Texas Energy Report BUZZ Archives October 2017

Archives are in order from newest to oldest



TXOGA President On Running For Jeb Hensarling’s US Rep. Seat

October 31, 2017

In the wake of news that Texas 5th Congressional District Republican US Representative Jeb Hensarling won’t be running for re-election, a number of names of are being floated to run for the office to replace him, among them former Representative Kenneth Sheets and District 1 State Senator Bryan Hughes.

Also among them is Texas Oil & Gas Association President Todd Staples, so The Texas Energy Report reached out to Mr. Staples by Twitter Tuesday night, asking if he would comment.

His reply: “Bryan Hughes!”



Rep. Jeb Hensarling Says He Won’t Seek Re-Election

October 31, 2017

US Representative Jeb Hensarling said Tuesday afternoon that he will not run for re-election.

The onetime Green Mountain Energy vice president is nearing 15 years as Texas 5th Congressional District representative and currently chairs the House Financial Services Committee.

There have been rumors that Hensarling would not run again ever since his name was floated earlier this year as a possible Treasury secretary in the Trump administration; Hensarling counts Vice President Mike Pence among his close friends.



New York Investor Buys Controlling Interest In Houston Oil Services Co.

October 31, 2017

A private equity firm is buying controlling ownership of Houston-based industrial and oilfield services provider The Brock Group.

Price and terms of the deal have not been disclosed.

New York’s American Industrial Partners is giving Brock a shot of liquidity and capital resources and a significant debt paydown; Brock says it’s now in the strongest financial position in recent history.

The investor promises to work with Brock on a “business transformation” to help expand Brock’s business.



No Injuries in Texas City Explosion During Refining Restart

October 31, 2017

An explosion early Tuesday morning at a Houston area refinery happened as Marathon Petroleum Corp. prepares to restart a portion of the refining process, sources told Reuters.

An ammonia cylinder burst while being heated as part of preparations to restart the alkylation unit after repairs at the 86,000 barrel-per-day Texas City refinery.

The explosion that awakened nearby residents caused no injuries at the plant or elsewhere, a Marathon spokesman said.

Marathon said there has been no “off-site impact.”

Marathon is continuing the restart of the 10,000 bpd alkylation unit the sources said.

The unit had been shut to repair pinhole leaks in piping.



NextEra Sells Texas Wind Farm From One Unit to Another

October 31, 2017

NextEra Energy Inc. is moving some Texas assets from one pocket to another with the formal purchase from NextEra Resources of a wind generation facility in Webb County.

The 250 MW Javelina farm is part of an $812 million deal to put the assets into the portfolio of NextEra Energy Partners, a limited partnership that specializes in non-controlling interests.

NextEra Resources is the company’s renewable generation unit.

Both companies are subsidiaries of Juno Beach, Florida-based Next Era Energy Inc., as is Florida Power and Light Co.

All of the assets are long-term contract renewable energy facilities that include minority-interest in Riverside, California solar plants and two wind plants in North Dakota.

The deal is expected to close by the end of the year.

Earlier this year, NextEra attempted to purchase Oncor Electric and its majority owner  Energy Future Holdings out of Texas bankruptcy, but was turned down by the state PUC.



Diamond Offshore’s Higher-Than-Expected 3Q

October 31, 2017

Diamond Offshore reported a higher-than-expected quarterly profit after securing more contracts for its deep-water drilling rigs at better rates, sending its shares up as much as 8.3 percent.

A wave of consolidation in the struggling offshore drilling industry has helped increase activity on rigs, while driving a slow recovery in prices.

Rigzone reports the Houston company’s Chief Executive Marc Edwards said he was not ready “to call a bottom” in the offshore market, implying there was still some time before prices went up significantly.



Vistra Energy and Dynegy to Combine

October 30, 2017

Vistra Energy, parent company to TXU and Luminant, said Monday it will acquire Houston’s  Dynegy following a merger agreement worth $1.74 billion expected to close next year.

It’s to be a tax-free, all-stock merger, resulting in a company with combined market capitalization of more than $10 billion and a combined enterprise value of more than $20 billion.

Dynegy shareholders will receive 0.652 shares of Vistra Energy common stock for each share of common stock they own, resulting in Vistra Energy and Dynegy shareholders owning approximately 79 percent and 21 percent, respectively, of the combined company.

It’s just the latest in a string of power company mergers this year as producers such as Dynegy take on more debt while profit margins diminish while electricity prices shrink becaue of cheap natural gas from shale fields.

