American gas infrastructure narrowly escapes meltdown in winter storm

The storm brought back memories from the deadly 2021 winter blast which caused widespread blackouts across Texas. But while that system hit a region unaccustomed to extreme cold, this one spread across the Midwest and Northeast — two areas that should be well-prepared. The fact that they weren’t highlights the flaws of a system that’s facing limited natural gas supplies and the unpredictability of solar and wind power.

“These cold fronts expose the fragility of our energy systems,” said Michael Webber, an energy resources professor at the University of Texas in Austin. “Though the variability of wind and solar are well known and discussed a lot, these freezes also show the flimsiness of the gas system.”

Supplies of natural gas, the nation’s primary heating and power-generation fuel, plunged the most in more than a decade as wells froze and pipelines failed, sending prices skyrocketing. The nation’s largest power grid was on the brink of forced rotating outages, while power was knocked out at least briefly to some customers in at least 24 states. At least 27 storm-related deaths occurred in Buffalo, New York.

Massive Storm

The storm’s sheer size and magnitude made it unusual. Temperatures as low as minus 50F (-46C) were also factors. Extreme diving by the jet stream across North America drove the wedge of cold air across a huge swath of the country. With cold blasting so much of the nation at once, power grids weren’t able to rely as much on neighboring systems to help bolster supplies. It’s the kind of event that could become more common — sharp kinks in the jet streams are a hallmark of the changing climate.

US natural gas production saw its worst one day decline in over a decade on December 23, with approximately 10% of supply being wiped out by well freeze-offs. According to BloombergNEF data that is based upon pipeline schedules, Saturday’s output was just 84.2 billion cubic inches, a 16% drop from the average levels before a slow recovery began.

This meant that suppliers relied heavily on gas inventories held in salt caverns or depleted aquifers to meet demand.  

The Northeastern Appalachia Basin was the most affected by the loss of output. There, supplies plummeted to their lowest level since 2018. 

Pipeline Problems

According to BloombergNEF’s pipeline flow data, the Midwest saw more than half the reduction in supplies from Appalachia and Tennessee Valley to the Midwest. The problems were made worse by mechanical issues at pipeline infrastructure, including at a Ohio compressor station. Enbridge Inc.’s Texas Eastern Transmission Co., which invoked force majeure on some gas supplies. The Tennessee Valley Authority is a federally-owned power provider to many southern states. Duke EnergyTo conserve energy, we had to order rolling blackouts.

Friday’s physical gas deliveries to the hub that supplies Virginia and Carolinas traded at $60 per Million British Thermal units. This is nearly 650% more than two days ago. That’s also more than 8 times the price for gas delivered into the Henry Hub in Louisiana, the US benchmark. Gas prices in Washington, New England and other parts of the country had risen to $100 by Saturday.

PJM Interconnection LLCThe largest US grid operator, with lines that run from Illinois to New Jersey, declared an emergency on Christmas Eve. This required some 65 million customers to reduce their demand and warned them about the possibility of rotating outages. Grid also encouraged households to save energy over the weekend. Texas’ Energy Department granted an emergency waiver that allowed power plants to continue running without exceeding their emissions limit.

This winter marks the third consecutive winter that natural gas production has dropped at least 8 Billion cubic feet per day due to freeze-offs. It also underlines the increasing frequency of outflow-disrupting storms.  

Due to the shale boom, natural gas has now become the top power-plant fuel. It was so costly that New England had to rely on coal for as much as 40% of its power during the long Christmas holiday weekend.

System-wide impacts for natural gas and electricity are “making it difficult to dismiss February 2021’s Winter Storm Uri as a one-off event,” said Eli Rubin, an analyst at EBW AnalyticsGroup.

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