The lawsuit filed by Exxon Mobil’s natural gas business said last month’s massive winter storm and declarations of emergencies in Texas prevented it from fulfilling its supply commitment to Macquarie, the second largest U.S. gas marketer.
FERC will align with President Biden’s climate goals but the energy transition cannot be done “on the backs of oil and gas workers,” says Ken Irvin, co-leader of global energy practice with Sidley Austin.
Qatar Petroleum and Exxon Mobil are betting big on LNG and natural gas as the demand outlook appears promising for both.
Gas prices, which usually trade around $3 per MMBtu, rocketed to over $300 per MMBtu at some hubs, while power prices, which usually trade around $25 per megawatt-hour in Texas, soared to over $10,000 at times.
The NorTex Midstream deal follows the acquisition of Tall Oak II and III by Tailwater Capital last month in Oklahoma’s Arkoma STACK.
The Texas Railroad Commission, though, likely does not have the authority to interfere with contracts between companies to sell gas out of state, says Commissioner Jim Wright.
Texas Governor Greg Abbott ordered the restrictions on out-of-state supplies of natural gas from Texas through Feb. 21, citing the weather emergency. Mexico is Texas’ main out-of-state customer for gas.
The deep freeze hit Texas’ energy industry, shutting refineries and forcing restrictions on natural gas pipeline operators, while leaving over 4 million people without power.
High costs, regulatory hurdles and environmentalist opponents have made it difficult to construct major natural gas pipelines out of Appalachia.
Constraints on the midstream will result in higher gas prices, East Daley says, leading utilities to rely more on cheaper coal.