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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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The Biggest Winners From The Texas Freeze

The cold spell that paralyzed Texas in February benefited companies that produce, distribute and trade natural gas, Reuters has reported, citing interviews and quarterly earnings reports.

Among the biggest winners were commodity trading major Vitol, pipeline operators including Kinder Morgan, Enterprise Products Partners, and Energy transfer, and lenders including Goldman Sachs, Bank of America, and Macquarie Group, the report said.

The cold wave that swept through swathes of the U.S. in February paralyzed Texas, freezing millions of barrels in oil production and sending electricity prices on Texas’ independent energy market sky-high.

The Freeze also caused outages at gas-fired power plants and a shortage of the commodity as demand for energy soared. This, in turn, led to blackouts that left millions of Texans without power for days in some cases and some of them with much fatter than usual electricity bills.

Given the price jumps in gas and power, it is unsurprising that some benefited from the crisis that was blamed on several factors, chief among them the general unpreparedness of the Lone Star State’s energy system for below-zero temperatures.

While some of those who stood to profit from the crisis have raked in fatter profits, others may not see much of the money they made as lawsuits started pouring in soon after the end of the Freeze.

According to a Wall Street Journal report from mid-April, some of the lawsuits accuse natural gas suppliers of price-gouging and overcharging utilities for the gas they supplied. One group of suits, filed by San Antonio-based utility CPS Energy, alleges that gas suppliers were “profiteering from scarcity during a declared disaster,” with some hiking their prices by a staggering 15,000 percent.

Gas suppliers are also suing: ConocoPhillips and others have accused utilities of not paying their bills. Yet others allege that gas suppliers need to be relieved of their responsibility to supply the commodity to utilities with a backdate for the period of the Texas Freeze.

The Federal Energy Regulatory Commission is currently reviewing gas and electricity markets for evidence of manipulation.

By Irina Slav for Oilprice.com

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