As power plants winterize in Texas, gas producers get a pass
A week after February's devastating blackout, Texas' top oil and gas regulator delivered a message to state lawmakers from Texas gas operators.
“I sit before you today to state that these operators were not part of the problem. The oil and gas industry was part of the solution,” Railroad Commissioner Christi Craddick told members of a state House committee.
In Craddick’s account, the failure of natural gas producers to deliver fuel to power plants was not mainly caused by freeze-ups at gas wellheads and along the supply chain. It was caused by the power cuts themselves. The state’s grid operators and utilities deprived electricity to gas operators, she said, forcing them to shut down.
Many grid analysts, engineers and power plant operators pushed back. The version of events pushed by Commissioner Craddick and the oil and gas industry was simply untrue, they said. But her version appears to have shaped the laws legislators passed in response to the blackout. Under those policies, power plants must winterize, while gas producers and transporters may not.
Now, an analysis of the blackout from the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation provides what may be the strongest refutation yet to the claim that gas system freeze-offs weren’t a problem.
In their final reporton the Texas freeze, the federal agencies said freezing temperatures were the biggest cause of gas production declines, accounting for over 43% of the decrease in gas supply. Only 21.5% of declines, the report found, were “caused by midstream, wellhead or gathering facility power losses.”
The report comes as oil and gas regulators at the Railroad Commission continue to work on winterization rules that could allow gas producers and suppliers to opt out of any mandates to protect themselves against freezing weather. It’s an exception, some say, gas operators would gladly take because the tight supply of gas during the crisis brought windfall profits to the industry.
“It’s an outrage,” Curt Morgan, CEO of the power company Vistra, told KUT. “It's the only business I know in the state of Texas, during a crisis situation, that can increase the price of their product by a hundred times and nobody says a word about it.”
The Railroad Commission recently approved a plan to bake $3.4 billion of the added cost of February's high gas prices into gas bills for up to the next 30 years. That means consumers will pay the price.
In this episode of The Disconnect, we visit a Texas gas power plant that is preparing for winter, talk about the drama in Austin as lawmakers and oil and gas regulators square off over policy, and ask the question: Is Texas ready for another big freeze?
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