What’s behind the devastating power outages in Texas? Some say the problem was freezing natural gas pipelines; some say it’s because wind turbines froze, or because of mismanagement by the Electric Reliability Council of Texas (ERCOT).
Jason Isaac, who predicted a power crisis in Texas months ago, explains what’s going on in Texas. He’s the director of Life:Powered, a national initiative of the Texas Public Policy Foundation seeking to “raise America’s energy IQ.”
Jan Jekielek: Jason Isaac, such a pleasure to have you on American Thought Leaders.
Jason Isaac: It’s wonderful to be back here Jan, Thanks for having me on.
Mr. Jekielek: So Jason, 2 million homes basically lost power in Texas. I believe on the 15th, 16th. Right now, from what I understand there are about 200,000 customers or meters that still don’t have power. There’s all this information out there on social media, conflicting information and various media about what actually happened. Why don’t you give us your take?
Mr. Isaac: Sure. This is a culmination of bad policy that’s been put in place that’s been distorting the market for decades now, not only in Texas at the federal level, but has propped up one form of energy production that’s unreliable over another form of energy production that is reliable. Market distorting policies at the federal level have propped up wind and solar that are intermittent, variable, unreliable sources that only provide electricity when the wind is blowing or the sun is shining.
They have competed so much that they’ve outpaced and outplaced and displaced natural gas, clean coal and nuclear generation. We’ve seen a net loss of thermal generation, which is electricity from natural gas, coal, or nuclear over the last five years, a decrease, when our population, our economy have not gone in that direction, they’ve actually increased significantly.
But we have seen a massive increase in wind and solar generation over the last four years that just didn’t come through, an incredibly small percentage of electricity being generated on Valentine’s night and early President’s Day morning, Monday morning from these unreliable sources. That is really the precipice of how this began. It just wasn’t a one time issue. We’ve known this was coming for years at the Texas Public Policy Foundation. I actually wrote about this and warned about this eight months ago. So it was unexpected by some but predicted by others, including myself.
Mr. Jekielek: I want to dig into that part as well. But can you give me the best that you’ve got from [the] verified knowledge, that kind of play-by-play of what happened on the 14th to the 15th and take us through today?
Mr. Isaac: Demand started increasing significantly on the night of the 14th. As temperatures dropped to record lows throughout the state of Texas, there wasn’t supply to meet that demand. So what happens is, you have to begin rolling outages, the lines and the grid have to maintain a certain voltage. If that voltage drops too low, you trip power plants. This is the reason California was doing rolling blackouts earlier or last summer to prevent tripping power plants [from] essentially blowing a fuse and shutting that plant down.
Unfortunately, our grid operators, the Electric Reliability Council of Texas or ERCOT, were asleep at the wheel late Sunday night and demand increased faster than supply could. It caused the charge and aligns to get too low and several thermal power plants, coal and natural gas tripped offline, thus exacerbating the problem.
Mr. Jekielek: Bill Magness, I believe who runs ERCOT, we have him saying that the grid was basically moments away from some kind of a total blackout or a long term blackout. Can you kind of explain to me what actually happened?
Mr. Isaac: So ERCOT woke up and realized that they needed to begin implementing rolling outages immediately. Even though a couple of thermal plants had already tripped, it could have gotten worse, and they began rolling outages immediately. That’s where you have to keep the charge and the lines high enough. You do that by essentially forcing the elimination of demand and you shut off numbers of homes throughout the state of Texas. That’s what they began doing.
One of the things that made the problem completely awful was they did rolling outages throughout the Permian, one of the largest oil and gas fields in the world. They rolled power out at substations that are providing the gas supply, to the power stations that are generating this thermal electricity with natural gas. We saw an incredible decrease. The natural gas supply almost went to less than 25 percent of its normal supply when there was incredible demand for home heating and electricity. [It was] a complete, colossal mistake to have a rolling outage at substations that are providing the natural gas that our state so desperately needed.
Mr. Jekielek: So now as we continue with our play-by-play here, power starts coming back, but there’s still 200,000—I don’t know how many right now, we’re four or five days into this whole thing—and there’s still 200,000 homes or customers that are out of power.
Mr. Isaac: There are about 200,000 meters or maybe half a million Texans that still don’t have electricity. Cold winter times are much more deadly and dangerous than summer times. I really thought this would happen in the heat of an August, Texas summer when demand skyrockets. But unfortunately, it happened here in February during an unprecedented cold spell in Texas, where we’ve had these prolonged sub-freezing temperatures.
