CAPE HATTERAS, N.C. (Bloomberg)—Emergency agencies along the Eastern seaboard are preparing for the arrival of Hurricane Earl, which threatens to graze North Carolina and lash coastal Massachusetts with wind and rain before going ashore in Nova Scotia.

Evacuations may be needed if the storm doesn't turn north, Craig Fugate, Federal Emergency Management Agency administrator, said in a conference call Tuesday. While Earl isn't expected to make landfall in the U.S., even a small jog to the west from its current track will have an impact on the mid-Atlantic states, said Bill Read, director of the National Hurricane Center.

Earl, a Category 4 storm, or the second-strongest on the five-step Saffir-Simpson scale, is on a track that would take it just past North Carolina's Cape Hatteras early Sept. 3 and then on toward Nantucket and Cape Cod in Massachusetts later that day, according to the center.

“The next few days are going to be very stressful for people on the East Coast from Hatteras to Boston,” said Jim Rouiller, senior energy meteorologist at commercial forecaster Planalytics Inc. “The tracking models are fairly clustered together, but there are enough errors built in where you can be off by 50 to 200 miles.”

Hatteras-bound

Earl was 1,070 miles south-southeast of Cape Hatteras with maximum winds of 135 miles per hour (217 kilometers per hour) and moving west-northwest at 14 mph, according to a center advisory released at 11 a.m. Miami time.

The U.S. Coast Guard has put shipping in Norfolk, Va., on notice and the National Hurricane Center says it may issue hurricane watches along the mid-Atlantic coast later Tuesday.

“Residents and tourists anywhere from North Carolina up to New England should keep track of this storm,” Robbie Berg, a hurricane specialist at the center, said Tuesday in a telephone interview from Miami. “It's too early to tell what kind of impact will occur.”

Evacuation decisions are made at the state and local level, not by FEMA, Mr. Fugate said, adding that the federal agency was speaking out to make sure people are prepared right away.

“We've actually had people moving from the West Coast to the East Coast to have enough teams to cover all the states, because this storm is going to parallel the coast and we want to have people ready to go in each of the states if there is a request,” he said.

Strike odds

The chances are 10% that the U.S. will experience hurricane-force winds of at least 74 mph in the next three days, according to Tropical Storm Risk, a London-based venture that grew out of a U.K. government-supported tsunami initiative.

TSR puts the possibility of tropical storm-force winds of at least 39 mph at 60% in the same time period. Both Cape Hatteras, in North Carolina, and Chatham, Mass., have a 10% risk of hurricane-force winds.

In 2003, Hurricane Isabel struck the Outer Banks as a Category 2 storm, killing at least 16 people and causing $3.4 billion of damage, half of it to insured property, according to the center.

Providence, R.I., and Montauk, N.Y., have a 35% chance of experiencing tropical storm-force winds within the next four days, TSR said in a statement Tuesday.

“People only have two or three days to prepare,” said Mr. Rouiller. “We can get some power outages in Massachusetts up through Halifax.”

Massachusetts impact

Cape Cod and Nantucket island are likely to receive the highest wind gusts from Earl, said Meredith Croke, a meteorologist with AirDat L.L.C. in North Carolina, which installs weather-gathering sensors on commercial aircraft.

“Long Island is tucked in a little more so it will be better for that region,” she said.

Earl's winds have reached the same intensity as Danielle at its peak. Danielle late Monday weakened to 70 mph over the North Atlantic as it became a post-tropical storm, an indication it no longer derives its energy from warm waters. Earl's tropical storm-force winds extend up to 200 miles from its eye and hurricane-force winds reach 70 miles.

Based on the current path of the storm, Progress Energy Inc. expects normal operations at its Brunswick 1 and 2 reactors near Southport, N.C., which have a combined capacity of about 2,100 megawatts, Jeff Brooks, a company spokesman, said in a telephone interview.

Canada landfall

The current track shows the storm going ashore near Yarmouth, Nova Scotia, on the morning of Sept. 4, Chris Fogarty, program supervisor for the Canadian Hurricane Centre in Dartmouth, Nova Scotia.

High temperatures this summer have caused the waters around Nova Scotia to remain unusually warm, and that may allow Earl to keep its strength longer and be more powerful when it hits land, Mr. Fogarty said.

“It looks like a 75% to 80% chance of decent winds will move into some part of Nova Scotia,” Mr. Fogarty said. “The big question is, will it be hurricane strength when it arrives here.”

Earl is being followed across the Atlantic by Tropical Storm Fiona, which formed Monday and remained a “weak” system Tuesday with sustained winds of 40 mph, the hurricane center said.

Fiona is 440 miles east of the Leeward Islands, heading west-northwest at 24 mph, the center said at 11 a.m. Miami time. The storm is predicted to pass to the northeast on a course between Bermuda and the U.S. East Coast. A hit on Bermuda remains a possibility, graphics on the center's website show.

Fiona's path

Earl may keep Fiona from strengthening, according to Allan Huffman, also an AirDat meteorologist.

“The problem with Fiona is that it is so close to Earl,” Mr. Huffman said. “If there is a stronger storm at the front, it will have an adverse impact on the one behind it.”

Earl has already caused damage to some of the islands of the Caribbean, blowing the roofs off of buildings in Anguilla and destroying at least one home in Antigua, according to an e-mailed report by Caribbean Risk Managers Ltd. Flooding also occurred on Antigua, and 350 people were forced into shelters, according to the risk management company, based on Castries, Saint Lucia.

Tropical storm watches, which indicate such conditions are expected within two days, were issued Tuesday for Antigua, Barbuda, Montserrat, St. Kitts, Nevis, Anguilla, Saba and St. Eustatius. A tropical storm warning is in place for St. Martin and St. Barthelemy.

Caribbean warnings

Tropical storm warnings were lifted for Puerto Rico, where some 200,000 customers were without power, and the U.S. and British Virgin Islands after Earl passed. The Turks and Caicos remain under a tropical-storm warning, while the southeastern Bahamas are under a watch.

Forecasters are now watching another area of disturbed weather off the coast of Africa that has a 10% chance of becoming a storm in the next two days.

Mr. Rouiller said satellite images show other systems stacked up over Africa ready to move to sea.

“Clear across Africa they are lined up, there is a conveyor belt and we don't see an end to it,” Mr. Rouiller said. “We could be in this for a while.”

Copyright 2010 Bloomberg

A major hurricane in the Northeastern United States could prove to be more damaging than a similar one in Florida or the Gulf Coast. A recent Business Insurance webcast examines the unique hurricane risks in the Northeast, as well as what risk managers in that region should do to now prepare for such a storm. The free webcast can be viewed here: http://bit.ly/af0zJt.