Texas’ chief energy regulator fiercely defended fossil fuels after historic blackouts. She also profits from oil and gas.

Late last month as Texans were digging out from a historic winter storm and dayslong power outages, the state’s chief oil and gas regulator had a clear message: Natural gas producers are not responsible for the disaster.

“Some media outlets would have you believe that natural gas producers and frozen transmission lines caused the power shortages across the state,” said Christi Craddick, who chairs a three-member commission overseeing the industry, during a Texas House of Representatives hearing Feb. 26. “But … these operators were not the problem. The oil and gas industry was the solution.”

Craddick and her father, a well-known Republican state representative who sits on two Texas House committees overseeing oil and gas, have direct financial ties to that industry, including with some of the same gas-producing companies that have admitted to shutdowns of their own facilities during the storm.

The father-daughter pair, who hail from Midland — the heart of the West Texas oil and gas boom of the past decade — own and manage land across the state that generated more than $100,000 from Texas’s largest natural gas producers in 2019, according to forms they submitted to the state Ethics Commission last year. The companies include XTO Energy, a subsidiary of ExxonMobil, and Pioneer Natural Resources, both of which reported equipment failures during the winter storm.

Critics say the ownership stakes reflect a conflict of interest for the Craddicks and exemplify a major ethics loophole in Texas, where regulators are allowed to have financial interests in the companies they oversee, unlike in some other oil-rich states. The ties are also newly relevant in light of last month’s blackouts, which left more than 9 million Texans without power and may turn out to be the costliest weather event in the state’s history.

Adrian Shelley, director of the advocacy group Public Citizen’s Texas office, said regulatory agencies in the state are “explicitly in service of industry.” He added that in the absence of robust conflict-of-interest laws preventing such situations, many Texans assume energy regulators are controlled by oil interests.

“For [Christi] Craddick, in all of her visits to the various state committees, there hasn’t been any earnest self-reflection of the agency’s role. It’s just been a strict defense of the industry,” said Shelley.

Christi Craddick declined an interview request. In a statement, she said that she is transparent about her investments and that the agency she leads — archaically named the Railroad Commission — “has no jurisdiction regarding mineral interests, royalty payments, or stock investments.”

The commission issues operating permits and has other enforcement authority over energy operators including oil and gas producers, pipeline operators and mining companies.

Craddick has made supporting the oil and gas industry a central component of her political platform. In campaign donation solicitation documents obtained by The Washington Post, she used the phrase “energy galore” to describe the state’s economy, while asking contributors for help fighting “wild-eyed, hare-brained socialistic schemes that would wreak havoc on our Lone Star State and spread misery across the country.”

Rep. Tom Craddick said in a statement that his business interests reflect the fact that he lives in Midland, the center of the state’s oil and gas industry. The part-time Texas Legislature meets once every two years, so lawmakers earn just $600 a month and usually hold other jobs.

“My assets reflect the business of our hometown and the surrounding region,” he wrote. “Simply put, I live where I work.”

Some of the most powerful statewide elected officials, along with more than two dozen Texas lawmakers with authority over the energy industry, also have significant financial interests in it, according to a Post review of hundreds of pages of personal financial disclosures filed with the state Ethics Commission. They include Texas Attorney General Ken Paxton and his wife, state Sen. Angela Paxton, who received at least $5,000 in investment income from XTO Energy in 2019. Lt. Gov. Dan Patrick and his wife in 2019 earned more than $15,000 in investment income from the pipeline company Energy Transfer Partners.

The Post’s review defined a “significant” investment as more than 100 shares or $5,000 worth of stock, or investments in more than one energy company.

The attorney general’s office and Angela Paxton did not respond to requests for comment.

Through his spokeswoman Sherry Sylvester, Patrick declined an interview request. “What you are referring to are simply stock dividends,” Sylvester wrote in an email. “He has a diversified portfolio of many businesses and industries in mutual funds that his stockbroker manages.”

At least 13 members of the Texas Legislature who regularly weigh in on energy-related issues through their committee assignments draw some form of personal income from oil and gas, either through stock dividends, owning land where oil and gas drilling occurs, or directly through businesses they own or work for.

