New base 18 february 2021 energy news issue 1407 by khaled al awadi

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NewBase Energy News 18 February 2021 - Issue No. 1407 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
U.A.E: Adnoc expands refined products portfolio, solvent,Spirit
MEED+ Trade Arabia + NewBase
The Abu Dhabi National Oil Company (Adnoc) said that it has added White Spirit and Solvents to
its refined products portfolio, enabling Adnoc to capture more value from Abu Dhabi’s natural
resources. With this, Adnoc can produce products that can be used by domestic industry to promote
In-Country manufacturing, while also expanding its market reach internationally.
White Spirit & Solvents are produced by Adnoc Refining in Ruwais. These specialty products have
various industrial and household applications and are used to produce products such as varnish,
adhesives, inks, paint thinners and cleaning agents.
Abdulla Ateya Al Messabi, CEO of Adnoc Refining, said: “In our Refineries, we continue to focus on
stretching the margin from every barrel of oil that we process.
I am proud of our teams who responded swiftly and efficiently to market dynamics, expanding and
diversifying our product range and unlocking value from our operations and resources. These
products will enable Adnoc to extend its reach to new markets and widen its customer base.”

The expansion of Adnoc's product range is also part of its broader downstream 2030 Smart Growth
Strategy. The strategy capitalizes on Abu Dhabi's proximity to global growth markets, access to
competitive feedstock, and its attractive fiscal and regulatory environment.
Since launching the strategy in 2018, Adnoc has attracted significant foreign investment into Ruwais
and expanded downstream partnerships across its refining, fertilizer, and pipeline assets.
This strategy is transforming Ruwais into a world-class and globally competitive chemicals cluster,
stimulating private sector activity and long-term specialized employment opportunities, particularly
for those from the Al Dhafra region.
Adnoc Refining produces more than 40 million metric tons of high-quality refined products to
markets around the world.
It has the capacity to refine more than 922,000 barrels of crude oil and condensate per day into
various products, including liquefied petroleum gas, naphtha, gasoline, jet fuel, diesel, base oil, and
petrochemical feedstock; such as propylene. It also produces specialty products such as carbon
black and calcined coke.
Since 2019 Adnoc Refining has been run as a joint venture company between Adnoc and the
European energy firms Eni and OMV.

Saudi Arabia’s Ultimatum to Unsettles Firms Move In or Lose Out
Bloomberg - Zainab Fattah and Lin Noueihed
Saudi Arabia’s ultimatum for global companies to move their regional hubs to Riyadh by 2024 or
lose business is the kind of decision making that has made some wary of investing there.
The millions of dollars in costs, sudden policy changes and arbitrary legal rulings mean companies
will need to weigh the risks of moving there with the potential rewards Crown Prince Mohammed
bin Salman’s economic overhaul promises.
Saudi Arabia said this week state contracts
would go only to companies with regional hubs
in the country to stop economic “leakage.” It
gave few details, fueling the kind of uncertainty
many regional executives say complicate their
dealings with the world’s top oil exporter.
Saudi Arabia Adds Pressure on Global Firms
to Move to Riyadh
Some businessmen say Saudi Arabia is
a sleeping giant that’s waking up, with a
consumer market three times the size of the United Arab Emirates, planned mega-projects worth
hundreds of billions of dollars and a young, rapidly-changing society that’s almost unrecognizable
from the ultra-conservative kingdom of five years ago.
But one manager at a multinational headquartered in Dubai, the Gulf’s main business hub, said
companies know the political tide can turn fast in Saudi Arabia. The lack of legal recourse they have
makes them vulnerable as most contracts come via the state so it’s difficult to chase unpaid money,
he said. Like others he spoke on condition of anonymity because of the sensitivity.
Companies have mostly looked past Saudi Arabia’s arrests of businessmen and royals in what it
called a crackdown on corruption, and the killing of a dissident columnist in 2018. Yet sudden shifts
like tripling value-added tax create uncertainty and cost.
Overreach and Incentives
Saudi officials are frustrated by the consultants and executives working on Saudi projects who
based themselves in Dubai, business-oriented city that draws in millions of foreign workers.
“It’s a combination of desperation and a little bit of overreach” said Ryan Bohl, a Middle East analyst
at Stratfor Worldview. “It’s going to be hard to convince multinationals and regional giants to pick
sides,” he said, predicting Riyadh would make exceptions and find ways for companies to function
in both.
A Saudi government presentation to investors seen by Bloomberg said officials were working on an
“attractive incentive package” for Riyadh’s King Abdullah Financial District, set to become a special
economic zone. Subject to final approval, sweeteners include a 50-year exemption from 20%
corporate tax and a waiver of rules around hiring Saudis for at least 10 years. The presentation also
touted the potential exemptions to Saudi laws based on investor needs and an easier work permit
system.
Dubai shouldn’t underestimate the willingness of companies to follow the money, a Dubai
businessman said. The Saudi plans mean Dubai has to be inventive and stop relying on a model of
charging fees and making the city more expensive to do business in.