People are now getting their power back on, but what happens is you have trees that freeze that haven’t been trimmed around power lines trees and residential areas that are falling on home power lines. That seems to be the biggest issue now. The grid is back up, demand has stabilized, production has stabilized. Those power plants that were tripped off by poor management at the grid, at the ERCOT level, those plants have come back online.
It takes sometimes days to get a power plant back online. You just don’t go flip a breaker switch and it comes back on and starts producing gigawatts of electricity. That doesn’t happen. But most of the problems, if not all the problems we’re seeing right now are attributable to power lines being down because of tree damage and other issues like that.
Mr. Jekielek: Jason, before we continue, just explain to me exactly how this tripping works that ends up shutting down an entire power plant.
Mr. Isaac: The grid has to be stable and the lines have to be charged. If they’re not charged, that’s where you start to run into some safety issues and equipment will overheat, the turbines will spin out of control. So there are safety mechanisms that are built into these natural gas and coal fired power plants. So [if] demand increases significantly, [and] there’s not enough supply there, the charge drops in the lines, and that triggers the power plants to shut off, and that completely exacerbates the problems.
So how do you control that? You control that by doing rolling outages. Those rolling outages should have begun Sunday night where you take a couple of 100,000 homes off of electricity for 30 minutes, that keeps the supply and the lines charged up high enough, and you essentially force demand down to keep from tripping power plants.
But that didn’t happen Sunday night or Monday morning, the power plants tripped. We lost several thermal generating power plants, which are coal and natural gas, and that completely exacerbated the problem. Had there been any more delays in beginning these rolling outages, the rolling brownouts, we would have seen a system wide failure of the entire grid in the state of Texas, which supplies power to about 90 percent of the population in the state of Texas, and that could have been months long power outages.
Mr. Jekielek: That’s interesting, because the Texas grid is unique from what I understand, in that it’s actually largely independent, about 90 percent independent of the rest. Now there have been some calls to actually integrate, based on what we just saw, to integrate the Texas grid. Governor Abbott said, “No, I don’t think that’s a good idea,” from what I understand. What’s your take here?
Mr. Isaac: No, we’re an independent state, and we like to have our Texas independence. The last thing we want to do is have our grid controlled by any kind of federal regulatory agency or the federal government. We like having it independent, we like managing it. We want to see the elimination of these market distorting policies that pick one type of winner over another type of reliable source of electricity generation.
We’re already connected to the eastern grid and the western grid, and even Mexico. We do power sharing and power trading with those interchanges to the east, to the west, and to Mexico from time to time. Sometimes we’re importing electricity from Mexico, and other times we’re exporting it. It seems to work, the setup is good. The management was poor, and market distorting policies via subsidies have really hampered us, and this has been a long time coming.
Mr. Jekielek: They weren’t able to pull energy from these other grids?
Mr. Isaac: Not a significant amount to help prevent this problem at all. If you will, the electric pipes aren’t big enough to pull in that much electricity from the surrounding grids.
Mr. Jekielek: So one of the things that I’ve seen referenced repeatedly is this idea that these coal and natural gas plants actually froze and failed for that reason. Can you speak to that, please?
Mr. Isaac: There is some winterization that’s needed, and that’ll certainly take place. That will happen. Absolutely, when these power plants were tripped offline, and not being utilized, you have parts that aren’t moving, and those parts will freeze up. I’ve seen where people said natural gas froze. Natural gas methane freezes at minus 256 degrees.
It may have felt that cold in Texas. It wasn’t that cold, but some of the nozzles and some of the valves had condensation built up on them. When they rolled an outage through the Permian that impacted natural gas supply throughout the state. When you trip power plants offline because of poor management, that’s going to affect their operation. Surely, there were some power plants that went down, and then materials and mechanics started to freeze up because of the excess coal that we had.
Mr. Jekielek: Because [with] these thermal generators, it’s actually steam or water that’s used to actually drive the turbines, right?
Mr. Isaac: That’s absolutely correct. Thermal generation is steam that’s generated from heat, whether it’s nuclear, natural gas, or coal. If you’re not generating any heat in the extreme cold, like we’ve seen here over the last week, you’re going to have some components that do freeze up.
Mr. Jekielek: So in your argument here, you’re talking about these various scenarios where the non- renewable sources or as you call them, unreliable sources, are based on policy that are basically being built preferentially, presumably there’s subsidies or something of this nature. You have some clear policy ideas around what should be done here, please.
