In an effort to determine if natural gas prices were manipulated during the February 2021 winter storm, Oklahoma Attorney General Kim David issued a request to law firms to launch an investigation. This comes after the Oklahoma Corporation Commission issued its own call for an investigation into potential manipulative practices of the state’s natural gas suppliers. [(https://www.reddit.com/r/u_Oklahoma_Watch/comments/1537rn0/oklahoma_ag_wants_law_firms_to_investigate_winter/)] The Corporation Commission has asked constituents to share any suspicion regarding potential unfairly raised natural gas prices, with claims that the February 2021 winter storm prices could have been significantly higher than normal due to market manipulation. [(https://kfor.com/news/local/occ-calling-on-ag-to-investigate-natural-gas-prices-in-oklahoma/)] As a result, Oklahoma officials are revisiting the circumstances that led to the skyrocketing prices during the storm. [(https://www.oklahoman.com/story/news/politics/government/2023/03/02/oklahoma-officials-want-to-revisite-2021-winter-storm-costs/69956250007/)] This article will explore Attorney General Kim David’s call for an investigation into whether or not natural gas prices were manipulated during the 2021 winter storm.
Table of Contents
- 1. Oklahoma AG Calls for Investigation of 2021 Winter Storm Natural Gas Prices
- 2. Record Prices and High Utility Costs Create Urgency for Action
- 3. Assessing the Impact of the Winter Storm on the Market
- 4. Seeking Resolution and Preventative Measures for Future Events
1. Oklahoma AG Calls for Investigation of 2021 Winter Storm Natural Gas Prices
What is the 2021 Winter Storm?
The 2021 Winter Storm began on February 11, 2021 and ended on February 19, 2021, bringing extremely frigid and icy weather conditions to the U.S. southern states. This winter storm caused an estimated $195 billion worth of economic losses due to the destruction and disruption of essential services including electricity, telecommunication, and natural gas.
What is the Office of the Comptroller of the Currency (OOC) Investigation?
In June 2021, the Oklahoma Office of the Comptroller of the Currency (OCC) called for Attorney General Mike Hunter to investigate potential manipulation of natural gas prices during the 2021 winter storm in Oklahoma. [(https://kfor.com/news/local/occ-calling-on-ag-to-investigate-natural-gas-prices-in-oklahoma/)]. The probe aims to understand if the natural gas market was manipulated to increase prices artificially to the detriment of consumers.
To this end, the OCC aims to:
- Review the market for natural gas in Oklahoma and analyse if prices were responsive to the demand and supply conditions.
- Review relevant public testimony from other relevant state agencies and energy companies.
- Investigate if other states face the same circumstances as in Oklahoma. [(https://mn.gov/puc/rest/rss/News?id=14&detailPage=/puc/about-us/news/newsroom/index.jsp)]
At the time of this post, the Attorney General has not released an official statement or response to the OCC’s investigation. It remains to be seen if, and what form, the probe will take and what effects it might have on the natural gas market in Oklahoma and elsewhere.
2. Record Prices and High Utility Costs Create Urgency for Action
With ever-advancing technology and more resources becoming available, it is not far-fetched for utilities across the world to come under ever-increasing pressure to meet customer demands for lower prices and improved services. However, a combination of record prices and high utility costs has been a tricky situation for many states including Illinois.
[(https://www.whitehouse.gov/wp-content/uploads/2023/03/budget_fy2024.pdf)]The US federal budget report for fiscal year 2024 revealed a 2.6% decrease in overall utility costs nationwide. This drop was primarily caused by falling coal prices, however, costs have remained stagnant in certain states no doubt due to the utilities having to compete for limited resources in those states. [(https://www.indeed.com/career-advice/career-development/cost-savings-examples)] To offset these costs, companies are looking into several methods such as:
- Reduce spending
- Avoid IT upgrades
- Invest in equipment
- Reconsider research and development costs
In the meantime, [(https://news.wttw.com/2023/01/18/illinois-utilities-seek-increase-rates-across-state)] many of the major utilities companies in Illinois are pushing to increase their rates across the state. This creates an urgent need for action and drives up the need to be creative in developing new methods to reduce overall costs while still ensuring high quality services to the customers.
3. Assessing the Impact of the Winter Storm on the Market
The impact of a severe winter storm can cause significant economic damage, as it can cause both property damage and loss of life. The Insurance Information Institute estimates that from 2003-2018, winter storms were the 5th most expensive natural disaster. [(https://www.iii.org/fact-statistic/facts-statistics-winter-weather)] Additionally, the power outages caused by winter storms can disrupt services and supply chains or lead to other non-weather-related disruptions in the global economy. [(https://www.pnc.com/en/about-pnc/corporate-responsibility/corporate-responsibility-thought-leadership/global-economic-outlook-winter-weather-outages.html)]
Stock Market Impact
The stock market is highly sensitive to changes in economic conditions, including the effects of winter storms. When a severe winter storm hits, stock prices can experience sharp decreases in the aftermath. [(https://www.quora.com/What-types-of-effects-do-severe-winter-storms-have-on-stock-prices)] Additionally, as severe winter storms that cause widespread destruction could potentially cost the global economy billions, stocks belonging to companies in the affected areas could also experience significant drops in value. In order to assess the impact of a winter storm on the stock market, it is important to review the economic and property damage done by the storm, and to have an understanding of what types of stocks are affected.
