Given that the U.S. gets about 40% of its electricity from natural gas, and much of the natural gas delivery sector is powered by electricity, a reliable supply of both electricity and natural gas depends on these two sectors working together to their mutual benefit.
This was powerfully illustrated in recent years in a recent cold weather events that froze wellheads, shut down compressor stations and caused natural gas power plants to go offline for lack of fuel.
In response to what they call a growing reliance on gas-fired power generation, several regional transmission organizations released a joint position paper for increasing collaboration between power grid operators and natural gas infrastructure regulators and operators.
The RTOs include ISO New England, Midcontinent ISO, PJM Interconnection and the Southwest Power Pool. Together, these electricity reliability organizations serve all or parts of 36 states and deliver electricity to 144 million people. This area runs roughly from the eastern edge of the Rocky Mountains to Washington, D.C. up to Maine — excluding the South, New York State and most of Texas. Manitoba, Canada is also included, via MISO.
“Gas-fired generation plays a critical role in helping to balance the grid,” according to the paper. “[G]iven our growing reliance on gas-fired generation, our role as reliability coordinators for over two thirds of the nation compels us to keenly focus on effective gas-electric coordination.”
Motivations for the joint blueprint included constraints on the gas pipeline system, a difficulty in building new infrastructure, and forecast increased in demand for electricity.
The paper names three goals:
Gas market enhancements to help improve supply and pricing options to ensure reliability given a rapidly evolving electric generation fleet. This recommends increasing natural gas commodities market liquidity and transparency, especially during times when markets are traditionally closed, such as holidays and weekends. The paper says FERC, the National Association of Regulatory Utility Commissioners (NARUC), gas pipeline operators, gas marketers and power plant operators could conceivably work on this.
Operational enhancements to proactively address specified reliability needs and identified vulnerabilities. This includes identifying what vulnerabilities the natural gas and electricity sectors share, and determining how these can be addressed. Weatherizing natural gas wellheads and electricity-powered gas compressor stations is one solution mentioned. FERC does not regulate wellheads, according to the paper, so this would require the participation of NARUC, the United States Pipeline and Hazardous Materials Safety Administration, gas suppliers and potentially state governments.
Regulatory coordination of state and federal authorities to address emergencies. This includes addressing the U.S. Department of Energy’s handling of fuel emergencies, as well as curtailment policies at the state and federal levels. This goal would require some use of the Defense Production Act and possibly other statutory tools, or perhaps congressional action.
The paper also states that while permitting reforms for transmission and natural gas pipeline projects are under consideration currently, they are talked about separately in a way that does not consider how the two systems are interdependent upon one another.
“The electric industry and gas pipeline industry should coordinate so as to better educate policymakers on the interdependencies of these two systems and the need for permitting reform to address these co-dependencies in a comprehensive manner,” according to the paper.
Expanding critical infrastructure and developing a criteria for when expansion is needed is a huge issue that requires more dialogue, according to the paper. Demand for more throughput and more adaptable use of the pipeline system by gas power plants is in conflict with both the need for new infrastructure and the traditional regulatory roles assigned for pipelines and the gas market, according to the joint RTOs.
Key problems for power grid operators include impending power plant retirements as well as the difficulty of getting new transmission lines built. The DOE's Energy Information Administration said recently that power plant retirements have slowed to a pace not seen since 2008, but natural gas-fired units will continue to go offline in coming years. Nearly half (46%) of planned capacity retirements will come from natural gas-fired units.
For the gas sector, there is the issue of needing more production, transportation and storage capacity for natural gas. Entities are also slow to invest in new infrastructure for the gas market because of permitting complexity, NIMBY-ism and site opposition, as well as federal environmental regulations. Transmission developers also face these issues.
While the paper states that the RTOs are not trying to set solutions in stone, the position paper identifies a few short-term action items:
- Market Enhancements: This means more gas market liquidity, transparency and system flexibility — including during weekends and holidays.
- Operational Enhancements: This means working to address the vulnerabilities shared by gas delivery and power grids.
- Regulatory Harmonization: The RTOs want state and federal curtailment policies to align and have a clear authority during emergencies — namely through the DOE.
The paper states that recent extreme weather events have shown the need for addressing these mutual weaknesses.
“During Winter Storms Elliott and Uri, both the gas and electric systems identified instances where effective winterization efforts could have reduced vulnerabilities on both systems. Certain electric[1]powered natural gas compressor stations and processing facilities were affected by an interruption of electric supplies, which then led to declines in available commodity to fuel electric generators. In short, the co-dependencies, without adequate backup facilities, can represent a significant area of vulnerability for both systems. recognizing these vulnerabilities, we can increase our collaborative efforts to address and mitigate these issues,” according to the paper.
