Weather

Wind Fails, Media Blames Natural Gas… Again – Has It Risen For That?


Guest “Get out for a bit!” by David Middleton

Huge increase in natural gas supply shows that Texas is not ready for the cold yet
By Gerson Freitas Jr, Francesca Maglione and Sergio Chapa
Jan 3, 2022, 12:06 PM CST Fixed January 6, 2022, 1:18 PM CST

Texas’ natural gas industry had nearly a year to prepare for last weekend’s cold blast and avoid another production loss. Once again, however, equipment froze, production fell, and companies spewed a layer of miasma into the atmosphere in an effort to keep it running.

While Saturday’s cold front wasn’t as severe as the February storm that killed hundreds and knocked out power in much of the state, nearly 1 million cubic feet of gas was burned or wasted as a result of the shutdown. weather, according to filings with the Texas Environmental Quality Commission. At the same time, output fell to its lowest level since the last freeze, BloombergNEF data showed.

[…]

Bloomberg Green

The article includes this eye-catching image:

The Bloomberg article is…

Frosty weather over the New Year’s weekend caused some operators to shut down production. The media, however, deliberately exaggerated the drop in output and deliberately overlooked the actual failure.

EIA data shows natural gas production in Texas down 5% – Not 25% as some facilities report

January 7, 2022

Bloomberg adjusts for total exaggeration of cold weather-related emissions (Adjusted from 1 Billion Cubic Feet to 1 Million Cubic Feet)

AUSTIN – Being quick to blame and slow to listen can get a lot of attention, but it doesn’t bring out the truth needed to make thoughtful decisions that protect Texans’ lives.

Recent media reports and industry hacks have exaggerated data on natural gas systems related to recent cold weather. There are no official daily reports on actual natural gas flows – they are submitted monthly. However, analysts can make estimates based on market activity, the same type of activity that sellers and buyers use natural gas to make their day-to-day decisions.

Recent estimates of natural gas production vary, as expected because of the assumptions that go into every estimate. They are also different because not all analysts analyze the exact same data, area or timeframe.

Based Just released data from the US Energy Information Administration (EIA), IHS Markit estimated average weekly natural gas production in the Permian Basin of West Texas and Southeast New Mexico down 0.8 Bcf/d (5%) from the previous week. The periods of the week analyzed were from December 22 to December 29 and December 29 to January 5.

RBN Energy released comment on the storm last Monday. The RBN looked at Permian data including Texas and New Mexico and said production last week was near 14 Bcf/d and over the weekend fell to 10.89 Bcf/d, down 3.11 Bcf, respectively. with a decrease of 22%. The RBN data attribute the decline to both frigid conditions and high winds, which were often a factor in production declines in the Permian, not just during cold days.

Whatever the actual number is for the whole of Texas when all production basins are included, the drop in natural gas production is not unique to Texas, nor is the decline in production in Texas. Texas is anywhere near a big problem for gas in general for those who plan ahead and use large reserves of natural gas (544 Bcf of working capacity). Otherwise, the market will reflect a shortfall in spot pricing, a true test of availability. What’s important to this conversation and the system is what we’ve consistently stated since our discussion at Uri: some of the fluctuations in production happen with sudden temperature changes – this is Field operations, not factory settings are controlled.

Texas typically produces about 25 Bcf/d of natural gas. The natural gas used to generate electricity is typically only about 4 Bcf/d, which means that 75% of the natural gas produced in Texas is for purposes other than generating electricity. This remaining 75% can be called by the generators if they want to buy it. For speculative purposes, let’s say Texas experienced a total 3-day cold weather drop of 20% (much higher than the EIA estimate of 5%), which is 20 Bcf/day, times five times the amount of gas used to generate electricity. , plus hundreds of billions of cubic feet of natural gas in storage for those who choose to contract and buy it.

To further confuse what happened during the recent cold weather event, Bloomberg initially reported 1 billion cubic feet (Bcf) of natural gas had been emitted during this period, which created even more media hype about the impact of the cold weather. Bloomberg gave the correct correction that 1 billion cubic feet is actually 1 million cubic feet – this is a significant error. TCEQ can and will fully investigate this issue but initial reports confirm this is within normal operating expectations and the impact is minimal.

Also Bloomberg, for all its dire, shows a similar amount of natural gas availability as there was a year ago. Thus, there is no crisis.

[…]

TXOGA

Despite all the talk about Texas and ERCOT being unprepared for winter, natural gas power generation has responded to the freeze as it was designed to.

Can you guess which power source fails as the temperature drops?



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