Texas gas order puts power before exports

Texas governor Greg Abbott's order to halt natural gas exports out of the state through 21 February mandates that all sourced natural gas "be made available for sale to local power generation opportunities before leaving the state of Texas."

Abbott's office cited the Texas Disaster Act of 1975 as the authority under which the order could proceed. The act applies to energy emergencies as a result of a local shortage of petroleum, natural gas or liquid fuel energy supplies that make emergency measures necessary to reduce demand or allocate supply.

Abbott announced the measure during a press conference yesterday but offered no further details on whether the order would immediately halt routine shipments on pipelines into other states and Mexico or exports at the Gulf coast via LNG terminals.

The order says that all necessary resources should be used in Texas, and "this includes ensuring that any natural gas currently in Texas is not sent outside of Texas during this unprecedented emergency."

The state's oil and gas regulator the Texas Railroad Commission will implement the order. Abbott's order does not affect the commission's curtailment priorities stated in an emergency order issued by that commission on 12 February, which was extended through 23 February, it said.

Mexico buys most of Texas' natural gas exported by pipeline, and the recent 1 Bcf/d (28mn m³/d) cold snap-related cut in its usual 5 Bcf/d supply led to power outages in 29 Mexican states. Mexico is in talks with the state's government to try to overturn the order, which would divert key supply from the country.

Abbott has requested all major industrial natural gas consumers to limit their natural gas use and earlier asked Freeport LNG in Texas to voluntarily curtail its operations in order to reduce gas and power demand.

By TL Hamilton