The US oil and gas infrastructure crisis appears to be worse than originally thought, with the impact of the Texas storm earlier this year highlighting major problems.
Aging infrastructure is the reason for President Biden’s new national infrastructure plan. However, this comes after years of neglect which has cost the oil and gas sector billions of dollars, as well as wreaking havoc on both the environment and communities relying on vital energy supplies.
Every year, extreme weather hinders energy distribution across the US During California’s hot summers we see wildfires halting energy production from the state’s aging electrical infrastructure. This is largely because it is common practice to wait until a component fails within the system for it to be replaced, rather than preemptively investing in better structures.
This February, the electrical grid shut down and refineries halted production as Texas was hit hard by a winter storm which saw freezing pipes and no energy supply for heat and water to many houses across the state. Many were left to rely on generators to heat their houses to escape freezing temperatures for up to a week.
However, just last month the outlook appeared brighter with experts predicting a profit for several oil majors despite the disruptions earlier this year. Despite companies such as Exxon experiencing as much as $800 million in damages from the storm, Exxon and many other firms are expected to announce a profit in the first quarter of 2021.
But now it looks like the effects of the storm, and more generally of aging energy infrastructure across the US, may be worse than originally thought. Figures released last week suggest that the loss in production at the beginning of the year was worse than at first glance.