With the dead of winter approaching, it is appropriate to reflect on last year’s Winter Storm Elliott, which occurred over Christmas and caused millions of people to lose power across the eastern United States. It followed Winter Storm Uri, which happened in Texas a year earlier.
Natural gas, 40% of this country’s energy portfolio, is the primary fuel for winter heating. Some of the most progressive states, like California, with the largest renewable energy portfolios, rely on natural gas. The winter storms have taught us that waiting several years for new infrastructure to develop jeopardizes energy reliability and economic security.
According to the Interstate Natural Gas Association of America, the current political environment makes delivering fuel to natural gas customers taxing. “The United States needs more natural gas pipeline capacity to maintain a resilient system that affords homes and the power grid access to multiple sources of this critical fuel,” the trade group said in a prepared statement.
The United States Energy Association tackled this subject during its monthly virtual press briefing in which I took part. The experts responsible for delivering dependable heat and electricity to customers agreed that more infrastructure is required. The natural gas trade group said the country must have 24,000 miles of new gas pipelines by 2035, but we are planning for much less.
To that end, the North American Electric Reliability Corp. cautioned that half of this country and parts of Canada could go cold this winter because of inadequate natural gas pipeline infrastructure. Indeed, NERC and the Federal Energy Regulatory Commission issued a joint statement about the potential loss of the Everett Marine Terminal in New England and its consequences for the reliability and affordability of the region’s energy supplies.
“Winter Storm Elliot caused blackouts in nine states,” said Jim Matheson,” the National Rural Electric Cooperative Association chief executive during the press briefing. “We do need more pipeline capacity. In this country, specific regions are constricted, and it’s difficult to build new pipelines in this day and age.”
How Will Policymakers Respond?
With that, the National Economic Research Associates issued a report concluding that this country has sufficient natural gas resources to feed the domestic population and export to fuel-hungry Europe and Asia. Prices would also remain “relatively low” — $3 to $4 per million Btus. However, the researchers added that a lack of new pipeline capacity presents a “material impediment” for the industry to maintain reliability and inexpensive fuel.
The report points to the Northeast, which has quick access to the Marcellus and Utica Shale Basins but has limited pipeline capacity. Several pipeline operators have canceled their projects because of regulatory and permitting hurdles.
According to the U.S. Energy Information Administration, 3 million miles of existing natural gas pipelines exist in the United States, delivering 27.6 trillion cubic feet of natural gas to about 77.7 million consumers. Gas producers say that as many as 62,000 miles of new pipelines are needed by 2050 to fuel electric generators and feed the chemical and manufacturing processes.
“My natural gas plants are paperweights if I don’t have the fuel to run to them,” said Rudy Garza, chief executive of CPS Energy in San Antonio, Texas, during the event. “From a policy perspective, gas suppliers must be held to account the same as electric and gas utilities are. Utilities have the same predicament,” he added, noting that they already optimize natural gas storage units and diversify suppliers.
Extreme weather has become the “new normal,” and this winter, the Mid-Atlantic, New England, or the Midwest could suffer. Texas teaches us that it is unwise to rely on one energy source. When Texas froze in February 2021, its infrastructure failed — specifically, the natural gas supplies and the pipelines to transport it. The state also learned that it must winterize its wind turbines.
As for Texas, about 52% of its electricity comes from natural gas while 23% comes from renewables, the U.S. Energy Department says. Coal supplies 17%, and nuclear makes up 8%. The state is also uncommon because its grid system is insulated, making it unable to get new supplies from other areas of the country.
The Legal Landscape Affects The Outcome
Pablo Vegas, chief executive of the Electric Reliability Council of Texas (ERCOT), said Texas’ challenge is to gear up for economic growth. Transmission system operators, like ERCOT, want to work with utilities to deploy demand response — automatically controlling thermostats and asking residential and small business users to shift their energy usage. Industrial customers use demand response.
“We are focused on weatherization and inspecting our power plants and transmission lines,” says Vegas. “And we make sure we have firm fuel supply — part of a structured program that ERCOT does for the summer and winter.”
Getting energy infrastructure built in the United States is an exhausting task. Lawsuits abound, which for the environmental movement is often intended to preserve ecological integrity. Judges are walking a delicate line, complicated by concerns over leaking methane and the effects of climate change.
Courts do not make sweeping decisions that apply to every project. If anything, though, they are trying to facilitate productivity and growth while protecting the air, land, and water — issues that are not mutually exclusive.
Winter storms can wreak havoc, with Uri and Elliott providing the proof. The Federal Reserve Bank of Dallas said Uri — a four-day event that left 4.5 million without heat — cost the Texas economy as much as $130 billion. The question before policymakers is how to defend against those events. The answer invariably requires a mixed response given the surge in demand: building more pipelines while diversifying fuel sources.
That’s a lofty goal: Expanding any kind of energy infrastructure requires regulatory support and legal backing, adding years to the process.