Memory of Deadly Freeze Looms Large in Texas Oil-Regulator Election

Source: By Joe Carroll and Sergio Chapa, Bloomberg • Posted: Monday, February 14, 2022

Early voting across the state begins Monday on the first anniversary of the historic collapse of energy infrastructure that blacked out millions of homes.

A neighborhood in Waco, Texas, covered in ice and snow on Feb. 18, 2021.
A neighborhood in Waco, Texas, covered in ice and snow on Feb. 18, 2021. Photographer: Matthew Busch/AFP/Getty Images

When Texans cast their ballots this election cycle, they won’t just be choosing candidates: They’ll be broadcasting whether they think the sitting politicians during last year’s deadly freeze share any of the blame.

The battle to join the Texas Railroad Commission—which, despite its name, is one of the world’s most powerful energy regulators—is now under way. The race is the closest thing yet to a referendum on the handling of a historic storm that killed more than 200 people and paralyzed the second-largest U.S. state for almost a week.

One seat on the three-member panel that has regulated the state’s petroleum explorers for more than a century is up for grabs, with challengers to incumbent Chairman Wayne Christian, a Republican, seeking to shake up the agency roundly criticized for its performance during last year’s catastrophe. Early voting for the March 1 primary begins Monday, the anniversary of last year’s paralyzing storm.

“The Texas Railroad Commission played a major role in the February 2021 grid failure,” Luke Warford, a 32-year-old trying to become the first Democratic commissioner in almost three decades, said on his campaign website. “The Commission failed to enforce weatherization requirements on the industry, which led to the grid failing. Then, during the storm, the Commission was central in making billions for oil and gas executives and making Texans foot the bill.”

Related: Gas Sellers Reaped $11 Billion Windfall During Texas Freeze

The election is the first opportunity for Texas voters to render a verdict on the Railroad Commission’s culpability in last February’s cascading meltdown of energy, transport and water networks that stranded millions of residents for the better part of a week. The Commission has been broadly criticized for failing to foresee and plan for the disaster—and for being too cozy in general with the industry it’s supposed to oversee. The outcome has the potential to shift the focus of a regulator that’s unabashedly pro-fossil fuel and hostile to solar and wind, even as renewables make up an ever-larger share of Texas’s energy portfolio.

Texas Blackouts To Continue Today and Into Early Tuesday
Pumpjacks in the snow in the Permian Basin in Midland, Texas, U.S, on Saturday, Feb. 13, 2021.  Photographer: Matthew Busch/Bloomberg

In fact, more than half of the respondents to a University of Houston poll of 1,400 registered English- and Spanish-speaking voters said they plan to factor in how elected officials handled the freeze when they vote in the November general election. If there’s a repeat disaster, respondents say they are most likely to blame the grid manager known as the Electric Reliability Council of Texas, the Public Utility Commission, or even the Republican governor, Greg Abbott—also up for re-election. But the Railroad Commission won’t get off scot-free either, with almost one in five saying they’d hold the panel responsible for a repeat of the catastrophe.

Originally created in 1891 to crack down on uncompetitive practicesby railroad operators in East Texas lumber country, the agency’s powers were expanded in the early 20th century to rein in wildcatters flooding the market with crude and crushing prices. When OPEC was established in 1960, the founding nations used the Commission as their template. For much of its existence, the Texas panel tightly controlled how much oil drillers pumped, and it only abandoned such rationing in the early 1970s. The group no longer oversees railroads, though the name hasn’t been updated in subsequent decades to reflect the shift.

And while it’s a regulator at only the state level, the implications of the panel’s decisions go well beyond Texas boundaries. That’s because the agency has enormous sway over the biggest source of oil in the world’s largest economy. During a historic price crash in early 2020, for instance, the commissioners held lengthy discussions about forcing drillers to limit output, an option the panel ultimately rejected but shows the scope of its power.

Related: Exxon and Chevron Plan Permian Oil Surge as Peers Preach Caution

The agency is widely seen as friendly to or even advocating for the sector it regulates, according to Ed Hirs, an energy expert and economics professor at the University of Houston. Similar regulatory bodies in New Mexico, Colorado and California enforce far more stringent rules and take more adversarial roles to oil and gas drillers. In fact, Texas is so laissez-faire that, after finishing a new well, drillers are allowed to burn off any quantity of unwanted natural gas permit-free for 10 days. The practice, called flaring, has come under intense criticism from environmentalists and some investors for wasting fuel and adding to pollution.

The regulator has also been criticized for its 2021 storm performance. Even though then-Chairman Christi Craddick held an emergency meeting on the evening of Feb. 12 to give electricity generation serving “human needs” higher priority than industrial users, for many power producers, the decision came too late. Those orders, while well-intentioned, also led to widespread confusion as to who exactly qualified. Critics of the regulator say it would have been easy to require gas operators—long before the blackouts began—to fill out a form that would have classified them as critical to the grid and allowed them to keep receiving power. They say that would have helped those operators keep the gas flowing, and avoid the major cuts to electricity supply that followed.

Now, efforts are under way to more clearly define who’ll be at the top of the list to keep receiving electricity during severe winter weather in the future. But that process is going to take time: New rules to ensure important gas operations keep running the next time the state freezes aren’t required to be in place until six months after a mapping process of critical facilities is completed, meaning the gas sector’s winterization requirements could take until early 2023—even though dozens of generators reported trouble getting fuel after gas wells and delivery systems froze in the 2021 storm. Power plants, in contrast, were ordered to meet long-delayed winterization standards by Dec. 1, 2021.

Related: Texas Had All Year to Prep for Cold, and It’s Not Ready

For his part, 71-year-old incumbent Christian makes no bones about his commitment to aiding and protecting the industry. When the U.N. last summer said climate change should be a “death knell” to fossil fuels, Christian lashed out, telling oil conference attendees that avoiding global warming wouldn’t be worth the cost of decarbonizing the economy and wrecking decades of industry investments. A solution to warming fears, he said, would be to “turn the damn air conditioner up.” The vocal critic of climate-change activism and renewable energy has positioned himself as a defender of the oil and gas industry that employs almost 200,000 Texans.

The GOP primary ballot lists four challenges to Christian, including one candidate who was killed this month in a car accident but remains on the ballot. The Republican primary is likely to go to a May runoff. If Christian wins those contests, the former Grammy-winning gospel singer will go on to face in the November general election Democrat Warford, who started his career as an organizer on then-President Barack Obama’s campaign for a second term. A Libertarian and a Green Party candidate have also thrown their hats in the ring.

“Wayne Christian is committed to protecting our oil and gas jobs and economy against the radical Joe Biden administration,” said Travis McCormick, a spokesman for the commissioner’s campaign. “Texas is a conservative state and is going to overwhelmingly reject a former Obama/Clinton staffer like Warford.” Christian declined to be interviewed for this story.

Related: Texans Load Up on Firewood, Spurred by Memories of Deadly Freeze

Warford’s campaign slogan is “Let’s Keep the Lights On” and he’s not alone in making the freeze the primary driver of a bid to unseat a Republican incumbent. Beto O’Rourke, a Democrat trying to upset Abbott in the gubernatorial race, has been slamming Abbott’s storm performance and just wrapped up a 12-day, multi-city tour called “Keeping the Lights On.”

“We don’t really need a Railroad Commission to look out for the interests of the operators—they can do that on their own,” Hirs of the University of Houston said. “There’s no one in Austin looking out for the interest of the consumer.”

— With assistance by Mark Chediak