Texas Deep-Freeze – More Strain on Supply

The historically cold winter storm that struck the US Gulf Coast beginning the weekend of 13-14 February led to widespread shutdowns of petrochemical facilities and oil refineries, as well as closures of industrial gas providers, storage facilities, transportation links, and other critical infrastructure across the region. The petrochemical industry has started the process of inspections necessary to carry out the safe restart of production, but nobody expects this process to be completed in a hurry.

The entire state of Texas was plunged into darkness as the electrical grid failed, and rapidly falling temperatures resulted in frozen pumps and burst pipes that further damaged power generation and water treatment facilities. It was not only industrial sites that were affected, of course, as millions of Texas residents were left without electrical power, heating, or potable water for days. The political fallout and finger-pointing over potential responsibility for the massive failure of the state’s critical utility systems will undoubtedly last for months.

Natural disasters are not uncommon along the US Gulf Coast – hurricanes and tropical storms frequently disrupt operations in the petrochemical and refining hubs around Houston, Corpus Christi, and Beaumont in Texas. Some production facilities in Lake Charles, Louisiana, have only recently returned to normal operations after Hurricane Sally made landfall in late August 2020. All petrochemical companies have protocols in place for the annual hurricane season, and the petrochemical industry has a long history of handling the aftermath of those storms. However, the industry is not accustomed to dealing with prolonged spells of freezing temperatures, and as one petrochemical industry participant said, “Those big plants do not react well to cold weather.”