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And So it Goes - ERCOT, Texas Regulators, Permian Gas Supply, LNG and the Energy Transition

After the catastrophic experience of Winter Storm Uri in February 2021, the Electric Reliability Council of Texas was restructured, with new statutory requirements and a whole new cast of characters. The Texas Railroad Commission (TRRC) put in place a number of fixes, including more stringent reliability rules for natural gas suppliers, from producers to transmission pipelines. At the same time, booming LNG exports, largely to Europe, combined with growth in Permian production have created new pressures and opportunities around the Texas energy mix — as well as implications for the ongoing transition to low- or no-carbon energy sources. How can all of these issues be understood and addressed at once — and in a way that doesn’t bore us all to tears? In today’s RBN blog, we outline the major themes to be discussed during the Texas Energy Symposium being planned by the Energy Bar Association and the University of Texas Law School.

The November 1 symposium is a follow-up of last year’s inaugural event, which was very well attended and received rave reviews. The focus then was Winter Storm Uri and the failure of both ERCOT and the supply of natural gas for power generation in Texas (ironically due to a significant degree of power being cut off to the natural gas industry). Those failures played a major role in causing some 700 deaths in Texas and billions of dollars in property damage. Much happened subsequently to address the mess, including state legislation, a replacement of the ERCOT board, and a major report by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation (the “FERC/NERC” report). More recently, the TRRC has imposed reliability standards on critical gas-supply facilities, and, of course, Texas gas production from the Permian Basin has continued to grow. That’s a good thing, too, since Texas is now a dominant source of LNG to the world, especially to Europe as it works its way through the Russian cutoff of major gas supplies to the continent amid the chaos of the invasion of Ukraine and the ensuing sanctions that resulted from it (see Higher and Higher and Help is on the Way). And, of course, Texas — along with the rest of the country — is working its way through the conundrum of major changes in the energy mix, with the goal of adding more renewables without losing reliability (see Sledgehammer).

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