Winter Deals Latest Blow to U.S. Energy Sector

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Posting successive declines in crude oil production from the Bakken shale patch due to inclement weather, regulators in North Dakota were starting to see a light at the end of the tunnel.

North Dakota last month reported that 70,000 barrels per day (BBL/d) in crude oil production was off because of the weather, and another 90,000 BBL/d was curtailed as of early February. It was 32 degrees Fahrenheit on Friday morning in the state capital, Bismark, some 60 degrees warmer than earlier last week.

Cold weather was impactful, despite the recent pullback from sub-zero temperatures. The North Dakota Pipeline Authority reported Thursday that as much as 160,000 BBL/d were sidelined by the cold, though the weather seems to be breaking in the state's favor.

Weather has been volatile over the past few months. Last year ended with successive hurricanes that threatened the production and refinery sectors along the U.S. Gulf Coast. The 2024 Atlantic hurricane season was officially registered as "hyperactive" by weather forecasters, with storms knocking out as much as 10% of offshore oil production.

There were 18 named storms, 11 hurricanes and five major hurricanes for last year's storm season. Four of those storms--Beryl, Debby, Helene and Milton--were responsible for most of the estimated $225 billion in damage.

The last storm of the season, Hurricane Rafael, was a Category 3 storm that tied the record set by Hurricane Kate in 1985 as the strongest November hurricane on record in the Gulf of Mexico (designated by the Trump administration as the Gulf of America).

By January, meanwhile, a series of Alberta Clippers brought heavy snow and sub-zero temperatures to parts of the United States. In the south, parts of New Orleans were buried under a rare 10 inches of snow. An estimated 50 gigawatts of production from the nation's power plants were under threat from the January storms.

Midstream networks were also facing issues. Pipeline operators issued recent alerts warning that flows could be impacted by the recent cold snap.

On February 14, Texas Governor Greg Abbott issued warnings due to sub-zero wind chill values. Hot summer weather in Texas can lead to surges in demand great enough for blackouts, while wind turbines and upstream infrastructure freeze off during the winter.

A report published Thursday by IIR Energy found total U.S. natural gas production was down by nearly 2 billion cubic feet per day, led primarily by declines from Oklahoma, New Mexico and Texas. Those declines were attributed to freezing temperatures in the region, though it's expected to be in the upper 60s by next week.

Reporting from Accuweather found that last month was the coldest January in more than a decade, and February was no sauna. By March, much of the continental United States could see above-average temperatures, though the cold weather should linger around in the Pacific Northwest.

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).