Why we need stronger monitoring in Texas gas pipelines
A yearlong investigation by Bloomberg News into activities of intrastate natural gas pipeline companies’ actions during the 2021 winter storm — in which hundreds of Texans died and those pipeline companies made billions now being paid by Texas consumers — showed lax state oversight that put profits over people’s lives.
After reading the Bloomberg article, The Dallas Morning News editorial team correctly proclaimed it was time for change:
“There’s a simple and proven solution to this, though it won’t be popular with pipeline companies or the libertarian wing of Texas Republicans: regulate the delivery of natural gas the same way the state regulates the delivery of electricity.”
As a group committed to the interests of Texans and the continued growth of the Texas economy, we couldn’t agree more.
We’re also realists. Advocating stronger oversight of this industry to protect both the families and businesses in this state is an uphill battle. In the meantime, Texans will continue to be at risk of sitting in the dark the next winter storm while pipeline companies can, as one gas company executive said following the 2021 winter storm, hit the profit jackpot.
There are two things that could be done now that will have an immediate impact:
Create a gas coordinating desk within ERCOT to ensure reliability to electric generators, which serve every Texan;
Install a gas independent market monitor (gas IMM) to ensure pipeline companies can’t play fast or loose with the system the way Texans were gamed during 2021, according to the Bloomberg article.
These steps could be taken at the direction of the governor, the Texas Legislature, the Public Utility Commission or Railroad Commission, or even ERCOT. It simply takes political willpower.
Gas desk. Two years ago, a simple proposal was presented by ERCOT so that the pipeline systems be required to notify the state’s electric grid manager if there were any interruptions in service. Known as a gas desk, similar setups are operational in several other states. Here in Texas, it could be set up in less than a month and at zero cost to consumers. Compliance would be achieved through emails, electronic bulletin boards, or even just phone calls. The Railroad Commission has blocked this proposal at every turn. The Bloomberg investigation noted that political threats were made to anyone who even entertained the idea, much less openly supported it.
Even though the idea has stalled under political pressure, we strongly believe this should have been done immediately after the 2021 winter storm.
If nothing is done, all of us — including the PUC, ERCOT, generators, electric delivery companies and retail electric providers — will continue to guess and hope about the stability of the natural gas supply system we depend on. That’s not a risk we should take as we enter our short, but often intense, winter season.
Gas IMM. The gas independent market monitor would be similar to the already existing monitors for the Texas electric market and numerous states across the nation. If this IMM were in place, lawmakers and the public would already know if we had something to fear in our next winter storm. As it is, Texans across the state are left wondering.
Opponents to a gas IMM consistently say the monitor could hurt the competitive market in the gas industry. Yet, the vast majority of the Texas Legislature already believes that the electric IMM ensures and enhances the electric competitive market because participants know it’s not being manipulated. Look no further than state Sen. Phil King, R-Weatherford, who simultaneously filed bills extolling the virtues of an electric IMM while publicly stating a gas IMM would be harmful.
Both proposals help Texas natural gas drillers and royalty owners by ensuring a healthy, competitive market without government intrusion while protecting the Texas consumers of gas and electric services. In fact, these proposals will hurt only bad actors among multibillion-dollar pipeline corporations. Those companies operating within the boundaries of good business will likely benefit from the transparency.
Winter is here and severe storms are coming, but it’s still not too late. A gas desk could be set up in a matter of days and a gas IMM would provide important post-storm information that protects Texans.