The Strategist

US gas sellers post record profit after Texas power crisis

07/12/2021 - 03:58

Gas sellers made over $11 billion in five days during the abnormal cold weather in Texas in February 2021.

Bloomberg came to this conclusion after studying interviews with energy company executives and financial reports. For example, Energy Transfer, an oil and gas transportation and storage company, posted its highest quarterly profit ever, more than tripling the result of its previous best quarter. 

For its part, the company said that years of investment in infrastructure had proved its worth by securing supplies at a critical time, unlike its competitors. The prices were set by the market, Energy Transfer said.

The agency found that in the days before the massive power outages in Texas, producers began drastically cutting natural gas production in the Permian Basin, leading to a huge jump in prices. Now, the state's residents will be paying higher gas rates for the next few years as utilities need to compensate for the losses. 

The freezing temperatures that hit Texas caused $80 billion to $90 billion in infrastructure damage. Approximately half of that amount was lost to the U.S. economy due to supply chain disruptions, with another $35 billion in infrastructure damage, including burst pipes. In mid-February, temperatures plunged to minus 13 degrees Celsius, compared to a climate norm of 5-10 degrees Celsius.