Government failure in Texas: electricity generation in extreme cold weather (reprint)

The Guardian has a story, "Texans brace for freezing weather in hopes storm won’t be repeat of 2021," about how the forecasted severe cold weather potentially threatens electricity generation in Texas, because the state hasn't moved that quickly to add resilience to their system, despite hundreds dying and billions of dollars of damage just last year.

They just don't seem to have a bias for action.  

Similarly, Republicans in Florida are dealing with the insurance repercussions of extreme weather in Florida, because most property casualty firms are abandoning the state, leaving the market to the state captive insurance firm, which is underfunded ("Why Republicans are coughing up billions of dollars to save Florida’s insurance market," Grist).  From the article:

In the three months since Hurricane Ian struck Florida, the state’s fragile property insurance market has been teetering on the brink of collapse. The historic storm caused over $50 billion in damage, more than any disaster in U.S. history other than Hurricane Katrina. It also dealt a body blow to an industry that was already struggling to stay standing: Several insurance companies had already collapsed this year even before the hurricane, and major funders are now poised to abandon those that remain.

In recognition of this crisis, Florida Governor Ron DeSantis convened the state’s Republican-controlled legislature last week for a special session devoted to stabilizing the insurance market. In a matter of days, lawmakers passed a package of bills aimed at doing so. The package includes bills that will cut down on litigation and fraudulent claims that raise costs for insurers, but it also provides insurance companies with a $1 billion public subsidy to help them stay afloat next year. That’s on top of another $2 billion the legislature rolled out earlier this year.

I am naive in believing that acting in advance of the potential for failure is better than acting afterwards.

This is a reprint from last year:

Annual household energy resilience planning: a new imperative?

For the past 10+ years, in December, I usually publish an entry on winter weather and "maintenance of way" for pedestrians, bicyclists, and transit, as most snow clearance planning and practice prioritizes motor vehicles.

-- "Snow, winter and the Sustainable Mobility City," 2019 (includes links to many previous entries)

While there is a fair amount of writing about how many households are installing generators in places where the electricity system is likely to fail, I haven't been in a situation, either in DC or Salt Lake, where utility interruption is a frequent occurrence, therefore the cost isn't justified.

But we all know what happened in Texas last February, a record cold snap, and the state's regulatory regime's failure to require winter hardening for critical supply and transmission infrastructure, in particular natural gas, led to massive failures across the state, blackouts, water system failure, and many hundreds of deaths.

-- "Talk and lying versus doing: The electricity crisis in Texas is produced by state regulatory failure"
-- Cold wave: the Texas power debacle disproportionately impacts the less well off"
-- "It's not rocket science: 10 ways to fix the Texas power grid, according to experts (From the Houston Chronicle)"
-- "October is National Energy Awareness Month"

In response, mostly the State of Texas has done very little to mandate system hardening, even though the Federal Energy Regulatory Commission once again has recommended that they do so, just as they did after a similar but less deadly event in 2011 ("Feds call for more regulation of Texas power grid, natural gas industry," Austin American-Statesman).

So what's up for Texans this winter?

The Dallas Morning News reports ("ERCOT report says Texans face steep shortfalls in power capacity if extreme event hits this winter") that the state energy coordination ERCOT, is warning Texas residents that the state is still vulnerable to catastrophic utility interruptions, if this winter is particularly cold.

Texas’ grid operator on Friday released its predictions for peak electricity use in Texas for this winter that showed steep shortfalls in power capacity in an extreme event, despite not accounting for February’s deadly freeze. 

ERCOT’s power demand projection known as the Seasonal Assessment of Resource Adequacy was already facing criticism for using data that did not account for climate change and did not take into account weather and outage data from February’s deadly winter storm. 

The main failure of the report, according to Texas A&M University professor Andrew Dessler, is that the Electric Reliability Council of Texas based projections of extreme demand on the 2011 winter event that left wide swaths of North Texas without power. 