The UAE is taking the regional challenge seriously and has made reforms to try to attract and keep
foreigners as the pandemic batters the tourism and logistics sectors.
Workarounds
Executives at several international companies said they’d seek workarounds.
A manager at a global food company with regional headquarters in Dubai said they could name a
second Mideast hub in Riyadh, or ask local Saudi partners to do so under their names. An
advertising executive said their firm would open a Saudi office because of more work but keep Dubai
as the regional base.
At the kingdom’s flagship investment conference last month 24 companies
including Pepsico and Bosch said they’d signed preliminary agreements to locate regional hubs in
Riyadh, though they’re waiting for the details before firming up commitments.
“The time frame of three years probably recognizes that this will be a big shift for corporations,” said
Nuno Gomes, head of Middle East Career business at consultancy firm Mercer, estimating the
additional costs of being in Riyadh can amount to 15%-25%.
Saudi officials realize the scale of the challenge, and are rolling out changes like a planned overhaul
of the judicial system. Rumors are even circulating that a long-standing alcohol ban may be relaxed.
“We need to also create for those expats that we attract a great living environment,” Fahed Al-
Rasheed, head of the Royal Commission for Riyadh City, said in an interview. “So your spouse
needs to be able to work. Your children need to have the best international schools and that’s
something that we have, and we’re working on.”

U.S. will import more petroleum than it exports in 2021 & 2022
Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), February 2021
Throughout much of its history, the United States has imported more petroleum (which includes
crude oil, refined petroleum products, and other liquids) than it has exported. That status changed
in 2020.
The U.S. Energy Information Administration’s (EIA) February 2021 Short-Term Energy
Outlook (STEO) estimates that 2020 marked the first year that the United States exported more
petroleum than it imported on an annual basis.
However, largely because of declines in domestic crude oil production and corresponding increases
in crude oil imports, EIA expects the United States to return to being a net petroleum importer on
an annual basis in both 2021 and 2022.
EIA expects that increasing crude oil imports
will drive the growth in net petroleum imports in
2021 and 2022 and more than offset changes
in refined product net trade. EIA forecasts that
net imports of crude oil will increase from its
2020 average of 2.7 million barrels per day (b/d)
to 3.7 million b/d in 2021 and 4.4 million b/d in
2022.
Compared with crude oil trade, net exports of
refined petroleum products did not change as
much during 2020. On an annual average
basis, U.S. net petroleum product exports—
distillate fuel oil, hydrocarbon gas liquids, and motor gasoline, among others—averaged 3.2 million
b/d in 2019 and 3.4 million b/d in 2020.

EIA forecasts that net petroleum product exports will average 3.5 million b/d in 2021 and 3.9 million
b/d in 2022 as global demand for petroleum products continues to increase from its recent low point
in the first half of 2020.
Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), February 2021
EIA expects that the United States will import more crude oil to fill the widening gap between refinery
inputs of crude oil and domestic crude oil production in 2021 and 2022. U.S. crude oil production
declined by an estimated 0.9 million b/d
(8%) to 11.3 million b/d in 2020 because
of well curtailment and a drop in drilling
activity related to low crude oil prices.
EIA expects the rising price of crude oil,
which started in the fourth quarter of
2020, will contribute to more U.S. crude
oil production later this year. EIA
forecasts monthly domestic crude oil
production will reach 11.3 million b/d by
the end of 2021 and 11.9 million b/d by
the end of 2022.
These values are increases from the
most recent monthly average of 11.1
million b/d in November 2020 (based on data in EIA’s Petroleum Supply Monthly) but still lower than
the previous peak of 12.9 million b/d in November 2019.

