Park's statement said Energy Transfer was “prioritizing the safety of the community and environment as it implements its emergency response plan.”

By late Tuesday, about 400 evacuees remained, and some expressed frustration over being forced to quickly flee and not being given any timeline for when they will be able to return.

“We literally walked out with the clothes on our backs, the pets, and just left the neighborhood with no idea where we were going,” said Kristina Reff, who lives near the fire. “That was frustrating.”

Energy Transfer and Harris County officials have said that air quality monitoring shows no immediate risk to individuals, despite the huge tower of billowing flame that shot hundreds of feet into the air, creating thick black smoke that hovered over the area.

Houston is the nation’s petrochemical heartland and is home to a cluster of refineries and plants and thousands of miles of pipelines. Explosions and fires are a familiar sight, and some have been deadly, raising recurring questions about industry efforts to protect the public and the environment.

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A pipeline carrying liquified natural gas burns near Spencer Highway and Summerton on Monday, Sept. 16, 2024, in La Porte, Texas. (Brett Coomer/Houston Chronicle via AP)

Firefighters protect a neighborhood from a fire in a pipeline carrying liquified natural gas burns near Spencer Highway and Summerton on Monday, Sept. 16, 2024, in La Porte, Texas. (Brett Coomer/Houston Chronicle via AP)

A massive pipeline fire burns near Spencer Highway and Summerton on Monday, Sept. 16, 2024, in La Porte, Texas. (Brett Coomer/Houston Chronicle via AP)

A pipeline carrying natural gas liquids burns near La Porte, Texas, on Monday, Sept. 16, 2024. (AP Photo/Lekan Oyekanmi)

FILE - A massive pipeline fire burns after a vehicle drove through a fence along a parking lot and struck an above-ground valve near Spencer Highway and Summerton on Monday, Sept. 16, 2024, in La Porte, Texas. (Brett Coomer/Houston Chronicle via AP)

LOS ANGELES (AP) — Homebuilder stocks are having a banner year, outpacing the broader market on a wave of optimism that mortgage rates will fall and help juice home sales into 2025.

The S&P Composite 1500 Homebuilding Index, which includes 16 stocks, including homebuilders Lennar, D.R. Horton, KB Home and PulteGroup, is up about 29% so far this year. while the benchmark S&P 500 has risen about 18%.

The sector typically notches gains in the months surrounding the start of a Federal Reserve rate cutting cycle. But analysts say there's reason to be skeptical that builder stocks will remain on a tear this time.

“We see a few key risks to the recent rally,” analysts at BofA Securities wrote in a research note this week.

Builder stocks started the year strong, but lost ground in the April-June quarter as the average rate on a 30-year mortgage surged above 7%.

The sector rallied again in the current quarter as mortgage rates eased and signs of waning inflation and a cooling job market fueled expectations of the first Fed rate cut in four years. Mortgage rates are influenced by factors including how the bond market reacts to the Fed’s interest rate policy decisions.

In the three months before and after the Fed cuts rates, homebuilder stocks have outperformed the S&P 500 index in three out of the last five such periods, according to BofA.

Still, the BofA analysts and many economists contend that the recent pullback in mortgage rates already reflects a Fed rate cut. Mortgage rates tend to track the moves in the 10-year Treasury yield.

BofA's mortgage-backed securities team forecasts that the average rate on a 30-year mortgage will be between 5.75% and 6% by the end of the year. That implies the bulk of the decline has already happened.

Other potential red flags: Homebuilder stock valuations are elevated after their sharp runup this year and the job market has been weakening.

“In our view, the stock performance has been stronger than the improvement in underlying fundamentals as investors look through near-term weakness to a 2025 recovery fueled by lower mortgage rates and pent-up demand.” the analysts wrote.

New homes are shown under construction in Wheeling, Ill., Monday, Aug. 26, 2024. (AP Photo/Nam Y. Huh)