Blackouts Cascade Beyond Texas in Deepening Power Crisis

[Draco-Onis]

Anyone thinking Texas won’t actually fix the issues because they think it’s such a rare occurrence that it’s just not worth the cost?

I do.

They had 10 years and multiple warnings from other close calls. What makes you think Republicans will suddenly give a shit? Once this is gone from headlines they will go back to ignoring facts and science.

[Ursus]

They had 10 years and multiple warnings from other close calls. What makes you think Republicans will suddenly give a shit? Once this is gone from headlines they will go back to ignoring facts and science.

To (enough) voters in Texas, this past week has been a small price to pay to protect their right to own a machine gun and to keep out illegal immigrant caravans hellbent on raping everybody. I actually saw a thread on one Texas message board that was unironically entitled "Lets talk about all the good Ted Cruz has done for us".

[Rasulis]

Well sure, obviously the Northern Grids are more prepared for that particular scenario, because it is more common. The root causes aren't really related to the actual mechanical failures, those are engineering problems which are solvable. The real issues stem from the "culture" of our grid. IE, where the motivation to maintain and repair it comes from. It is why deregulation is extremely dangerous, as Texas is demonstrating right now, but Trump repealed a ton of regulations that leave the rest of the US grids vulnerable as well. I view the price gouging as a separate, but related issue to the actual failures.

The real concern isn't specifically an ice storm, it is ANY low frequency event that disrupts production. The US is pretty used to losing power distribution, it happens all the time in hurricanes and severe storms. Line breaks, mass transformer outages, etc. We can resolve those issues pretty well. What happened in Texas is that they lost production, which is a much rarer incident, and much harder to recover from (And much more expensive to guard against).

This is why is certain conservative idiots are blaming it on renewables, which has a certain amount of truth, but is totally missing the point. Wind and Solar were not contributing to the grid during the ice storm, which is totally normal and planned for, but the problem is that the combustion sources failed at the same time, which is normally what would take up the slack. This caused a dramatic productivity drop. So yeah, they do have a point. This is the problem with having too much renewables on the grid, I have been saying that for years (Not that Texas is anywhere near that point). That isn't really the point though, the problem is that the whole infrastructure didn't plan for an event that forces both to shut down at the same time, and THAT is something that is common to the entire North American system. Now our production facilities are pretty well geographically separated in the other two grids, dramatically reducing the chances that a single natural event will hit enough to do that to the whole East Coast. The west coast is slightly more vulnerable, but still better off then Texas.

The specific thing most people are really concerned about for the other two grids is a cyber attack. Or worse, a combined cyber/physical attack. That ignores geographical separation, and could absolutely drop the grid for either the east or west coasts for potentially months. And just like Texas didn't invest in weatherproofing their systems, the rest of the US isn't investing in hardening its grid from cyber. I see it as more of a when, not if.

I still remember this one.

2011 Southwest blackout

[Breccia]

The real concern isn't specifically an ice storm

Right right, I got that and see your concern in the rest of the post. My outrage is still "you were without power during an emergency, that'll be one Honda Accord's price please" over and above the rest of the distaster that's leve 70 dead.

[Rasulis]

The dire situation triggered a frenzy of round-the-clock meetings. One group of traders convened their first Saturday morning conference call since the collapse of Lehman Brothers in 2008. The public holiday on Monday meant U.S. banks were closed, so -- desperate for money -- some market players turned to European parent companies that could deliver so-called margin payments on their behalf to the exchanges sooner. The cash showed up in different currencies, but it did the trick.

“I’ve been through a lot: The ‘98 and ‘99 power spikes in the Midwest, the California crisis” of 2000-2001, said Cody Moore, head of gas and power trading at Mercuria Energy America. “Nothing was as broadly shocking as this week.” One gas trader said in a message over the weekend his head was “still spinning.” Brian Lavertu, a trader in Texas’ power market, predicted prices were about to go “wild.”

That turned out to be an understatement. In what will go down as one of the most remarkable weeks in power and gas market history, gas soared as high as $1,250 per million British thermal units in some locations, electricity in Texas surged to its $9,000-per-megawatt-hour price cap and the state’s grid operator ordered the country’s biggest-ever forced blackout as the cold pushed its system to the brink of total collapse.

Winners will emerge -- like Jerry Jones, the billionaire owner of the Dallas Cowboys, whose gas company sold some fuel for high premiums. There will most undoubtedly be losers. Atmos Energy Corp., one of the largest independent suppliers of gas in the U.S., revealed Friday it’s looking to raise cash after committing to spend as much as $3.5 billion to secure fuel during the freeze. The company said it’s “evaluating a number of financing alternatives including available cash, short-term debt, long-term debt, and equity.” The markets may never be the same.

Spot prices at the Oneok delivery hub in Oklahoma, for example, which had mostly been trading at a small but steady discount to Nymex, moved sharply higher on Wednesday, Feb. 10, to settle at $9. On Thursday they hit $60. By Friday, they briefly surpassed $500, a level previously undreamed of.