U.S:Growing industrial consumption and exports support future
U.S. natural gas market growth ……………….
Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case
The U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2021 (AEO2021)
Reference case projects that growth in natural gas consumption in the United States between 2020
and 2050 will be driven by exports and industrial use; consumption growth from the other sectors
will increase slowly or stay flat.
In the Reference case projection, U.S. natural gas production will increase to 43.0 trillion cubic feet
(Tcf) in 2050 as consumption increases to 35.7 Tcf. EIA expects natural gas prices will remain low
compared with historical levels, and that low price drives the AEO2021 Reference case’s projection
of increased production. EIA expects that exports will rise as production outpaces consumption
throughout the projection period.
With economic growth driving U.S. industrial
output, natural gas consumption by the
industrial sector will increase by 3.6 Tcf, or
35%, from 2020 to 2050 and account for more
than 75% of the 4.6 Tcf growth in U.S. natural
gas consumption from all sectors during that
period.
Relatively low natural gas prices drive a
growing U.S. chemicals industry, the largest
domestic natural gas-consuming industry
because it uses natural gas as a raw material
(feedstock) as well as for heat and power.
According to the AEO2021 Reference case,

the bulk chemical industry will account for 45% of the industrial sector’s increased natural gas
consumption, or 1.6 Tcf, through 2050.
Natural gas consumption in the U.S. power sector will reach 12.1 Tcf in 2050, up 0.4 Tcf (4%) from
2020. In 2020, natural gas consumption in the power sector increased by 4% from 2019 to 11.7 Tcf
because of relatively low natural gas prices and COVID-19-related disruptions in the power sector’s
coal supplies.
Amid higher natural gas prices in 2021, EIA projects that consumption of natural gas by the power
sector will decrease by 16% to 9.9 Tcf. Natural gas consumption will then increase slowly until 2027
because of projected growth in natural gas-fired generation and because of new, more energy-
efficient combined-cycle turbine systems.
These systems limit growth in power consumption because they use less fuel to produce each
kilowatthour of electricity than older combined-cycle units or other fossil-fueled generators. Beyond
2036, EIA projects that consumption of natural gas in the U.S. power sector will continue to steadily
increase.
The AEO2021 projects growth in natural gas consumption by other end-use sectors as well. Beyond
2040, natural gas consumption in the U.S. transportation sector increases as natural gas becomes
a more predominant fuel for heavy-duty vehicles and freight rail.
The residential sector’s natural gas consumption remains nearly flat, and commercial buildings
show low-to-moderate growth because of energy efficiency improvements (particularly commercial
energy management controls and sensors) in space heating.

Britain will build its first hydrogen fueled homes by April, off
CNBC - Anmar Frangoul
The first U.K. houses where appliances including boilers, stoves and ovens are fueled exclusively
by hydrogen are due to be opened by April, with authorities hoping the buildings will provide the
public with “a glimpse into the potential home of the future.”
The project to develop the two semi-detached properties
has received £250,000 (around $347,175) in funding from the U.K. government’s Hy4Heat program.
In addition, two companies — Northern Gas Networks and Cadent — will each provide £250,000
for the initiative. The homes will be located at a Northern Gas Networks site in Low Thornley,
Gateshead, in the northeast of England.
The broad idea behind the development — the homes have not been designed to be lived in — is
to highlight how hydrogen could eventually replace natural gas, a fossil fuel, in a domestic
environment. To this end, members of the public will be allowed to visit the buildings and see how
the hydrogen-fueled appliances function.
“Unlike natural gas, which is responsible for over 30% of the UK’s carbon emissions, hydrogen
produces no carbon at the point of use, with the only by-product being water,” the government said
Tuesday.
Described by the International Energy Agency as a “versatile energy carrier,” hydrogen has a
diverse range of applications and can be deployed in sectors such as industry and transport.

