The U.S. loves the legends of the wildcatters drilling for oil while enduring on the American frontier. However, the modern oil and gas industry bears little resemblance to those legends. Today’s oil and gas industry is a fragile web of facilities that is sensitive to high temperatures, low temperatures, wind, rain and even lightning. The interconnectedness that makes the massive scale of the modern oil and gas industry possible is also its greatest weakness. When facilities have problems it impacts other facilities leading to cascading failures. Last month’s Winter Storm Fern put these problems on display.
From Thursday, January 22nd to Tuesday, January 27th, the Texas Commission on Environmental Quality (TCEQ) received nearly 70 reports of emissions events. Many of those events were outages at large facilities processing gas from dozens or hundreds of other facilities. The follow on effects of those outages coupled with the many outages that likely went unreported created an estimated loss of several billion cubic feet of gas production (much of which was likely released into the atmosphere) causing a gas shortage that drove U.S. natural gas prices to all time highs. The Texas oil and gas industry apparently cannot handle the extreme weather that its practices are exacerbating.
The core problem Fern underscores is that the hugely complicated modern oil and gas supply chain has a large number of failure points, all of which must not fail for gas to successfully travel from a well to a power plant/chemical plant/export facility/home.
Oil and gas come out of the ground at a well. While oil can often be stored at the well in tanks, gas cannot. Instead, gas is routed through pipelines to a processing plant or combusted in a flare. Once the gas has been processed it is put into another pipeline where it may travel to another processing plant or to a user. Pipelines operate at very high pressures, so gas must be compressed to raise its pressure enough to enter the pipeline. This occurs at compressor stations which are placed periodically along pipeline routes. A failure anywhere in this supply chain can stop gas from arriving at its destination. However, the gas still has to go somewhere. Oilfield Witness’s Executive Director, Sharon Wilson, equates this problem to a dammed river. The gas flows through the supply chain from well to pipeline to processing plant to pipeline to user like water through tributaries to a river. When an outage occurs, like a gas plant shutting down or a compressor losing power, the river is dammed. Water levels rise and flood the area upstream of the dam. For gas, this manifests as rising pressure in equipment because gas continues to flow out of the ground at the well but has nowhere to go. It has to be released. Sometimes this happens at the facility with the outage but it can also happen at facilities upstream of the outage.
You can see examples of this phenomenon when a gas plant shuts down for maintenance. For example, in 2023, the Energy Transfer Red Lake Gas Plant shut down for scheduled maintenance. Another company, Diamondback Energy, sends gas from nearly 300 wells to the gas plant for processing. With the plant shut down, Diamondback had to release the gas at the wells until the plant was back online. Diamondback applied for permits (Filing Number: 21299) to burn over 100 million cubic feet of gas per day while the plant was undergoing maintenance. Diamondback is just one of the companies sending gas to Red Lake so the true volume of gas released as a result of the outage was likely much larger.
During Fern, Red Lake Gas Plant shut down for 24 hours. Energy Transfer also had three other gas plants shut down. Targa, another major gas plant company, had 12 gas plants report emissions events during the storm. In addition to emissions from gas plants as gas was purged, these shut downs likely led to thousands of oil and gas wells venting or burning gas.
Cold weather can cause outages in a variety of ways. Hatches and valves can become frozen. During this storm Chevron even reported having hatches frozen open leading to large gas releases. At gas plants, some filtering systems can freeze. One of the most frequently cited problems by major facilities reporting outages during this storm was elevated oxygen levels. When cold weather causes pressure to drop in oil and gas equipment, oxygen can seep into the system. Since oxygen is extremely flammable, elevated oxygen levels often lead to a gas plant being shut down until oxygen levels return to normal rather than risk an explosion. Inside Climate News’ Dylan Baddour published a story last week featuring Sharon that dives into this problem in more depth.