Dynegy operates 27,000 MW of electrical generation facilities in Texas, the Midwest, the Northeast and Mid-Atlantic states.



Brent Holds Above $60

October 30, 2017

Word that OPEC-led oil output cuts will likely continue through at least the first quarter of 2018 sent Brent crude about the crucial $60 mark Monday morning as investor interest increased.

Over the weekend, The Wall St. Journal reported Saudi Crown Prince Mohammed bin Salman again stated his commitment to OPEC oil production cuts and would like to see them extended through the end of 2018, following their expiration at the second quarter of next year.

There has also been a slowdown in oil shipments from Iraq’s Kurdish region because of tensions with the Iraqi government over a Kurdish independence vote in September, raising concerns about the risk of oil supply disruptions.

Benchmark Brent futures were 39 cents higher than the open at $60.83 a barrel, not far from their highest since July 2015.

Brent is now 37% above the 2017 low.

WTI was up 49 cents Monday morning at $54.39, approaching an eight-month high.



Texas Oil, Gas and Chemicals Companies Earnings Roundup

October 27, 2017


A number of Texas-related energy companies late this week posted their third quarter 2017 financial earnings reports, among them Chevron, Phillips 66, ExxonMobil, chemicals manufacturer LyondellBasell and utility holding company Excel Energy.

Houston-based Phillips 66 reported an $823 million net profit, which the company said is a 60% increase over 3Q last year and 50% higher than this year’s second quarter, with refining profits alone up 100% over 2016, in spite of troubles caused by Hurricane Harvey, including the shutdown of its Sweeny refinery southwest of Houston.

Chevron reported nearly $34 billion in 3Q revenue for a $2 billion profit, up 54% when compared to last year at this time.

The San Ramon, California company saw downstream profits rise 70% and upstream 8% over 3Q 2016.

ExxonMobil also suffered financially from temporary refinery closings, but its earnings increased by 50% in the third quarter anyway, the Irving company said Friday, with nearly $4 billion in net income.

Exxon said it suffered $160 million in damages and losses because of Hurricane Harvey.

And LyondellBasell posted a more than $1 billion profit for the third quarter, despite losing about $220 million in sales because of Harvey, because of better profit margins.

The Houston company posted $8.5 billion in quarterly revenue, with profit up 11% over this time last year.

In the power markets, Xcel Energy Inc. reported Thursday its 3Q earnings of $492 million, or $0.97 per share, compared with $458 million in the same period last year.

Earnings were up because of higher electric margins to recover infrastructure investments, the company said, along with a lower effective tax rate and lower operating and maintenance expenses.

Hurricane Harvey reached the Texas Gulf Coast on August 25th at Rockport, near Corpus Christi.

Bloomberg analysts said this week they expected large refiners to profit considerably from increased gasoline prices nationwide following the hurricane.



Electric Cooperatives Group Adds Panhandle Partner

October 27, 2017


Texas Electric Cooperatives (TEC) continues to add to its growing list of partners with the new addition of the panhandle’s Greenbelt Electric Cooperative.

Greenbelt’s board earlier this month approved a sourcing alliance with TEC.

The co-op has 5,000 meters in all or part of nine Texas counties.

TEC now has 21 partners and represents 75 electric cooperatives, with Greenbelt the fourth alliance TEC has formed this year alone.

The alliance aims to reduce hardware purchasing costs through group negotiations and agreements.

“Growth is good for our members and it’s good for us. With each new alliance, TEC’s position in the market to negotiate pricing is strengthened,” Johnny Andrews, chief operating officer of TEC Manufacturing & Distribution Services said of the new partnership.



Onetime Oncor Suitor Now Eyeing Palmetto State Utility

October 27, 2017


Rumors have been circulating in South Carolina that the power company that earlier this year attempted to purchase Texas’ Oncor Electric Delivery is now considering a different electric utility.

The Columbia State newspaper said it has multiple sources claiming that NextEra of Florida wants to buy the state-owned Santee Cooper electric provider that’s being offered for sale after a botched attempt to expand its nuclear power capabilities.

A NextEra spokesman has said the Florida company, which bills itself as the largest electricity provider in the world, is interested in several utilites, Santee Cooper among them.

Santee Cooper, which provides power to two milion South Carolina residents, along with a financial partner in July abandoned a nuclear reactor expansion project near the state capital of Columbia, after spending $9 billion with the project still far from completion.

