Don’t Believe Alarmist Reports – Despite Harsh Winter Weather, Oil & Gas Production Is Resilient

Mon, January 31, 2022

As we approach the one-year anniversary of Winter Storm Uri and the cold weather rolls in, so too do the alarmist articles from media claiming that oil and natural gas production is going to drop precipitously in the face of future winter weather.

Don’t let these reports fool you – the data shows they are all hat and no cattle.  

Winter Storm Uri is far from the first time Texas has been hit with winter storms. Historical data reveals that cold, harsh, temperatures and teeth-chattering winter storms have previously resulted only in minimal, short-term production interruptions.

At the end of January 2010 and beginning of February 2010, Texas was battered by two winter storms. In the final days of January, freezing temperatures and ice covered swaths of the Lone Star State. Just over a week later, from February 11 -12, some parts of Texas saw as much as a foot of snow. Despite these rough winter conditions, natural gas withdrawals only fell roughly eight percent between January and February. The next month, production was three percent higher than pre-storm production numbers.

The next year, Texas was hit even harder. The Groundhog Day Blizzard of 2011 was a category 5 storm that swept almost the entirety of the United States, including the Lone Star State. Major cities and roads faced unprecedented amounts of sleet and snow, and news outlets termed the storm the largest of the decade. Despite the severity of the storm, Texas natural gas production only fell 13 percent – and like the year prior, by the next month, production returned to levels higher than before the storm.  

Source: EIA

These two years aren’t isolated incidents. In December 2013, yet another frosty storm knocked out power in Texas, and iced over roads. Production figures once again illustrated the resiliency of energy operators. Before the storm, total natural gas gross withdrawals for November were 680,447 MMcf. The month of the storm, production actually increased - December withdrawals were 692,762 MMcf. In January, in the aftermath of the storm, withdrawals continued to rise, hitting 696,202 MMcf.

 Though winter storms remain an ongoing challenge, oil and gas producers have continued to weatherize their operations and work closely with regulators and communities alike to ensure operations continue despite unexpected hurdles. These efforts are paying off – natural gas production in Texas reached a high of 23.5 Bcf/d in mid-January, despite a cold weather front that hit that same week. The reality is that winter storms and low temperatures present a short-term obstacle to oil and gas production that simply does not impact the industry’s long-term growth.

In fact, natural gas production has steadily increased since 2010, rising more than 48 percent. Overall, gross withdrawals in 2021 have met, and in some cases, surpassed pre-pandemic levels, with projections that they will set records in 2022 and 2023. Moreover, the Energy Information Administration (EIA) estimates that US dry natural gas production will increase from 95.1 billion cubic feet per day (Bcf/d) to 97.5 (Bcf/d) by December 2022, a new record high.

Source: EIA

Crude oil production has also been prolific in Texas across that same period. The Permian Basin remains the most productive oil basin in the United States, averaging 4.92 million barrels a day in December 2021, and is expected surge to 5.1 million barrels a day in February 2022.

Texans are tough, and we expect the industry that powers our lives to be as tough as we are. A look back at production numbers shows that our operators work tirelessly to deliver energy every day – rain, shine or snow.