Mr. Isaac: In talking about renewables or “unreliables,” those are heavily subsidized to the tune of billions of dollars a year from the federal and the state level. It’s interesting because some of the renewable or unreliable generators will say we save ratepayers a billion dollars. It’s interesting because last year in Texas alone with Texas tax dollars they took in and reduced their expenses to the tune of a billion and a half dollars.
So taxpayers are not winning out. Ratepayers are certainly not winning out by having this unreliable source of generation. A week ago, I didn’t know if we were going to have a lot of success getting our policies in place that would require unreliable electric generation providers to have reliable backup, basically dispatchable electricity on demand.
So, if you’re going to build a wind farm, that’s fine, but you’ve got to put in natural gas peaker plants, which are less expensive, smaller, and you can get those built quicker. You’re gonna have to put those on the grid so that when the wind stops blowing, if you need to produce electricity for Texans, then you’re going to have to do it with another means. We can’t just have this level of unpredictability, waiting for the wind to blow and the sun to shine. So our electric providers that are putting generation on the grid need to be held to reliability standards, and the market needs to drive affordability.
Mr. Jekielek: It’s interesting, because you would imagine that this is common sense that you need to have a backup for these systems that are on and off, depending on the availability of the wind or the sun.
Mr. Isaac: Yes, you’re exactly right. If you could only keep your refrigerator cooling food and protecting it from growing dangerous bacteria between the hours of 3 p.m. and 6 p.m. when the wind is blowing, you’re going to find a way to back it up, for instance, a generator to make sure that your food stays cold. We should do the same thing with our electric providers that are putting massive amounts of electricity on the grid. It just needs to be reliable.
This variable, unreliable generation has put us in this dangerous situation that’s been propped up by “Green New Deal-lite” type of policies that have been put in place for the last 40 years when wind first started getting its federal subsidies. “This is just temporary, it’s just meant to prop them up and help them get going.” Here we are 40 years later, and it’s putting Texans lives on the line and completely distorting our market.
Mr. Jekielek: Can you give me a sense of how or why it makes economic sense for most people that are choosing to build electric plants to be going for solar or to be going for wind? How impactful are these subsidies actually, and how has it changed the system and how has that growth curve changed?
Mr. Isaac: I’m glad you asked about the market distorting policies that the subsidies from both federal and state levels that have made it more advantageous to build and install wind and solar over reliable sources of generation. We’ve done extensive research on this at the Texas Public Policy Foundation, talking about the massive amount of subsidies that they get per kilowatt-hour of electricity generated and it favors wind and solar.
When you get these massive subsidies, it allows you to put your product on the market at a lower price, and that lower price gets priority placement on the grid. There’s been times in Texas where wind was actually paying the grid operators, the customers to take their product, and still making money. So imagine if you’re a food business, and you want to sell the exact same product as another competitor, but that competitors paying their customers to take that, you’re not going to survive. That’s why we’ve seen this net loss of thermal generation from natural gas, coal and nuclear because they can’t compete with a company or business that is providing their customers free electricity or even paying them to take it.
Mr. Isaac: It’s one of the reasons you see some of these companies that are heavily involved in the production of fossil fuels that are now getting involved in unreliables, wind and solar. They’re virtue signaling to their activist investors, but they also recognize they can make money doing it off the backs of taxpayers and ratepayers. It’s another reason you’ve seen a lot of foreign companies in Texas that are investing in this. The French government owns EDF Renewables, over 60 percent of that company, and they’re investing in wind farms in Texas. So in Texas, we’re subsidizing socialism. The Chinese communist government has purchased thousands and thousands of acres in Texas to build wind farms and solar farms.
Mr. Jekielek: It’s incredible to hear that, especially when we’re talking about communist dictatorships committing genocide by the U.S. government’s own observation, so to speak.
Mr. Isaac: We’re subsidizing that. It’s heartbreaking to think that people are working harder to provide for their families, while at the same time paying more for electricity and sending our tax dollars overseas. [That] absolutely should not be the case in Texas or anywhere in the United States for that matter. We need to produce American energy. We do it better than any other country in the world here in the United States, and we produce it cleaner, more environmentally friendly, more efficiently than anywhere else. We should be taking that energy and exporting it around the world.
In the northeast in Massachusetts, they actually import liquefied natural gas from Russia, in Massachusetts. We produce that natural gas here in the United States cleaner than anywhere else in the world, but because of politicians in New York that are anti-pipeline, the safest means to transport goods, we can’t get that natural gas from even Pennsylvania to Massachusetts. Those are some policies that need to change.