But the spot gas price spikes now being seen were triggering truly outsized demands: According to one trader, a small market participant with a margin requirement of $100,000 saw that balloon to $1 million. Larger companies had to find tens of millions of dollars. Many spot gas trades are conducted via next-day contracts on Intercontinental Exchange Inc., which boosted its margin requirements.

After the market closed Friday, stunned traders scrambled to work out how much additional funds they would need to set aside for the following week. Some trading houses were extremely nervous. An executive at one said he was worried that some counterparties could go bust and leave his firm with positions to fill on the spot market.

There were also more practical considerations as the weather closed in. Mercuria made the decision to book hotel rooms for some of its Houston employees so they could avoid driving in icy conditions. “This is an exceptional time and our first priority was to do whatever we can to keep the grid moving, the gas flowing properly,” Mercuria’s Moore said.

Meanwhile key pieces of Texas’ energy infrastructure began to fail. Oil and gas wells stopped producing as liquids froze in pipes. By the night of Sunday, Feb. 14, it was apparent that Ercot, which oversees Texas’ power grid, might have to implement rolling blackouts.

Some traders looking to raise more collateral urgently tapped credit lines, while lenders sprang into action. One bank was able to extend credit facilities by $500 million and have them in place when the markets reopened, according to a person working there. Other lenders also took similar action, according to other people with knowledge of the situation. “Nobody wanted to trade a liquidity event, so they stepped up,” one banker said.

By the morning of Tuesday last week, Texas was plunged into an unprecedented energy crisis, with Ercot unable to restore most of the grid. As markets reopened, some traders liquidated their positions, unable to post the additional margin.

“If you want to play, you’ve got to pay,” said John Kilduff, trader and founding partner at Again Capital. “It’s a mechanism to wring out excessive speculation.”

For those still in the game, the wild ride continued. By Wednesday, spot prices had surged at Henry Hub in Louisiana, the delivery benchmark for Nymex futures, while rates at Oneok touched $1,250.

Working from home, Phillips and his co-workers at Uplift saw orders filled in the Western Rockies at prices as high as $350. “I thought maybe the highest we could get was $20 this week, to be honest,” he said.

Some of Uplift’s clients were doing everything they could to keep the gas flowing at this point amid the frigid temperatures, using space blankets and portable heaters to stop pipes from freezing. “Some of our producer clients felt morally obligated that the gas was flowing,” Phillips said.

In Oklahoma, Chris Bird’s company Exponent Energy, was using similarly improvised measures, including a propane gas torch, to keep its gas wells from freezing. In just five days, Exponent’s wells in Osage County raked in about $3 million of revenue, compared with around $800,000 for the whole of last year.

As awareness grew of the sky-high cost of gas, outrage grew, even within the gas market. Some observers questioned why fuel was still flowing to liquefied natural gas export terminals when power was still down for millions of Texans.

“What is happening is a disgusting price-gouging that we have not seen since the California energy crisis,” said John Woods, an independent trader, referring to the spot prices. “Texas should ban the export of fuel.”

By late afternoon Wednesday, Texas Governor Greg Abbott announced during a televised address that he had stopped the shipment of gas from the state.

That created a fresh wave of panic in the market. Traders frantically sought clarification on how the order would be enforced. One trader on the West Coast who had been working around the clock lost $1 million within minutes, having earlier bought a gas swap priced at $20 -- essentially betting on continued supply constraints in Texas -- only to see the price fall to $12 immediately after news of Abbott’s order broke.

At the peak of the power outages, close to 4 million Texans were cut off, but by Thursday Ercot was having more success in reconnecting homes and businesses, and temperatures were beginning to recover. Gas supplies rebounded, too, and spot prices plunged. Oneok rates fell back to settle on Friday at $3.56 and Ercot ended emergency conditions.

While gas prices are almost back to where they started, the full repercussions of the wild ride will likely take a while to emerge. The hasty curbs on Texan exports may jeopardize the perception of how reliable U.S. LNG supplies could be in the future, said Katie Bays, managing director at FiscalNote Markets. Some financial losses in the U.S. market may only emerge toward the end of March, when billing comes due for February. Serious financial damage may end up raising the barriers for entry to the market, which in turn could reduce the amount of competition, said Kilduff at Again Capital.

This is not the end of the story by a long shot.

[postman1782]

When they pulverized the Confederacy?

But that was back when they had Abraham Lincoln and principles lol.

Yep, back when they were the actual liberal party, and not the ghost of its' former self now.

[Low Hanging Fruit]

I don’t think they will, which is sad. I don’t like that this happened, but hopefully more Texans, after having gone through this, vote these assholes out cause they’re not going to improve things... not when there’s profits to be made.

