It is important to remember - there is not one chokepoint in this situation. There are failures at every level. Let me quote form the RBN blog.
"To state the obvious, prices are a function of both demand and supply, and this Arctic event has been a doozy for both sides of that equation. Not only have record electric generation and heating demand been competing for gas supply, particularly in the Central U.S., but supply has taken a big hit, as freezing temperatures and widespread power outages have led to extensive freeze-offs at the wellhead as well as other types of upstream and pipeline outages that have crippled producers’ ability to get volumes to market. Today our focus is on the factors that stifled production in some of the most resource-rich areas of the country.
Initial pipeline data as of early Tuesday indicates Lower-48 gas production is down a whopping 10.6 Bcf since Friday to 76.1 Bcf/d and down 15 Bcf/d from the recent high of 91.1 Bcf/d seen a week ago on Friday, February 5. At this level, production is also 18 Bcf (~20%) lower than this time last year and more than 5 Bcf/d below the 5-yr average."
"Natural gas wellhead freeze-offs — a phenomena where low temperatures crystallize the water produced along with natural gas, forcing blockages at the wellhead — happen when outside temperatures drop below freezing in producing fields. The consequences range from minor inconvenience to major reductions in natural gas production and power outages affecting millions of customers. From a scale of 1 to 10, you could say Texas’s trouble has been turned up to 11 in terms of gas supply and power failure."
Yes, wellheads can be hardened. But question, do you add the extra expense to protect from a once in every 50 year event on a well that has only, say, a 20 year lifetime? With low prices, it would come as no surprise that most firms said no. You want to fix it? Have the Texas Railroad Commission make methanol injection systems integral to every new well completion.
"There are several points at which freeze-offs are common and can block the gas flow, including: right at the wellhead pipe-and-valve “Christmas tree,” in the inlet scrubber or separator that splits out the gas, water and condensate streams, and again just as the gas exits the separator and flows into the gathering system. There are processes to keep the wellhead operational, including the removal of water and condensates that accumulate in limited onsite storage breakdown. But these systems can automatically shut down production flows if those storage tanks don’t drain and fill to capacity. Similarly, freeze-offs can worsen if operators aren’t able to replenish the chemicals that prevent condensation in the gathering systems."
Look at the numbers. Not enough gas - not enough electricity. Then if the power plants have freeze problems, even less electricity. In Texas, many (most?) homes are heated by natural gas. By law they get priority over power plants. When it's extraordinarily cold, the residential demand goes up - way up! Less gas for electricity. Rolling blackouts. Then permanent blackouts. But at least they are controlled blackouts, carefully chosen - maybe. And that's better than having the entire grid go down hard.
The critical infrastructure I'm near? A major sewage treatment plant. Kept warm and running. Forth Worth let theirs freeze - not considered critical enough. Guess who is now boiling their water - if they get any at all?
Wind didn't help - they had their own freeze-up problems (and nobody made them add all the winterizing add-ons when they were built, either). Solar? You don't get much from a panel cover with 4 inches of snow.
Now there is Nat Gas storage in Texas, but gas can only go in and out so fast. Nowhere near fast enough to make up for the Nat gas shortfalls.
Finally, we older Texans remember all the "help" federal regulations for the oil business back in the 1970's. Federal law limited most Texas oil to $2.65 cents a barrel - when the open market price was $20 - $30 - $40 dollars a barrel. Do we want the same sort of federal "help" in the electricity market?
As a 5th generation Native Texan, I reserve the right to rant back. . . .
marker.medium.com
. What say ye now, Mr. Perry? Still loud and proud about that Feds-free (alleged) "energy independence" in Texas?
www.zerohedge.com