Mr. Jekielek: On the policy front, let’s say that you are pro-renewables, or as you call them, unreliables, but let’s just say you’re pro-renewables. You mentioned a few policy points. One of them is to have these backup gas or coal stations that can cover for these types of extreme situations, like what we see now. You mentioned some other policy directions, for example, not subsidizing other countries developing that, especially dictatorships. What is the policy outlook in an environment where renewables are still very much on the table. What are the recommendations?
Mr. Isaac: Again, some of the policy ideas are to eliminate these subsidies and level the playing field, eliminate the subsidies. You hear the Biden administration, talking about eliminating subsidies and tax breaks for the production of oil and gas or fossil fuels. We need to eliminate those subsidies across the board and completely level the playing field.
At the Texas Public Policy Foundation, we are a free enterprise, free market organization that would support those policies in getting rid of all market distorting subsidies throughout the United States for all forms of energy production. Let’s let the market compete. That’s where you would invite more competition to the market. The consumer wins when there’s more competition. Prices would go down and affordability would go up.
We’ve already been in conversations and communications with members of Congress from all over the country on some of these policy ideas, as well as the state legislature in Texas, and several other legislatures that are fighting back, namely against some of these financial institutions that are discriminating against the production of energy, U.S. American energy—financial institutions like BlackRock. Larry Fink is using his cartel and the Climate 100 [Climate Action 100+] to push back and tell banks not to loan money to American energy producing companies.
That to me is just completely absurd, it’s backwards. We’re producing the cleanest and the friendliest energy anywhere in the world right here in the United States. You have these financial managers like Larry Fink, and people at J.P. Morgan that are pushing back on making funds available. You have insurance companies that won’t make their products available if you’re in the production of oil and gas or if you’re in the forestry business.
These are just devastating policies that are hurting Americans. It’s just going to push production overseas to Saudi Arabia and to Russia. They are loving, loving these Green New Deal proposals, because it’s just going to help them out. It’s not going to reduce demand. It’s not going to reduce production. It’s just going to shift it to other states that are extremely irresponsible with the way they produce it.
Mr. Jekielek: In this vein, the U.S. announced that it’s officially rejoining the Paris Agreement. Your thoughts on this?
Mr. Isaac: We supported the United States getting out of the Paris Agreement. It does nothing to improve the environment, but it does hurt the economy. Even John Kerry came out and said after the U.S. was going to rejoin the Paris Accord, that, “It was too late, that there’s nothing that can be done.” The U.S. is a world leader at reducing harmful pollution. We reduced harmful pollution 77 percent in the last 50 years.
You look at some of these cities in the United States, like Pittsburgh is a great example. It used to be covered in smog 50 years ago, and now it’s beautiful there. I was there last summer, it’s just incredibly beautiful, the air quality is amazing there. We’re number one when it comes to access to clean and safe drinking water. If we really care about the environment, we should be asking our trading partners to sign a “Pittsburgh Accord” that would call on our trading partners to meet our air quality standards because we’re number one in reducing harmful pollution. There’s only a couple of smaller countries that have cleaner air than we do.
Even during the COVID shutdown in the first couple of months, the alarmists were screaming, “This is a perfect reason why we need to go 100 percent electric vehicles because the air quality has improved so much during the first two months of the shutdown, because there are 50 percent fewer cars on the road.”
What’s interesting to note, and we did the research again, at the Texas Public Policy Foundation, you can find this research. In some U.S. cities, the air quality got worse during the first couple of months of this shutdown. It shows that our air quality here in the United States is practically nearing natural state, that weather and foreign air pollution blowing in from China has more of an impact on air quality than Americans do.
Mr. Jekielek: In terms of the standards of the Paris Agreement, perhaps you can speak to this. My understanding is that after the U.S. withdrew five years ago, the U.S. actually met what those requirements would have been, irrespective. Is that correct?
Mr. Isaac: That’s correct. The U.S. was one, I think Gambia and Morocco were the other two that were on the path to meeting the terms of the Paris Climate accord. No others are anywhere close. China is increasing their CO2 emissions. This really has started out as somewhat of a religion to demonize CO2, which is necessary for life on Earth.