Sadly in Texas its almost impossible to vote Republicans out of office. The truth is if it was just raw numbers Texas probably would be pretty purple if not flipping blue sometimes. A lot like a Florida is when it comes to elections. But in Texas the system is so rigged and gerrymandered that really a very small % of the people in VERY republican areas control a huge percentage of the actual voting power in Texas. So no, nothing will change, some people will get fired at ERCOT with give severances. A few staffers probably get fired in and around government offices that have to do with making sure this doesn't happen. But the poison bit leadership that whistles as they take bribe money to look the other way will be safe and sound.

[Crissi]

https://www.wfaa.com/article/news/lo...2-523a51f58674

Customers cannot have their power disconnected for non payment, and electric companies cannot send invoices to customers for the time being. Good.

[Draco-Onis]

https://www.wfaa.com/article/news/lo...2-523a51f58674

Customers cannot have their power disconnected for non payment, and electric companies cannot send invoices to customers for the time being. Good.

Anything done by Abbott and the republicans in charge right now is for the optics, the real test will be when the cameras have moved on. If history is any guide Texas is screwed unless they vote out these idiots.

[Zan15]

I am going to be really pissed if bail out money goes to these vipers though it seems inevitable, they are going to get record profits for failing.


There's a lot wrong with not having electricity for days then getting a 17K+ electric bill, the only question is if the republicans in control of Texas pay a price for this. If history is any guide this will be forgotten in a few months then a few years later we are going to have the same disaster because climate change isn't going away.

All you have to do is look at NY, NJ, CT, Etc and see what happened after sandy...then the next storm....then the next....
Basically nothing.
Butchered some trees, Cut CEO pay a little here and there....etc

And now they want to pass on the cost of the last storm to ratepayers.


Even if the state steps in and pays the bills, it will still be taxpayer money. so instead of paying it directly they will pay it indirectly.

The state cannot really force these companies to forgive those huge rates. Some of them are not even in texas on the natural gas side.

[Crissi]

Anything done by Abbott and the republicans in charge right now is for the optics, the real test will be when the cameras have moved on. If history is any guide Texas is screwed unless they vote out these idiots.

People tend to have long memories if they're forced to foot massive bills for something that wasn't their fault, so I don't think this is just optics. Esp since it's only one yera out til Statewide elections.

[Endus]

People tend to have long memories if they're forced to foot massive bills for something that wasn't their fault, so I don't think this is just optics. Esp since it's only one yera out til Statewide elections.

I mean, that's the optics. They want to be seen doing something good. It's "for the optics" if it's just going to be a temporary relief before falling back on the same old status quo afterwards. "Please, notice us doing the right thing this one time, so you miss that we caused the whole problem we're half-assing saving you from right now".

[Zan15]

This is why is certain conservative idiots are blaming it on renewables, which has a certain amount of truth, but is totally missing the point. Wind and Solar were not contributing to the grid during the ice storm, which is totally normal and planned for, but the problem is that the combustion sources failed at the same time, which is normally what would take up the slack. This caused a dramatic productivity drop. So yeah, they do have a point. This is the problem with having too much renewables on the grid, I have been saying that for years (Not that Texas is anywhere near that point). That isn't really the point though, the problem is that the whole infrastructure didn't plan for an event that forces both to shut down at the same time, and THAT is something that is common to the entire North American system. Now our production facilities are pretty well geographically separated in the other two grids, dramatically reducing the chances that a single natural event will hit enough to do that to the whole East Coast. The west coast is slightly more vulnerable, but still better off then Texas.

.

Actually not "truth", wind still supplying the whole time just at reduced capacity just like everything else.
The actual impact of wind reduction was multiples lower than natural gas and the things natural gas powered .

[Mihalik]

Anyone thinking Texas won’t actually fix the issues because they think it’s such a rare occurrence that it’s just not worth the cost?

I do.

Climate change is a Chinese, liberal Biden hoax. There's no point in changing anything just because we get a once in century winter storm every 2nd year and once in a century hurricane 6 to 7 times a season.

[Shadowferal]

Get enough of a death toll they'll eventually figure out what everyone has been yelling at them about.

[Zan15]

Get enough of a death toll they'll eventually figure out what everyone has been yelling at them about.

i think florida proved this year that is not the case.

[Draco-Onis]

i think florida proved this year that is not the case.

The right has no problems with hundreds of thousands of people dying, if they can spin COVID-19 deaths they can spin anything and their gullible supporters believe it. I bet you anything most republicans in Texas are blaming this whole thing on windmills.

[Belize]

https://www.wfaa.com/article/news/lo...2-523a51f58674

Customers cannot have their power disconnected for non payment, and electric companies cannot send invoices to customers for the time being. Good.

It's a band-aid on a problem they've caused themselves though.

Let's remember the Commission overseeing ERCOT that suggested costs should be increased to match scarcity are basically all Abbott appointees.

[Bodakane]

Get enough of a death toll they'll eventually figure out what everyone has been yelling at them about.

Modern conservative beliefs, stances and platforms are fact-proof.

[Shadowferal]

i think florida proved this year that is not the case.

A fair, rather stinging point.