Ex-Shell Oil president speaks from Texas amid power outages: ‘It’s a very difficult situation’
Former Shell Oil President John Hofmeister, who lives in Houston, argues ‘the generators have no financial incentive to prepare for this kind of issue’ and so people ‘suffer.’
Former Shell Oil President John Hofmeister, who lives in Houston, told “Mornings with Maria” on Wednesday that he has been without power for two days following the “brutal” winter storm in Texas.
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He noted that he and millions of other people in Texas are without power.
“There’s no internet. There’s no electricity. It’s a real problem,” Hofmeister told host Maria Bartiromo. “We’re living in a third-world situation.”
At least 20 people were dead as of Wednesday morning after a winter storm swept across the U.S. In Houston, four family members died in a house fire while using a fireplace to stay warm.
The winter storm left millions without power, bringing record-breaking cold weather, overwhelming power grids and immobilizing the Southern Plains. Texas saw the worst of the U.S. power outages, which affected more than 2 million homes and businesses.
“My section of Houston has not had power since early Monday morning, about 2:00 a.m. and it’s pretty brutal,” Hofmeister told Bartiromo. “It’s a very difficult situation.”
On Tuesday, Texas Gov. Greg Abbott ordered an investigation into the Electric Reliability Council of Texas (ERCOT) amid statewide blackouts in freezing temperatures.
"Far too many Texans are without power and heat for their homes as our state faces freezing temperatures and severe winter weather. This is unacceptable," Abbott wrote in a statement. "I have issued an executive order to review the preparations and decisions by ERCOT so we can determine what caused this problem and find long-term solutions."
ERCOT, which manages power for more than 26 million Texans, about 90% of the state’s electric load, is facing criticism for its management of the state’s power grid after 4.1 million people were left without power amid the record snow and subzero temperatures. Some, including Hofmeister, had been without power for more than 24 hours after generating stations went offline Monday.
“I don’t think there needs to be much of an investigation,” Hofmeister said. “The answer is very simple, ERCOT, which is the electric reliability council of Texas, simply doesn’t plan on this kind of Arctic weather and so there’s a lot of kit, a lot of power generation around the state that’s simply sitting idle because it’s not winterized for winter operation.”
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“It sits there for the summer peak period of air conditioning when it’s so hot in Texas, but they don’t really need it in the winter except for an arctic blast like this,” he continued.
Hofmeister added that “there’s no financial incentive to prepare for a winter that may never come.”
“And so the way we have turned the electric grid into a competitive set of enterprises between generation and distribution, the generators have no financial incentive to prepare for this kind of issue and so we suffer,” he went on to explain.
The rare Arctic air that blasted into Texas resulted in record-breaking demand for power, causing the state’s electric system to fail. Energy suppliers planned to use rolling blackouts to deal with the demand, but the system was overwhelmed.
The freezing temperatures idled many of the state’s wind turbines and resulted in reduced oil and gas production, impacting the electricity generators that rely on fossil fuels.
On Wednesday morning ERCOT tweeted, “Some generation is slowly returning.”
“ERCOT was able to direct utilities to restore 600,000 households last night,” the tweet continued, noting that “2.7 million households still do not have power.”
When asked what he would like to see from the state in terms of upgrading the systems Hofmeister said, “The generators would need to be able to bill the consumer for preparations for winter.”
“Currently, they’re not allowed to do that,” he explained. “Under current, existing rules and regulation, the generators, who would prepare a plant that may not be brought online, have no ability to bill the cost of keeping that plant ready to go. That’s the problem.”
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He went on to explain that “theoretically it’s protecting the consumer from higher electricity rates, but I think a lot of consumers would rather pay than have no electricity.”
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Fox News’ Morgan Phillips and FOX Business’ Jonathan Garber contributed to this report.
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