Oil and Natural Gas Operational Preparations and Record Production, Storage and Pipeline Capacity Keep Texas Winter Ready

AUSTIN - As colder weather arrives in Texas, the Texas Oil & Gas Association (TXOGA) today highlighted the many steps the industry takes to prepare for weather events to ensure reliable oil and natural gas production and transportation no matter the weather. TXOGA also noted several positive policy developments designed to encourage investment in dispatchable electricity generation and expand electricity transmission infrastructure in the Permian Basin, both critical to meeting electricity needs in Texas.

"Record-breaking natural gas production, increases in natural gas storage capacity as well as dramatically expanded pipeline takeaway capacity bolster Texas' winter readiness," said TXOGA President Todd Staples. "In fact, Texas produces, moves and stores more natural gas than any state in the nation. On any given day, the Lone Star State produces more than three times the natural gas Texans need for electricity. Our storage capacity holds enough natural gas to power Texas for more than 5 months and modern pipelines can safely move more product from the wellhead and storage than ever before - all of which contribute to a Winter Ready Texas. While some disruptions are unavoidable, industry is doing its part to ensure to ensure maximum flow of our products."

From an operational perspective, oil and natural gas operators begin preparing for cold weather months in advance and have extensive resources in place to monitor and prepare for inclement weather on an ongoing basis and utilize best practices and operational plans in order to maximize product flow. Onsite, seasonal weatherization techniques include methanol injection, temperature activated pumps, steamer units, equipment shelters, and insulated critical lines and valves.

Additional and offsite measures also prepare operators to better respond during inclement weather to ensure assets and personnel are safe and able to respond to critical needs.

Examples of additional measures include:

• Secure shelter/housing and pre-positioning personnel to be closer to and access assets
• Adjusting employee schedules to ensure planning and preparations are in place
• Having extra methanol and other supplies on trucks
• Preparing and draining tanks to increase on-site storage and provide a temporary buffer for necessary 3rd party movement of product
• Pre-inspection of assets prior to weather event
• "Line-packing" to maximize product and pressurization in pipelines
• Communication with 3rd party vendors to prepare for inclement weather contingencies
• Identification of the most critical assets to help maintain power from electric utilities and keep production online

In 2021, the 87th Texas Legislature and the Railroad Commission of Texas (RRC) established critical load designation for the most critical natural gas assets and related systems, which means in part these assets will be prioritized to keep power on due to their critical functions, and this was not the case during Uri.. For two years now, operators with facilities have been required to weatherize must share their emergency preparedness plans with the RRC, including considerations for how each operator will protect their employees, the environment and their equipment when implementing their plans. Requirements extend to external support operations such as water disposal wells, a necessary function to continue oil and natural gas production.

Even with these winterization techniques in place, production fluctuations are expected during extreme weather conditions. Variation in daily natural gas production occurs with sudden temperature changes because these are field operations, not controlled factory settings. These production challenges are not unique to Texas but occur in much colder climates, confirming that some disruptions are unavoidable.

According to the RRC, even on mild weather days, daily natural gas production can fluctuate for a variety of reasons. Prudent users of natural gas domestically and globally should consider these factors when establishing agreements for product and make appropriate plans, which often include provisions to contract for firm storage, supply and transportation to meet their needs during possible production decline periods.

Texas is more fortunate than most states due to our vast natural gas storage infrastructure funded by the private sector. During significant weather events and expected production fluctuations, daily production combined with natural gas storage provides ample access to product for power generation and local distribution companies that have contracted for these services. Over the past year, Texas' natural gas marketed production has averaged over 32.9 billion cubic feet per day (Bcf/d), and natural gas used for electricity generation has remained around 5.7 Bcf/d. Texas has 878.1 Bcf of underground natural gas storage capacity, enough to power 5.7 Bcf/d of power generation for approximately 154 days or all of Texas' average natural gas consumption for 63 days.

Power generators with firm contracts for supply, storage, and transmission for the volumes they need during extreme weather prove more reliable and resilient. These three items are paramount for generators to ensure costs efficiencies and readily available fuel.

Finally, Staples highlighted the importance of the voter-approved Texas Energy Fund, a tool to encourage investments in dispatchable generation projects, and the Permian Basin Reliability Plan, which addresses growing concerns over insufficient transmission access in the Permian Basin and represents a bold approach to ensure that the electric grid is equipped to meet current and future needs.

"The oil and natural gas industry has worked closely with all stakeholders, lawmakers and regulators to develop and advance comprehensive energy solutions designed to keep Texas secure and ready, no matter the weather. We are all in this together and know that proper planning, preparation and coordination go far in minimizing disruptions and in ensuring that Texas is winter ready."

For more information on what the oil and natural gas industry in Texas does and is doing to prepare for winter weather, visit txoga.org/winterready.

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Founded in 1919, TXOGA is the oldest and largest oil and gas trade association in Texas representing every facet of the industry.