EnergyNatural Gas Critical Infrastructure Designation Rules Approved by State Agencies

The agency reforms aim to prevent another instance of natural gas infrastructure being cut off from power during an energy emergency.
December 2, 2021
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When the winter storm hit last February and forced blackouts were applied, some infrastructure essential to producing the natural gas needed to generate electricity were cut off from power. To prevent that from occurring again, state agencies approved rules governing that process this week.

What turned out to be a paperwork blunder — many facilities on the electricity supply chain were not marked as “critical infrastructure” in the state’s system — became a compounding force of the blackouts. Natural gas needed to generate electricity couldn’t get from the wellhead to the generators, creating a self-perpetuating cycle of exacerbation.

Natural gas-producing facilities, such as wellsites, were not eligible for such a designation before the winter storm, which has since changed. However, facilities such as natural gas processing plants were eligible and some of those were cut from power.

Both the Railroad Commission (RRC), which regulates the state’s fossil fuel industry, and the Public Utility Commission (PUC), tasked with overseeing the power grid, adopted new rules governing the designation of critical infrastructure.

According to a report by the Electric Reliability Council of Texas (ERCOT), about 12 percent — 6,130 megawatts, capable of powering 1.2 million homes at once — of the outage was caused by fuel limitations, or the inability to receive natural gas supply.

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Much hay was made over the application fee companies must pay to be exempt from critical designation. Applications are not granted carte blanche and must be reviewed and approved by the three-member RRC. But the application comes with a $150 fee set in statute — something that cannot be adjusted by the agency.

Additionally, the forms were adjusted to line up more with the nomenclature on the PUC’s critical infrastructure designation forms.

According to RRC Chairman Wayne Christian, only “very small operators” will be able to seek this exemption. “To receive an exemption an operator must provide compelling evidence that establishes a reasonable basis for why they should be exempted,” he said in comments to The Texan.

Facilities that cannot receive an exemption include pipelines that deliver natural gas to generators and underground gas storage sites.

The RRC declined to act on any weatherization requirements — used as a catch-all for improving resilience against extreme weather — because the meeting was limited to the critical infrastructure rulemaking.

The PUC’s reforms, meanwhile, set protocols for pipeline mapping, defined an “energy emergency,” refined the paperwork process for the critical infrastructure designation.

The more significant reforms will be unveiled and approved this month and will likely feature a dramatic shift to the incentive structure of the electricity market — as PUC Chairman Peter Lake put it, from a focus on low electricity prices to the grid’s reliability.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.