As if Canadians rig hands didn’t think it was cold enough, US oil production took a big hit this week as temperatures plunged all the way from Great Falls, MT to the Gulf of Mexico.Luckily for American power consumers, gas exports from the Great White North — specifically Alberta — helped our southern neighbours keep their lights on.Since Monday, more than one million barrels per day (bpd) of production and refining capacity were shuttered in the Lower 48, all the way from major producing states such as North Dakota to Texas.According to the North Dakota Pipeline Authority, as much as 650,000 bpd — nearly half of its 1.25 million bpd — was offline due to cold weather. The state is home to the prolific Bakken shale basin that extends into southern Saskatchewan..Meanwhile, ExxonMobil was forced to reconfigure operations at its 565,000 bpd refinery in the Houston suburb of Baytown, TX after a malfunction at a fluidic catalytic cracker and coker — used to process Canadian heavy oil — shut the facility down.Flint Hills Resources also said its 343,000-bpd refinery in Corpus Christi was “significantly impacted” by unseasonably cold weather, when instrumentation to operate equipment was jammed by freezing rain.Valero Energy began a planned overhaul on a crude distillation unit at its 335,000-bpd refinery in Port Arthur in addition to a coker and a vacuum distillation unit. The work is planned to take 45 days to complete.In a regulatory filing, Marathon Petroleum reported a disruption on a 64,000-bpd residual hydrotreater at its 593,000-bpd Galveston Bay Refinery in Texas City, Texas. The unit returned to normal operation but hydrotreaters and cokers are specialized pieces of equipment used to process heavy barrels from either Canada, or alternatively, Venezuela. More often than not, they come from Canada..Canadian oil production has thus far been steady, although outages at oil sands plants — and fires — become more common as temperatures dip below -40 Celsius. Natural gas well ‘freeze-offs’ are also common in winter months, owing to volumes of associated water in the gas stream. Unlike American producers, Canadian companies typically have specialized equipment such as heaters to solve the problem.But prices remained largely unaffected even though Lower 48 consumption hit a record daily high of almost 141 billion cubic feet for the week ending January 18, the US government’s Energy Information Agency (EIA) said in its regular weekly update.“The rapid increase in electric power demand caused problems for electric grid operators, as electricity loads increased significantly while freeze-induced outages reduced operational capacity in some markets,” it said.“While consumption of natural gas surged, production fell rapidly, creating an imbalance that led to large withdrawals from storage and increased natural gas pipeline imports from Canada.”In contrast to this country, natural gas pipeline imports “helped support the reliability” of the US power grid, supplying 10.4 billion cubic feet of natural gas to the US through December, the highest volume of daily imports from Canada since February 2007, according to data from S&P Global Commodity Insights.
As if Canadians rig hands didn’t think it was cold enough, US oil production took a big hit this week as temperatures plunged all the way from Great Falls, MT to the Gulf of Mexico.Luckily for American power consumers, gas exports from the Great White North — specifically Alberta — helped our southern neighbours keep their lights on.Since Monday, more than one million barrels per day (bpd) of production and refining capacity were shuttered in the Lower 48, all the way from major producing states such as North Dakota to Texas.According to the North Dakota Pipeline Authority, as much as 650,000 bpd — nearly half of its 1.25 million bpd — was offline due to cold weather. The state is home to the prolific Bakken shale basin that extends into southern Saskatchewan..Meanwhile, ExxonMobil was forced to reconfigure operations at its 565,000 bpd refinery in the Houston suburb of Baytown, TX after a malfunction at a fluidic catalytic cracker and coker — used to process Canadian heavy oil — shut the facility down.Flint Hills Resources also said its 343,000-bpd refinery in Corpus Christi was “significantly impacted” by unseasonably cold weather, when instrumentation to operate equipment was jammed by freezing rain.Valero Energy began a planned overhaul on a crude distillation unit at its 335,000-bpd refinery in Port Arthur in addition to a coker and a vacuum distillation unit. The work is planned to take 45 days to complete.In a regulatory filing, Marathon Petroleum reported a disruption on a 64,000-bpd residual hydrotreater at its 593,000-bpd Galveston Bay Refinery in Texas City, Texas. The unit returned to normal operation but hydrotreaters and cokers are specialized pieces of equipment used to process heavy barrels from either Canada, or alternatively, Venezuela. More often than not, they come from Canada..Canadian oil production has thus far been steady, although outages at oil sands plants — and fires — become more common as temperatures dip below -40 Celsius. Natural gas well ‘freeze-offs’ are also common in winter months, owing to volumes of associated water in the gas stream. Unlike American producers, Canadian companies typically have specialized equipment such as heaters to solve the problem.But prices remained largely unaffected even though Lower 48 consumption hit a record daily high of almost 141 billion cubic feet for the week ending January 18, the US government’s Energy Information Agency (EIA) said in its regular weekly update.“The rapid increase in electric power demand caused problems for electric grid operators, as electricity loads increased significantly while freeze-induced outages reduced operational capacity in some markets,” it said.“While consumption of natural gas surged, production fell rapidly, creating an imbalance that led to large withdrawals from storage and increased natural gas pipeline imports from Canada.”In contrast to this country, natural gas pipeline imports “helped support the reliability” of the US power grid, supplying 10.4 billion cubic feet of natural gas to the US through December, the highest volume of daily imports from Canada since February 2007, according to data from S&P Global Commodity Insights.