Unfortunately, these problems highlight the laissez-faire attitude that drives much of Texas’s oil and gas regulation. The Federal Energy Regulatory Commission (FERC) has been suggesting that the Texas energy grid and gas supply system needs to be better prepared for cold weather since 2011. Sharon Wilson has been highlighting these problems since the same year. However, Texas ignored these calls for winterization. The problem came to a head in 2021 during Winter Storm Uri. The storm caused such extensive problems for the Texas grid, that ERCOT (the agency in charge of managing Texas’s power) ordered “20,000 MW of rolling blackouts in an effort to prevent grid collapse”. At the time this was the largest manually controlled blackout in U.S. history. 246 people died.
While much of the discussion after the storm focused on utility companies and transmission lines, FERC also found that a significant driver of the problems during the storm was gas not getting to power plants. Even as some wells continued to produce gas, outages at processing plants and pipeline compressors led to much of that gas being released into the atmosphere instead of continuing on to a power plant. In response to the problems the storm highlighted, the Texas legislature debated extensively on new regulations to winterize Texas to prepare for the next winter storm. Ultimately, those efforts focused on ERCOT and improving grid management with little done to ensure the reliability of gas supplies. SB 3, the Winter Storm Uri omnibus bill, only added one requirement for oil and gas operators which was that they prepare emergency response plans and submit them to regulators. Later audits of SB 3’s implementation found that regulators were allowing operators to decide what constituted a sufficient plan, and only issued two violations to operators over more than 8,000 inspections of preparedness plans. In response regulators argued that “holding gas operators to industry best practices for weatherization is “unworkable.”
Given the legislature’s priorities, SB 3’s impact on Winter Storm Fern was unsurprising, Sharon even predicted it before the freeze started. Driven in part by increased battery storage, the Texas grid performed better than it did during Uri with more limited blackouts and many fewer deaths (enthusiasm about this success should be tempered by Fern being a less severe storm than Uri). However, the gas industry was still clearly unprepared for the event, which ultimately led to gas shortages driving all time high gas prices.
The huge volume of gas that was likely released during Winter Storm Fern is unfortunate. The world is in the middle of an ongoing climate disaster and those emissions will make it worse, which will lead to more extreme weather and more emissions. However, extreme events like this storm can overshadow the chronic problems that drive emissions in the oil and gas sector. Texas should winterize its oil and gas infrastructure. No amount of winterization will completely avoid cold weather problems, particularly during extreme weather, but we should not be over a decade after FERC’s winterization recommendations and still be having such extensive cold weather problems. Winterization also will not stop the impacts of extreme heat on the oil and gas infrastructure, which also lead to increased emission events. However, gas plant outages occur even under normal weather conditions. When they do, outages cascade across the state. “Unavoidable” emissions events happen that could be avoided if maintenance happened more frequently or investments were made in more reliable equipment.
Over the last few years, more oil and gas companies and environmental activists have expressed interest in the idea of “certified” natural gas. By verifying that a gas producer produced gas with low emissions the idea is that it could be sold at a premium to environmentally savvy gas purchasers (primarily the EU). Fern underscores how problematic this approach would be. Even if it were possible for gas to be produced as cleanly as these companies claim (visit our youtube if you want reason to be skeptical of that), the gas has to make its way through the entire supply chain before it gets to a buyer. Once the certified gas is sent to the next company it is no longer the problem of the producer. Even if the gas is sent to a processing facility that due to cold weather, warm weather, power issues, mechanical problems, high oxygen levels or any number of other factors releases the gas into the atmosphere that producer is still producing “certified” gas.
The current structure of the oil and gas industry has led many companies to be interreliant on each other to bring gas to market. Unfortunately, most current sustainability initiatives focus on the behavior of individual companies. Certification schemes, ESG reports, and voluntary initiatives like the OGMP, all aim to determine whether an individual company is sustainable. However, it does not matter how clean one company’s system is if the next link in the supply chain is just going to release the gas.
