Texas Gov. Greg Abbott has banned natural gas exports until the power supply is restored, Reuters reports, citing the governor’s statement.
The export ban runs until Sunday, with Abbott saying: “It will also increase the power that will be produced for homes here in Texas.”
What social media users call Texas Freeze wreaked havoc in the Texas grid and its energy industry because boreholes and production blocks were not insulated from freezing temperatures. As a result, natural gas production declined, leading to price increases above the $ 9,000 per MWh ceiling imposed by the state’s energy regulator.
The state Lone Star produces about 25 percent of the U.S. total. In December, the state’s share daily was between 22 and 27.8 billion cu ft. According to various estimates, it has now dropped between 8 and 10 billion cu ft.
According to industry insiders quoted by Natural Gas Intelligence, the production capacity of at least 7 billion cubic meters was shut down by the icy weather, which caused freezing of the wellhead, shutdowns of the gas processing plant and pipeline interruptions.
According to Refinitiv data from Reuters, the production rate this week dropped from 7.9 billion cu ft before the freezing point to 1.9 billion cu ft now.
Texas exports much of its natural gas production to other states and Mexico: as much as 40 percent of Mexico’s U.S. gas imports come from Texas. These exports also fell this week from 5.7 billion cu ft to 3.8 billion cu ft.
Due to the dependence on US imports, Mexico, in the northern part, was also hit this week by the interruption of gas production in Texas. According to media reports, as many as 4.77 million people in northern Mexico were without power due to the events in Texas.
By Charles Kennedy for Oilprice.com
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