Speaker 1: Last week, Texas was left powerless and freezing, with some
Speaker 1: even resorting to scrounging for firewood. Something's gotta change, right,
Speaker 1: Well maybe not. Today. On Parts of Rebellion, we talk
Speaker 1: about why the Lone Star estate may not be in
Speaker 1: a rush to shake up its electrical status quo. Hello,
Speaker 1: and welcome back to Parts per Billion, the environmental podcast
Speaker 1: from Bloomberg Law. I'm your host, David Schultz, and like
Speaker 1: most of you, I've been watching the awful scenes in
Speaker 1: Texas play out from a distance. Massive pile ups on
Speaker 1: the highway, shortages of food and medicine, centralized warming stations
Speaker 1: that themselves lost power and heat. It's just been really
Speaker 1: sad to watch. Today, we're going to talk about why
Speaker 1: Texas's entire system to deliver energy where it needs to
Speaker 1: be basically just all failed. And we're talking with Bloomberg
Speaker 1: News reporter and Texan herself, Rachel Adams. Heard. Rachel covers
Speaker 1: the energy industry for Bloomberg and is based in Houston,
Speaker 1: and I have to admit she really surprised me. I
Speaker 1: asked her if this disaster would change everything, and Rachel says,
Speaker 1: a lot of Texans aren't sure if they're willing to
Speaker 1: pay the cost to ensure against what might be a
Speaker 1: freak weather event. So we'll get to that in a second,
Speaker 1: but first I asked Rachel how she herself is holding
Speaker 1: up amid all the chaos. So it's actually eighty degrees
Speaker 1: in sunny right now, which makes the entire situation feel
Speaker 1: a little bit like a weird fever dream. But basically,
Speaker 1: starting Sunday night, we really started hearing about the potential
Speaker 1: for this major winter starm to turn into an electricity crisis.
Speaker 1: I don't think crisis was the word anyone was using
Speaker 1: at the time, at least that I saw, But shortly
Speaker 1: after midnight is when I started hearing from folks who
Speaker 1: had lost back power. And by the next morning, you know,
Speaker 1: everyone was thinking, I thought this was supposed to be
Speaker 1: a fifteen minute outage, thirty minute outage, and they still
Speaker 1: didn't have electricity. And as the day went on, we
Speaker 1: started hearing from some of these power providers like Centerpoint Energy,
Speaker 1: who were saying, hey, if if you don't have power,
Speaker 1: you shouldn't expect it. By nightfall, and obviously temperatures were
Speaker 1: dropping Texas As, I think a lot of people are
Speaker 1: aware just doesn't have the infrastructure to deal with the
Speaker 1: extreme cold and snow and ice on the roads, So
Speaker 1: a lot of people will stuck with this decision. Do
Speaker 1: you brave the highway, which you know, just a week
Speaker 1: ago we had seen this catastrophic one hundred car pile
Speaker 1: up on I thirty five to get to a friend
Speaker 1: or family member's house. Or do you buckle down and
Speaker 1: just try to stay as warm as you can overnight?
Speaker 1: So tell me, I mean, I'm thinking about you know,
Speaker 1: I've been working from home for the last almost a year,
Speaker 1: and you know, if I lose power, I lose Wi
Speaker 1: Fi and I can't do my job. Like, how did
Speaker 1: you manage to crank out some great reporting? How? I'm
Speaker 1: assuming you lost power too, right? I lost power Tuesday night,
Speaker 1: So Monday and Tuesday, it honestly felt very bizarre because
Speaker 1: I could see out my window right where the lights
Speaker 1: went out at night. So it was kind of a
Speaker 1: helpful way to see who would be the right people
Speaker 1: to talk to who didn't have power, because I could
Speaker 1: specifically locate where the outages were occurring at nighttime. But
Speaker 1: Tuesday night is when the power cut out, and then
Speaker 1: all day Wednesday and a lot of the day Thursday,
Speaker 1: we didn't have electricity, so yeah, taking taking calls from
Speaker 1: the car so I could charge my phone, and yeah,
Speaker 1: just a lot of texting and phone calls when normally
Speaker 1: it would be preferable to kind of have a heads
Speaker 1: up and give someone a calendar invite. It was all
Speaker 1: very spur of the moment, and it was also a
Speaker 1: very fast moving event with a lot of conflicting information
Speaker 1: going around, so it was a important for us to
Speaker 1: try to keep on top of kind of where those
Speaker 1: claims were going and how we would hold some public
Speaker 1: officials accountable. So I think, you know, having a big
Speaker 1: team really helped because we had power reporters elsewhere who
Speaker 1: were able to pick up Yeah. Well, I read your
Speaker 1: stories from the last week, and you've done some amazing work.