Examples of its use in the latter include trains, airplanes, cars and buses powered using hydrogen
fuel cells.
Hydrogen can be generated using electrolysis, which splits water into oxygen and hydrogen. If the
electricity in the process comes from a renewable source then the end product is dubbed “green
hydrogen.”
The hydrogen gas used at the homes in
Gateshead will come in bottled form to
begin with, although in future green
hydrogen could be used.
The project is part of a wider effort to
decarbonize the U.K. Towards the end of
2020, Prime Minister Boris Johnson
released details of a 10-point plan for a so-
called “green industrial revolution.”
That plan includes the goal of developing
a town “heated entirely by hydrogen” by
the end of this decade. This year will also
see the government publish a Hydrogen
Strategy that will “outline plans” to develop
a hydrogen economy in the U.K.
The development in Gateshead is not the
only project in the U.K. focused on using
hydrogen within a domestic setting.
Last November, energy regulator Ofgem
announced it would provide as much as
£18 million in funding for a Scotland-based
scheme centered around using green
hydrogen to heat homes.
A further £6.9 million of investment for the
project, known as H100 Fife, is to come
from the Scottish government.
In a statement at the time, SGN, a firm
responsible for the gas network in
Scotland and the south of England, described the initiative as a “100% hydrogen demonstration
network … that will bring carbon-free heating and cooking to around 300 homes from the end of
2022.”
Over in the U.S., last December saw the Southern California Gas Co. announce plans to build its
“H2 Hydrogen Home.”
In a statement at the time, the firm described the project as a “first of its kind” for the U.S. and said
it would consist of “a home, solar panels, a home battery, an electrolyzer to convert solar energy
into clean hydrogen, and a fuel cell to convert that hydrogen back to electricity.”
In addition, the home — which is due to be completed by the end of this year — will use a blend of
hydrogen and natural gas to run its appliances.

NewBase February 18-2021 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices climb on fears Texas freeze hamper U.S. crude output
Reuters + NewBase
Oil prices rallied again on Thursday to hit 13-month highs as concerns that a rare cold snap in Texas
could disrupt U.S. crude output for days or even weeks prompted fresh buying.
Brent crude climbed 69 cents, or 1.07%, to $65.03 a barrel by 07.40 GMT, touching its highest since
Jan. 20, 2020. U.S. West Texas Intermediate (WTI) crude futures gained 40 cents, or 0.651%, to
$61.54 a barrel, registering its highest since Jan. 8, 2020.
Oil price special
coverage

Both benchmarks rose about $1 on Wednesday and have gained more than 6% since their close
last Thursday.
Texas oil producers and refiners remained shut for a fifth day on Wednesday after several days of
blistering cold, and the governor ordered a ban on natural gas exports from the state to try to speed
the restoration of power.
Roughly 1 million barrels per day (bpd) of crude production has been shut, according to Wood
Mackenzie analysts, and it could be weeks before it is fully restored.
“Oil prices got a boost again from expectations that the disruptions of Texas oil producers and
refiners due to the cold storm could last for a while,” said Hiroyuki Kikukawa, general manager of
research at Nissan Securities.
“With hopes of fresh U.S. economic stimulus and wider rollouts of the COVID-19 vaccine, oil prices
are expected to stay on the bullish trend,” he said, predicting that WTI could test a key $65 level.
In addition, a larger-than-anticipated draw in the U.S. crude oil inventories added to supply
concerns, said Chiyoki Chen, chief analyst at Sunward Trading.
U.S. crude oil stocks fell by 5.8 million barrels in the week to Feb. 12 to about 468 million barrels,
compared with analysts’ expectations for a draw of 2.4 million barrels, American Petroleum Institute
data showed. [API/S]
U.S. Energy Information Administration (EIA) oil inventory data will be released later on Thursday,
delayed by a day after a Monday holiday. [EIA/S]
Oil’s price rally in recent months has also been supported by a tightening of global supplies, due
largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and
allied producers in the OPEC+ grouping that includes Russia.
OPEC+ sources told Reuters the group’s producers are likely to ease curbs on supply after April
given the recovery in prices.

