Tomlinson: Texas oil and gas regulator needs to explain failure during February blackout

Written By Chris Tomlinson at The Houston Chronicle

Railroad Commission Chair Christi Craddick owes Texans an explanation.

Two-thirds of Texans experienced power outages, and 30 percent saw storm damage to their homes during the February Freeze, according to a University of Houston poll. Yet Craddick gave a full-throated defense of the state’s natural gas industry, which she is supposed to regulate, so we have the energy we need.

“Some media outlets would have you believe that natural gas producers and frozen transmission pipes caused the power shortage across the state, but I sit before you today to state that these operators were not the problem - the oil and gas industry was the solution,” Craddick told lawmakers in March. “Any issues of frozen equipment or delays in process restoration could have been avoided had the production facilities not been shut down by power outages.”

But Texas’s natural gas producers definitely were the problem, according to a new report from 12 University of Texas at Austin faculty members. And Craddick’s Railroad Commission could have done more to prevent blackouts.

“The data indicate that natural gas output started to decline rapidly before the electricity forced outages (load shed) began early on February 15, with production declining about 700 million cubic feet per day from February 8-14,” the Energy Institute researchers discovered. “This decline is likely due to weather-related factors and not a loss of power at natural gas facilities.”

The more we learn about how and why the grid failed, the more apparent our state regulators’ failure becomes.

The three-member Public Utility Commission, which Gov. Greg Abbott recently replaced, gave the researchers access to confidential reports, documents and communications. The PUC has refused to release that information to the public.

The picture painted by the professors is damning.

The vast majority of Texans are served by a grid operated by the nonprofit Electric Reliability Council of Texas, known as ERCOT. The grid is not connected to the rest of the country. Generators are lightly regulated and only get paid for electricity the grid uses.

Most of the year, Texas has more generating capacity than customers need. But when the weather turns extremely hot or cold, ERCOT relies on expensive, quick-start natural gas plants to meet peak demand. Wind and solar are essential sources of power, but they are not what ERCOT depends on in an emergency.

February’s winter storm triggered an entirely preventable emergency. The National Weather Service provided ample warning, and the PUC, the Railroad Commission and the governor’s office started preparing for the polar vortex days in advance, according to the UT report.

Then-PUC Chair DeAnne Walker made more than 100 calls to discuss the need for natural gas supply, according to phone logs obtained by industry publication E&E News. Walker alerted Abbott, Craddick and lawmakers to an impending natural gas shortage four days before the blackouts.

“I contacted Chairman Craddick about the gas curtailment concerns. I also advised the leadership in the House and Senate about the gas curtailment information,” Walker wrote in a recounting of events.

West Texas natural gas has a lot of water in it, which can freeze at the wellhead and block the flow. The commission has repeatedly ignored calls to require well operators to prepare for freezing temperatures. By the time the wells were freezing in February, the Railroad Commission could do little but watch the dominoes fall.

Texas lost 85 percent of its non-oil-related natural gas production by the second day of the blackouts. Two-thirds of natural gas processing plants in the Permian Basin experienced an outage, the UT report states.

Natural gas power plant operators couldn’t get enough fuel. But some contributed to the crisis with their lack of preparedness.

“Some power generators were inadequately weatherized; they reported a level of winter preparedness that turned out to be inadequate to the actual conditions experienced,” the UT report said. “The outage, or derating, of several power plants occurred at temperatures above their stated minimum temperature ratings.”

When the power plants shut down, transmission line operators shut off electricity flowing to other natural gas wells because the operators had failed to apply for “critical load” status. The more wells went offline, the more power plants shut down.

Craddick’s testimony in March sounded to me like cheerleading for the industry that finances her campaigns, not a defense of Texas consumers who cast ballots. She has since vociferously opposed proposals that would prevent future blackouts at the industry’s expense.

The Texas Legislature needs to invite Craddick back to explain what she’s learned since March. In light of the UT report, she needs to clarify whether she intends to continue blocking new consumer protections.