Also in July, the Texas PUC nixed NextEra’s $18.7 billion attempt to buy Oncor, saying the company’s plan was not in the state’s best interest.

Oncor is Texas’ largest regulated utility; in August the PUC began looking at Sempra Energy‘s $9.45 billion deal to buy Oncor.



Speaker Joe Straus, Rep. Byron Cook Will Not Seek Re-Election

October 25, 2017


In a campaign email, Texas House Speaker Joe Straus said, “I believe that in a representative democracy, those who serve in public office should do so for a time, not for a lifetime. And so I want you to know that my family and I have decided that I will not run for re-election next year.”

In a statement Wednesday morning Rep. Byron Cook said he will “pursue other opportunities to serve our great state,” according to the Quorum Report.



LyondellBasell Plans New Gulf Coast Propane-Fueled Plastics Plant: Chron

October 25, 2017

A new $2 billion plant using propane for chemicals and plastics production is planned by LyondellBasell, with the Houston area as a possible location.

The Houston-based chemicals, plastics and refining company’s CEO Bob Patel told the Houston Chronicle on Wednesday that the plant will be along the Gulf Coast but it will be a “good part of” a year before a final decision on location and other details are nailed down.

The company is already building a plastics plant in the LaPorte



Lt. Gov’s Interim Charges List 2: Energy and Water Markets Studies

October 24, 2017

Lt. Governor Dan Patrick released his second round of interim charges for the Texas Senate on Tuesday, which includes studies of water rights permitting, freshwater management and governing of energy markets.

The Business and Commerce committee is charged with checking for market distortions in the free energy markets may have been caused by “government competitive intrusions,” and with determining what impact competitive versus non-competitive electric retail markets may have on reliability and price.

The Agriculture, Water and Rural Affairs Committee is tasked with studying and recommending changes to streamline the uniform issuance of water rights permits, and to study groundwater governance to assure that private property rights are protected.

The committee will also be monitoring the implementation of water management legislation passed during the most recent session.



Lt. Gov’s Interim Charges List 2: Energy and Water Markets Studies

October 24, 2017

Lt. Governor Dan Patrick released his second round of interim charges for the Texas Senate on Tuesday, which includes studies of water rights permitting, freshwater management and governing of energy markets.

The Business and Commerce committee is charged with checking for market distortions in the free energy markets may have been caused by “government competitive intrusions,” and with determining what impact competitive versus non-competitive electric retail markets may have on reliability and price.

The Agriculture, Water and Rural Affairs Committee is tasked with studying and recommending changes to streamline the uniform issuance of water rights permits, and to study groundwater governance to assure that private property rights are protected.

The committee will also be monitoring the implementation of water management legislation passed during the most recent session.




October 24, 2017

US DOI Proposes Largest Gulf Oil & Gas Lease Sale Ever


The US Department of the Interior says it will propose the largest oil and gas lease sale ever held in the United States — nearly 77 million acres in the Gulf of Mexico off the coasts of Texas, Louisiana, Mississippi, Alabama and Florida.

The sale is scheduled for next March and includes all available unleased areas on the Gulf’s Outer Continental Shelf. The proposal surpasses a lease sale conducted last year by about a million acres, the Associated Press reported Tuesday.



October 23, 2017

Texas Senate Charges: Study Port Funding, Barriers to Economic Growth; TERP Eval


Lieutenant Governor Dan Patrick has released the first round of interim charges for the Texas Senate, including evaluation of port funding, progress of TxDot overweight shipping rules, modification of administration and regulatory barriers to economic growth and, like the House charges also released by Speaker Straus on Monday, monitoring of the RRC.

The Senate Natural Resources and Economic Development Committee is charged with conducting legislative oversight of the Texas Railroad Commission‘s funding and Sunset rules, along with environmental safety and waste disposal regulation.

Both the Finance and the Natural Resources and Economic Development committees are charged with reviewing, and studying the effectiveness of, the Texas Emissions Reduction Program.

The Transportation committee is tasked with reviewing state appropriations for Texas ports and the Ship Channel Improvement Revolving Fund, then recommending increases in funding for future needs.

The list of charges is here.



Halliburton Has Good 3Q, Warns Weaker 4Q Possible

October 23, 2017


Halliburton made a $365 million profit in the third quarter, according to figures released Monday, way up from the seven million dollars in the third quarter of last year.

The Houston-based company was up 42 cents per share thanks to the fracking boom that helping bring in $5.44 billion in revenues.

But the company warned of slower growth expected in its drilling business, indicating the 4th quarter might see some weakness when compared with 3Q.



