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Some 250 million people expected to see frigid

temperatures

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Oil and gas well freeze-offs could hit production

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Total U.S. gas use, including exports, could hit 156.4

bcfd

By Scott DiSavino

Jan 3 (Reuters) - Freezing weather and snow storms

across the U.S. could cause massive power outages over the next

week and boost natural gas demand to its highest levels of the

winter, according to energy analysts and reliability

coordinators.

The bump in demand comes as supplies of gas could drop due

to the freezing of oil and gas wells and pipes, known in the

energy industry as so-called "freeze-offs."

Gas provides about 43% of the nation's power generation and

heats about 45% of the country's homes, according to data from

the U.S. Energy Information Administration (EIA). The jump in

demand coupled with a drop in supply could drive up prices next

week.

"Appalachia and Rockies production face freeze-off risks as

temperatures drop into the single digits or below," analysts at

energy consulting firm Gelber and Associates said in a note.

The U.S. produces about 105 billion cubic feet per day

(bcfd) of gas with about a third of that supply coming from the

Appalachia region of Pennsylvania, West Virginia and Ohio,

according to data from financial firm LSEG and the EIA.

In past winters, freeze-offs have slashed gas output by

massive amounts, including the loss of around 16.5 bcfd in

January 2024, according to data from LSEG.

Frigid temperatures in December 2022 cut supplies by 19.4

bcfd, and in February 2021 hit output by 20.4 bcfd, according to

LSEG data.

One billion cubic feet of gas is enough to supply about five

million homes for a day.

As heating demand picks up, LSEG projects total U.S. gas

use, including exports, could reach 156.4 bcfd on Jan. 9. That

compares with the nation's daily record of 168.4 bcfd hit on

Jan. 16, 2024 during another brutal winter freeze.

The combination of soaring demand and freeze-offs in January

2024 boosted spot gas prices at the U.S. Henry Hub benchmark

in Louisiana to over $13 per million British

thermal units (mmBtu).

Next-day prices at the Henry Hub were currently around $3.65

per mmBtu, the highest levels since January 2024.

POWER COMPANIES PREPARE

Some 250 million people will feel frigid air across 40

states in the next week, according to meteorologists at

AccuWeather. They warned of significant ice accumulations that

could cause power outages in parts of Missouri, Illinois,

Indiana, and Kentucky over the weekend and through Monday.

U.S. energy company CenterPoint Energy ( CNP ) on Friday

said its cold weather action plan was in place for power and gas

customers in several states, including Texas, Louisiana,

Indiana, Ohio and Mississippi.

Earlier this week, the North American Electric Reliability

Corp (NERC), the nation's reliability coordinator, urged

everyone in the electricity supply chain to take steps now to

ensure the highest levels of reliability.

NERC said it is "especially concerned about natural gas

supply given the significant amount of production in the

mid-Atlantic and Northeast."

Extreme weather in February in 2021 left millions in Texas

without power, water and heat for days and resulted in over 200

deaths as the state's power grid scrambled to prevent the

electric system from collapsing.