Natural gas production in Texas fell by nearly half during the week of the historic winter freeze in February - an important factor in the massive blackout that caused dozens of deaths and billions of dollars in property damage - but A new report paid by the major sectors of the natural gas industry, the trading group largely relieved it of any responsibility for the disaster. (Jim Parkin / Dreamstime / TNS)

Washington - Following the massive blackout in Texas in February, not only did millions of people lose power, but it also caused the price of natural gas to soar. U.S. Representatives Joaquin Castro and Lloyd Doug Lloyd Doggett) will introduce legislation on Wednesday to allow the federal government to intervene in the US natural gas market during times of stress.

The Texas Democrat’s legislation will create what Castro calls “market fuses,” through which the Commodity Futures Trading Commission will order state regulators to set natural gas price caps during periods of extreme volatility, such as weather emergencies. . Castro of San Antonio described the mechanism as necessary to prevent oil and gas companies from "kicking up prices."

He said in a statement: “Although families in Texas face life-and-death situations and struggle to stay warm in cold temperatures, natural gas sellers have earned more than $10 billion by raising prices by 10,000%. Profit." "Texans in need should not pay for the greed of oil and gas companies trying to profit from their suffering."

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Last winter, as historically cold temperatures swept across Texas, the price of natural gas along the Houston Waterway increased by more than 100 times, from $3.72 per million British thermal units on February 11 to February 17. 400 dollars.

This caused huge losses to power companies and utility companies, threatening the financial crisis in the Texas power sector, and when the state legislature passed legislation allowing these companies to obtain billions of dollars in taxpayer-backed bonds. The crisis was avoided.

Now, some regulators are asking what can be done to avoid repeating the same mistakes.

A Valero Energy Corp. refinery is in Corpus Christi, Texas, USA on Friday, February 19, 2021. Due to mild weather and reduced power outages, the energy crisis that plagued the central United States has eased, and natural gas futures fluctuated on Friday. Photographer: Eddie Seal/Bloomberg

"I believe that if Congress grants, whether it be FERC or other agencies, some kind of circuit breaker power when extreme prices appear, (to) impose some kind of restrictions at certain times, it will be helpful," the Federal Energy Regulatory Commission Committee chairman Richard Glick said at the hearing last month.

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This move may arouse strong opposition from oil and gas companies, which, under state and federal laws, have no restrictions on how much gas they charge—even though power plants that use their products can charge.

But for natural gas and power utilities like Centerpoint Energy, which charged billions of dollars in excess natural gas fees during the winter storm in February, the price cap would be a major benefit, not just for their bottom line. , And for them eventually pass these costs on to customers.

Paula Gold-Williams, CEO of San Antonio Utilities CPS Energy, said in a statement provided by Castro: "Although our friends and neighbors in Texas are working together to meet unprecedented challenges , But some natural gas suppliers are busy making profits at the expense of the public interest.” Office. "As not all market participants have the ability and willingness to challenge this predatory behavior by law, we believe that the development of additional statutory standards will be very helpful to protect more consumers from future natural disasters. An attempt to make a profit."

James Osborne reports on the intersection of energy and politics from the Houston Chronicle bureau in Washington, D.C.

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