NewBase Special Coverage
The Energy world – Feb-18-2021
Texas Freeze , empacts and leassons to be learned
Bloomberg + NewBase
The deep freeze that has forced the shutdown of U.S. refineries, oil wells and meat plants, disrupted
shipments of soybeans and corn, and is still leaving more than 3 million customers without electricity
could continue to keep parts of Texas in the dark for several days.
To prevent the collapse of their networks, suppliers from North Dakota to Texas implemented rolling
power cuts for a second consecutive day, with outages spreading to more states Tuesday night
including Arkansas, Louisiana and Mississippi. The operator of the Texas electric grid no longer
expects all service to be restored in the state by Tuesday night, saying it could take days for enough
power plants to be up and running. Utility CenterPoint Energy Inc. also warned residents blackouts
may last for several more days
In the Permian Basin, major producer
Occidental Petroleum Corp. told
customers it would be forced to curtail
oil deliveries, while Chevron
Corp. shut in some wells in the
region. Fracking in the top U.S. shale
plays has gone dark. U.S. oil
production has plunged by a third.
Meanwhile, gasoline futures in New
York jumped almost 5% on Tuesday
as more than 20 refineries were
disrupted by the polar blast. Citgo
Petroleum Corp. said its Corpus
Christ refinery in Texas won’t be able
to deliver fuels. Wheat futures also
surged as the freeze snarled grain
shipments.
0Amazon.com Inc. closed facilities in Arkansas, Illinois, Oklahoma, Missouri, Tennessee, Texas,
Indiana and Kentucky.
Authorities warned Houston-area residents to stay off the roads and highways after sunset on
Tuesday amid expectations that plunging temperatures and an approaching ice storm would make
driving dangerous. Long lines formed at grocery stores in scenes reminiscent of the early days of
Covid-19 as residents stocked up on necessities.
Hotels in the area suspended some meal service because of delayed deliveries, and vacancy rates
were near zero. The number of people being inoculated with the Covid-19 vaccine in Texas has
fallen since the weather disruptions began.
Politicians are using the widespread power outages as fodder in the debate over whether the
government should back massive investment in clean energy and infrastructure. Texas Gov. Greg
Abbott has blamed intermittent renewable power sources for the blackouts, while the state’s

agriculture commissioner said on Facebook that no wind turbine should ever be built in the state
again. Both are Republicans.
Democratic Congresswoman Alexandria Ocasio-Cortez fired back on Twitter, saying “the
infrastructure failures in Texas are quite literally what happens when you don’t pursue a Green New
Deal.”
The infrastructure failures in Texas are quite literally
what happens when you *don’t* pursue a Green
New Deal.
Meanwhile one of Texas’s Senators, Ted Cruz, was
reminded on Twitter of comments he made about
California being “unable to perform even basic
functions of civilization” during its blackouts last
summer. He sheepishly responded:
“I got no defense. A blizzard strikes Texas and our
state shuts down. Not good.”
The Arctic freeze in the U.S. is set to cause a
cumulative production loss of about 70 billion cubic
feet of natural gas and 16 million barrels of oil, Citigroup analysts said in a report Tuesday. The loss
could be bigger if the size and duration of disruptions exceed those during a similar event in
February 2011.
While oil and gas production may rebound from the majority of wells in a week or two, it will take
longer for output to recover from nearly all the wells. Meanwhile, processing facilities, including
refineries and power plants, are likely to resume operations quicker. Still, the increase in energy
prices caused by the disruptions could face headwinds and may remain “very volatile” over the next
couple of days as shutdown of refineries and petrochemical plants boost inventories.
At least 20 deaths have been reported across the U.S. in connection with severe winter weather
that has left millions without power, according to the Associated Press.
Three people were found dead after a tornado in North Carolina, and four others died in a Houston-
area house fire after lighting a blaze in the fireplace to stay warm. Other causes of death included
car crashes on icy roads and carbon monoxide poisoning.
The Midcontinent Independent System Operator Inc. lowered its emergency level to a level that no
longer requires rolling blackouts.
The grid had earlier asked all utilities in its southern region -- most of Arkansas, Louisiana,
Mississippi and Southeast Texas -- to implement periodic power outages after frigid weather forced
generator shut-downs at the same time demand was rising.
Motor fuels are running low in some parts of Texas as winter storms and frigid weather cripple power
generation, natural gas output and the oil refineries that rely on them.
The shortages have been detected along a stretch of Interstate 10 between San Antonio and El
Paso, the Texas Department of Transportation said in a tweet late Tuesday.
“Parts of Texas have fuel shortages,” the tweet said. “If you must drive, top off before you hit the
road.”