Speaker 1: And one of the things that I gathered from your
Speaker 1: stories is that so many different things had to go
Speaker 1: wrong for this to happen, Like so many fail safes
Speaker 1: had to fail for this event to transpire. Can you
Speaker 1: talk a little bit about just how many protections were
Speaker 1: in place or weren't in place that just didn't work. Yeah.
Speaker 1: I think what was really remarkable with last week was
Speaker 1: seeing this extreme cold hit all different types of infrastructure
Speaker 1: and all different types of energy. I mean, at first
Speaker 1: everyone was kind of describing it as an electricity crisis,
Speaker 1: and that was fair because we didn't really know what
Speaker 1: was going on immediately. But then I think it became
Speaker 1: apparent that this wasn't just power, this was energy wide,
Speaker 1: and for a state like Texas that really prides itself
Speaker 1: for having such an expansive and sophisticated network, I think
Speaker 1: it was a little bit of an ego blow, honestly.
Speaker 1: So you had wells out in the Permium basin that
Speaker 1: we're experiencing what are called freeze off, So the heavier hydrocarbon,
Speaker 1: the water that's in the gas stream is frozen, and
Speaker 1: that obviously hamper's production. And you had compressor stations in
Speaker 1: the oil field not working, and that gets the gas
Speaker 1: into these pipelines. What I thought was really interesting was
Speaker 1: that the oil field actually didn't have power for a
Speaker 1: lot of this time, and it's a lot of these
Speaker 1: companies need power to produce more gas. So you had
Speaker 1: gas supply being affected by the cold, either because of
Speaker 1: the infrastructure literally getting frozen or because they didn't have
Speaker 1: power to produce gas. You had the wind turbines that
Speaker 1: was not a dominant factor, as was the claim by
Speaker 1: a lot of people last week. Right, Well, we'll get
Speaker 1: into that. Yeah, but you did have problems with wind turbines. Absolutely.
Speaker 1: They didn't have the de icing technology that a lot
Speaker 1: of places that are more used to cold climates have
Speaker 1: than you had power plant failures themselves. So it really
Speaker 1: did span, you know, this entire network. And that's why
Speaker 1: I think that as we try to come up with answers,
Speaker 1: it's not like this one nice little easy fix that
Speaker 1: we can make. It's really going to require investment into
Speaker 1: a lot of different types of equipment and infrastructure. Yeah,
Speaker 1: and so really quickly, let's talk about the wind turbines.
Speaker 1: I think there were some discussion in the days after
Speaker 1: this all started that people said that, you know, the
Speaker 1: state's reliance on renewable energy was to blame. I think
Speaker 1: that got debunked pretty quickly. Can you just talk a
Speaker 1: little bit about what went on there and sort of
Speaker 1: debunk some of those claims yourself. Yeah, So it was
Speaker 1: it was a tweet that went viral, and it showed
Speaker 1: a wind turbine with a helicopter flying near it and
Speaker 1: basically shooting this liquid at it and The caption was
Speaker 1: something along the lines of, you know, like this is
Speaker 1: a fossil fuel powered helicopter de icing a wind turbine,
Speaker 1: and it was debunked pretty quickly. It was actually a
Speaker 1: photo from Sweden in twenty fourteen. But you know, as
Speaker 1: is the case with a lot of these misinformation and
Speaker 1: disinformation campaigns, like it doesn't really matter how quickly it's
Speaker 1: debunked because at that point it's been shared so many
Speaker 1: times that it becomes something that in Texas we even
Speaker 1: saw our state officials repeating. And I think what makes
Speaker 1: it especially difficult in this situation is that it wasn't
Speaker 1: absolutely false or a lie. There was truth to it, right.
