Video: Deep freeze shuts down US Gulf Coast oil production
Unusual sub-zero temperatures have wrought havoc with the US Gulf Coast energy sector, shutting down a fifth of America’s refining capability and closing the Houston
An almost unprecedented cold snap has shut down the US Gulf Coast, closing refineries and affecting a key shipping route, reports Dryad Global. 4 million barrels were knocked off US daily oil production and the strategically important Houston Shipping Channel has been closed.
News agency Reuters, estimates that 500,000 to 1.2 million bpd of crude production has also been disrupted and authorities say it may be weeks before full production is restored. An estimated 5.3 million homes were without power, with Texas being the hardest-hit state. Texas runs power grids that are largely independent of the rest of the country and has been particularly affected as the state can’t draw power from neighbouring grids.
Todd Staple, president of the Texas Oil and Gas Association, said: “The entire Texas system from the wellhead to the electric meter on a home is more designed to deal with multiple 100 degree days than multiple single-digit days.”
The arctic weather sent US oil prices to a near 13-month high, with front-month gas futures jumping to a three-month high. Many refiners have declared force majeure and have shut down operations. The last time the industry was impacted so badly was when Hurricane Harvey hit the Gulf in 2017.
Senior research analyst with Wood Mackenzie, Marc Amons, said: “We’re talking about a major portion of the U.S. Gulf Coast refining capacity currently being offline, in all likelihood, above 4,000,000 barrels a day”.
