11, two pipeline companies, Targa Midstream Services LLC and DCP Midstream LP, were forced to shut gas-processing facilities due to freezing weather, according to filings with the Texas Commission on Environmental Quality. 15, according to data compiled by BloombergNEF. Crucially, 52% of the drop in volume came before ERCOT’s first power cut in the early hours of Feb. Some producers shut in their wells as a preventative measure massive amounts of water are used in fracking and operators feared the cold weather would freeze wells, pipes and roads.Īs the cold weather swept through west Texas, the state’s gas production tumbled by some 11 billion cubic feet over nine straight days from Feb. Most of it was attributed to weather-related breakdowns and idled plants. Multiple parts of the system were to blame: regulators failed to predict the severity of the low temperatures, power producers underestimated demand, wind turbines froze and coal and nuclear plants tripped offline.īut the largest point of failure was generators powered by natural gas, according to the Electric Reliability Council of Texas. Its prices were fully negotiated and set by the market, the company said.Īt its peak, Winter Storm Uri left the Texas grid nearly 50% short of the power it needed, causing widespread blackouts 500 times worse than those affecting California during the wildfires of 2020. “Energy market participants took full advantage of the declared disaster, or did not take the appropriate steps to stop the exorbitant and unconscionable prices.”Įnergy Transfer said years of investment meant it was able to keep its pipelines running and sell gas from storage, providing critical supplies when others could not. This is “the most massive wealth transfer in Texas history,” said Ron Nirenberg, mayor of San Antonio. Energy Transfer posted its highest quarterly net income on record, more than three times its previous best quarter. What Abbott didn’t mention was the massive windfall key industry players made during the freeze. Even though gas failed in its role as a reliable backup fuel during the freeze, Abbott pushed regulators in a letter to strengthen incentives for fossil fuel and nuclear generators while increasing “reliability costs” for intermittent renewable power sources. This week, Governor Greg Abbott appeared to double down on his early assessment that wind and solar were prime culprits of the freeze. Texas lawmakers have set aside $10 billion to help natural gas utilities cover their natural gas costs from the storm through low-interest, state-backed bonds.Ī special legislative session convened Thursday but the agenda did not include any measures to fix the power grid. Millions of Texans are now faced with the prospect of paying higher gas prices for years as utilities seek to spread the cost over a decade or more. The BNEF estimate is based on spot prices at major hubs assessed by S&P Global Platts rather than private contracts, so is likely an upper limit of the total cost. A further $3 billion was spent by utilities providing gas for cooking, heating and fireplaces. The cost of gas for power generation alone was about $8.1 billion, or 75 times normal levels. Soon customers will be saddled with the bill.Īnd it’s a big one: The total comes to about $11.1 billion for a storm that lasted for just five days, according to estimates by BloombergNEF analysts Jade Patterson and Nakul Nair. Power producers were forced to pay top dollar in the spot market for whatever gas they could find. As the flow of gas cratered, everyone scrambled to secure enough supply, sparking one of the wildest price surges in history. Interviews with energy executives and an analysis of public records by Bloomberg News show that natural gas producers in the Permian shale basin began to drastically reduce output days before power companies cut them off. It’s now becoming clear that while millions of Texans endured days of power cuts, the state’s gas producers contributed to fuel shortages, allowing pipelines and traders to profit handsomely off them. (Bloomberg) - The official autopsy of the great Texas winter blackout of February 2021 quickly established a clear timeline of events: Electric utilities cut off power to customers and distributors as well as natural gas producers, which in turn triggered a negative feedback loop that sunk the state deeper and deeper into frigid darkness.
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