Dive Brief:

• Michigan Democratic Gov. Gretchen Whitmer on Jan. 30 urged residents and businesses to reduce their natural gas usage after a fire at a Consumers Energy facility limited supply of the fuel during a historic cold snap.

• Consumers said it is relying on gas reserves after a fire in a natural gas compression station in suburban Detroit took the facility offline on Jan. 30. The utility asked large customers to reduce their gas usage and residential ratepayers to turn their thermostats down to 65 degrees so it can supply gas to critical infrastructure.

• In response, Michigan automakers and other businesses agreed to interrupt production schedules at some plants, though Consumers CEO Patti Poppe said residential curtailment would also be necessary. The incident could have an impact on federal debates over pipeline construction and energy system resilience.

Dive Insight:

The fire at Consumers' compressor facility Jan. 30 illustrates how individual gas infrastructure incidents can cause widespread disruption to both businesses and residents.

At 10:30 a.m. on Jan. 30, Consumers said a fire broke out at its Ray compressor station in Macomb County, forcing the utility to shut the system down. The station's three compressors and storage fields hold enough gas to supply about 680,000 people, or 40% of the utility's typical winter demand.

Consumers said the fire burned itself out around 3 p.m. EST, and the two compressors not involved in the fire would be up and running within 48 hours. In the meantime, it activated nearby gas storage facilities and urged residents to curtail usage.

On Thursday morning, Consumers officials said they were "cautiously optimistic" their requests were reducing gas consumption, but urged residents to continue conservation measures through the end of the week. 

"Repairs at our Ray Compressor Station are ongoing and the station is partially in service, providing natural gas to our distribution system," Consumers said in a Facebook post. "However, we are asking that all customers continue to conserve until the end of the day Friday, Feb. 1, to allow for temperatures to moderate and additional repairs to the Ray Station."

In response to the Jan. 30 request, Consumers said the Big Three automakers and steel manufacturer Gerdau had agreed to reduce operations.  

"I want to personally thank all of our large business customers, companies like General Motors, Chrysler-Fiat, Ford, Gerdau and many, many countless others for interrupting their production schedules tonight, tomorrow and Friday as a result of our system capability," Poppe said in a Jan. 30  video on Facebook.

In all, automakers will turn down heat or curtail operations at 18 plants across Michigan, the Associated Press reported, but Poppe said the business reductions alone are "not enough" to allow the utility to meet gas demand. She urged residents to turn their thermostats down to 65 degrees, or 62 if they are not home.

The calls for reduced usage come during a Polar Vortex weather event that has dropped temperatures across the state into the negative 20s, fueling record demand for natural gas across Consumers' system.

"It's going to be colder tomorrow than it is today," Poppe warned residents, "and without any action that will mean there will be more demand for natural gas."

The Consumers incident also comes amid a federal debate over the security and construction of natural gas infrastructure. Earlier this month, Politico reported that the White House is considering using emergency authority to bypass state and federal regulators to construct new pipelines.

Those conversations focus particularly in the Northeast, where citizen opposition to gas infrastructure is strong, but a perceived weakness in existing gas infrastructure could stoke conversations over energy security in the administration.

On Jan. 30, the White House National Security Council took the rare step to urge Michigan residents to heed warnings to reduce their usage.

For those in Michigan, please listen to your State and local authorities tonight and tomorrow re natural gas use in the coming days. https://t.co/7n8fdf9OtE

— NSC (@WHNSC) January 31, 2019

The incident could also have an impact on discussions at the Federal Energy Regulatory Commission regarding power grid resilience and fuel security. In those cases, coal and nuclear interests, along with the Trump administration, have argued a reliance on natural gas for power generation could open the U.S. to risks of fuel supply disruption.

Those conversations will likely also be influenced by how power systems in other states respond to the continuing cold this week. As of Thursday morning, operations were normal across the markets operated by the Midcontinent ISO, PJM, the New York ISO and ISO-New England, although power demand in New England was significantly higher than the ISO forecast. That could cause tight load conditions if, like last year, a major generator in the region goes offline.