Texas Energy May Stay the Course Even After Freeze

Texas play out from a distance. Massive pile ups on the highway, shortages of food and medicine, centralized warming stations that themselves lost power and heat. It's just been really sad to watch. Today, we're going to talk about why Texas's entire system to deliver energy where it needs to be basically just all failed. And we're talking with Bloomberg News reporter and Texan herself, Rachel Adams. Heard. Rachel covers the energy industry for Bloomberg and is based in Houston,

and I have to admit she really surprised me. I asked her if this disaster would change everything, and Rachel says, a lot of Texans aren't sure if they're willing to pay the cost to ensure against what might be a freak weather event. So we'll get to that in a second, but first I asked Rachel how she herself is holding up amid all the chaos. So it's actually eighty degrees in sunny right now, which makes the entire situation feel

a little bit like a weird fever dream. But basically, starting Sunday night, we really started hearing about the potential for this major winter starm to turn into an electricity crisis. I don't think crisis was the word anyone was using at the time, at least that I saw, But shortly after midnight is when I started hearing from folks who

had lost back power. And by the next morning, you know, everyone was thinking, I thought this was supposed to be a fifteen minute outage, thirty minute outage, and they still didn't have electricity. And as the day went on, we started hearing from some of these power providers like Centerpoint Energy, who were saying, hey, if if you don't have power,

you shouldn't expect it. By nightfall, and obviously temperatures were dropping Texas As, I think a lot of people are aware just doesn't have the infrastructure to deal with the extreme cold and snow and ice on the roads, So a lot of people will stuck with this decision. Do you brave the highway, which you know, just a week ago we had seen this catastrophic one hundred car pile up on I thirty five to get to a friend

or family member's house. Or do you buckle down and just try to stay as warm as you can overnight? So tell me, I mean, I'm thinking about you know, I've been working from home for the last almost a year, and you know, if I lose power, I lose Wi Fi and I can't do my job. Like, how did you manage to crank out some great reporting? How? I'm

assuming you lost power too, right? I lost power Tuesday night, So Monday and Tuesday, it honestly felt very bizarre because I could see out my window right where the lights went out at night. So it was kind of a helpful way to see who would be the right people to talk to who didn't have power, because I could

specifically locate where the outages were occurring at nighttime. But Tuesday night is when the power cut out, and then all day Wednesday and a lot of the day Thursday, we didn't have electricity, so yeah, taking taking calls from the car so I could charge my phone, and yeah, just a lot of texting and phone calls when normally it would be preferable to kind of have a heads

up and give someone a calendar invite. It was all very spur of the moment, and it was also a very fast moving event with a lot of conflicting information going around, so it was a important for us to try to keep on top of kind of where those claims were going and how we would hold some public officials accountable. So I think, you know, having a big team really helped because we had power reporters elsewhere who

were able to pick up Yeah. Well, I read your stories from the last week, and you've done some amazing work. And one of the things that I gathered from your stories is that so many different things had to go wrong for this to happen, Like so many fail safes had to fail for this event to transpire. Can you talk a little bit about just how many protections were in place or weren't in place that just didn't work. Yeah.

I think what was really remarkable with last week was seeing this extreme cold hit all different types of infrastructure and all different types of energy. I mean, at first everyone was kind of describing it as an electricity crisis, and that was fair because we didn't really know what

was going on immediately. But then I think it became apparent that this wasn't just power, this was energy wide, and for a state like Texas that really prides itself for having such an expansive and sophisticated network, I think it was a little bit of an ego blow, honestly. So you had wells out in the Permium basin that we're experiencing what are called freeze off, So the heavier hydrocarbon, the water that's in the gas stream is frozen, and

that obviously hamper's production. And you had compressor stations in the oil field not working, and that gets the gas into these pipelines. What I thought was really interesting was that the oil field actually didn't have power for a lot of this time, and it's a lot of these companies need power to produce more gas. So you had gas supply being affected by the cold, either because of the infrastructure literally getting frozen or because they didn't have

power to produce gas. You had the wind turbines that was not a dominant factor, as was the claim by a lot of people last week. Right, Well, we'll get into that. Yeah, but you did have problems with wind turbines. Absolutely. They didn't have the de icing technology that a lot of places that are more used to cold climates have than you had power plant failures themselves. So it really

did span, you know, this entire network. And that's why I think that as we try to come up with answers, it's not like this one nice little easy fix that we can make. It's really going to require investment into a lot of different types of equipment and infrastructure. Yeah, and so really quickly, let's talk about the wind turbines. I think there were some discussion in the days after this all started that people said that, you know, the state's reliance on renewable energy was to blame. I think

that got debunked pretty quickly. Can you just talk a little bit about what went on there and sort of debunk some of those claims yourself. Yeah, So it was it was a tweet that went viral, and it showed a wind turbine with a helicopter flying near it and basically shooting this liquid at it and The caption was something along the lines of, you know, like this is a fossil fuel powered helicopter de icing a wind turbine, and it was debunked pretty quickly. It was actually a

photo from Sweden in twenty fourteen. But you know, as is the case with a lot of these misinformation and disinformation campaigns, like it doesn't really matter how quickly it's debunked because at that point it's been shared so many times that it becomes something that in Texas we even saw our state officials repeating. And I think what makes it especially difficult in this situation is that it wasn't absolutely false or a lie. There was truth to it, right.

