TXOGA Statement on State Energy Plan Report

September 1, 2022

The following can be attributed to Todd Staples, president of the Texas Oil and Gas Association:

“We appreciate the work and effort of the State Energy Plan Advisory Committee but the 7-5 vote demonstrates more deliberation and research are needed. The report failed to look at the energy needs for Texas broadly and seemed to be more narrowly focused on the failures of Winter Storm Uri. While that is important, the legislature has made massive changes, many of which have been implemented, that ensure what happened during Winter Storm Uri will not happen again, and this is a key component that must be recognized.

“The report does not appropriately convey that many natural gas operators already have measures in place to operate in severe weather and weatherization of the natural gas supply chain is just one element in this discussion, as we know power loss to natural gas supply chain and impassable road conditions were the biggest factors producers faced during Uri.

“Any over-emphasis on weatherization of natural gas facilities that are unmanned and in remote locations is concerning because, depending on the severity and timing of extreme weather, it should be expected to lose daily production, regardless of the operating area and regardless of the level of weatherization. Stopping production is a necessary option for environmental and safety reasons, and flexibility must be allowed in rulemaking for operators to maintain safety.

“Critical load designations, increased communication among all parties in the natural gas and electricity supply chains, weatherization of generators, and firm contracting for natural gas supply, transportation, and storage are far more impactful in securing the electricity grid, and users would be better served if these distinctions were highlighted.

“The report, in its narrow Uri-centered approach, focused heavily on natural gas while it should have made clear that natural gas was not the primary cause of outages as concluded in reports from ERCOT and data from the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC) that showed fuel limitations were 12% to 15% of the reason for outages and derates of power generators during Winter Storm Uri. In fact, the same FERC-NERC report concluded that weather and mechanical issues at the power plants themselves were actually about 65% of the causation for power plant outages. The emphasis of the report should have focused on how to ensure proper generation mix in our state to meet the needs of Texas now and into the future.

“Regarding potential market design changes, our goals are to ensure that our system is market-based, risk is not shifted to consumers and that additional revenue to the system results in actual dispatchable energy that is used and that benefits consumers.

“We look forward to continuing to be a part of the process and to bring forward solutions to any current and future identified problems.”

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Founded in 1919, TXOGA is the oldest and largest oil and gas trade association in Texas representing every facet of the industry.

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AUSTIN – Texas’ production of oil, natural gas, and natural gas liquids achieved new record highs, and resource reserves should support decades of prospective production, according to a new monthly energy economics analysis prepared by Texas Oil & Gas Association (TXOGA) Chief Economist Dean Foreman, Ph.D.

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