Statement: Railroad Commission doesn’t inspire confidence in gas supply winterization effort

Environment Texas Research and Policy Center

AUSTIN — The Railroad Commission of Texas, the state’s main regulator of the oil and gas industry, approved Tuesday new critical infrastructure rules to guide the winterization of the gas supply. This comes in response to freeze-offs at gas wells and other parts of the gas supply chain that were key factors in the February black-outs. 

The Federal Energy Regulatory Commission (FERC) issued a report earlier this month that found a shortage of natural gas was primarily the result of the oil and gas industry’s failure to weatherize its systems. SB 3, the Legislature’s blackout response bill, directed the Commission to determine what parts of the gas supply chain are critical infrastructure, which, if included on a forthcoming electricity supply chain map, could be subject to winterization requirements in a future rule.

In September, the commission announced a draft rule, which allowed broad exemptions from complying with (still to be written) winterization requirements simply by paying a $150 fee. This drew wide condemnation, including from members of the Texas Legislature. The final rule narrows the exemptions to what counts as critical infrastructure, but still allows marginal gas wells to opt out with the $150 fee and evidence of a “reasonable basis and justification” for the exception. According to comments filed by the Texas Alliance of Energy Producers, marginal production wells represent “approximately 10 to 20% of total production, a critical portion during a curtailment event.” 

Environment Texas Executive Director Luke Metzger released the following statement in response:

“With global warming supercharging extreme weather, it’s a question of when, not if, we’ll see another winter storm like the one in February. That disaster, and previous storms like the one in 2011 and those before it, makes clear that we must be better prepared for the next one — and the ones after that — which will certainly test us in the future. 

“Federal investigators were quite clear that failures to winterize the gas supply chain were a major factor in the February blackouts. We’re glad the staff and commission listened to reason and reduced the number of companies allowed to opt out of doing their part to protect our grid. However, I worry this rule gives too many gas companies a free pass to avoid requirements. A $150 fee to shirk responsibility is outrageous, especially if it’s in state law. That’s pocket change to the oil tycoons.  The gas industry wants to have its cake and eat it too – they want all their wells to be critical enough to not get their power shut off during an emergency, but not so critical as to require them to winterize. You can’t have it both ways.

“By failing to deliver gas during the February freeze out when power plants needed it, not only did the gas companies keep millions of Texans in the dark and cold for days, but they were also able to jack up prices and gouge consumers to the tune of billions of dollars. Talk about failing upwards. 

“It’s very disappointing that the commissioners continue to repeat gas industry talking points in an attempt to avoid responsibility. Shifting blame to wind and solar, which the FERC report proved wasn’t the main cause, is just plain wrong. Texans deserve independent regulators who will put the public interest first, not commissioners who do the bidding of oil companies, which are focused on their own profits.

“Today’s rule is just one step in a long process which will determine whether and how gas companies actually winterize. If gas facilities aren’t included in the still to come “supply chain map,” they won’t have to winterize. And how strong the actual requirements will be is also still to be determined. Given the commissioners continue to gaslight Texans with their inaccurate defense of the gas industry, I’m worried that the ultimate outcome of this will be rules which benefit gas industry profits at the expense of public health and safety.”