You did see wind turbines experiencing difficulty with the cold. The issue is that it wasn't nearly to the extent that natural gas experienced issues. And that's not to say, you know, I think this conversation devolved into one of which fuel is better. At the end of the day, it comes down to wind is expected to be variable, and it's not something that folks consider, you know, a

reliable source of energy at this point in time. Natural gas is so when you have a shortfall and supply it really touches the system off guard, and that's what we experienced last week. So I'm glad you brought up natural gas because I wanted to talk to you about what's been going on there, and especially you've done some reporting on some natural gas suppliers who have you know, really suffered the last few years and especially the last year with very very low prices, and now all of

a sudden the last week, prices are skyrocketing. So you would think that would be good news for these natural gas as producers. However, they're also having trouble just simply getting their product from the crown to where it's needed. I mean, is this situation a good situation for the oil and gas industry or gas in particular, or is it bad or is it mixed? I just I don't

know where they stand right now. Well, the most dramatic price reaction was seen in physical gas prices, so you know, specific hubs, specific areas in Oklahoma, say on one pipeline, where prices you know, increased to one thousand dollars per and c. Yeah, so you had these crazy situations and folks who were regionally located to those areas could advantage for sure, that's why you had Jerry Jones come out

and say that his company had done really well. But I think, big picture, most of the oil and gas companies that we think of as the big independence, especially in Texas, they had days where their production was impacted dramatically. I think Diamondback Energy, which is one of the big show producers in West Texas, they said that they lost like five days of production, which is staggering for a

company that produces that much. So I think you will see these situations where you had some players benefit tremendously from very very high spot gas prices. But I think in general, the industry did not necessarily see this massive windfall that's going to last for the rest of the quarter or something like that from the events of last week. That's a really good point. I mean, I guess the price of a commodity doesn't really matter if you can't

get that commodity to market. That's segus. That's what it come back to. All right, let's look forward and specifically let's talk about energy delivery in Texas. I mean, this is a fast moving story. There was just some news that broke this afternoon as we're talking on Tuesday, afternoon here that the board of URKAT, the state electric company

in Texas, has stepped down. Do you see this as a moment where the way that energy is regulated in Texas and the way it's delivered is going to completely change? Like will this be a paradigm shift or maybe is it too soon to say? As someone who's lived in Texas most of my life, I have a hard time

seeing this being a paradigm shift. But you know, I do think there are gonna be a lot of questions asked about weatherization and whether we require power plants to weatherize their system so that they don't feel in the extreme cold. But then that gets into another question is how do you require the oil feel to do the same for their assets? Is it the producers themselves? Is it the pipeline companies. At that point, you're dealing with

a whole different regulator, the Railroad Commission. Then you have the Texas Public Utility Commission. So there are so many different entities that play here and so many different companies that you would actually need to either a incentivize or b require to weather eye And I don't think that we really have all of the answers to exactly what we're wrong last week to have a solid idea of exactly what that solution is going to look like. And we should say, you know, this has been reported a lot.

You've reported this, but it's worth repeating that the reason we're talking this winter storm affected the whole lower Midwest, like Oklahoma, you know, Kansas, Nebraska, but we're just talking about Texas here because Texas has its own kind of self contained grid that's not connected to other states, Like

that's pretty well known at this point. But do you think that's going to change, that this sort of Texas wanting to have an independent grid will will shift, or again, do you think it's too soon to say, Yeah, there are a lot of people pointing out that that's a place to start. I think it's going to depend on how we look back and see how our neighboring grids

fared during the same storm. Because the folks I've talked to have pointed out that in this specific situation, and obviously it could be different in future weather events, but it didn't really look like we would be that much better off if we had been able to pull on neighboring grids. So that is something that I think obviously being able to tap your neighbors when you're in need

is going to mitigate risk of it. But I don't necessarily think it played as big of a factor as maybe was originally thought that would inspire that specifically to see some sort of overhaul. That's interesting, and that's kind of surprised. I hadn't thought about that, because, you know, I guess in reading the headlines, you think like, this has got to be the end of the you know, this experiment where Texas goes it alone. But yeah, I guess you're right. I would Texas have fared any better?

Maybe not, That's what everyone's asking themselves. Yeah, I think I guess part of living here and talking to, you know, folks in Austin, but also folks in Houston who work in the industry, and also a lot of oil field workers in West Texas, I think a lot of people were outside of Texas were asking how is Texas going to fix it? And I think the question for a lot of folks here is would we is this going

to be something that we think is worth fixing? Because a lot of people on the ground are saying, if this is a one hundred year event, I don't want to spend fifty dollars a month on my power bill to just ensure that this doesn't happen again. And so that's where I think it's going to come down to

kind of individual experiences through the storm. How bad was it for you, Because obviously this was an extremely tragic event for a lot of people who lost their loved ones due to carbon monoxide poisoning or fires or just exposure to extreme cold, and then it was a pretty mild event for some other people who lost power for a few hours, but we're otherwise fine. So I think it's really going to come down to how we view these the likelihood of these events in the future, and

how we think of insurance. That was Bloomberg News's Rachel Adams heard speaking to us from Houston. And that's it for today's episode of Parts per Billion. If you want more environmental news, check out our Twitter. We use a pretty easy to remember handle. It's ad environment. Just that that's the Twitter at environment. I'm at David B. Schultz if you want to chat with me about anything. Today's episode of Parks Rebillion was produced by myself and Josh Block.

Pres Per Billion was created by Jessica Coombs and Rachel Daegel. Today's music was a Message by Jazarre and Smoking Monkey by Tom Hillock and Nicholas Boskovich. You're used under a Creative Commons license. Thank you so much everyone for listening. This is Adam Allington and I'm here to announce a new season of Uncommon Law, a narrative podcast series from

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