Texas Power Grid Braces for Freeze That Imperils Fuel SupplyThe Texas power grid and the natural gas drillers, wind farms and solar arrays that supply it are facing their second test in less than a month as subzero weather bears down on the Lone Star state. Temperatures in wide swaths of the second-largest U.S. state are forecast to plunge to well below normal in coming days, according to the National Weather Service.
The freeze will arrive little more than two weeks after the first arctic blast of the year crippled an as-yet undetermined number of gas wells, processing plants and other equipment vital to ensuring the steady flow of fuel to electricity generators.
During the early January chill, more than 10% of Texas gas production was knocked offline over a two-day period, according to BloombergNEF data. It was the most severe cut since the infamous February 2021 disaster that killed more than 200 people and paralyzed the state for the better part of a week.
“It is important to remember, however, as we have consistently stated, that some variation in production occurs with sudden temperature changes -– these are field operations, not controlled factory settings,” Todd Staples, president of the Texas Oil and Gas Association, said in an email.
Freeze Offs
In Midland, Texas, the unofficial capital of the Permian Basin oil and gas field, temperatures are forecast to bottom out at 18 degrees Fahrenheit (minus 8 Celsius) on Thursday, 15 degrees below the normal low for that day. Natural gas futures rose as much as 2.4% on Wednesday in New York, extending the previous day’s 0.5% gain.
Gas wells are particularly susceptible to so-called freeze offs because of the high volumes of subterranean water that typically flow out of the ground alongside the fuel. Wind installations also can be knocked offline by intense cold while overcast weather and snow disrupt solar-power output.
“If we experience another severe winter storm before operators have weatherized their equipment, the grid could be at risk again,” said Virginia Palacios, executive director of watchdog group Commission Shift.
Crude Ripples
The impending chill may also roil oil markets depending on the extent of freeze offs in the Permian, North America’s largest crude field. Any supply hiccups typically create dislocations in regional oil prices before rippling into the broader oil-futures market.
During this month’s earlier cold snap, West Texas crude rallied to a two-week high as buyers scrambled for supplies.
The Texas Railroad Commission, which oversees oil and gas production in the state, sent an email and held two conference calls about the upcoming freeze with top producers and major pipeline operators on Tuesday.
“They didn’t anticipate anything other than normal production fluctuations, however they are prepared to address any issues they may have with overnight freezing temperatures,” Railroad Commission spokesman R.J. DeSilva said in an emailed statement.
Inspectors for the main grid operator of Texas found that the vast majority of power generating units are in compliance with new rules that require them to be able to operate during winter weather.
The Electric Reliability Council of Texas said that three generators out of 302 resources inspected didn’t meet the standards, according to a report filed with state regulators on Tuesday.
“The Texas electric grid is more prepared for winter operations than ever before,” Interim ERCOT Chief Executive Officer Brad Jones said in a statement.