Dessler, an atmospheric sciences professor, said the report shows that Texans have around a one-in-10 chance of seeing weather-related power outages this winter. “One in 10 years seems to me to be not a great worst-case scenario,” Dessler said. “That means that there’s a 10% chance we’re going to do worse than that.”

It's definitely criminal that the State Legislature, Governor, and regulatory authorities have basically done nothing in response to February's crisis, which also affected states outside of Texas, because they were dependent on natural gas supplies from Texas.

This means that residents that can afford it are likely to install generators ("Facing power grid anxiety, Texans are buying generators and bracing for blackouts," San Antonio Report), install converters if they have solar power systems, and buy vehicles, like the Ford F-150 truck, which if you buy the special electricity generation package can power their houses in case the utility distribution system fails, although it still needs gasoline ("Texas man uses new 2021 Ford F-150 to heat home, power appliances during blackout," Detroit Free Press).

But what about the people without the means to protect themselves by buying large stocks of water and generators?

And in any case, if water systems fail because of power interruptions, people will have to store large supplies of water as well.

======

States that frequently experience winter cold have long since weatherized their electricity generation systems.  It's the southern states, that before climate change became as serious as it has didn't worry much about "cold snaps," that haven't done this.  It's particularly important in Texas, since it is such a large energy producer.  When systems fail there, they don't just effect Texas, but all the other states that rely on Texas energy production.

 

Hurricanes and the preponderance of chemical and oil company facilities on the Texas coast: How to mitigate the risk?

Hurricane Katrina and the devastation of New Orleans.  This is the 15th anniversary of Hurricane Katrina and I've been thinking about how the failure of the levees in New Orleans and the subsequent inadequacies of the disaster management response are some of the first major catastrophic failures of the US federal government in the neoliberal age.

Federal government failure becomes more routinized.  It's not been until the chaos presidency of Donald Trump that catastrophic failure of federal government operation has become an almost daily occurrence, with the denouement in the over 180,000 deaths associated with the coronavirus.

But it's also the logical result of underfunding government activity for the past 40 years as a result of a market (neoliberal) approach to the philosophy of government, and the press to continually lower taxes.

-- "We Are Living in a Failed State," The Atlantic

Photo: Robert Sullivan/Agence France-Presse — Getty Images. There are hundreds of chemical plants and 7 major oil refineries in the Galveston Bay and along the Houston Ship Channel.

The disaster risk presented by Galveston Bay and the Texas coast.  So an op-ed in the New York Times, "Texas Is Running Out of Near Misses," by Professor Jim Buchanan of the Rice University Severe Storm Prediction, Education and Evacuation from Disaster Center, about the risk from presented by the conglomeration of oil and chemical production facilities on the Texas coast, is particularly prescient.

Note that last year, a fire at a petrochemical plant, which led to the closure of part of the Houston Ship Channel for three days was said to cost petrochemical firms $1 billion in lost economic activity--that's three days, for part of the channel ("Houston Ship Channel closure could cost energy industry $1 billion," Houston Chronicle).

High water and heavy industry on Lake Charles on Thursday. Credit: William Widmer for The New York Times

Both in terms of the anniversary of Katrina but also the current Hurricane season, where as an example, Hurricane Laura caused major damage in Louisiana just last week.

-- "Laura Hits Petrochemical Region, and a Factory Goes Up in Smoke," New York Times

Besides taller barriers (perhaps using the Thames River barrier in London as a model), the Rice Center proposes a system called the Galveston Bay Park Plan, of newly constructed islands, parks and open space as "soft" responses as a way to mitigate flooding.

According to Professor Buchanan, there are at least three problems with how the Army Corps of Engineers is dealing with the problem.

1.  Failure to plan for extremes.  They aren't planning for more extreme storm surges ("Texas, Corps Outline $31 B Plan to Protect State's Coast," Engineering News-Record), even though storms in the present and future are likely to be worse than the storms from the past 100+ years ("Climate change didn't cause Hurricane Laura but it did make the storm worse," CNN), and existing models tend to be based on past storms ("risk of 1 in 100 year flood, etc.).

