Texas grid reforms must not overlook natural gas supply
Eight months after Winter Storm Uri left much of Texas in the dark, researchers and regulators are still trying to figure out what exactly caused such widespread power plant failures, and how to prevent them from recurring. The latest effort comes from a joint inquiry by the North American Electric Reliability Corporation (NERC), which is responsible for setting electric reliability standards, and the Federal Energy Regulatory Commission (FERC), which oversees the wholesale electric market throughout much of the country. FERC and NERC recently released preliminary findings about the storm. While the findings confirm in broad outlines what has been clear for a while—that Texas’ summer-focused grid was unprepared for the extreme cold and ice of Winter Storm Uri—the findings also highlight how failures in the natural gas market exacerbated the crisis.
While the majority of power plant outages during the storm were due to freezing equipment and other on-site problems, a substantial 31 percent were due to fuel supply issues, almost all of which involved natural gas. Natural gas fuel supply issues led to problems at a total of 357 individual natural gas-fired generating units, roughly half of which were within the Electric Reliability Council of Texas (ERCOT) region. These numbers could well understate the extent of the fuel supply disruption issue, since at least some of the plants that faced outages due to equipment failure might not have been able to run even without those problems because they would not have been able to get fuel.
Natural gas is transported via a system of pipelines which are powered by compressors. Freeze-related impacts at the wellhead; loss of compression due to frozen infrastructure; or inaccessible road conditions that prevent transportation or repairs can all impact fuel supply. Disruption to any of these factors can result in a lack of fuel at a power plant.
Some have suggested that the natural gas supply problems were themselves the result of the blackouts—a snowballing effect as gas infrastructure lost power. But this does not appear to be the case. As the findings note, “natural gas pipelines were only minimally affected by power outages (because most have backup power) and were largely able to meet their firm transportation commitments.” In addition, fuel production failures mostly came before failures at power plants themselves. Sixty percent of the units affected by a lack of natural gas supply had already experienced outages or related issues by the time the blackouts started on February 14.
A more likely culprit involves the decline in the production of natural gas at the wellhead, which the United States experienced in February; combined daily natural gas production for Texas, Oklahoma and Louisiana fell by more than half. As a result, the United States saw the largest monthly decline in natural gas production on record.
Whatever the case, it is clear that we cannot protect the Texas grid from future blackouts merely by increasing the resilience of electric generators themselves. The most robust power plant will still be inoperable in a crisis if it cannot get fuel.
Yet when it comes to strengthening the grid in the wake of the February blackouts, addressing problems with the natural gas supply system has been mostly an afterthought. This spring, the Texas legislature passed SB 3, which among other things required Texas power plants to winterize. The legislation was supposed to include a similar requirement for natural gas infrastructure, but something apparently went wrong somewhere in the drafting. According to a proposed interpretation by the Texas Railroad Commission, the weatherization requirement only applies to natural gas infrastructure that is designated as “critical infrastructure.” Facilities designated as critical infrastructure are to be shielded from curtailment during times of electrical scarcity. However, any facility that wishes not to be designated as critical infrastructure can do so simply by filling out a form with the Commission and paying a $150 fee. By avoiding this designation, a facility would also bypass the requirement to weatherize.
Allowing natural gas facilities to opt out of the weatherization requirement not only renders the requirement toothless, but also potentially counterproductive. While power loss was not a major cause of natural gas supply disruption during the February blackouts, it could be so during future events. The more facilities that designate themselves as non-critical to avoid having to weatherize, the greater the chance that they may lose power during a future event.
This is no way to run a railroad—or a Railroad Commission. At the very least, regulators need to make sure that the list of entities that have declared themselves non-critical is publicly available so that generators and customers can have an accurate sense of vulnerabilities. And overall, Texas needs to recognize that the natural gas supply system is an integral part of a well-functioning grid, and we cannot protect the one without securing the other.
Image credit: Aloshin Evgeniy