Money Talks

Two consecutive summers of brutal heat and drought have left some parts of Texas with notably low water supplies going into 2024.

Looking ahead, forecasters increasingly expect another scorching summer here this year. Via @insideclimate: https://t.co/hjzH32HF9V

— Texas Tribune (@TexasTribune) January 22, 2024

 This requires a rather lengthy background presentation:

Corpus Christi, with 421,000 people in its two-county metro area, sits where the Gulf Coast marshes meet the semi-arid South Texas plains. The region’s combined reservoirs dropped from 53.7% full in 2022 to 43.6% in 2023 to 30.5% this month. 

The city announced in December that it would no longer release water from its reservoir system to support basic ecology in coastal bays and estuaries. 

Wherever Texas rivers join the sea, these once-vast wetlands host critical reproductive cycles of many aquatic species, and they depend on freshwater inflows for their characteristically half-salty, nutrient-rich systems. When water supply gets tight, the bays and estuaries typically are first to see their allocations revoked while cities keep dam gates closed. 

“Due to the ongoing drought in our water supply,” wrote a city spokesperson in a statement. “NO water is being released from Lake Corpus Christi to the Bays and Estuaries.” 

These ecosystems, which once benefited from all the water from the formerly undammed rivers of Texas, have adapted to natural droughts. Dry years severely decrease the amount of species reproduction, but when wet weather returns, the system can usually recover within a year, according to Paul Montagna, endowed chair of hydroecology at the Harte Research Institute for Gulf of Mexico Studies in Corpus Christi. 

“However, if a system is permanently impaired it is also possible that recovery will not reach former levels,” Montagna said. 

Studies suggest that systems around Corpus Christi may already be “permanently impaired,” Montagna said, largely due to a sustained lack of fresh water. 

Similar problems span the lower Texas coast. The Rio Grande hasn’t flowed consistently into the Gulf of Mexico since the early 2000s. On the Colorado River, which runs through Austin, authorities have kept water releases to the coastal wetlands at a bare minimum in recent years. Jennifer Walker, director of the National Wildlife Foundation’s Texas Coast and Water Program, called it “critical life support.” 

“Water to meet environmental needs is frequently the first to be negotiated away,” Walker said. “Our bays and estuaries are a hugely important part of Texas, and they’re not something that would be easy to go back and fix.” 

In Corpus Christi, a major refining and export hub for Texas shale oil and gas, city authorities have imposed water use restrictions on residents, with more to come if reservoir levels fall below 30%. But the region’s largest industrial water consumers operate unabated, thanks to a purchasable exemption from drought restrictions for industrial users — 25 cents per 1,000 gallons — passed by the City Council in 2018. 

That includes users like ExxonMobil’s massive new plastics plant, which is authorized to use up to 25 million gallons of water per day — a quarter of the regional summertime water demand. 

“Industry can continue full bore through all of these drought stages and the estuary gets cut off early,” said a water resource consultant from Corpus Christi who requested anonymity to preserve his business relationship with the city. “I think it’s a looming disaster. They are still trying to recruit all these water-intensive industries along the coast.” 

Proceeds from the exemption program were supposed to fund development of seawater desalination plants that would expand the regional water supply and meet demands of a booming industrial buildout. The first plant was initially planned to begin operations early last year, but it remains mired in challenges and years away from breaking ground. Meanwhile, the industrial buildout continues.

From fresh water (and the species dependent on it), to electricity (and the residential consumers dependent on it):

ERCOT issues voluntary calls for conservation when the amount of energy reserves on the Texas power grid shrinks to a level that the grid operator finds uncomfortably small. 

By asking people to reduce energy use voluntarily, the grid operator hopes to avoid issuing “Energy Emergency” declarations that require more drastic interventions in grid operations and the energy market to balance supply and demand on the grid. Those interventions can be costly. They include paying big energy consumers like factories and cryptocurrency miners large amounts of money to shut down their operations, freeing up more power for the rest of the grid. 

Since the 2021 winter blackout, reports suggest that the grid operator and the Public Utility Commission of Texas are also under political pressure to avoid declaring an energy emergency. 

The conditions that require ERCOT to declare energy emergency alerts are clearly defined and largely mandated by federal policy. When energy reserves drop to X number of megawatts on the grid for X amount of time, the grid operator is required to declare an emergency. 

It appears the conditions that lead to the issuing calls for voluntary conservation are more based on vibes than data. 

When KUT asked if there were “triggers” to determine when conservation requests are issued like there are for energy emergency alerts, ERCOT media representatives did not directly answer the question. Instead, they forwarded a link to frequently asked questions that do not address the specific rules around conservation requests. 

Regardless, the Texas grid operator seems to be issuing these alerts more frequently as part of its response to the 2021 blackout and because the number of extreme weather events in Texas has increased in recent years. 

"[ERCOT] has become a little more cautious over the years in issuing more notices when it sees severe weather coming or when it sees that something might happen,” Daniel Cohan, a civil engineering professor at Rice University, said.

So Exxon can buy its way out of water restrictions, and bitcoin mining can force ERCOT to pay to keep the grid from collapsing. But ERCOT doesn’t like to do that because ERCOT doesn’t have the deep pockets of Exxon. (By the way, ERCOT reports voluntary restrictions on usage works, but can’t explain how it knows that). So effectively, everyone downstream gets screwed.

The irony is the Texas Constitution currently in effect was a product of 19th century populism and a white hot anger at banks and the railroads, the Exxons and bitcoin miners of their day. That Constitution created the Texas Railroad Commission to, yes, regulate (control) the railroads.  It was later given authority over oil and gas, and was so successful it was the model for OPEC in the’70’s.

Yeah, you’re welcome.

There was a move (about 40 years ago) to replace the creaking 19th century mess that is the state constitution, but as one lobbyist in opposition to that idea said: “If it ain’t broke, don’t fix it.”

It’s broken, alright. It’s just not broken for the right people. The ones with money, I mean. 💰