There’s finally some good news for folks in Texas: it’s gradually getting warmer, and the power outages that left much of the Lone Star State in the cold and dark the past few days should keep winding down. But what are we all to make of what just happened? How could a state blessed with seemingly limitless energy resources of every type — natural gas, coal, wind, and solar among them — end up so short of electricity when it needed power more than ever? It turns out that the electric grid that the vast majority of Texans depend on day in, day out is designed to perform very well almost all the time, but is susceptible to a rapid unraveling when an unfortunate combination of events hit. Today, we continue our review of how this week’s extraordinarily low temperatures have been impacting energy markets — and many of us.
Over time, Texans have pretty much seen it all, weatherwise. Scary thunderstorms. Baseball-size hail. Hurricanes and their attendant flooding. Tornadoes too — plenty of them. Snow and ice storms aren’t out of the question either, nor are sub-freezing temperatures. But no one alive today has seen anything like what many of us have experienced the past few days. Worse yet, the polar vortex of February 2021 wasn’t a short-term thing — it’s lingered way too long, and it’s had profound effects both on energy markets and the people who have lived through it all.
This is our third blog on the deep freeze this week. First, in East Is East, West Is West, we discussed the mayhem that unfolded in the physical gas market in trading for the weekend (and in weekend trading) as a massive spike in demand and a supply contraction (both in terms of production and interregional flows) created localized supply shortages and resulted in record, triple-digit gas prices across the Midcontinent and West. Then, in Terminal Frost, we looked at how natural gas 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.
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About the song
"Perfect Storm" was written by Brad Paisley and Lee Thomas Miller. It appears as the third song on Brad Paisley's 10th studio album, Moonshine in the Trunk. Released as the second single from the album in September 2014, the song went to #1 on the Billboard Country Airplay chart, #4 on the Hot Country Song chart, and #52 on the Hot 100 Singles chart. It has been certified Gold by the Recording Industry Association of America (RIAA). Personnel on the record were: Brad Paisley (vocals, guitar), Randle Currie (pedal-steel guitar), Gary Hooker (guitar, baritone guitar), Kenny Lewis (bass), Kendal Marcy (keyboards), Gordon Mote (piano), Ben Sesar (drums, percussion), Bryan Sutton (banjo, guitar), and Justin Williamson (fiddle, mandolin).
Moonshine in the Trunk was produced by Brad Paisley and Luke Wooten. It was released in August 2014 and went to #1 on the Billboard Top Country Albums chart and #2 on the Billboard Top 200 Albums chart. It has been certified Gold by the RIAA. Four singles were released from the LP.
Brad Paisley is an American country music singer, songwriter, guitarist, and record producer. He has released 12 studio albums, three compilation albums, and 46 singles. He has won 14 Academy of Country Music Awards, 15 Country Music Association Awards, three Grammy Awards, two American Music Awards, and one ASCAP Award. Paisley has also appeared in several television shows in guest roles. He still records and tours.
Comments
Thank you for writing this clear explanation of what happened this week in TX (I live in Austin). I've told people I know that our grid works remarkably well most of the time, particularly in the hot summer months, but we had an unfortunate confluence of events. I am curious what Governor Abbott and the state legislature propose to prevent a similar occurrence in the future. My guess is they will require "winterizing" of generators as a first step. Added cost, but it will provide some insurance against a similar catastrophe in the future. I hope all fellow Texans that are still affected stay warm to make it through to the other side.
I am curious about your statement below. Can you give more detail? The TRRC put out a mandate that nat gas was not allowed to be used for industrial purposes, prioritizing human needs. https://www.rrc.state.tx.us/news/021721-emergency-order-extension/ Isn't that why nat gas passed by the ship channel? "But that gas...had to move right past the higher-priced Houston Ship Channel market, indicating that there probably wasn’t physically a way to get in there"
Thank you for a great blog. To me, the surprising thing is that Texas does not offer more choices to its customers. A market should allow customers to choose what level of certainty that each one wants, so an industrial customer can choose the lowest price option and a residential customer can choose a higher certainty of service at a higher price. The time for "one size fits all" power markets died with the ability of a utility to control supply at every meter.