They include state Rep. Craig Goldman, chair of the Energy Resources Committee. Goldman has proposed requiring natural gas producers to harden their infrastructure and also owned hundreds of thousands of dollars’ worth of ExxonMobil stock as of 2019, the disclosures show.

State Rep. Jay Dean recently proposed a bill barring new rules that restricts “directly or indirectly, the use of natural gas or propane” in commercial and residential construction. He is chief executive of one oil field services company and a paid consultant for another, his 2020 disclosure form states. He also sold more than $5,000 in Pioneer Natural Resources stock in 2019 and received investment income from two other oil companies.

Dean and Goldman did not respond to requests for comment.

Scrutiny focused on power generators, not natural gas producers

More than 9 million Texans lost power during Winter Storm Uri last month. Many resorted to boiling snow after water plants lost power, pitching tents in their living rooms to keep warm, and moving in with friends and neighbors, despite the warnings of public health officials to maintain social distancing. At least 50 people in the Houston area died.

The crisis has prompted widespread outrage in Texas across the political spectrum, especially since a similar disaster occurred during a cold snap almost exactly a decade ago that led to multiple investigations and calls for reform. But officials declined to place any mandates on the energy industry to harden its infrastructure, instead opting to raise the price of wholesale power in the hopes of incentivizing companies to invest on their own so they could realize bigger profits.

That wasn’t enough to prevent a far worse power failure last month when temperatures dipped far lower, for a much longer period of time, and over a much larger swath of the state. State data show 356 generators experienced outages during Winter Storm Uri, compared with 193 a decade earlier. Unlike other states, Texas has its own power grid, which is almost entirely cut off from the rest of the country, largely preventing it from importing electricity as its power plants went down.

Public outrage has focused so far on the electric power industry and its regulators, many of whom have already resigned. There has been little mention of oil and gas companies, which provide the natural gas that fuels most of the state’s power generation plants — and their regulator provided a full-throated defense of the industry when speaking before lawmakers last month.

“Any issues of frozen equipment or delays [in natural gas deliveries] could have been avoided had the production facilities not been shut down by power outages,” Christi Craddick declared. She went on to say that any problems that power generators had getting natural gas were caused by electricity cutoffs that were beyond the gas producers’ control.

But in dozens of reports made public in a little-known state database, natural gas producers acknowledged failures of their own equipment — from “vapor recovery units” that remove toxic gases, to storage tanks, to electrical equipment — because of freezing temperatures. The reports do not need to specify the exact impact each of those failures had on the state’s supply of natural gas, but shutdowns would have led to some delay in the delivery of natural gas to power plants.

One of those companies is Pioneer Natural Resources, which reported malfunctions at oil and gas storage tanks that lasted as long as 60 hours and led to shutdowns of some of the company’s oil- and gas-producing wells in mid-February. It’s not clear how long those shutdowns lasted.

“Extremely cold weather caused freezing issues on the VRUs that resulted in them going offline and venting occurred,” the company’s operators wrote in one report, referring to “vapor recovery units” that siphon off escaping gases so they can be sold as an additional product.

Those facilities are under Christi Craddick’s jurisdiction. Her ethics disclosure forms show she received thousands of dollars in 2019 from Parsley Energy, which was acquired by Pioneer last fall. Her father received more than $50,000 from Pioneer and Parsley that year.

Asked during a shareholder meeting what the company might do in anticipation of future weather emergencies, Chief Operating Officer Richard P. Dealy said, “Given the freak nature of it … at this point, we don’t see any substantial changes that we would make.”

In a statement, Pioneer spokesman Tadd Owens told The Post that the company is evaluating some possible changes but that “the primary issue we faced during the storm was the loss of electricity to maintain our production operations.”

As head of the Texas Senate and second-in-command to the governor, Patrick is among the state’s most powerful elected officials. He and his wife reported earning up to $5,000 in 2019 through the sale of more than 1,000 shares of stock in the gas company Targa Resources, and they also sold stock in Energy Transfer Partners, reporting a loss of more than $20,000.

Targa reported a shutdown of its Wildcat Gas Plant “as a result of the sustained freezing temperatures,” along with issues at several other gas plants it owns in West Texas, which process and refine natural gas so it’s ready to be used for power generation.

