How the Texas Power Crisis Has Affected Oil & Gas

Oil Rig
Statistics from relevant authorities show that millions of Texas homes and businesses have been living without power for about a week. Winter storms and low temperatures have disrupted the local power system and refineries. The problem is also affecting other areas. The state’s power grid is primarily powered by natural gas and wind, equipped to handle hot and humid weather when the demand soars.
However, unlike blistering summers, the winter weather was a major blow to power production plants. This cut supplies as extreme weather led to unprecedented demand. The Federal Energy Regulatory Commission has revealed it would investigate the root cause of the power crisis, but the focus is restoring power and ensuring residents’ safety.

Although most agencies have turned their attention to frozen wind turbines, most outages were caused by other energy sources, including coal, nuclear, and natural gas, which produce a significant percentage of power in the state during the cold months. Frozen blades made the turbines inoperable.

For renewable power critics, the current power crisis shows the need to reevaluate the state’s grid’s reliability. However, they’re skeptical that initiatives to slow wind and solar power will increase. The winter storm affected multiple forms of power generation.

Texas doesn’t have typical policies for renewable energy that can be modified according to changing needs. U.S. oil prices skyrocketed to $60 per barrel for the first in the last 12 months despite the trajectory being upward amid vaccine approvals and stimulus programs.

Utility companies are struggling to keep the lights on, which has been one of the top reasons for high power prices. Also, companies are buying at any price due to contractual obligations. The increased cost may end up in local consumers’ utility bills.

Natural gas prices increased by 3% last week after surging over 7%. For the month, the prices have skyrocketed by about 26%. Some people believe renewable energy sources led to blackouts. However, the outages were due to issues relating to natural gas production.

Some experts expect a slowdown in the adoption of renewable sources and increased demand for natural gas. Although renewables weren’t the root cause of the current crisis, they’re intermittent sources. Innovative energy storage facilities are vital in making renewables more dependable.