![]() ![]() ![]() During the cold snap, one executive discovered a major hub selling gas at $50 per million BTUs, already nearly 17 times the normal price. “You just had the greatest week in the history of the gas market.”įurthermore, Texas’ lightly regulated gas industry doesn’t require public price disclosures, which meant that buyers like power companies and utilities didn’t know whether the deals they were getting were reasonable.īefore the cold snap, natural gas in Texas had been trading at around $3 per million BTUs. “If you’re producing half as much gas as normal but selling at 70 to 100 times the price, then that math is working for you,” one anonymous executive told Bloomberg. But the spot market’s high prices more than made up for the issues. If spot prices hadn’t spiked, gas suppliers would have shared in the pain when producers began shutting down wells. In a statement to Bloomberg, Energy Transfer co-CEO Tom Long blamed the utility’s “miscalculations of the severity of the storm and their lack of competent planning.” The company’s CEO, Paula Gold Williams, has said the pipeline company engaged in “blatant unlawful price gouging” and used the cold snap to “generate more than two years’ worth of profits from intrastate gas sales in just the first quarter of 2021.” CPS is suing Energy Transfer to recoup a portion of the $1 billion it lost during the storm. One utility, CPS Energy, is blaming Energy Transfer for its woes. We’ve reached out to both companies for comment and will update this story if we hear back. Kinder Morgan, another large gas seller in Texas, made $1.41 billion in the first quarter this year compared with a loss of $306 million in the first quarter of 2020. Energy Transfer Partners reported record earnings for the first quarter, securing a profit of $3.29 billion compared with an $855 million loss for the same quarter in 2020. ![]() ![]() Two major players in the Texas gas pipeline system reaped substantial windfalls from the disaster. As gas supplies tightened, traders and pipeline companies could charge “almost any price they wanted,” power executives told Bloomberg. Gas providers canceled their contracts with utilities and power producers, which had to turn to the volatile spot market to make up the shortfall. By the end of the blackouts, almost half of the state’s natural gas production was offline. After the blackouts began, gas production dropped another 5 billion cubic feet over the next several days as wells still operating lost power. Producers' equipment may not have been winterized, either, and fracking requires massive amounts of water, which can freeze pipes and wells. That was due in part to producers shutting down wells in advance of the cold weather. In the six days before the outages began, daily Texas gas production dropped by nearly 6 billion cubic feet, almost a quarter of the state’s total. In the days leading up to the blackouts, the chair of the Public Utility Commission of Texas spoke with the governor's office 32 times about natural gas curtailments caused by a shortage of supplies.Įarly gas shortages may have been more severe than previously known, according to a new report by BloombergNEF. Equipment problems at gas power plants were compounded by a lack of supplies. The incident was caused largely by coal, natural gas, and nuclear power plants that failed due to equipment that was not prepared for the frigid temperatures. Further Reading Texas gov knew of natural gas shortages days before blackout, blamed wind anywayTexas’ grid collapsed in the early morning hours of February 15. ![]()
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