Texas oil and gas companies face few consequences after power outages

After being battered by withering criticism of its management of the power grid during last month’s winter storm, the Electric Reliability Council of Texas saw several of its board members resign and fired its CEO. The chair of the Public Utility Commission, which oversees the grid operator, was forced to resign.

The political fallout from the long-lasting Texas power outages have hit both entities hard after Gov. Greg Abbott blamed ERCOT’s leadership for the near-collapse of the electric grid and made its reform a legislative priority, and state lawmakers hammered the PUC for what they called a failure of oversight.

Yet politically powerful natural gas companies, along with their regulators, appear so far to have escaped the wrath of the governor and the Legislature.

From the natural gas wellheads in West Texas to the power plants that burn gas to generate electricity to the companies that deliver power to Texans, multiple systems failed during the storm and made what should have been a mild inconvenience into a statewide crisis, executives, regulators, lawmakers and experts said.

At the height of the crisis, nearly half the grid’s total power generation capacity was offline as weather conditions caused failures in every type of power source: natural gas, coal, wind and nuclear.

“The entire energy sector failed Texas,” Mauricio Gutierrez, CEO of NRG Energy Inc., a large Houston-based power generation company, said solemnly during his testimony last week to Texas lawmakers. “We must do better.”

More than 25,000 megawatts of natural gas generation, enough to power 5 million Texas homes, went down, along with around 17,000 megawatts of wind generation, according to ERCOT. Natural gas is the largest source of generation on Texas’ grid, especially during the winter. This season, the Texas grid was expected to rely on “thermal sources,” which are mostly natural gas, for at least 80% of its power when demand is high, according to ERCOT’s winter forecast.

Yet as lawmakers grilled agency heads and demanded accountability — and resignations — during two days of hearings last week, leaders of the Texas Railroad Commission, which regulates natural gas production and transportation in Texas, were not asked to resign. Lawmakers spent relatively little time questioning natural gas production and transportation executives.

And few of the bills they filed in the aftermath of the outages seek to reform problems that the storm exposed in the way natural gas is produced, delivered and used to make power. The plunging temperatures froze machinery, created icy conditions that prevented crews from reaching trouble spots, and caused power outages that knocked out facilities like compressing stations that help deliver gas to power plants.

“There was a lot of shrugging and finger pointing to [electricity generators],” said Adrian Shelley, director of Public Citizen, a Texas consumer advocacy group. “There’s not a clear fall guy on the oil and gas fuel side of things, in the way that ERCOT is taking the brunt of the responsibility on the transmission side. … I don’t think that’s entirely justified.”

Energy executives and industry representatives testified last week that a lack of winterization throughout the natural gas supply chain, and a failure to ensure that power kept flowing to key parts of that chain when fuel was desperately needed, were key reasons that millions of Texans lost power for days in bitter cold.

“If we don’t have a seamless gas and electric power system,” said Curtis Morgan, CEO of Vistra Energy, an Irving-based power generation company, “what happened last week will happen again.”

Oil and gas companies are big political donors

In Texas, the oil and gas industry’s political influence — and its deep pockets — are legendary.

A Texas Tribune analysis of political donations shows that Abbott, who was quick to blame renewable energy for the blackouts last month, received at least $26.9 million from the oil and gas industry in the last two decades, more than 10 times what he received from the electric power sector, which gave at least $2.6 million to the governor over the same period.

Oil and gas interests have given Lt. Gov. Dan Patrick at least $5.1 million since 2009, while the electric power sector has given him at least $708,000.

During and after the power outages, as elected officials hammered ERCOT, the PUC and the renewable power industry, the Railroad Commission and industry representatives mounted a public defense of the oil and gas industry.

Christi Craddick, chair of the Texas Railroad Commission, praised natural gas for its ability to deliver fuel to homes with…