How Texas’s Freeze Knocked Out 40% of U.S. Oil Output
(Bloomberg) -- The Arctic blast that knocked out power in 13 U.S. states in mid-February reduced oil production by more than 4 million barrels a day nationwide, according to traders and executives, as wells froze up and gas lines were clogged with ice. The cold itself interrupted oil production, as did the rolling electricity blackouts experienced throughout Texas and other states. Occidental Petroleum Corp., the second-largest producer in America’s biggest oil field, and Oryx Midstream Services both declared force majeure as they were forced to reduce deliveries of oil and gas.
1. Why do oil wells shut during the freeze?
Natural gas, when pulled straight from shale wells as a byproduct of oil extraction, carries water vapors that can freeze and clog pipes. The well must then be closed off -- or “shut-in,” in the terminology of the industry. Another issue is with gas compressors, which are used to inject gas to pump liquids out of a well. At low temperatures, the gas that is injected into the well may liquefy inside the compressor, causing the equipment to go down and bringing the well to a halt. Then there’s the problem of the power outages that vexed Texas for several days. Oil production is vastly dependent on electricity supplied by the grid, so like other industries, it’s vulnerable to outages.
2. How long does it take for wells to unfreeze?
Frozen water vapor takes longer to melt than water. Most producers just wait for warmer weather to set in, after which it might take 24 hours for the pipes to be completely clear. Some may choose to pump antifreeze into the pipe, but the cost may be prohibitive at a time when oil demand has yet to recover to pre-pandemic levels. On Feb. 18, the highs in Midland, Texas, in the heart of the Permian Basin, were still below freezing.
3. How long does it take to restart an oil well?
A well can be brought back to production in as soon as 24 hours. However, layoffs triggered by the pandemic have reduced repair crews. Combined with icy roads and other challenges, crews are taking longer than usual to get the service done.
4. How reliant are oil wells on electricity?
All wells need electricity to run the 40-horsepower pumpjacks that rock back and forth. Other ways of bringing oil to the surface are the use of electrical submersible pumps or gas lift, which is the injection of gas into an oil reservoir to create enough pressure to lift the oil.
5. Does it make sense to keep wells producing amid rolling blackouts?
Yes. But knowing that there’s a rolling blackout protocol in place, most producers will reduce production rates to prevent any weather-related stress on their equipment.
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