Records show that an Energy Transfer pipeline malfunction during the storm resulted in the venting of more than 60,000 of volatile natural gas-related compounds into the air over two hours. Another report noted a dayslong malfunction at its West Texas natural gas processing plant because of the cold weather. “All other ETC plants were down from the weather and most [producers’] wells were froze or they shut them in,” the report said, referring to the company’s Texas subsidiary.

Days after the storm, Patrick vowed to subpoena the chief executives of energy companies and “find out what the hell happened.” Explaining the crisis in a speech in Houston, he referred to malfunctions of gas wells, pipelines and gas plants, as well as the need to “winterize” pipelines.

But he has since focused his criticism on electric power regulators and generator companies, saying little about the responsibility of the natural gas industry. A list of legislative priorities that he released last month includes changes to the electric grid and “oil and gas investment protection.”

Patrick’s spokeswoman told The Post in a statement that he is active in ongoing investigations that “have included questioning of the RRC and energy companies.” She continued, “Lt. Governor Patrick is a longtime champion of Texas oil and gas industry which has made both our state and our country energy independent. Since the winter storm power outages, his commitment to thermal energy is even stronger.”

Targa did not respond to multiple requests for comment. Energy Transfer Partners declined to provide additional details on its equipment issues.

ExxonMobil, which operates in Texas as XTO Energy, also reported problems with its drilling operations because of freezing temperatures, including one that led to the venting of toxic gases beyond acceptable limits for 36 hours. “COLD WEATHER FREEZING TRANSMITTERS IN THE PLANT,” the company wrote of the event that started on the morning of Feb. 15.

Numerous Texas politicians reported significant financial interests in ExxonMobil, including Craddick, Ken Paxton and Angela Paxton, according to their 2020 disclosure forms.

As the state’s chief law enforcement officer, Paxton has launched investigations into the activities of several power generation companies following the storm but no natural gas producers.

Angela Paxton, who sits on the Texas Senate’s Business and Commerce Committee, has spoken out against power regulators and generators but has said nothing about oil and gas. She drew scrutiny last month for traveling to Utah with her husband during the crisis and later excoriated the wind power industry during a committee hearing, though wind turbines generate only a fraction of the state’s electricity.

Neither Paxton responded to detailed requests for comment.

In a statement, ExxonMobil spokeswoman Julie King told The Post that the company “worked continuously to ramp-up natural gas production that was impacted by record freezing temperatures during the Texas winter storm.”

“We continue to analyze the causes for decreased production, which varied at locations throughout the state,” King wrote. “Once facilities lose power, they require a series of checks to bring them back online safely. Road conditions across the state made this challenging for the entire industry.”

The public may never understand the full role of natural gas producers and transporters in the power outages that devastated Texas. While power generators have already submitted details on the impacts of their equipment malfunctions on the amount of electricity available on the grid during the storm, oil and gas companies do not need to report such impacts. In addition, power generators have to submit annual “winterization” plans to state regulators; oil and gas companies do not.

“The Railroad Commission does not dictate to companies on preparedness plans,” Craddick said in her statement to The Post. Speaking before lawmakers last month, she said, “If you’re a prudent operator, you ought to weatherize. That’s something we’ll continue to have a conversation about.”

Gov. Greg Abbott has committed to implementing such requirements during this year’s legislative session, though the scope is unclear.

So far, the oil and gas industry is pushing back on the idea.

“Additional and mandated winterization of oil and natural gas wells would not have averted the extreme difficulties … during Winter Storm Uri,” Lauren Clay, a spokeswoman for the Texas Oil and Gas Association, said in a statement to The Post. “Implying otherwise is practically and intellectually incorrect, and injurious to the public who need reliable power.”

Legal experts say regulators’ close ties to the energy industry could strike some as a conflict of interest, but state laws are so permissive that individuals such as Christi Craddick probably are within the bounds of the law.

“It sounds like what she is doing is not illegal and is unlikely to actually violate any ethics rules on the books. But … there’s a good argument she has a conflict of interest,” said Richard Briffault, a professor of legislation at Columbia University’s law school.

It’s a common problem for state regulatory commissions, Briffault said: “They have the knowledge but they also have the biases.”

This article was originally posted on Texas’ chief energy regulator fiercely defended fossil fuels after historic blackouts. She also profits from oil and gas.