Suppliers, power plants blame each other
President of oil and gas association opposes weatherization mandate after outage crisis
AUSTIN — During a second day of legislative hearings on the state’s deadly outages last week, natural gas industry officials fought back against the notion that they were to blame, saying they lost critical power to fuel their pumps at the moment when it was needed most.
Power generators have testified that some of their plants went offline because they lost the gas pressure they needed to run. Meanwhile, natural gas operators and regulators have blamed loss of power to their facilities for problems delivering the fuel.
Gov. Greg Abbott and Lt. Gov. Dan Patrick have made weatherization of the state’s power system a priority for this legislative session, and lawmakers continually asked questions during the hearings Thursday and Friday about how to make that a reality.
But it quickly became apparent that the natural gas industry, historically opposed to suggestions they equip their facilities for extreme weather because of the high cost involved, had identified an alternative problem and solution.
Grant Ruckel, vice president of government affairs at pipeline company Energy Transfer, testified that the biggest failure during the disaster was cutting power to gas pipelines, many of which are not listed as essential services, a designation made for hospitals and other critical infrastructure.
About half of the gas pipelines use electricity in their compressors, about half use natural gas in compressors and a few use diesel fuel, said Christi Craddick, chair of the Texas Railroad Commission, which oversees the oil and gas industry.
“How could we let those compressors be part of the blackout if there is a process for critical load and essential services?” said Rep. Eddie Lucio III, D-Brownsville.
“How did that slip through the cracks and then allow generation plants to fail? That is just baffling to me.”
Craddick said she was not aware before this week that operators could register as essential services through the Electric Reliability Council of Texas, known as ERCOT.
“I didn’t know that was an opportunity. We’d never been told that as an agency, to my knowledge,” Craddick said. “I will say we had a phone call (with ERCOT), and they said, ‘We’ve got a form.’ It took me 30 minutes myself, knowing that there was a form sitting there, to find it. So I think better communication (is needed) to understand that.”
Some larger operators may have been aware, she said, but many small operators weren’t. By Tuesday afternoon, she had operators emailing and texting her coordinates of their facilities to try to get power restored.
Craddick questioned the need to require winterization of natural gas wellheads that froze “because one-size-fits-all is always a challenge for us.” Some may already do it, she said, but she could not provide any examples of operators that had.
“If you’re a prudent operator, to me, you would look at how you safely weatherize or do smart things with your facilities,” she said.
Todd Staples, president of the Texas Oil and Gas Association, also opposed a weatherization mandate.
“Different systems have different needs, and it would be such a complex process to regulate what winterization means at the midstream level, the upstream level,” Staples said.
State Rep. Joe Deshotel, DBeaumont, floated the idea of requiring natural gas pipeline operators to keep backup power systems. Craddick said she didn’t think the agency had the authority to mandate it, so later Deshotel proposed a state tax credit.
Deshotel said he had asked generators how many plants would have gone down if they hadn’t lost gas pressure, and the answer was only a couple.
“We’re taking away that big excuse that generators are saying, ‘We couldn’t get the gas pressure because they couldn’t deliver,’ ” Deshotel said. “That would be gone.”
Meanwhile, in the Senate, the benefits of weatherization were coming into view. Tom Hancock, assistant managing director at Garland Power and Light, said his utility’s internal fuel supply remained stable throughout last week and attributed that to changes it made after the freeze in 2011. The company installed heated coils around its pipes and purchased other heating devices.
Hancock said he still needed to buy natural gas from the open market during the crisis, and the price of that gas rose from about $3 per cubic foot to as much as $500 per cubic foot. Terry Naulty, assistant general manager at Denton Municipal Electric, said their expenses for gas went up to $700 per cubic foot.
“Would you consider it an exorbitant price?” asked Sen. José Menéndez, D-San Antonio.
“It was the price I had to pay,” Naulty said. “We were going to do whatever it took to keep the lights and heat on for our citizens.”