Railroad Commission won’t prohibit sale of ‘wet gas’

The Texas Railroad Commission did not consider a request Tuesday to prohibit the sale and distribution of unprocessed natural gas to rural customers despite claims that what has been described as a “raw gas cocktail” is unsuitable for residential use.

The commission, in approving a hearing examiner’s recommendation that Atmos Energy be allowed to discontinue service to a few homes near Lake Palo Pinto, ignored a plea that homeowners at least be notified that they are receiving the unprocessed gas, also known as “wet gas.” The agency regulates natural gas utilities in Texas.

“I am disappointed that the Railroad Commission refused to address our request that Atmos be required to notify each residential customer who is currently being supplied with unprocessed, raw natural gas [and] to advise them of the safety risks posed by its use,” said Michelle McFaddin, an attorney and former assistant director of enforcement at the agency.

“If the Railroad Commission is unwilling to use its authority to protect the residential users of natural gas from the appliance malfunctions, service interruptions and potential carbon monoxide emissions that can result from the use of unprocessed, raw natural gas, then perhaps the Texas Legislature needs to act to force the Railroad Commission to adopt gas quality standards to protect Texas residents,” McFaddin said.

Selling untreated natural gas to residential customers became an issue last year when Atmos asked the Railroad Commission to abandon service to nine customers and pay for converting them to propane or electrical service. Atmos officials argued that maintaining the service was not economically feasible because the gas had too high a concentration of liquids, which often would freeze and disrupt service.

In the Lake Palo Pinto case, Atmos said it has annual operating costs of about $15,590 a year while taking in only $1,900 in revenue from the nine customers. In one year, the company responded to 129 service calls.

During an abandonment hearing, an employee testified that the gas was “not suitable for residential use” and added during cross-examination that it can cause a “very irregular flame burning in your appliances” that could give off carbon monoxide.

Eight of the nine customers approved of the switch-over. One homeowner, Jon Salis, initially opposed the discontinuation of service. But when he found out about the health risks, he quickly opted to drop the service, too.

Nonetheless, Salis and McFaddin didn’t drop their efforts to persuade the Railroad Commission to notify customers who are getting the untreated gas of its dangers. But hearing examiner Cecile Hanna told the commissioners Tuesday, as she had in a previous report, that the request went beyond the scope of the proceeding. In documents filed in the case, Atmos supported that interpretation but said it does discuss the service with its customers.

“The company takes the responsibility of providing safe and reliable service to its customers very seriously and is taking steps to eliminate/reduce wet gas service to residential customers,” Atmos said in its filings.

Salis, on his way home from Austin, said he was not surprised that the commission approved the application without discussion. He said the “ostrich put its head in the sand.”

“I expected this. The handwriting was on the wall that there was very little concern about what a utility customer is going to get as far as satisfaction from the Railroad Commission,” he said.

This story was originally published April 28, 2015 at 5:45 PM with the headline "Railroad Commission won’t prohibit sale of ‘wet gas’."