Natural gas trade group blames power outages for lower production during winter storm

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Texas’ largest oil and gas trade group said power outages and a breakdown in communication between producers, pipeline operators and electric utilities were behind the catastrophic grid outage during the February winter storm.

The Texas Oil and Gas Association, however, did not require its members to apply for special designations that would exempt them from power outages in an emergency. The association said it supports broader efforts to improve coordination and communication between the natural gas and electricity industries, as well as to identify critical gas facilities that should be prioritized for electricity.

“While the equipment freeze forced the wells to shut down, we see very clearly that this would have only been a temporary issue had electricity been available to power their equipment,” the TXOGA chairman said Thursday, Todd Staples.

The oil and gas industry has come under intense scrutiny following the power grid blackout that left nearly 200 people dead and billions of dollars in property damage. Since the storm, TXOGA has launched a public relations campaign to deflect blame from the industry.

In its latest efforts, the trade group commissioned Austin-based energy research firm Enverus to conduct a comprehensive review of the challenges facing Texas energy producers. The 41-page report, released Thursday, found the sharp drop in natural gas production during the storm was likely caused by power outages at producers and pipeline operators.

Natural gas production fell nearly in half to a low of 11.8 billion cubic feet per day during the storm, according to the US Department of Energy.

An Enverus survey of producers and pipeline companies found that power outages were most of the challenges they faced during the winter storm. Enverus and TXOGA did not specify how many companies were surveyed or responded, but said they account for more than half of the states’ natural gas production.

“Based on our assessment of the available data and the timing of the outages, it is likely that the problems began at the power-generating units,” the Enverus report said. “Once the blackouts began, natural gas production was affected as surface facilities and infrastructure are highly dependent on electricity for their operations, which then exacerbated the capacity of electricity generators to receive supplies of natural gas.”

Enverus also noted that natural gas production began to decline on Friday, February 12, a day before the first natural gas-fired power plant went out and two days before ERCOT ordered phased blackouts early Monday morning. . Natural gas production fell 200 million cubic feet on Friday, 700 million cubic feet on Saturday and more than 2 billion cubic feet on Sunday, before plunging significantly at the height of the winter storm. Texas produced 21.3 billion cubic feet of natural gas daily in the week leading up to the February storm, according to the Energy Department.

Bernadette Johnson, senior vice president of energy and renewables at Enverus, said Friday and Saturday’s drop in production was within typical fluctuations seen during the winter season. Some natural gas customers also refused to take the product, as prices had soared to $385 per million British thermal units from 5 cents per million British thermal units before the storm, it said. -she adds.

“When we look at seasonally or during an event, it’s pretty typical that you get a fair amount of day-to-day fluctuation with production,” Johnson said. “There’s a significant amount of production in Texas, so for us that’s not a red flag.”

Power producers pushed back against natural gas producers, saying they share the burden of responsibility for the collapse of the power grid. Power plants said insufficient supplies of natural gas caused some of their plants to shut down during the storm.

The Electric Reliability Council of Texas, which operates the state’s electric grid, said earlier that natural gas shortages accounted for a quarter of outages at natural gas-fired power plants.

Natural gas provided the majority of power generation during the winter storm, Enervus said, but it also accounted for the largest share of outages. TXOGA said Texas natural gas supply from the oilfield and storage never fell below demand during the storm.

Some industry analysts have called on natural gas producers and pipeline operators to protect their equipment from the elements and ensure that standby power generators prevent natural gas power plants from going offline during next frost. Houston pipeline operator Kinder Morgan announced this week that it made $1 billion after it was able to keep its gas pipelines running through the winter storm, largely because it invested in winterizing .

“Just as many power plants need a steady supply of natural gas, gas facilities need to ensure they are properly registered as essential to grid operation and weatherproof,” said JP. Urban, Acting General Manager of the Association. of Electric Companies of Texas, said in an email.

TXOGA said there are more effective and efficient ways to ensure the reliability of the state’s natural gas supply.

“Generally we don’t have harsh winters,” Staples said. “Consumers are looking for the best deal and they want the lowest prices, and that’s what our system is designed to deliver. Any additional factor that has a cost that does not result in increased reliability is truly a disservice to consumers. »

University of Houston economics researcher Ed Hirs said the winter storm underscored the need for the natural gas and electricity industries to coordinate better. Political and industry leaders must stop blaming each other, he said, and work together to solve the problems.

“Nobody wants to stand up and take the blame because we have almost 200 dead and tens of billions of dollars in damage,” Hirs said. “That’s what’s so distressing about it. They seem to be trying to fix potholes on a collapsing bridge.

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