The Texas oil and gas regulator on Thursday notified producers of the governor’s directive that the state’s natural gas providers not ship outside Texas during a deadly cold snap.
Source: Reuters
Days of freezing temperatures have killed at least 21 people and at one point knocked out power to more than 4 million people in Texas. It shut in about one-fifth of the nation’s refining capacity, closed oil and natural gas production across the state and affected power generation in Mexico, which imports Texas natural gas.
The Texas Railroad Commission, the state’s oil and gas regulator, though, likely does not have the authority to interfere with contracts between companies to sell gas out of state, Commissioner Jim Wright said in an interview on Thursday.
“They’re certainly focused on selling everything they can into Texas, but they’re obligated under contract,” said Wright, one of three elected commissioners. “I’m not sure we have authority to mess with that, nor do I really want to.”
Wright has spoken with Enterprise Product Partners and other companies about the governor’s letter, and said that companies with extra natural gas are already selling into the local market whenever possible.
“I can tell you that anybody with any common sense that has extra gas is certainly trying to sell it in Texas because the price of gas right now is so high,” Wright said, adding that by the weekend, the power crisis in Texas is likely to be resolved.
The mandate from Governor Greg Abbott asks producers to “take all reasonable steps” that Texas-produced natural gas be available for local power generation.
The Mexican government called the top U.S. representative in Mexico on Wednesday to press for natural gas supplies as power cuts there have hit millions of residents.
Texas exports gas by pipeline to Mexico and ships carrying liquefied natural gas (LNG) from terminals in Freeport and Corpus Christi. It also supplies numerous regions of the country, including the U.S. Midwest and Northeast.
