Another severe winter storm threatens Texas power grid

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Another severe winter storm threatens Texas power grid

The Texas power grid and the natural gas drillers, wind farms and solar arrays that supply it are facing their second test in less than a month as sub-zero weather bears down on the Lone Star state.

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The National Weather Service said that temperatures in the wide swaths of the second largest U.S. state are expected to plunge to well-below normal in the coming days.

The freeze will arrive a little more than two weeks after the first arctic blast of the year crippled an undetermined number of gas wells, processing plants and other equipment vital to ensure the steady flow of fuel to electricity generators.

More than 10% of Texas gas production was knocked offline over a two-day period during the early January chill, according to BloombergNEF data. It was the most severe cut since the infamous February 2021 disaster that killed more than 200 people and paralyzed the state for the better part of a week.

In an email, Todd Staples, President of the Texas Oil and Gas Association, said that some variation in production occurs with sudden temperature changes and these are field operations, not controlled factory settings.

In Midland, Texas, the unofficial capital of the Permian Basin oil and gas field, temperatures are expected to drop to 18 degrees Fahrenheit minus 8 Celsius on Thursday, 15 degrees below the normal low for that day.

Because of the high volumes of subterranean water that typically flows out of the ground alongside fuel, gas wells are particularly susceptible to so-called freeze offs. Wind installations can be knocked offline by extreme cold while overcast weather and snow disrupt solar-power output.

The grid could be at risk if we experience another severe winter storm before operators have weatherized their equipment, said Virginia Palacios, executive director of the watchdog group Commission Shift.

The impending chill can also roil oil markets depending on the extent of freeze offs in the largest crude field in the Permian, North America. Any supply hiccups usually cause dislocations in regional oil prices before they can be rippling into the broader oil-futures market.

During the month of January's cold snap, West Texas crude rallied to a two-week high as buyers scrambled for supplies.

The Texas Railroad Commission, which oversees oil and gas production in the state, didn't respond immediately to a request for comment.

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