BofA did not respond to a request for comment.Įnergy Transfer, which can store about 60% of U.S. The Federal Energy Regulatory Commission is reviewing gas and power markets for potential market manipulation. Utilities are complaining of price gouging and of unwarranted supply cancellations. The week-long output loss cost shale producer Pioneer Natural Resources US$80 million, Chevron about $300 million, and Exxon Mobil $800 million. Losers include producers that could not deliver oil and gas due to frozen wellheads, gathering systems and processing stations. It is possible that some companies may never collect on those sales due to ongoing litigation, however. The firms combined stand to reap billions of dollars in profits by selling gas and power during the storm, according to interviews and reviews of public documents. The biggest winners were companies with access to supplies, including leading energy trader Vitol, gas suppliers Kinder Morgan, Enterprise Products Partners and Energy Transfer, and banks Goldman Sachs, Bank of America (BofA) and Macquarie Group. But a clearer picture is emerging from quarterly earnings and as utility companies smarting from big bills sue to recoup their losses. Demand for heat pushed wholesale power costs to 400 times the usual amount and propelled natural gas prices to record highs, forcing utilities and consumers to pay exorbitant bills.Īfter the storm, few companies wanted to talk about their financial gains, unwilling to be seen as profiting off others' hardships. The deep freeze caught Texas's utilities off-guard, killed more than 100 people and left 4.5 million without power. winter blast that roiled gas and power markets, according to more than two dozen interviews and quarterly earnings reports. Energy Transfer posted its highest quarterly net income on record, more than three times its previous best quarter.Natural gas suppliers, pipeline companies and banks that trade commodities have emerged as the biggest market winners from February's U.S. 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. From a report: 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. 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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