Officials in several Houston suburbs issued so-called boil orders warning residents to purify water
supplies amid deepening weather and energy crises.
Water-pressure levels in some municipal systems west and south of the fourth-largest U.S. city have
fallen so low that the water is no longer safe for human consumption, according to warnings from
multiple districts late Tuesday.
The boil orders came just hours after office towers in the downtown business district warned tenants
that low pressure meant the water was no longer potable. Power supplies across the state have
been crippled by a combination of record cold temperatures and disruptions in fuel deliveries. Water
utilities in Texas rely on electric pumps to operate distribution networks.
The Freeport liquefied natural gas export plant in Texas has delayed and canceled planned loading
of several shipments over the next few weeks as the facility curbs output in response to the deep
freeze. Texas Governor Greg Abbott asked the three-train plant to dial back operations in keeping
with the state’s disaster declaration.
Power disruptions at export facilities, closed ship channels and a reduction in the flow of natural gas
have held back LNG tankers off the coasts of Texas and Louisiana. Crews are working to restore
power to the Sempra Energy-owned Cameron LNG export terminal in Louisiana. Houston-based
Cheniere Energy Inc., the top U.S. LNG exporter, also curbed production at Sabine Pass LNG in
Louisiana and Corpus Christi LNG in Texas.
Gas flows to U.S. LNG export facilities have dropped to the lowest level since early-September,
according to data from BloombergNEF.
The Midcontinent Independent System Operator Inc., which runs the largest power grid in the U.S.
Midwest, called for rolling blackouts across its entire southern region amid generation outages and
high demand. The order is scheduled until 1 a.m. on Feb. 17.

MISO operates a system that stretches along the Mississippi River region from the Canadian border
to the Gulf of Mexico, taking in 15 U.S. states and the Canadian province of Manitoba.
Rolling blackouts that have paralyzed Houston and the rest of Texas may last for several more days,
utility CenterPoint Energy Inc. warned residents.
With too little electricity being generated to supply all demand in the fourth-largest U.S. city,
CenterPoint said in a tweet that it has no way to predict when supplies will be restored.
A deep freeze that’s sent Texas power prices surging and curtailed millions of barrels of oil
production is serving as a short-term boon for Canada, which is fetching a rare premium for its
natural gas.
The country’s benchmark AECO gas price traded at a 27% premium to its U.S. equivalent on
Tuesday, just days after touching a 7-year high of $5.28 per million British thermal units, data
compiled by Bloomberg show. Canadian gas usually sells at a discount to American supplies
because of its distance from major population and manufacturing centers, among other reasons.
Total U.S. oil production has plunged by nearly a third as an unprecedented cold blast freezes well
operations across the central U.S., according to traders and industry executives with direct
knowledge of the operations.
Crude output has now fallen by about 3.5 million barrels a day or more nationwide, they said, asking
not to be identified because the information isn’t public. Before the cold snap, the U.S. was pumping
about 11 million barrels a day, according to last government data. Production in the Texas’s Permian
Basin alone -- America’s biggest oil field -- has plummeted by as much as 65%.
Operations in Texas have stumbled because
temperatures are low enough to freeze oil and
gas liquids at the well head and in pipelines that
are laid on the ground, as opposed to under the
surface as practiced in more northerly oil
regions. The big question now is how quickly
temperatures return to normal.
The operator of the Texas electric grid no longer
expects all service to be restored in the state by
Tuesday night, saying it could take days for
enough power plants to be up and running.
One of the chief hurdles is that there isn’t enough
natural gas flowing to fuel plants, Bill Magness, chief executive officer of the Electric Reliability
Council of Texas, said in a briefing. He expects “significant progress” in the next several days but
warned more power plants could still trip offline.
“We are seeing progress on restoration of the system,” Magness said. “There could be setbacks”
Earlier Tuesday, grid officials said they expected all power to be restored by the evening.
Blackouts In Texas And California Teach A Hard Lesson: Climate Change Is Costly
A record-setting polar vortex, which brought intense cold to a majority of the American heartland,
has led to massive blackouts in Texas as significant amounts of generating capacity have been
knocked offline.

