Cold Weather Sidelines Some U.S. Oil Production

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--It's cold enough in the Upper Plains states that frostbite can occur within 10 minutes, making it no surprise that regulators in North Dakota pointed to a decline in crude oil production already.

The high for Bismarck, North Dakota, on Wednesday was minus 2 degrees Fahrenheit. The wind chill was closer to minus 50.

Cold weather is likely to stick around for at least another week. Already, the shale-rich state is reporting problems with production as well heads freeze in the frigid cold. The state last month reported that about 70,000 barrels per day (BBL/d) in production was curtailed by inclement weather.

Citing information gleaned from the North Dakota Pipeline Authority, the Reuters news service reported that production was down by as much as 90,000 BBL/d so far in February.

"Cold conditions are expected to continue this week," Justin Kringstad, the head of the authority, was quoted as saying. "Recovery typically takes up to a week once more normal weather conditions arrive."

Rather than burn it off, North Dakota captures much of the gas associated with its crude oil deposits. Kringstad said that natural gas output was curtailed as well, according to Reuters, although North Dakota is only a nominal producer relative to the other inland shale-rich states.

In its monthly market report for February, the U.S. Energy Information Administration, the data arm of the Department of Energy, expects Bakken gas production to average 3.3 billion cubic feet per day (Bcf/d) this year, which is about 10% of the output from the Appalachia Basin, the largest inland gas producer.

Total Bakken oil production is expected to average 1.26 million BBL/d this year, the EIA estimated.

IIR Energy continues to monitor the impacts of weather across North America. Most major facilities seemed to be operational as of Wednesday morning.

Two other systems are bringing heavy snow and cold air to much of the continental United States. Freezing rain and sleet were in the forecast for Oklahoma on Wednesday, while an ice warning was in place for parts of northern Ohio. Power outages were likely for parts of northern Ohio under the warning.

IIR Energy data showed power centers and major refineries were operational as of Wednesday morning.

As much as 10 inches of snow could fall on West Virginia. Hundreds of power plants could be impacted by the weather, though there have been few issues so far.

A surge in demand for natural gas, which keeps the lights on and powers the furnaces of many homes and businesses, is expected in the U.S. due to the cold. Henry Hub, the U.S. benchmark for the price of natural gas, was trading near $3.50 per million British thermal units early Wednesday, jumping 7% so far this week.

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