The Natural Gas That Didn’t Come in from the Cold

Michael Giberson

Among the complications caused by the cold weather last week, short supply of natural gas throughout much of the southwest United States. Reports indicate some gas wells were freezing up and loss of electric power to gas production systems, but more of the problem was loss of power to natural gas pipelines. And, as mentioned here Friday, in some cases the rolling blackouts in Texas cut power to the natural gas system, resulting in inadequate gas supplies, resulting in some gas-fired power plants being cut off from supply, hampering efforts to end the rolling blackouts. But the shortage wasn’t just a supply-side issue, a gas company official said demand for gas was the highest its been for 30 years.

Sources: Dallas Morning News, “Freeze knocked out coal plants and natural gas supplies, leading to blackouts,” and Wall Street Journal, “Texas Power Outages Cause Natural Gas Shortages In US Southwest.”

Hard hit New Mexico saw lawmakers spring into action. U.S. Representative Ben Ray Lujan is asking the Federal Energy Regulatory Commission to investigate. A state legislative committee is holding hearings today on the outages in the state. Thousands of Arizona gas consumers also lost service. Southern California gas supplies were difficult, but San Diego Gas & Electric and Southern California Gas Co. were able to maintain service to firm customers by drawing on nearby storage supplies and cutting off interruptible customers. (Interruptible customers are typically large industrial consumers who choose to pay a lower rate in exchange for agreeing to be among the first to be cut off during emergencies.)

Texas regulators are also asking questions, “Texas to Probe Rolling Blackouts.”

Texas officials have ordered an investigation into rolling blackouts that struck the state’s electric grid last week, including whether market manipulation played a role along with harsh weather in disrupting natural-gas and electricity supplies to millions of people.

The Public Utility Commission of Texas asked the state’s independent energy-market monitor, Daniel Jones, to conduct a probe to see if power generators, pipeline companies or others broke market rules. …

To be sure, Texas set an all-time winter power demand record one day during the storm, placing historic pressure on power providers.

Electricity-grid officials said Mr. Jones’ team will look at price patterns and power-plant outages remembering that, in California’s energy crisis of 2000-2001, unscrupulous power generators feigned equipment problems to drive up the price of electricity. A significant number of plants in Texas failed last week, and wholesale electricity prices briefly spiked.

Some commentators linked the electric power-gas pipeline interdependency issue to environmental regulation. As this Energy Information Administration document on natural gas compressor stations explains, compressor stations can be either electric or natural gas-fueled. As of the November 2007 date, most compressors were gas fueled, drawing gas from the pipeline itself to run the compressor station, but in some areas of the country “all or some may be electrically powered primarily for environmental or security reasons.” (Note that the document is dated before the current administration took office, so you can’t blame the White House for it.)

Pipelines head north and east from Texas in addition to west, but no reports of supply problems anywhere else in the country.

U.S. Natural Gas Pipeline Compressor Stations Illustration, 2008
U.S. Natural Gas Pipeline Compressor Stations Illustration, 2008. (EIA)