The Fed is urging Texas to “winter” $ 130 billion after storms hit the grid
The February Arctic explosion caused $ 130 billion in economic damage in Texas, and the state’s $ 1 billion annual investment needed to protect the state’s electricity grid from freezing temperatures is worth the cost. report on Friday.
The storm dealt a severe blow to the state, took power for nearly a week, killed at least 100 people and caused extensive damage to housing, business, agriculture and infrastructure. The Dallas Fed put the economic toll at between $ 80,000 and $ 130 billion.
The storm also revealed a weak electricity grid and a natural gas supply system that was unable to withstand permanent freezing temperatures – critical gas and coal-fired equipment failed, wind turbines were confiscated and gas wells and pipes were frozen. half the capacity to create a statue.
“Politicians and industry have proven that the cost of annual preparations, which are extreme weather and relatively few, is difficult,” said a group of Dallas Fed economists. “Our analysis seems to be economically reasonable for extreme winter weather events.”
The Texas legislature is debating proposed rules to respond to the storm that would have to provide funding for power plants to put their facilities into winter and pay the cost, with penalties rising to $ 1 a day.
The newly proposed regulations, part of a broad storm response, are similar to the recommendations recommended by federal officials after a similar outbreak in 2011 caused widespread blackouts, but were never adopted by Texas state lawmakers or regulators.
The Dallas Fed said it is another look at the “amazing aftermath of the February frost and widespread demand for power outages,” and estimates the total cost of hardening measures is $ 430 million a year.
The installation of 162 state-owned gas plants in the winter, many of which froze pipes and other equipment that were thrown offline during the storm, would cost about $ 95 million.
The Dallas Fed says it would be “impossible” to install internal heating equipment in the state’s 13,000 wind turbines, but it would be more resilient to upgrade cold weather coatings on turbines and install more freezing drones. Newly drilled oil and gas wells would be more expensive to upgrade at an additional $ 200m annual cost, the Dallas Fed estimates.
Texas lawmakers have so far failed to take similar steps as the oil and gas industry needs to protect their equipment from the cold weather, critics say there is a huge gap in the state’s storm response.
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Natural gas production fell 45 percent during the storm as many wells and pipelines were left unconnected by freezing temperatures and others lost strength, “creating a death spiral to generate electricity.”
Many have called on the Texas authorities to strengthen the power grid as climate change threatens to bring more severe storms to the state.
“Certainly, these extreme weather events come with greater frequency and intensity and will come with costs and loss of life,” Sylvester Turner, mayor of Houston, Texas, said at a U.S. House hearing about last month’s storm.