Mexico Wants to Halt Texas Gas-Hoarding Plan: Energy Update

(Bloomberg) — The sprawling blackouts that plunged Texas into chaos in the midst of an historic cold blast are easing, but the energy crisis that the outages sparked continues.

Four of the largest refineries in Texas are discovering widespread damage from the deep freeze that crippled the state and expect to be down for weeks of repairs, raising the potential for prolonged fuel shortages that could spread across the country.

About 340,000 homes and businesses in the state were still without electricity Thursday evening, according to Poweroutage.us, which aggregates data from utility websites. That’s down from more than 3 million on Wednesday. Texas Governor Greg Abbott said in a tweet that any remaining residential outage is due to downed power lines or the need for reconnection.

The economic fallout from the crisis is broad and potentially lasting. U.S. oil production plunged by a record 40%. While some wells are being restarted in Texas, several companies in the oil industry have claimed force majeure, a warning to customers that they won’t be able to meet deliveries under contract.

Repercussions are being felt in the global crude market. Top U.S. liquefied natural gas exporter Cheniere Energy Inc. said it’s temporarily cutting gas and electricity consumption.

“None of the massive infrastructure was designed to handle freezing conditions,” Paul Sankey, an oil analyst at Sankey Research, wrote in a note. “This is an energy crisis that very few in the market, certainly outside Texas and Oklahoma, realize.”

Texas Governor Greg Abbott, who has taken the extraordinary step of restricting the flow of natural gas across state lines, Thursday afternoon demanded that lawmakers make winterization of power plants mandatory. Abbott harshly criticized the state’s grid manager for what he said was a failure to provide a realistic assessment of Texas’s generating capacity prior to the unprecedented cold snap.

Read More: How Extreme Cold Turned Into a U.S. Energy Crisis: QuickTake

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All time stamps are EST.

Mexico Wants to Stop Texas Gas-Hoarding Plan (7:50 p.m.)

Mexico has asked the U.S. ambassador to help make sure the nation isn’t impacted by a Texas decision to force local gas producers to offer their fuel to in-state buyers before exporting it.

“We are doing our diplomatic work so that this doesn’t happen,” President Andrés Manuel López Obrador of Mexico said at a news conference on Thursday. “This wouldn’t just affect Mexico — it would also affect other states in the Union.”

Texas is the biggest gas producer in the U.S., and Governor Greg Abbott on Wednesday signed an order restricting gas sales through Feb. 21 amid the state’s widespread power outages.

U.S. pipeline gas exports to Mexico plunged by about 2 billion cubic feet a day earlier this week after a pipeline outage, contributing to power outages south of the border.

Restarting Texas’ Damaged Oil Refineries Is Going to Take Weeks (6:50 p.m.)

Four of the largest refineries in Texas are discovering widespread damage from the deep freeze that crippled the state and expect to be down for weeks of repairs, raising the potential for prolonged fuel shortages that could spread across the country.

Exxon Mobil Corp.’s Baytown and Beaumont plants, Marathon Petroleum Corp.’s Galveston Bay refinery and Total SE’s Port Arthur facility all face at least several weeks to resume normal operations, people familiar with the situation said. Gasoline prices at the pump could reach $3 a gallon in May as long outages crimp supply ahead of the driving season, said Patrick DeHaan, head of petroleum analysis for retailer tracker GasBuddy.

The cold snap and power outages roiling energy markets affected more than 20 oil refineries in Texas, Louisiana and Oklahoma. Crude-processing capacity fell by about 5.5 million barrels a day, according to Amrita Sen, chief oil analyst for consultant Energy Aspects Ltd.

Automakers Shut or Slow Several Plants Because of Weather (5 p.m.)

Volkswagen AG said its Chattanooga factory in Tennessee, which builds the Passat sedan and Atlas SUV, will have a temporary production suspension Friday due to the inclement weather’s continued impact on supply chain operations.

Ford Motor Co. said the unseasonably cold weather throughout much of North America continues to affect operations at some of its plants in the region, from Kentucky to Michigan. Its Hermosillo assembly plant in Mexico is down due to the gas shortage caused by the cold. The company has asked its Texas dealers to deploy more than 400 of its newly redesigned F-150 pickup equipped with an on-board electric generator.

Texas Governor Blasts Grid Manager, Demands Power Plant Upgrades (4:43 p.m)

Texas Governor Greg Abbott demanded that lawmakers make winterization of power plants mandatory under state law after four days of widespread blackouts and water shortages.

Abbott harshly criticized the state’s grid manager, known as Ercot, and its CEO…