Christi Craddick sat in her Austin office March 24, facing more than a dozen congressmen via livestream. The members of the U.S. House Energy and Commerce Committee were eager to learn what had gone so wrong in Texas that the electric grid had failed, leaving 4.5 million households and businesses without power, during the February winter storm that other states weathered with little disruption. Her voice as steady as a freight train, the chairman of the Railroad Commission, which regulates the Texas oil and gas industry, steadfastly pointed her finger elsewhere: production of natural gas, which was used to generate more than half the electricity used in Texas last year, struggled during the storm because producers fell victim to regulators’ decisions to order blackouts across the state. “The oil fields simply cannot run without power, making energy the best winterization tool,” she said.
During her testimony, Craddick didn’t mention that dozens of natural gas producers had failed to file a two-page form with the Electric Reliability Council of Texas (ERCOT) prior to the storm that would have allowed their facilities to be listed as critical infrastructure to be spared from outages. She also breezed past the fact that many natural gas facilities were unable to supply power plants with fuel as a result of frozen equipment. Because of their failure to prepare for cold weather, facilities providing one third of the state’s gas production “froze off” and, according to ERCOT, at least 20 percent of power outages during the February storm stemmed from a loss of natural gas supply. Congressman Marc Veasey, a Fort Worth Democrat, jumped on those omissions, accusing Craddick and Republicans in the Texas Legislature of refusing to accept responsibility for the blackouts and stalling to prevent substantial reforms. “They don’t want to deal with this. They don’t want to require anybody to have to do anything, which means we’re going to be sitting in the cold, again,” he said. “They are running out the clock.”
Indeed, Texas lawmakers have just eight weeks to pass legislation that could prevent future blackouts. May 31 is the last day of the regular session of the Lege. It’s true that many industries bear fault for the widespread outages. The electric sector failed to adequately prepare for the intensity of the storm, and, in addition to natural gas shortages, coal and wind producers failed to meet production targets. Yet lawmakers are taking an oddly blinkered approach to their oversight responsibilities. The seven major energy bills advanced in the Lege this week overwhelmingly focus on the electric sector. Among the major changes proposed in the various bills: a requirement that power generators prepare for extreme weather emergencies; a ban on the kinds of wholesale rate plans that resulted in $17,000 bills for some Texan homeowners during the storm; and a reconstitution of ERCOT to ensure all its members are Texas residents. None prescribe weatherization requirements for natural gas infrastructure to prevent the gas fields from “freezing off” again—measures that the powerful gas industry has opposed.
Legislators came closest to prescribing new regulations on the oil and gas industry in an omnibus bill that passed unanimously in the Senate on Monday and now sits in the House. If passed, the legislation would require the Railroad Commission to draft rules for how gas facilities throughout the supply chain must “prepare to operate” in a weather emergency and to send inspectors to check for compliance. It would also give the commission the ability to levy fines of as much as $1 million a day on facility operators that violate the rules. But the carefully worded bill, which uses the word “may” instead of “shall” in several key provisions, stops short of requiring that the commission demand operators take any action to address weaknesses in their weatherization plans, even after repeated or major-storm-related failures. And the Railroad Commission is not known for taking a heavy hand with industry, often siding with natural gas utilities over consumers and routinely allowing producers to burn off excess gas. The Railroad Commission’s members are considered more solicitous of the views of oil and gas executives than those of consumers. One reason is that, in Texas, commissioners are allowed to earn income from the industry they regulate. In 2019, Craddick and her father, Representative Tom Craddick, a Republican from Midland, earned more than $100,000 from Texas’s largest natural gas companies, including from two that reported equipment failures during the storm.
In the aftermath of hearings on the power grid’s failure, House leaders declared plans to make weatherizing at natural gas facilities a priority, but quickly abandoned the cause. On March 8, House Speaker Dade Phelan announced a slate of seven energy bills, saying, “We must take accountability, close critical gaps in our system, and prevent these breakdowns from ever happening again.” The original slate of bills Phelan proposed would have required the Railroad Commission to “adopt rules requiring gas pipeline operators to implement measures that ensure service quality and reliability during an extreme weather emergency.” But the bill unveiled by House Energy Resources Committee chairman Craig Goldman, a Fort Worth Republican, had a new twist on reform. Instead of a weatherization requirement, it relied on an old legislative trick: the stakeholder committee. If passed, it would merely create the riveting-sounding Texas Electricity Supply Chain Mapping Committee (with the catchy shorthand of TESCMC) to identify critical infrastructure sources along the electricity supply chain and suggest how they might weatherize. It’s worth noting that in 2011, after widespread blackouts following a February storm, the Lege’s response to the need to weatherize was to order a commission to study it.
Senator Charles Schwertner, a Georgetown Republican who introduced the Senate omnibus bill, said his intention is to hold both natural gas producers and the electric sector responsible for the blackouts. “Both have a component of failure,” said Schwertner, a doctor apparently used to doling out bad news. He contends that the Senate bill will boost accountability and preparedness by requiring natural gas producers to undergo inspections and that he believes the Railroad Commission will take its new role of writing rules for weatherization seriously. But the Senate passed the bill unanimously, at least in part because of its soft touch with the natural gas industry. One lawmaker, Drew Springer, a Republican from Muenster, withheld support from the omnibus bill until he was convinced it would require no expensive mandates on natural gas pipeline facilities. He even tried to pass an amendment stripping out all sections of the bill about weatherizing of natural gas pipeline facilities, only withdrawing it upon reassurance from Schwertner that his bill left it to the Railroad Commission to determine whether such measures were necessary. “Knowing that we’re giving the power to the Railroad Commission to determine where that line is and what they need to do to use their best judgments as the expert in the field helped me to become comfortable with the fact that they have that power,” he said.
Nonetheless, even the relatively toothless Senate bill has provoked the industry. The Texas Oil and Gas Association, a trade group whose members account for more than 80 percent of the oil and natural gas produced in the state, opposes the Railroad Commission writing additional regulations for natural gas producers, arguing that electricity producers bear the brunt of blame for blackouts and should be required to store more gas to prevent future crises. Others in the industry argue that some natural gas producers, if mandated to weatherize, might decide to shut in wells rather than pay to prepare them for inclement weather, which can cost more than $100,000 a well.
“I think it’s misleading and it’s dangerous to public health not to acknowledge the vast amount of winterization in place today and not look at the real dilemma,” Todd Staples, president of TXOGA, told Texas Monthly, though he could not provide a number for how many natural gas operations were already winterized. “More winterization will not ensure gas flows to a power generator. Unless a power generator can properly plan ahead to have the gas on hand, they will not have it.”
Many energy experts believe the Texas electric grid will continue to fail unless natural gas operators are required to winterize their facilities. “Instead of looking in the mirror and saying, ‘How could we regulate better?’ they said, ‘We did nothing wrong,’” Doug Lewin, president of Stoic Energy, a consulting firm that advises clean energy companies, told me. Joshua Rhodes, a research associate at the Webber Energy Group at the University of Texas at Austin, agreed. “I just worry we’re going to do things like window dressing,” he said. “It seems we’re much more willing to penalize the electricity sector versus the gas sector and probably because most people interacted in this event through their electricity, not necessarily natural gas, which is one or two steps removed.”
Craddick has yet to comment publicly on passage of the omnibus bill, but minutes before the Texas Senate was scheduled to convene to debate on it Monday morning, she tweeted out a message: “I am committed to working with my colleagues here at the Commission and at the Capitol to develop meaningful solutions that protect all Texans moving forward.”