EnergyStatewide NewsTexas Oil and Gas Producers Provide a Look at Weatherization Techniques

For the upstream operators in Texas’ powerhouse energy producer, the Permian Basin, it’s the simple solutions like windscreens, insulation blankets, and heating tape that prevent their facilities from falling victim to cold snaps.

On Thursday, the Texas Railroad Commission’s weatherization mandate went into effect and Permian producers Diamondback Energy and Ovintiv opened their doors to showcase those simple solutions for winter resistance.

If Texas were its own country, it’d be the world’s third-largest producer of natural gas — the lifeblood of the state’s energy grid and a boon for the rest of the country and the globe. Over half of the electricity generated in the State of Texas comes from natural gas generation.

Close to two years ago, a winter storm the likes of which Texas has rarely seen before knocked the lights out. Electricity demand skyrocketed to record highs, and the cold weather made it difficult for generators of all sorts to produce enough power to keep up with the need.

Because of that shortfall, the Electric Reliability Council of Texas (ERCOT) — the operator of the state’s largest power grid — began rolling blackouts that turned into sustained blackouts.

Not only did average homes across the state lose power for days on end, but so too did the very wellheads that churn out that natural gas. The winter storm threw a wrench into the state’s power generation machine, creating a spiral as fuel producers were cut off from the very electricity their commodity is so central to producing.

Mike Schubert, senior manager of Permian production for Ovintiv, said that had the power not been cut off, his company would have only lost between 10 and 30 percent of its natural gas production during the storm. Instead, 100 percent of it was stalled out for a portion of the blackouts.

This caused the price of the remaining natural gas supply to skyrocket, leading to massive debts incurred by companies that hadn’t planned ahead with storage or supply contracts.

“One of the most profound lessons was that much of our industry was not eligible for critical load designation to maintain power during an electricity load shed event,” Todd Staples, president of the Texas Oil and Gas Association, said at a tour of two Midland facilities. “Fortunately, Texas lawmakers corrected this error, and the Railroad Commission of Texas (RRC) now has a process that mandates [critical load] designation for the most critical natural gas assets and related systems.”

The RRC approved the tweak of the critical load designation process last December with an exemption that only “very small operators” may be granted.

Ovintiv has 1,500 wells in the Permian, producing 93,000 barrels of oil along with 265 million cubic feet of natural gas per day per year.

“We are excited about the level of preparedness the oil and gas industry has taken to meet the needs of Texans,” Staples said.

At Ovintiv’s drill site — a central hub of compressors and batteries — winter preparedness is as simple as preventing the freezing of any excess water that may leak out during the process. The company uses blankets both as wind shields and heat insulators.

“This doesn’t look very impressive and that’s the point; it’s not very complicated,” Schubert said.

The petroleum mixture extracted from the ground varies at a temperature between 100 and 160 degrees Fahrenheit. When it reaches the compressor station, it cools down to 70 and then 50 degrees during the winter.

There, the petroleum mix is separated out into crude oil, natural gas, and water.

In Texas, it’s most often the heat that kills, and so when weatherizing properly for winter, the industry uses flexible options.

At Diamondback’s facility, a removable wall surrounds the compressor — removable so that it can be taken down during the summer. Ovintiv’s compressor also has a surrounding barrier, but that one is open to the south; it blocks the cold winter winds from the north and uses the summer winds from the south to cool down the machinery.

Heat tracing is another but more technologically complicated safeguard. Cables with sensors are lined within a system of pipes and once installed can alert operators of risky drops in temperature. More sophisticated heat trace systems can be self-regulating, triggering a heat injection when sensing a temperature drop.

The crews at the drill sites also use methanol injections during the winter; methanol has a lower freezing point than water and injecting it into the pipes lowers the freezing point of the water within.

Staples also stressed the importance of firm fuel contracts for storage, supply, and transportation. Texas companies have stored over 100 times the amount of natural gas used in daily electricity generation — more than enough to supplement the state during a weeklong emergency.

According to the Texas Pipeline Association, no generator that had firm contracts in place during February 2021 lost out on their supply. Instead, companies who chose to purchase fuel on an interruptible basis — a strategy that can take advantage of cheaper day-to-day prices but is at risk of astronomical price spikes during times of scarcity — had to fulfill their generation obligations by paying out the wazoo for gas supply.

That’s a risk some feel is worth it, but it’s the same one that forced Brazos Electric Power Cooperative to file for bankruptcy last year.

Reliability, or near-guaranteed service, comes at a premium, whether it’s natural gas, electricity, or widgets — something that in the State of Texas is becoming more clear with every day as electricity prices rise due to the additional caution with which ERCOT operates.

The other factor that caused issues during the blackouts was the nearly unnavigable roads. Texas was not prepared for poor road conditions like northern states are because a storm like the one in February 2021 — both in its severity and expanse — is simply not common below the Mason-Dixon Line.

It became difficult for container trucks or other large, multi-axle vehicles to reach the sites only Ovintiv’s army of pickup trucks could. Where necessary, another method used by the company to provide heat in a pinch was to connect the trucks’ exhaust pipes to the system through a tube, pumping hot air into the points of vulnerability.

Overall, the two companies, like others in their region, contend that they’re ready for this coming winter — echoing the sentiment from the state’s grid regulators. And after an extensive mapping of critical load across the state, the paperwork snafu that caused the spiral is unlikely to repeat.

None of these methods for weatherization are new, members of the industry asserted. They’ve been deployed for years and sometimes decades, all predating the 2021 storm. The difference now is that the spotlight’s on these simple safeguards, an unavoidable reality after the 2021 grid collapse, and that is likely to continue for a long time to come.

But ultimately, the ability to provide natural gas where and when it’s needed comes down to keeping the power at the wellhead on.

Electricity powers everything in society, even the ability to extract the fuel responsible for generating it in the first place.

Editor’s Note: This article has updated with clarified numbers on Ovintiv’s oil and gas production.