Plunging Natural Gas Supply Shows Texas Still Not Ready for Cold

Plunging Natural Gas Supply Shows Texas Still Not Ready for Cold

Texas’s natural gas industry had almost a year to prepare for last weekend’s cold blast and avoid another loss of production. But yet again, instruments froze, output plunged and companies spewed a miasma of pollutants into the atmosphere in a bid to keep operations stable.

Though Saturday’s cold front wasn’t as severe as the February storm that killed hundreds and knocked out power to much of the state, nearly 1 million cubic feet of gas was burned or wasted due to weather-related shutdowns, according to filings with the Texas Commission on Environmental Quality. At the same time, production plunged to the lowest level since the last freeze, BloombergNEF data shows.

That has environmental implications. Natural gas is composed mostly of methane, a potent greenhouse gas. And the roughly dozen gas facilities that reported problems with the cold also emitted a combined 85 tons of sulfur dioxide and 11 tons of carbon monoxide, among other pollutants, according to a Bloomberg review of environmental filings. 

RELATED: Texas Had All Year to Prep for Winter, and It’s Still Not Ready

“We know this is pollution that can hurt people’s health and, overwhelmingly, this is avoidable,” said Luke Metzger, executive director of the nonprofit Environment Texas. “These facilities could be investing in better insulation and other kinds of things that would prevent equipment from freezing,” he said. “It’s easier to pay a fine.”

It’s a stark reminder of the industry’s continued vulnerability to extreme weather. Despite calls for producers to harden their infrastructure against cold, much of the industry has managed to avoid doing so. The Texas Railroad Commission, the state’s top regulator of the industry, plans to adopt some weatherization standards but those won’t go into effect until 2023, and they include loopholes that allow some companies to opt out of compliance. 

The commission’s two-year timeline risks a repeat of last winter’s freeze that plunged millions into darkness for days, said Virginia Palacios, executive director of the Railroad Commission watchdog group Commission Shift. “It makes our hearts beat a little faster because of what we went through last February. It was a traumatic event that I don’t think anybody wants to relive.”

READ: Restarting Texas’s Frozen Energy Hub Will Be a Climate Mess

Most of the natural gas released due to operating issues this weekend came from plants owned by Pioneer Natural Resources Co. Other facilities that reported operating issues and related emissions were owned by Occidental Petroleum Corp., Targa Resources Corp. and DCP Midstream. None of the companies immediately replied to requests for comment.  

The TCEQ, which enforces air regulations in the state, declined to comment. The Texas Railroad Commission did not immediately provide comment.

Normal operations have resumed at many of the facilities and gas production has rebounded to near-normal levels. 

Prices for the fuel weren’t much affected by the production dip, with next-day delivery at the Waha spot hub in West Texas trading at $3.35 per million British thermal unit Monday, traders said.

©2022 Bloomberg L.P.

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