Fatal Winter Storm Highlights Inadequacies of US Energy Infrastructure

The recent deep freeze across much of the US has killed dozens of people and left millions without power. However, the country has narrowly avoided an even worse disaster, as natural gas and power supplies have buckled under the strain in several states. This lays bare just how vulnerable the electric grid has become to a full-blown catastrophe.

The storm brought back memories of the deadly 2021 winter blast that caused widespread blackouts in Texas. But while that system hit a region unaccustomed to extreme cold, this one spread across the Midwest and Northeast — two areas that should be well-prepared. The fact that they weren’t highlights the flaws of a system that’s facing limited natural gas supplies and the unpredictability of solar and wind power.

"These cold fronts expose the fragility of our energy systems," said Michael Webber, an energy resources professor at the University of Texas in Austin. "Though the variability of wind and solar are well known and discussed a lot, these freezes also show the flimsiness of the gas system."

Natural gas supplies plunged by the largest amount in more than a decade as wells froze and pipelines failed, sending prices skyrocketing. This left the nation's largest power grid on the brink of forced rotating outages, while power was knocked out at least briefly to some customers in at least 24 states. Storm-related deaths reached at least 27 in Buffalo, New York.

The storm was unusually large and powerful, with temperatures as low as minus 50F (-46C) in some areas. The jet stream dipped sharply across North America, bringing a blast of cold air across a large part of the country. This put a strain on power grids, as they couldn't rely as much on other systems for help. This type of event could become more common in the future, as sharp kinks in the jet stream are a sign of climate change.

On Dec. 23, US natural gas production saw a significant decline, with roughly 10% of supplies wiped out due to wells freeze-offs. Output was as low as 84.2 billion cubic feet on Saturday, a 16% decline from typical levels, before a slow recovery started, according to BloombergNEF data based on pipeline schedules. This was the worst one-day decline in natural gas production in more than a decade.

This means that suppliers were heavily relying on inventories of gas held in salt caverns and depleted aquifers to meet rising demand, which peaked at 144 billion cubic feet on Friday.

The majority of output loss was seen in the Northeastern Appalachia basin, where supplies fell to the lowest level since 2018.According to data compiled by BloombergNEF, supplies from Appalachia to the Tennessee Valley and the Midwest have more than halved from typical levels. Issues have been exacerbated by mechanical problems at pipeline infrastructure, including at a compressor station in Ohio operated by Enbridge Inc.'s Texas Eastern Transmission Co., which has invoked force majeure on some gas supplies. The Tennessee Valley Authority, a federally owned power provider to several southern states, and Duke Energy have been forced to order rolling blackouts to conserve energy.

On Friday, gas prices at a hub supplying the Carolinas and Virginia soared to $60 per million British thermal units, up 650% from just two days earlier. That's also more than 8 times the price for gas delivered into the Henry Hub in Louisiana, the US benchmark. By Saturday, gas prices had topped $100 in Washington and parts of New England.

PJM Interconnection LLC, the largest US grid operator, declared a rare emergency on Christmas eve, requiring some of its 65 million customers to curtail demand while warning for the possibility of rotating outages. The grid also appealed to households to conserve over the weekend. In Texas, the Energy Department granted an emergency waiver to allow power plants to keep running without violating emissions limit.

This is the third winter in a row that freeze-offs have caused natural gas production to drop by at least 8 billion cubic feet a day, underscoring the increased frequency of storms that disrupt output.

Natural gas is now the leading power-plant fuel, overtaking coal in recent years thanks to the shale boom. The fuel was once so expensive that New England was relying on coal for up to 40% of its power over the long Christmas holiday weekend. However, the increased production of natural gas has led to lower prices and increased use of the fuel for power generation.

System-wide impacts from natural gas and electricity are "making it difficult to dismiss February 2021's Winter Storm Uri as a one-off event," said Eli Rubin, an analyst at EBW AnalyticsGroup.