After a severe winter storm battered the State of Texas with a generational storm earlier this week, including record-low temperatures and enough snowfall for skiing around Lake Travis, millions of Texans have been left without electricity and heat. At its peak, more than 4 million households were cut off from power. Once promised rolling blackouts turned into days without power for some Texans – some who are still without power at the time of writing.
As one would expect, the responses of leaders throughout the state have been mixed. Some cities, including Houston and San Antonio, kept the downtown lights on as their residents languished in the dark. Other cities, like Dallas (and Houston, in turn), shuttered the lights to conserve energy. Many leaders requested that those individuals with power refrain from using it until a sustainable cycle could be attained. However, a significant number of residents have been seriously injured or have even died from car accidents, smoke inhalation due to indoor fires, and carbon monoxide poisoning after using their cars to keep warm.
On the industry side, energy companies have been overwhelmed by complaints from rightfully dissatisfied customers while political leaders throughout the state add fuel to the proverbial fire by deflecting blame from themselves on to Washington politicians and clean energy sources. In the long term, retail energy providers will likely suffer greatly due to surging energy prices over the past several days.
One of the biggest entities that is facing blame at the moment is the Electrical Reliability Council of Texas (ERCOT). Texas famously maintains its own power grid – mainly for political and financial purposes. However, this also means that Texas is largely on its own when it comes to facing surges in energy demand. The week’s storm answers the question of what happens when demand exceeds supply for extended times, and also the underwhelming level of preparedness and responsiveness from the State and its leaders.
“I simultaneously wear a number of hats in the Energy industry”
Shared Ralph Cantafio, a partner attorney with Cantafio Nagel & Song PLLC. “Many focus on climate change, which is fair, but grid failure as we have just witnessed in Texas impacts everyone – whether we are talking about large multinational corporations, small local businesses or consumers. When electricity becomes unreliable or unreasonably priced we are all in crisis. It is only when confronted with crisis does our society prioritize fixing these types of problems. Observers have known of these grid vulnerabilities for years.
“The truth is the electrical grid needs to be fixed, and now.”
Cantafio Nagel & Song PLLC has long been on the forefront of the energy industry in both Texas and globally. In the summer of 2020, Partner Ralph Cantafio and Associate Miles Nowak authored an article in the Texas A&M Journal of Property Law, Survey on Oil & Gas, to make a case for a national energy system. While not specifically contemplating the disastrous storm that took place this week, the article shows immense forethought by making a case for a more national energy system that would allow for easier energy sharing between regions in the event of untimely spikes in demand, to prevent Texas energy consumers from being literally and figuratively frozen out, while also providing a benefit to the industry and Texas as a whole.
“Texas has a resiliency about itself when it comes to natural disasters”
Said David Nagel, founding partner of Cantafio Nagel & Song PLLC, placing a firm stance in the belief of creating solutions to prevent millions of Texans from power and essential resource loss again. “Whether it be tornadoes, hurricanes, extremely hot heat, and as seen with the most recent outages to the power grid due to ice storms.
"As an attorney and former lobbyist I read the headlines and they are politically charged. Blame it on frozen wind turbines. Blame it on coal. Blame it on the natural gas energy grid. Texas has a stand-alone power grid consistent with its own very fabric of independence. Now it is time to revisit that grid: to weatherize it like it were Minnesota, and to build reserve margins for flux capacities."
The article will go to print in Volume 7 of the Survey that will be published later this year. Beyond just energy availability for consumers, the article will touch on the many positive impacts that expanding Texas’ energy system could have on producers, regulators and politicians, and of course Texas energy consumers. The article further touches on energy inequity among American citizens and how the national energy grid would not only support the industry, but also the American people.
Article Abstract: The focus of the article is to raise awareness and assist energy professionals in beginning to discuss and examine what needs to be done to replace the current Interconnection system so as to simultaneously benefit the economies of each of the states and the United States as a whole; continue producing reliable and affordable electricity to consumers and industry; increase profitability for the electrical industry participants; reduce the impact on the electrical industry on climate change; make sure electricity remains affordable to consumers; and increase domestic reliance on domestic energy while reducing foreign dependence.
About the authors:
Ralph A. Cantafio is Partner at Cantafio Nagel & Song PLLC in Denver, Colorado. With over 30 years of legal experience, Ralph’s practice focuses on Oil and Gas Law as well as a wide scope of commercial transactions and litigations. Ralph is licensed to practice in the state courts of Alaska, Colorado, North Dakota, Texas, Utah, and Wyoming. He is also a lecturer at the University of Colorado at Denver, where he teaches in the Global Energy Management Program, and has also lectured foreign professionals focusing on international oil and gas law, as well as international contracts and drafting. Ralph obtained his J.D. from the University of Colorado School of Law, a Master of Science in Mineral Economics from Colorado School of Mines, a Master of Science in Global Energy Management from the University of Colorado at Denver, two professional oil and gas certificates in Petroleum Land Management and Energy Finance from the University of Denver, and an undergraduate degree from the University of Nevada, Las Vegas.
Miles C. Nowak is an Associate at Cantafio Nagel & Song PLLC in Denver, Colorado. Miles’s practice focuses on Oil and Gas Law as well as a wide scope of civil and commercial transactions and litigations. He went to high school and college in Texas and is passionate about serving Texas consumers and industry professionals. He hopes that this winter storm and corresponding fallout will push political and industry leaders to value innovation and change to spur the great State of Texas going forward. Miles obtained his J.D. from the University of Denver Sturm College of Law, where he specialized in both International Law and Corporate and Commercial Law, as well as an undergraduate degree from Southern Methodist University.