Yes, the climate is changing, man has an impact, but we’ve been doing amazing things here in the United States to mitigate that. The changes in weather are more resilient. Man becomes more resilient with access to affordable, reliable energy. The people that suffer from weather-related events are the poorest of the poor. In any effort to have a pro-China carbon pricing policy or a carbon tax hurts the least among us, more than anyone else, and they’re the most susceptible. We’ve got to be producing more American energy and lifting everyone out of poverty around the world.
Mr. Jekielek: Based on the Paris Agreement, what are the restrictions on a country like China who from what I understand is building like a coal plant a day and doesn’t have anywhere near the pollution reducing technologies that the U.S. has?
Mr. Isaac: There’s a big asterisk in the Paris accord that says that if your economy is growing, then you don’t have to meet the terms of the Paris Agreement. That’s the case in China. And that’s the case in India, too. They both have this asterisk. Their signatures meant nothing on the Paris Climate Agreement, whatsoever. We need to hold them to the fire to meet our environmental standards. We’re world leaders in environmental protection.
Mr. Jekielek: Let’s jump back to what’s going to happen next. What’s on the horizon for ERCOT, for example?
Mr. Isaac: I know there’s going to be some Texas legislative hearings next week, February 25th, the House State Affairs and Energy Resources committees will combine to have a hearing to learn more about what happened and why it happened and how to prevent it from happening again.
The ERCOT is this 501C4 nonprofit entity that was created a few decades ago to oversee the grid. The industrial players that are throughout Texas have sent board representation to lead the organization. And actually, five board members of the council don’t even live in Texas, including the chairman, who is an incredible proponent of wind, which may have been part of the reason why we’re there today. She lives in Michigan.
I would expect there’s going to be some incredible regulatory oversight in the Public Utility Commission of Texas. It does have three commissioners that are appointed by the governor. It does have some oversight. I would imagine that oversight is going to be much more strong over this coming Texas legislative session. And we’re going to see some great changes that will hopefully benefit Texans.
I don’t know if it’s going to be enough in time for our August heatwave when our economy is really churning. By this August, we will continue to see emergency situations where businesses are forced to shut off their electricity and send their workers home without pay. That’s not good for those families, but that’s what happens when we don’t have enough market-driven policies in place that help promote the growth of reliable electric generation on our Texas market.
Mr. Jekielek: Basically, you’re saying unless there’s building now or increasing the supply of, as you call it, reliable energy, these thermal sources, it’s almost certain that there’s going to be brownouts in the future.
Mr. Isaac: Yes, I’d written about this last July. If it were not for the COVID shutdowns, we would have had outages last July and August of 2020. And so, we anticipate those will happen in 2021, that we will actually see ERCOT go to an emergency situation, which is the first step where they shut off their heavy industrial users. They actually pay them not to use electricity, the ratepayers do, I should say. And then they’ll begin rolling outages to keep power plants from tripping off, throwing that circuit breaker, and to maintain our grid load.
But that will certainly happen again later this summer if we don’t act now, and it may be too little too late. Because it takes a while to build a new power plant, a new thermal plant. And the battery capacity is just not there. A lot of people on the left are saying, we’ll just use battery supply. The projected battery supply in Texas by 2025 if fully stored and charged will provide point 4% of our electric needs.
Mr. Jekielek: Jason, obviously, you have power as we speak. Tell me how were you and your family affected by all this?
Mr. Isaac: We’ve been abundantly blessed here. We have not lost power or water or gas. The lights flickered one time; that got us a little bit nervous. We had enough food stores; we were fine.
But we have welcomed a family overnight that lives not very far from us that did not have power or water or gas service to heat their homes. We’ve had multiple children that have been spending the night here because their homes just a quarter of mile away don’t have electricity.
Pedernales Electric Cooperative, my electric provider in the hill country here in Texas west of Austin, has done a great job, at least for us. I know they do have some customers that are out because of downed power lines. But we’ve just been abundantly blessed so that we can host people that were not so fortunate.
Mr. Jekielek: Any final thoughts before we finish up?
Mr. Isaac: No, I just hope our legislators get back to work here next week and fix these problems. I’m glad that some of our legislative priorities will now be at the top of the list, so that we can continue to promote affordable, reliable electricity. Hopefully, our grid can maintain that and promote affordable, reliable electricity so that all Texans can continue to flourish and hopefully warm up. But the thaw is beginning here in Texas as temperatures rise, and that’s much, much needed.
Mr. Jekielek: Jason Isaac, such a pleasure to have you on.
Mr. Isaac: Great to be on, Jan. Thank you very much.
This interview has been edited for clarity and brevity.