By Shelby Webb STAFF WRITER
During a press conference Tuesday, Texas Railroad Commission Chairman Jim Wright sought to reassure worried Texans that the natural gas industry his agency oversees is prepared for winter weather poised to sweep across the state this week.
He repeated a claim the Railroad Commission has made for weeks: inspections found that 98 percent of 4,000 natural gas facilities — helping to generate electricity for some of the 26 million customers on Texas’ power grid — have been winterized.
“And the remaining 2 percent were in the process of winterizing when the inspections occurred,” he told a room packed with reporters, Gov. Greg Abbott and the heads of other state agencies.
Results of the commission’s inspections obtained by the Houston Chronicle raise doubts, however, that the state’s natural gas infrastructure is as prepared as state officials would have residents believe. Not only does the 98 percent figure also include oil-powered sites — not just those running on natural gas — but reports filed by Railroad Commission inspectors reveal wider suspicions about the regulator’s oversight.
The Chronicle reviewed data gathered from inspections of 3,663 oil and gas sites and found that only 41 percent — 1,506 sites — had successfully tested their weatherized equipment or procedures. Operators at nearly 11 percent, or 390 sites, said their winterization efforts didn’t work or that they simply didn’t know.
Only about 9.5 percent of the site operators said they had asked the Electric Reliability Council of Texas, the state’s grid manager, to be considered as critical infrastructure, which would ensure they maintain power during blackouts.
Inspectors themselves, however, have raised questions about the validity of the data. One inspector wrote in his comments that “Most answers are actually not applicable,” that the information “came from more than one source,” and that “ ‘regulated-entity level’ personnel had to defer to senior or field personnel for best response.”
Natural gas generators produced about 42 percent of the power managed by ERCOT last year. But when the freeze hit last February, most of the power lost to disruptions would have come from those generators.
DeSilva said it’s difficult for operators to test preparations for freezing weather because there haven’t been many instances since the historic storm when temperatures have fallen significantly. And, he said, each piece of natural gas equipment requires different types of weatherization — if they need any at all — to stay up and running.
“In the fall, some of the sites had yet to finish winterizing or test winterization because they were coming off summer,” he said. “Two freezes have occurred in January and there were no major disruptions; we will continue to keep on top of things to ensure warmth and safety for residents.”
Flawed data
Beyond its importance to the integrity of Texas’ power grid, the data collected during the Railroad Commission’s inspections shines an unflattering light on the oversight of the industry’s watchdog in Texas.
When the commission asked operators of the 3,663 oil and natural gas facilities whether they had voluntarily filed with ERCOT to be considered critical infrastructure, 2,462 or more than 67 percent, said they had not. Another 854 said they did not know if they had, while 347 — or 9.5 percent — said they had.
Adding to the confusion, regional utility providers, such as CenterPoint in the Houston area, not ERCOT, are responsible for keeping power flowing to critical infrastructure. The utilities know which sites, such as jails, hospitals, power generators and now natural gas producers, are considered critical. If ERCOT needs to reduce power consumption when supply is tight, it contacts utility providers, which make the final decisions on who loses power.
For example, the Railroad Commission’s data showed that XTO Energy, a subsidiary of Exxon Mobil, said it had only registered one of the 227 locations inspected by the Railroad Commission as critical. But many had filed with their utility provider, Exxon Mobil spokeswoman Sarah Nordin said.
“We don’t file anything with ERCOT, so it would be up to that utility to file whatever they’re required to with ERCOT,” Nordin said.
But after the Chronicle requested comment from XTO and the Railroad Commission, Nordic said, the Railroad Commission told the company that those designations would have to be sent to ERCOT. As of Friday, the Railroad Commission had not yet processed those numbers and did not know how many had applied to be critical infrastructure.
The Chronicle polled the state’s four main utility companies and found that the number of sites seeking the designation from utilities had soared.
Within Oncor, which serves the Dallas-Fort Worth area as well as much of the Permian Basin, the number of sites deemed critical for natural gas jumped to 1,816 from 35. In the AEP Texas service area in South and West Texas and parts of the Panhandle, the number jumped to more than 200 from 11. In Texas-New Mexico Power’s service areas in far West Texas and Galveston County, about 200 sought the designation, while in the Houston area, served by CenterPoint, 100 sites applied to be considered critical.
The governor on Tuesday said about 1,500 natural gas facilities had applied for the designation, up from about 50 last year.
Up to gas producers
Natural gas producers now identify themselves as critical infrastructure, according to Railroad Commission rules.
That will change this year.
A new state committee created by the Texas Legislature after last year’s freeze has been tasked with mapping the supply chain of power generation across the state, from natural gas wellheads and wind turbines all the way to local power lines that provide electricity to houses. That work was scheduled to be finished in fall, but DeSilva said, the committee now hopes to complete the work before summer.
Legislators told the Railroad Commission it must create more weatherization rules and create penalties for noncompliance six months after the supply chain mapping is finished.
DeSilva said the inspection data collected this year was meant to give the commission more information so it could develop best practices and to see what methods were being used by producers to prepare sites for winter weather. He said officials also have had extensive conversations with oil and gas producers to see what else they are doing.
“What we are discovering through those conversations is that field employees whom our inspectors talked to were not privy to all the details, such as tests, or the ERCOT form submissions done by the companies,” he said.
But Ed Hirs, an energy fellow for the University of Houston, said the inspections may not have been thorough. He said much of the data collected relied on natural gas producers and field workers to tell them that they had complied with new rules.
“The inspections that they have done appear to be at the last mile, and so that’s the equipment that connects to a generator, or the flow line that connects to the generator. They really haven’t gone back and looked at the whole integrated system back to the well heads,” Hirs said. “There’s nothing they can honestly hang their hats on.” shelby.webb@chron.com