Rolling Blackouts in Texas — Sneak Preview of the Brave New World of Deindustrialization

It is the supreme irony that an outbreak of unusually cold weather has exposed ominous signs of weakness in an industry about to be further hobbled by regulations designed to combat global warming. It is doubly ironic that this should have occurred in a state whose name is more or less synonymous with energy production.

Texas, which produces and consumes more electricity than any other state, experienced power shortages last week sufficient to warrant rolling blackouts and an undertaking (subsequently reneged upon) to import power from Mexico.

In fairness to operators such as the Electric Reliability Council of Texas (ERCOT) – who caught the brunt of the public wrath over the rolling blackouts, especially when critical care facilities also had their lights turned out – it is true that the power shortages were caused by failures of power plants not designed to withstand the cold.

All power plants are built to a certain standard based on the weather expected in their location. The plants in the northern parts of the United States are more weatherized than those in the South, according to electricity traders who used to work at power plants.

In the North, plants have heaters and monitors on water pipes and other equipment outside in the cold that in the past may not have been needed on plants in the South.

But in the South, where temperatures can top 100 degrees Fahrenheit (37.8 Celsius) for several days in a row, plants are designed to take the heat much better than units in the North.

More than 50 power units representing more than 7,000 megawatts of generating capacity were unable to run Wednesday when the mercury dropped and a fierce winter storm dropped snow and ice on several parts of Texas.

Fair enough, but the larger — and more interesting — question is why sufficient extra capacity wasn’t available in the system to offset the shortfall. One would expect that Texas with a daily demand of around 60,000 MW should be able to withstand a 12% reduction in output without seeking help from another country or turning off the respirators at Parkland Hospital every 45 minutes.

This would be the same “reserve margin” question ERCOT itself expressed concerns about back in late 2008:

ERCOT said in its annual report on electrical generation capacity and demand that the cushion of excess capacity in Texas could drop below the council’s target in 2014 and 2015. That’s because a natural gas power plant that was scheduled to begin operating in 2013 won’t go online at that time.

ERCOT aims to keep at least a 12.5 percent reserve margin to maintain reliability, even if several power plants go out at the same time. ERCOT estimates that the reserve margin will be 21.8 percent in 2010 and will drop to 12.3 percent in 2014 and 10.2 percent by 2015.

It would appear these projections were a little on the optimistic side. But who could have known — except anyone who listened to candidate Obama for five minutes — that the EPA would arrogate to itself massive new de facto regulatory powers and ensure that anyone still foolish enough to consider building anything that didn’t have the words “green”, “solar” or “wind” in it would come to understand his folly somewhere between the umpteenth delay and final bankruptcy?

Perhaps sensing that Obama might not have been kidding, ERCOT wisely hedged its bets at the conclusion of the report:

The reserve margin estimates are a moving target. Every time another power plant gets a permit or is delayed, the forecast changes.


Further, developers are considering building power plants amounting to more than 30,000 megawatts of capacity in the next five years. ERCOT doesn’t include those plants in the report because they lack either agreements to interconnect to the power grid or air permits.

The words “air permits” here should probably be set off in huge granite letters like “Ben Hur”, such is their importance and relative immovability.

According to the U.S. Energy Information Administration:

Natural gas-fired power plants typically account for about one-half of the electricity produced in Texas and coal-fired plants account for much of the remaining generation.

Please note the absence of the words “green”, “solar” or “wind” in that sentence. If you’re the State of Texas you’ve got to be basking in the EPA love as they glower over their bifocals in disapproval.

Not that Texas didn’t give it the old college try. Consider this unintentionally hilarious paean to wind-power of another kind:

Although renewable energy sources contribute minimally to the Texas power grid, Texas leads the Nation in wind-powered generation capacity, and substantial new wind generation capacity is under construction.

Got it. Texas has been browbeaten into constructing enough of these white elephants to surpass California in pouring money down this particular rat-hole and now leads the nation in wildly uneconomical and utterly insignificant alternative energy output. This has to be great comfort to the Texans as they freeze in the dark.

And in the end they needn’t have bothered. An altogether unimpressed EPA has decided to make Texas — one of the few states to challenge its recent decision to regulate greenhouse gas emissions from power plants and oil refineries — its poster child by directly taking over its greenhouse gas permitting program.

The facts are painfully clear; because of the EPA’s obsession with global warming, which has spawned the lunatic classification of carbon dioxide as a pollutant, an already onerous regulatory system is about to become much worse. We have already lost years in the struggle to keep our energy supply apace with growing demand by banning and/or over-regulating our most economical sources such as fossil fuels and nuclear while promoting “green” solutions, some of which may someday be economically viable but whose adoption can only be considered premature at this point.

Organizations like the Sierra Club, who have no idea how to change a lightbulb much less power one, may get positively giddy when announcing that 150 planned coal-fired plants have been canceled since 2001, but the Chinese, with whom we are presumably supposed to compete, have no such misgivings.

The net result of crippling energy solutions that work in favor of those that don’t is progressive deindustrialization. If the EPA prevails in its attempt to micromanage power plants with an army of carbon-sniffing bureaucrats, long on ideology and short on industry experience and expertise, we will all look back on the rolling blackouts of 2011 with nostalgia.

(Cross-posted at NewsReal Blog.)