Sunday, January 29, 2023

Hurricanes knock out US oil, gas and electricity production, causing prices to soar

by Erwin Seba and Scott DiSavino

December 23 – Freezing cold and hurricane-force winds knocked out power across the United States on Friday and reduced energy production, driving up heat and power prices as people prepared for the holiday.

Winter storm Elliott brought freezing temperatures and extreme weather warnings to nearly two-thirds of the United States, with freezing temperatures and snow in some areas well into the holiday season.

More than 1.5 million homes and businesses lost power, Texas oil refineries cut gasoline and diesel production due to equipment breakdowns, and heating and electricity prices soared from the deficit. Oil and gas production froze from North Dakota to Texas, reducing supplies.

Refining capacity along the US coast in the Gulf of Mexico has been cut by about 1.5 million barrels per day due to cooler temperatures. The production losses are not expected to last long, but they have pushed up fuel prices.

TotalEnergies, Motiva Enterprises and Marathon Petroleum facilities located outside Houston were closed. The cold also disrupted Exxon Mobil, LyondellBasell and Valero Energy plants in Texas, which produce gasoline, diesel and jet fuel.

Cameron Plant LNG The director of Sempra Infrastructure in Louisiana said the weather had disrupted its liquefied natural gas production without elaborating. Workers at the plant, which produces 12 million tonnes a year, are trying to restore production.

Pale where ice crystals block the production of oil and gas Output from North Dakota oil fields fell this week between 300,000 and 350,000 barrels per day, or a third less than normal. El Paso natural gas operator Kinder Morgan Inc said at its Permian oil fields in Texas, colder temperatures are causing more gas to be extracted than injected.

Benchmark US oil prices rose 2.4% to $79.56 on Friday, and gas in West Texas rose 22% to nearly $9 per million British thermal units (MMBtu), the highest level since 2021 in the state.

Electricity prices on the Texas grid also rose to $3,700 per megawatt hour, prompting generators to add more power to the grid, before prices dropped again as thermal and solar supplies worked.

The New England power provider said it expected to have enough to meet demand, but strong winds elsewhere caused power outages, mainly in the Southeast and Midwest; North Carolina reported more than 187,000 customers without power.

“Crews are restoring power, but strong winds are making repairs difficult at most of the 4,600 outage points,” Jeff Brooks, a spokesman for Duke Energy, wrote on Twitter.

Heating diesel and natural gas futures rose in response to the cold. US heating diesel futures rose 4.3%, while natural gas futures gained 2.5%.

In New England, gas at the central Algonquin rose 361% on Friday to a nearly 11-month high of $30 mmBtu.

About half the electricity generated in New England comes from gas plants, but on cold days, generators switch to burning more oil. According to the network operator, New England isoAs of Friday afternoon, 17% of power companies’ production came from oil plants.

Gas production plunged nearly 6.5 billion cubic feet per day (bcfd) over the past four days as well freezes in Texas, Oklahoma, North Dakota North, Pennsylvania and elsewhere hit a nine-month low of 92.4 bcfd on Friday. has reached

This is the biggest drop in production since a February 2021 cold snap that left millions without power in Texas.

One trillion cubic feet of gas is enough to power about 5 million American homes for a day.

Nation World News Desk
Nation World News Desk
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