From the op-ed:

In its continuing studies to design protection for these facilities, the methodology used by the Army Corps of Engineers substantially restricts the size of storm to be used in the design of protection structures. This methodology is outdated, does not adequately address the environmental and economic risks associated with such storms and does not factor in climate change and its impact on storm intensity.

Houston Ship Channel.  Photo: Brett Coomer, Associated Press

By contrast, the Nuclear Regulatory Commission accounts for extreme surges in its safety guidance for nuclear plants. The commission has been doing this since 2012, after the Fukushima disaster, when it issued a letter recommending that an estimation of low-risk surges be incorporated into the design and permitting of nuclear power plants.

The comparison of these policies with those currently used by the Army Corps of Engineers is revealing. The nuclear agency evaluates the hurricane surge for a plant near Bay City, Texas, and concludes that it would have to design for a surge of more than 30 feet above sea level.

By contrast, the coastal spine, a set of 14-foot-high barriers and a two-mile-wide gate structure designed by the Army Corps of Engineers to protect the Galveston Bay system (an area comparable to Bay City) is meant to protect against a 17-foot surge at the coast — insufficient for the surge generated by either a Category 4 or Category 5 storm. Indeed, with a category 5 storm, over 100 separate chemical plants or refining facilities would be flooded, assuming the construction of the $20 billion coastal spine federal project.

Given what happened in Fukushima and how going forward it's more reasonable to expect more virulent storms compared to the past, this severe disconnect between the agencies illustrates the need for more robust and resilient planning schemes across the federal government and between federal agencies. 

During Hurricane Katrina, the floodwall and levee on the 17th Street Canal in New Orleans collapsed without being overtopped. It was one of about 50 breaches in the flood protection system that was supposed to repel "the most severe storm" that could be expected in the area.

When given the choice, the standard practice should be to adopt stronger, rather than weaker, protections

2.  Inadequate cost-benefit analytical frameworks.  Because of the failure to acknowledge the likelihood of higher storm surges, based more on future predictions rather than past experience, the ACE cost-benefit analytical calculations don't support building a more robust system of barriers.

3.  How to pay for it?  Given Republican opposition to funding infrastructure, it will be difficult to get federal funding.  A more robust storm surge protection project for the Texas coast could cost upeards of $60 billion.

I took issue with one of the suggestions in the op-ed, identifying "social impact bonds" as a way to help finance the system.

Social impact financing involves monetizable revenue streams with the potential for extranormal returns and for financial savings compared to current program expenditures. While the use of social impact bond financing is still very new, it doesn’t lend itself to funding the arts which very rarely has the ability to generate extra-normally positive cash flow or cost reductions in programs.

The examples I am familiar with, such as Salt Lake County’s funding of early childhood education, tend to involve social programs expected to reduce government expenditures over time if successful, but the government lacks the money and/or appetite for risk necessary to finance the program through on its own.

Unless insurance companies are going to be willing to pay social impact investors a return on disaster effects foregone, I can't see how a social impact bond investor can see how there will be returns on using SIBs to fund flooding defense systems.

It's not like the Thames River barrier in London was funded by the private sector.


But thinking about it more, some kind of program for paying into a fund to mitigate the potential risk is in order.

Do insurance companies, reinsurers and capital markets help finance it ("Insurers Are Going High-Tech to Mitigate Risk This Hurricane Season," Fortune Magazine, Insuring hurricanes: Perspectives, gaps, and opportunities after 2017," McKinsey) since they'd be saving so much money by avoiding disaster?

Levees are paid for in part by the creation of special service districts which assess an add on property tax.  How about a special tax on the major property owners likely to be catastrophically affected by storm surges?

Given the environmental and economic disaster that would result from storm surges and catastrophic rains, it seems clear that a much taller barrier system needs to be created.

And that it should be considered a high priority given the risk.