Speaker 1: You did see wind turbines experiencing difficulty with the cold.
Speaker 1: The issue is that it wasn't nearly to the extent
Speaker 1: that natural gas experienced issues. And that's not to say,
Speaker 1: you know, I think this conversation devolved into one of
Speaker 1: which fuel is better. At the end of the day,
Speaker 1: it comes down to wind is expected to be variable,
Speaker 1: and it's not something that folks consider, you know, a
Speaker 1: reliable source of energy at this point in time. Natural
Speaker 1: gas is so when you have a shortfall and supply
Speaker 1: it really touches the system off guard, and that's what
Speaker 1: we experienced last week. So I'm glad you brought up
Speaker 1: natural gas because I wanted to talk to you about
Speaker 1: what's been going on there, and especially you've done some
Speaker 1: reporting on some natural gas suppliers who have you know,
Speaker 1: really suffered the last few years and especially the last
Speaker 1: year with very very low prices, and now all of
Speaker 1: a sudden the last week, prices are skyrocketing. So you
Speaker 1: would think that would be good news for these natural
Speaker 1: gas as producers. However, they're also having trouble just simply
Speaker 1: getting their product from the crown to where it's needed.
Speaker 1: I mean, is this situation a good situation for the
Speaker 1: oil and gas industry or gas in particular, or is
Speaker 1: it bad or is it mixed? I just I don't
Speaker 1: know where they stand right now. Well, the most dramatic
Speaker 1: price reaction was seen in physical gas prices, so you know,
Speaker 1: specific hubs, specific areas in Oklahoma, say on one pipeline,
Speaker 1: where prices you know, increased to one thousand dollars per
Speaker 1: and c. Yeah, so you had these crazy situations and
Speaker 1: folks who were regionally located to those areas could advantage
Speaker 1: for sure, that's why you had Jerry Jones come out
Speaker 1: and say that his company had done really well. But
Speaker 1: I think, big picture, most of the oil and gas
Speaker 1: companies that we think of as the big independence, especially
Speaker 1: in Texas, they had days where their production was impacted dramatically.
Speaker 1: I think Diamondback Energy, which is one of the big
Speaker 1: show producers in West Texas, they said that they lost
Speaker 1: like five days of production, which is staggering for a
Speaker 1: company that produces that much. So I think you will
Speaker 1: see these situations where you had some players benefit tremendously
Speaker 1: from very very high spot gas prices. But I think
Speaker 1: in general, the industry did not necessarily see this massive
Speaker 1: windfall that's going to last for the rest of the
Speaker 1: quarter or something like that from the events of last week.
Speaker 1: That's a really good point. I mean, I guess the
Speaker 1: price of a commodity doesn't really matter if you can't
Speaker 1: get that commodity to market. That's segus. That's what it
Speaker 1: come back to. All right, let's look forward and specifically
Speaker 1: let's talk about energy delivery in Texas. I mean, this
Speaker 1: is a fast moving story. There was just some news
Speaker 1: that broke this afternoon as we're talking on Tuesday, afternoon
Speaker 1: here that the board of URKAT, the state electric company
Speaker 1: in Texas, has stepped down. Do you see this as
Speaker 1: a moment where the way that energy is regulated in
Speaker 1: Texas and the way it's delivered is going to completely change?
Speaker 1: Like will this be a paradigm shift or maybe is
Speaker 1: it too soon to say? As someone who's lived in
Speaker 1: Texas most of my life, I have a hard time
Speaker 1: seeing this being a paradigm shift. But you know, I
Speaker 1: do think there are gonna be a lot of questions
Speaker 1: asked about weatherization and whether we require power plants to
Speaker 1: weatherize their system so that they don't feel in the
Speaker 1: extreme cold. But then that gets into another question is
Speaker 1: how do you require the oil feel to do the
Speaker 1: same for their assets? Is it the producers themselves? Is
Speaker 1: it the pipeline companies. At that point, you're dealing with
Speaker 1: a whole different regulator, the Railroad Commission. Then you have
Speaker 1: the Texas Public Utility Commission. So there are so many
Speaker 1: different entities that play here and so many different companies
Speaker 1: that you would actually need to either a incentivize or
Speaker 1: b require to weather eye And I don't think that
Speaker 1: we really have all of the answers to exactly what
Speaker 1: we're wrong last week to have a solid idea of
Speaker 1: exactly what that solution is going to look like. And
Speaker 1: we should say, you know, this has been reported a lot.
