New RRC Rules Will Ensure Essential Assets are Designated Critical and Less-Essential Assets are Not Unnecessarily Prioritized

November 30, 2021

The rules adopted by the Texas Railroad Commission today ensure essential assets are designated as critical load and less-essential assets are not unnecessarily prioritized when there is not enough electricity in some emergency events. If TDUs were required to maintain power to every natural gas facility in Texas, it would create a dangerous situation by diverting power that may be needed elsewhere. Not every natural gas facility is a priority from a power perspective during an emergency. This is why mapping is the most crucial part of the process.

Regarding winterization, most companies employ best practices including weatherization to keep product flowing and these measures are well underway to prepare for winter. Winterization techniques vary based on factors such as well characteristics, production levels and location. Weatherization examples include: methanol injection, temperature activated pumps, steamer units, equipment shelters, and insulated critical lines and valves. However, without power, no amount of weatherization is sufficient. Future rules regarding weatherization are required to be implemented by the RRC after the mapping process has been completed.

Strengthening the reliability of our power grid is the Texas oil and natural gas industry’s priority and is a multi-step process our community will continue working on alongside regulators and stakeholders to achieve the Legislature’s targets. Mapping the power grid and improving the critical infrastructure identification process are key to determining which upstream assets should be winterized, and many operators already have these measures in place. It is important to note that natural gas is used for a variety of purposes beyond for power generation, and extreme weather events will likely continue to have some impact on upstream production regardless of the weatherization techniques because these are mechanical processes. Therefore, it is important for those that rely on natural gas for power generation to secure firm contracts for supply, storage and transmission of the product prior to emergency conditions. Texas is home to 544 BCF of working natural gas storage and a robust midstream industry made possible by the significant natural gas production. Experts agree securing firm contracts to supply, store and transport natural gas will greatly increase reliability.