More Data And Information For Texas Blackout Questions
“We continue to find new and interesting data and analysis of the Texas blackout situation. We see from this white paper how natural gas performed and in what ways it was impacted by the bitter cold temperatures.”
As every day goes past, we gain more data and information impacting analysis and questions about the Great Texas Blackout. At the same time, we get reporters commenting on the reasons for the power system problems that often are based more on talking points than serious inquiries. We can analyze the data, but without answers from the owners and operators of natural gas wells, gas processing plants, pipelines, generators, wind turbine operators, coal plant operators and nuclear plant owners as to exactly what happened to their operations during the polar vortex storm, we are left with a large degree of speculation. That will not be adequate for determining what, if any, changes to Energy Reliability Council of Texas (ERCOT) operations and policies are needed.
As we said before, there are not enough fingers to point at all the possible suspects in this disaster. And we have left out the possibility that this was one big accident. We all expect our electricity to come on with the flick of a switch, just as we count on the heat being there when we turn up the thermostat. We ignore the reality that this is a highly sophisticated logistics system that depends on every piece working properly and in sync. When we consider that power often travels over hundreds of miles of transmission lines, or that the fuel to generate electricity must move via pipeline for hundreds of miles, we begin to grasp that the electricity grid provides power instantly only if every part is working as needed. One slip and you have a chain-reaction accident of incredible magnitude, as Texans have just experienced.
“We can never allow this to happen again” is a popular expression by politicians. That is easy to say; more difficult to ensure. Political, as well as human rights decisions, impacted the course of the blackouts. Did the U.S. Department of Energy contribute to the power generating crisis by not granting a blanket emissions exemption during the height of the bitter cold weather? Did our willingness to embrace renewables without sufficient winterization of units because the power was cheap, and we liked virtue signaling provide a false sense of electricity supply adequacy? Maybe natural gas producers did not bother to winterize their production and gas treating facilities because the price of the product was so low for so long. Were gas pipelines required to favor utility customers with heating demand at the expense of those only producing electricity? Every one of these issues played a role in the blackouts.
There are lots of arguments ongoing over the culprits, but often these arguments are over semantics and data interpretation. Was the problem that 12,000 megawatts (MW) of wind energy was frozen, or that wind overperformed what suppliers anticipated delivering? Was the loss of that wind capacity critical to the blackouts? Maybe it was due to 30,000 MW of gas generation going offline that was the culprit. Yet, electricity from gas increased 75% during the power crisis. ERCOT was counting on thermal (gas, coal and nuclear) to produce enough power to overcome the output lost from some thermal plants, along with the loss of renewable power.
Consultant ICF produced a white paper on the gas market impact Sunday. They show how Texas natural gas production declined during the weather crisis. Their paper relies on data from OPIS PointLogic, which shows that natural gas production in Texas dropped 41.5% from 22 billion cubic feet per day (Bcf/d) on February 13, to 11.7 Bcf/d on February 17.
Exhibit 32. Texas Gas Production Dropped During The Storm SOURCE: ICF
The impact on gas supply in the state was moderated by feedgas to liquefied natural gas (LNG) plants dropping from 4 Bcf/d on February 9 to almost zero on February 18. Likewise, gas volumes exported out of Texas declined nearly 77% between February 9 (13 Bcf/d) to February 17 (3 Bcf/d). Some of that decline may have been weather related due to the problem of producing wells, in addition to the challenges of moving liquids-rich gas that can more easily freeze in transit. Some volumes normally exported (like to Mexico) may have been retained in-state for use by gas utilities. These adjustments may have enabled interstate pipeline deliveries of gas in Texas to soar begore falling sharply with the cold temperatures.
Exhibit 33. Gas Deliveries In Texas Soared With The Cold SOURCE: ICF
PointLogic provided their model of Texas power generation from natural gas. While gas demand is estimated to have fallen 35.5% (7.6 – 4.9 Bcf/d) between February 12 and February 16, it began growing the prior Monday (February 8). That week, gas demand grew by 90% (4.0 – 7.6 Bcf/d) to the February 12th peak.
Exhibit 34. How Gas-Generated Electricity Fell SOURCE: ICF
Understanding the workings of the Texas natural gas market is challenging given the various segments and how they were impact by and reacted to the bitter cold weather, electricity blackouts and official policy actions. ICF stated that based on their review, gas deliveries from interstate pipelines to generators in Texas set a record at 2,235 million cubic feet (MMcf) on February 14th. Deliveries from interstate pipelines to gas utilities (LDCs) also set a record on February 13th with 1,049 MMcf.
To illustrate the problem of understanding the gas market and gas generator demand, ICF wrote about one power plant connected to an interstate gas pipeline. This was after ICF noted that pipelines were citing the drop in gas production and lower system pressure due to the cold weather as a problem.
Odessa-Ector power plant, for example, saw deliveries from the El Paso Natural Gas pipeline drop from 159 MMcf on February 12th to 66 MMcf on February 15th despite having a firm transportation contract from 100 MMcf of gas. To a degree, this is consistent with the Texas Railroad Commission order to prioritize gas utilities serving critical needs customers over gas power plants.
So, was it a lack of gas supply, a lack of gas demand, or regulatory policy that explains the decline in gas-generated electricity supply? Our inability to know the answer to that question is why we can only speculate on the causes of the problems Texas experienced, and what remedies might have prevented the disaster. We need more facts, and that will take time, unfortunately. In the interim, we suggest viewing news stories with a healthy degree of skepticism, as they are written by reporters with limited knowledge of the workings of the power industry. The only things in which we are confident are that the recovery from this episode will take weeks, if not months, and it will also lead to numerous changes to and within the Texas power industry, which will have ramifications for the entire national energy market. Things will be different from what they have been. Predicting in what ways they will be different is impossible.