Speaker 1: You've reported this, but it's worth repeating that the reason
Speaker 1: we're talking this winter storm affected the whole lower Midwest,
Speaker 1: like Oklahoma, you know, Kansas, Nebraska, but we're just talking
Speaker 1: about Texas here because Texas has its own kind of
Speaker 1: self contained grid that's not connected to other states, Like
Speaker 1: that's pretty well known at this point. But do you
Speaker 1: think that's going to change, that this sort of Texas
Speaker 1: wanting to have an independent grid will will shift, or again,
Speaker 1: do you think it's too soon to say, Yeah, there
Speaker 1: are a lot of people pointing out that that's a
Speaker 1: place to start. I think it's going to depend on
Speaker 1: how we look back and see how our neighboring grids
Speaker 1: fared during the same storm. Because the folks I've talked
Speaker 1: to have pointed out that in this specific situation, and
Speaker 1: obviously it could be different in future weather events, but
Speaker 1: it didn't really look like we would be that much
Speaker 1: better off if we had been able to pull on
Speaker 1: neighboring grids. So that is something that I think obviously
Speaker 1: being able to tap your neighbors when you're in need
Speaker 1: is going to mitigate risk of it. But I don't
Speaker 1: necessarily think it played as big of a factor as
Speaker 1: maybe was originally thought that would inspire that specifically to
Speaker 1: see some sort of overhaul. That's interesting, and that's kind
Speaker 1: of surprised. I hadn't thought about that, because, you know,
Speaker 1: I guess in reading the headlines, you think like, this
Speaker 1: has got to be the end of the you know,
Speaker 1: this experiment where Texas goes it alone. But yeah, I
Speaker 1: guess you're right. I would Texas have fared any better?
Speaker 1: Maybe not, That's what everyone's asking themselves. Yeah, I think
Speaker 1: I guess part of living here and talking to, you know,
Speaker 1: folks in Austin, but also folks in Houston who work
Speaker 1: in the industry, and also a lot of oil field
Speaker 1: workers in West Texas, I think a lot of people
Speaker 1: were outside of Texas were asking how is Texas going
Speaker 1: to fix it? And I think the question for a
Speaker 1: lot of folks here is would we is this going
Speaker 1: to be something that we think is worth fixing? Because
Speaker 1: a lot of people on the ground are saying, if
Speaker 1: this is a one hundred year event, I don't want
Speaker 1: to spend fifty dollars a month on my power bill
Speaker 1: to just ensure that this doesn't happen again. And so
Speaker 1: that's where I think it's going to come down to
Speaker 1: kind of individual experiences through the storm. How bad was
Speaker 1: it for you, Because obviously this was an extremely tragic
Speaker 1: event for a lot of people who lost their loved
Speaker 1: ones due to carbon monoxide poisoning or fires or just
Speaker 1: exposure to extreme cold, and then it was a pretty
Speaker 1: mild event for some other people who lost power for
Speaker 1: a few hours, but we're otherwise fine. So I think
Speaker 1: it's really going to come down to how we view
Speaker 1: these the likelihood of these events in the future, and
Speaker 1: how we think of insurance. That was Bloomberg News's Rachel
Speaker 1: Adams heard speaking to us from Houston. And that's it
Speaker 1: for today's episode of Parts per Billion. If you want
Speaker 1: more environmental news, check out our Twitter. We use a
Speaker 1: pretty easy to remember handle. It's ad environment. Just that
Speaker 1: that's the Twitter at environment. I'm at David B. Schultz
Speaker 1: if you want to chat with me about anything. Today's
Speaker 1: episode of Parks Rebillion was produced by myself and Josh Block.
Speaker 1: Pres Per Billion was created by Jessica Coombs and Rachel Daegel.
Speaker 1: Today's music was a Message by Jazarre and Smoking Monkey
Speaker 1: by Tom Hillock and Nicholas Boskovich. You're used under a
Speaker 1: Creative Commons license. Thank you so much everyone for listening.
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