4. Seeking Resolution and Preventative Measures for Future Events
It is important to consider both the current resolution and preventative measures for future events. In order to do this, one must use an amalgamation of various strategies, including [(https://about.gitlab.com/handbook/markdown-guide/)] methods for ordering correctly formatted text.
- Establish clear lines of communication between anyone involved in the event under consideration.
- Develop a plan to monitor the situation over time in order to intervene when necessary and prevent the event from occurring again.
- Make sure decisions are made with input from all involved stakeholders.
- Think about the long-term benefits of each solution as well as the short-term ones.
- Establish trust between those involved.
In addition to considering the immediate ramifications of the resolution procedure, it is important to focus on the anticipated effects of the preventative measures. [(https://firstname.lastname@example.org/mast-essentials-of-formatting-text-with-html-in-jupyter-notebook-a31ee525ad79)] There are numerous strategies developers can employ to ensure the effectiveness of the preventative plan. For example:
- Invest in the skills, capabilities, and knowledge of those responsible for monitoring.
- Create clear plans of action – both short and long term – for quickly responding to potential triggers and events.
- Utilize technology and data to track the effectiveness of the plan.
- Use sound communication channels to update the stakeholders regularly.
- Implement [(https://www.litmus.com/blog/the-ultimate-guide-to-bulleted-lists-in-html-email)] measures to ensure that everyone understands what is expected and the roles each need to play in the plan.
Q: What is Oklahoma Attorney General Mike Drummond asking for regarding Winter Storm Uri?
A: Oklahoma Attorney General Mike Drummond has asked for a thorough investigation into the prices charged by natural gas providers leading up to and during Winter Storm Uri. He believes that many companies may have taken advantage of the storm to “rake in billions of dollars in ill-gotten gains” [(https://kfor.com/news/local/ok-ag-announces-potential-legal-action-over-alleged-market-manipulation-during-feb-2021-winter-storm/)].
Q: What is the purpose of the investigation?
A: The purpose of the investigation is to learn more about the reasons behind the price surge of natural gas during the winter storm and to determine whether or not any companies should face legal action for taking advantage of the situation. The Attorney General’s investigations could potentially lead to the filing of lawsuits aimed at recovering ill-gotten profits [(https://kfor.com/news/local/ok-ag-announces-potential-legal-action-over-alleged-market-manipulation-during-feb-2021-winter-storm/)].
Q: What have Oklahoma state leaders and energy companies said about the investigation?
A: Oklahoma state leaders and energy companies have spoken in support of the Attorney General’s investigation, noting that they do not believe oil, gas producers, or utility companies should be blamed for the fallout from the winter storm. Senator Mary Boren, Chair of the Telecommunications Committee, has stated that she agrees that an investigation is needed [(https://okcfox.com/news/local/state-leaders-and-energy-companies-back-oklahoma-ags-investigation-into-2021-winter-storm-fallout-attorney-general-gentner-drummond-senator-mary-boren-telecommunications-committee-lawmakers-oil-gas-marketers-ong-oge-brent-howard-commissioner-bob-anthony)].
Outro: In the aftermath of the 2021 Winter Storm, many Oklahomans are still paying hefty sums for their electricity and natural gas. This high cost prompted Oklahoma Attorney General Mike Hunter to call for two law firms to investigate the surge in natural gas prices. Understanding the high cost of electricity and natural gas for Oklahomans will provide further insight on how to ameliorate the situation in the future. [(https://books.google.com/books?id=bl0EAAAAMBAJ&pg=PA45&lpg=PA45&dq=Oklahoma+AG+Winter+Storm+Natural+Gas+Costs+creative+outro+writing&source=bl&ots=D1gnNWQO0i&sig=ACfU3U0TVaW-OjoaSaxB9bKoeixSrBHefA&hl=en&sa=X&ved=2ahUKEwijiP67-a2AAxVzE1kFHWYSDowQ6AF6BAgrEAM)], [(https://books.google.com/books?id=1-EDAAAAMBAJ&pg=PA15&lpg=PA15&dq=Oklahoma+AG+Winter+Storm+Natural+Gas+Costs+creative+outro+writing&source=bl&ots=r3og0ctJnf&sig=ACfU3U3_xbxQn1EgHm01Z5Knor5Vr9UOdA&hl=en&sa=X&ved=2ahUKEwijiP67-a2AAxVzE1kFHWYSDowQ6AF6BAgEEAM)], [(https://www.kosu.org/energy-environment/2023-07-18/oklahoma-ag-plans-most-significant-lawsuit-in-state-history-over-2021-winter-storm-natural-gas-prices)] Through the investigation, Oklahoma Attorney General Mike Hunter hopes to find a way to lessen the financial burden of the winter storm.