Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Roughly a year and a half after a deadly winter storm collapsed the Texas power grid, the state’s regulators approved new rules on Aug. 30 that require oil and gas companies to properly prepare natural gas infrastructure for extreme weather.
The new Weather Emergency Preparedness Standards rule (Statewide Rule 3.66) approved by the Texas Railroad Commission (RRC) requires facilities representing a large portion of daily natural gas supply in Texas to be prepared to operate during weather emergencies. Fines for administrative violations could reach up to $1 million, according to a release by the RRC.
“These new rules ensure our state’s natural gas supply chain is prepared for extreme heat and freezing cold,” RRC Chairman Wayne Christian commented in a statement.
The adoption of Statewide Rule 3.66 represents the state’s first weatherization rule for natural gas facilities and implements provisions in Senate Bill 3, which was passed by the Texas Legislature and signed by Governor Abbott in 2021 following Winter Storm Uri.
“These new rules ensure our state’s natural gas supply chain is prepared for extreme heat and freezing cold.”—Wayne Christian, Texas Railroad Commission
The new rule requires critical gas facilities on the state’s electricity supply chain map to weatherize, based on facility-specific factors, to ensure sustained operation during a weather emergency. Companies must also correct known issues that caused weather-related forced stoppages occurred before Dec. 1 and contact the RRC if they sustain a weather-related forced stoppage during a weather emergency.
Types of critical facilities include natural gas wells and oil leases that contain natural gas wells, saltwater disposal wells, gas processing plants, all intrastate underground natural gas facilities, and gas pipelines that directly serve electricity generation on the electricity supply chain map.
“The natural gas supply chain is comprised of many individual pieces, each with their own unique challenges and vulnerabilities in the face of extreme weather,” said RRC Commissioner Jim Wright. “Today’s rule is focused on preparation, planning and communication and requires those critical facilities on the electricity supply chain map to review their operations, identify potential vulnerabilities, and have plans and procedures in place to fortify assets and maintain operations during extreme weather.”
“Any over-emphasis on weatherization of natural gas facilities is concerning because, depending on the severity and timing of extreme weather, it should be expected to lose 10% to 30% of daily production, regardless of the operating area and regardless of the level of weatherization.”—Todd Staples, Texas Oil and Gas Association
Todd Staples, president of the Texas Oil and Gas Association (TXOGA)—the oldest and largest oil and gas trade association in the Lone Star State, raised concerns about negative effects of the legislative mandate on natural gas production and operator safety.
Citing reports from the Electric Reliability Council of Texas (ERCOT), the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC), Staples pointed out that natural gas was not the primary cause of outage problems during Winter Storm Uri.
“Any over-emphasis on weatherization of natural gas facilities is concerning because, depending on the severity and timing of extreme weather, it should be expected to lose 10% to 30% of daily production, regardless of the operating area and regardless of the level of weatherization,” Staples said in a statement.
“These are field operations and not factory settings, and most if not all upstream production sites are unmanned,” he continued. “Stopping production is a necessary option for environmental and safety reasons, and flexibility must be allowed in rulemaking for operators to maintain safety.”
The RRC’s critical infrastructure division inspectors based in regional offices across the state will begin inspections Dec. 1.
Inspections will begin by prioritizing wells and other natural gas infrastructure that produce, store, process or transport large volumes of natural gas. The RRC will further prioritize inspections in descending order in accordance with a facility’s production volume or storage, processing or transportation capacity.
2024-02-12 - As Haynesville E&Ps look to add scale and get ahead of growing LNG export capacity, Tellurian’s Louisiana assets are expected to fetch strong competition, according to Energy Advisors Group.
2024-01-09 - Low natural gas prices are driving producers such as Chesapeake and Southwestern to seek large ‘strategic’ deals at a time when large-scale consolidation is coming under increased scrutiny by lawmakers and regulators.
2024-01-11 - Chesapeake Energy and Southwestern Energy's merger will create dominant positions in Appalachia and the Haynesville Shale, which the companies say would compete on the global stage.
2024-02-14 - EQT Corp. inked upstream and midstream M&A in the fourth quarter—and the Appalachia gas giant is looking to ink more deals this year.
2023-12-27 - Williams purchase of 115 Bcf of natural gas storage capacity from Hartree Partners ties in with LNG terminals and comes as demand for natural gas has grown by 56% while gas storage capacity has increased by only 12%.