Texas Governor Greg Abbott is banning sales of the state’s natural gas beyond its borders in the latest sign the crisis roiling energy markets and leaving millions in the dark is far from abating.
Top U.S. liquefied natural gas exporter Cheniere Energy Inc. said it’s temporarily cutting natural gas and electricity consumption to help the Texas power grid, and that its decision was made head of Abbott’s order.
While many households in the Lone Star state have been struggling to stay warm and get potable water, some natural gas and power providers are poised to make billions of dollars from skyrocketing energy prices.
Comstock Resources Inc., the gas producer owned by Dallas billionaire Jerry Jones, is among those cashing in big gains. Power sales this week could exceed $30 billion, according to BloombergNEF estimates. Meanwhile, a Canadian provider of wind and solar power in the Lone Start state estimates it may lose as much as $47 million because of the extreme weather.
While power has been returned for many, more than 1 million households in the state remain without electricity early Thursday. About 43,000 megawatts of electricity generation remained offline — enough to power more than 8.6 million homes.
Economic fallout is cascading. U.S. oil production has plunged by a record 40%, while fracking in the Permian shale plays has gone dark. The freeze snarled grain shipments and delayed coronavirus vaccine shipments. Amazon.com Inc. closed facilities from Illinois to Texas. Gasoline prices are rising because of refinery outages, while propane used for heating jumped to the highest since 2014.
Several companies in the oil industry have claimed force majeure, a warning to customers that they won’t be able to meet deliveries under contract. Repercussions are being felt in the global crude market.
Bloomberg
