Weather Raging in U.S., But No Major Energy Hiccups

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Late-winter weather is creating a volatile mix of extremes in the U.S., from blizzards to fire warnings, although much of the U.S. energy sector is holding up.

Demand early Tuesday from consumers covered by the Midcontinent Independent System Operator (MISO), which provides access to transmission services and monitors the grid across the Midwest and into parts of Canada, was around 65 gigawatt hours, an increase from the prior day.

Iowa, Kansas, Nebraska and Missouri, parts of which are under MISO's umbrella, were all under warnings of some sort on Tuesday, although conditions were highly volatile. Red flag warnings were in place for parts of Missouri, with dry conditions and wind gusts as high as 50 miles per hour creating fire conditions.

"Any fire that develops will catch and spread quickly," the National Weather Service reported. "Outdoor burning is not recommended."

Further north in Nebraska, however, windy conditions persist, although the region is covered not by fire warnings, but by blizzards, with as much as 6 inches of snow expected. Visibility was only a quarter mile on Tuesday morning in Hastings.

About 40% of the nation's power supply comes from natural gas. Henry Hub, the U.S. benchmark for the price of natural gas, was up about 1% in pre-market action on Tuesday to trade near $4.06 per million British thermal units.

Natural gas production declined by around 1 billion cubic feet (Bcf) from Monday's level to reach 103.3 Bcf on Tuesday. The curtailment, however, was not weather related but due to maintenance on pipelines in Texas.

Meanwhile, several states are preparing for tornado drills on Wednesday. That would follow a severe weather outbreak that spawned tornadoes across the country, with at least 40 people dead as a result of the inclement weather.

Missouri was hit the worst, with 12 tornadoes reported in the state.

"The State Emergency Management Agency has been working closely with local emergency management officials, and we are confident the damage meets the threshold for FEMA (the Federal Emergency Management Agency) to participate in joint damage assessments," said Nebraska Governor Mike Kehoe.

So far, IIR Energy has uncovered no major issues with the nation's energy sector or the grid. And with spring approaching, temperatures shouldn't drop to the point that crude oil or natural gas production is curtailed.

North Dakota earlier reported that about 100,000 barrels of oil per day (BBL/d) in oil production was offline because of severe cold so far this year. After a late-February storm system curtailed production, however, state regulators said they were expecting a recovery in March. North Dakota, home to the Bakken shale formation, produces around 1.2 million BBL/d on average.

Looking ahead, the threat of severe weather continues. Should the current system stretching from west Texas all the way to Lake Michigan remain intact, a severe weather threat--including tornadoes, damaging winds, and hail--could unfold from Louisiana to Alabama, spreading into Georgia by Saturday night.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).