The Texas grid operator, the Electric Reliability Council of Texas (ERCOT for short), announced
early Monday morning the need for short-duration rolling blackouts across the Texas grid to balance
demand with available supply.
Within hours, those short duration blackouts had morphed in to massive outages impacting more
than four million residents for hours on end. As of this writing, millions from Houston to Austin still
do not have power restored and utilities are advising consumers to be prepared for further outages
over the next 24 hours. ERCOT projections point to roughly 54 GW of generating capacity being
available by end of day Tuesday (above the 48 GW currently available), far short of the 69 GW in
demand the system saw Sunday evening and short of the projected demand tonight.
If this all sounds familiar, its because California went through a similar situation just a few short
months ago. Faced with an unprecedented heatwave, residents of the Golden State found
themselves losing power for hour-long periods as the California Independent System Operator
(CalISO) struggled to match supply and demand statewide.
CalISO had dealt with heat waves in the past, and generally called upon electricity imports from
neighboring states to balance the load in prior years. But the heat wave that hit California last year
was particularly extreme and beyond what scenario planners had ever envisioned: a region-wide
event impacting the entirety of the Western United States.
The usual route of shoring supplies through electricity imports failed because other states in the
region were experiencing the same heatwave, and blackouts were ordered before the entire grid
went down.
All indications point to a considerably worse scenario now unfolding in Texas. Despite the uproar,
California’s blackouts were modest in nature, with around 500,000 homes and businesses losing
power at the height of the blackout period for between 15 minutes and 2.5 hours.
Texas, however, appears to be suffering from an unprecedented loss of generating capacity, with
early reports pointing to roughly 30 GW of primarily gas-fired capacity offline, representing more
than a third of generation capacity in the state.
Some have taken the chance to blame wind and renewables for the issues plaguing the state, but
it is primarily a failure of supposedly resilient fossil-fired assets that is impacting the region.
Compounding matters, Texas is the lone state in the lower 48 with its own power grid and has limited
ability to import power from neighbors.
The Southwest Power Pool, another grid operator in the central United States that
had indicated earlier this week that it may begin blackouts of its own, avoided a similar disaster in
part by leaning on neighbors.
While it’s too soon to identify a root-cause for the catastrophe unfolding in Texas, it’s likely that
planning failures analogous to California’s are to blame. A cold snap of this severity and longevity
was likely not considered by ERCOT or Texas utilities in their resiliency planning scenarios.
The failure of such a large portion of the generating fleet suggests that infrastructure designed for
less extreme weather was left defenseless to the extreme cold. Equipment is icing, natural gas lines
and distribution points are freezing, and fuel supplies are being prioritized elsewhere.
Technologies exist to keep the wheels in motion during extreme cold (just ask Minnesota), but the
added expense for the cold weather upgrades was likely deemed unjustified in traditionally mild
Texas or cost-prohibitive in the deregulated Texas electricity market.

As climate change worsens extreme weather events, we should expect more of these failures. Aging
infrastructure built around 20th century weather patterns will be continually tested by the more
extreme weather now becoming commonplace.
Reliability plans based off similar assumption sets will need to be reworked entirely. Industry
analysts peg the cost of upgrading and modernizing the US grid in the trillions of dollars alone, which
doesn’t even account for the trillions more needed to replace aging fossil-fired assets and build
gigawatts of energy storage to support further renewables penetration.
No matter your policy positions or thoughts, climate change will find its way in to your utility bills.
These grid failures are wake-up calls and provide further proof that the impacts of climate change
are not geographically constrained, nor do they take aim at one political party. One way or another,
the cost of climate change on each of us will make itself known: in this both California and Texas
can now agree.

NewBase Energy News 18 February 2021 - Issue No. 1407 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as Technical Affairs Specialist for Emirates General
Petroleum Corp. “Emarat “with external voluntary Energy consultation for the GCC
area via Hawk Energy Service, as the UAE operations base. Khaled is the Founder
of NewBase Energy news articles issues, an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities &
gas compressor stations. Executed projects in the designing & constructing of gas
pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted &
finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements.
Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass
energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous
conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-
in-Chief of NewBase Energy News and is a professional environmental writer with more than 1400 popular
articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste
management and environmental sustainability in different parts of the world. Khaled has become a reference
for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC
leading satellite Channels. Khaled can be reached at any time, see contact details above.
NewBase: For discussion or further details on the news above you may contact us on +971504822502, Dubai, UAE
NewBase 2021 K. Al Awadi

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