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Texas Power Outage Will Have Far-Reaching Effects on Local, National Energy Policy

Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley

At time of writing, 536,000 Texas households lack power, and millions more are suffering without water, as ERCOT, the independent power grid operator failed to keep up with a surge demand due to multiple power generation sources being taken offline by the winter storm. At the peak of the crisis, more than four million Texas residences were without power as sub-freezing temperatures covered the state.

Political finger pointing has begun, and we can expect this crisis to dominate local and national energy policy discussions for months, or even years, to come. The crisis makes it clear that Texas, and the rest of the country, need investment in energy infrastructure. Debate about the causes and potential solutions will play a major role in President Biden’s forthcoming infrastructure bill.

Energy is likely to be a big issue in the Texas state legislature and state politics this year. Governor Abbott announced a full investigation into ERCOT and the state electricity supply. In a live television interview, Abbott called for the organization’s leadership to resign.

The governor also ordered that natural gas be made available for sale to local power generators before leaving the state of Texas until February 21. This order could be extended depending on how long it takes for the markets to stabilize and generation to come back online. Expect calls to increase local supply mandates for baseload and peak power producers going forward.

Fallout from the Texas situation will be felt in Washington as well. Questions around the storm and the resulting power shortages are likely to lead questioning next week when President Biden’s pick for Secretary of the Interior, Deb Haaland, goes before the Senate Energy panel. The hearing is expected to be contentious as the Republican lead on the committee, Sen. John Barrasso (R-WY), announced opposition to her nomination. In addition to questions regarding the Texas power crisis, expect queries about President Biden’s executive order limiting new leases on federal lands and waters, and her plans for this policy.

Energy Workforce & Technology Council is working with members on both sides of the panel to highlight how the moratorium will cause harm to economies and employment in states most reliant on energy production on federal lands, as well as across the nation. It is especially important that Sen. Joe Manchin (D-WV) express his concerns about the ban during questioning.

In international news, White House Press Secretary Jen Psaki said the Biden Administration would consider sanctions if Russia and Germany proceed with completing the Nordstream 2 pipeline that would double exports of natural gas from Russia to Germany. She said the project is a bad deal because it divides Europe. Construction on the pipeline resumed earlier this month, but the administration has not implemented sanctions authorized by Congress last year.

For more information on the Council’s advocacy efforts, contact SVP Government Affairs & Counsel Tim Tarpley