October 23, 2017
House Committee Charges Released: Study RRC, Utilities, Eminent Domain, Groundwater and Energy Industry Impact On Texas Roads


Texas Speaker of the House Joe Straus on Monday released a full list of interim charges that included almost every committee and included some emphasis on Hurricane Harvey — for instance, Energy Resources is tasked with examining the Railroad Commission’s response to the hurricane and the Environmental Regulation committee charged with examining whether regulations for cleanup and response “adequately protect the public,” industrial facilities and others.

The House Committee on State Affairs will be looking at the electric utility industry’s response to Harvey to decide whether rules and regulations hinder response to natural disasters.

Taking up a topic touched on at the recent legislative session, State Affairs is also charged with examining the liability of “certain electric utilities that allow the public recreational access” to utility-controlled land.

The House Committee on Land and Resource Management will be reviewing the General Land Office‘s role and efforts during the hurricane recovery period, looking at state zoning and land use regulations and eminent domain issues.

Land and Resource Management has also been tasked with reviewing the GLO’s State Power Program, to evaluate “program offerings to public customers as compared to those available in the retail electric market,” and “make reform recommendations.”

The Natural Resources committee will look at the status of the state’s groundwater policy, including “increasing competition for scarce resources” such as clean water. They will also study the hazards “presented by abandoned and deteriorated groundwater wells.”

And the House Committee on Transportation is tasked with evaluating “the impact energy exploration and production have on state and county roads and make recommendations on how to improve road quality.”

The full charges list is here.



October 20, 2017

Hearing Dates Set for New Texas House Committee


The first hearing date for the new Texas House Select Committee on Economic Competitiveness has been set for November 15th.

A second meeting is scheduled for December 5th.

Speaker Joe Straus named the special seven-member House committee on October 11th, asking them to send a report to him December 12th.

He told the Austin Chamber of Commerce that the panel will work aggressively to find the best way for the state to ratchet up appeal for companies outside the state to relocate here.



October 20, 2017

Schlumberger 3Q Up, Baker Hughes and GE Down


Schlumberger said Friday its revenues are growing, resulting in $545 million in profits for the third quarter, but Baker Hughes reported in with a $104 million loss as its new owner, GE, warns of a slump deeper than some analysts had expected.

Schlumberberger, riding the expanding shale market boom along with upturns in Asia, Russia and the North Sea, reported revenues of nearly $8 billion.

In contrast, Baker Hughes, which was purchased by GE at the start of the third quarter, posted the $104 million loss on 3Q revenue of $5.38 billion, missing Wall Street forecasts that ran slightly higher, while its new parent company cut its own 2017 profits forecast.

As Bloomberg reports, GE promises sweeping change including the sale of $20 billion in GE businesses with “everything on the table,” calling the latest quarter results “completely unacceptable” after cutting its industrial cash flow forecast from $12 billion down to $7 billion.

With regard to offshore drilling, Schulumberger cautioned that “in the US Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans.”



October 20, 2017

More Than $20 Million to Texas from Deepwater Horizon Fund


BP will be paying out up to $8.8 billion over 15 years to help repair environmental damage along the Gulf of Mexico that resulted from the 2010 Deepwater Horizon disaster, and the latest chunk of money from the fund goes to improve ecosystems along Galveston Bay.

More than $5 million will go to five projects that include restoration of 150 acres of marshland, rehabilitation of oil reefs and protection of bird habitats, the Houston Chronicle reports.

And nearly $16 million is being set aside to go to McFaddin Beach and the Dune near Sabine Lake not far from the border with Louisiana, replacing sand along 17 miles of Texas shoreline.



October 20, 2017

US Drilling Rig Count Down By 15: Baker Hughes GE


The number of US commercial rigs producing oil and gas declined considerably, off by 15 this week to a total of 913, still far above the 553 rigs extant a year ago at this time, according to Friday figures from Baker Hughes GE.

The number of oil rigs declined by seven, natural gas rigs by eight.

There were 736 oil rigs and 177 natural gas rigs, with Texas down eight, Wyoming and Alaska down two and Utah and New Mexico down one.

Offshore drilling rig numbers were flat, but Schulumberger warned Friday that “in the US Gulf of Mexico, activity continued to weaken in the third quarter, and the outlook remains bleak for this region based on current customer plans.”



October 18, 2017

Crude down 5.7 million barrels: EIA


Commercial crude oil inventories fell by 5.7 million barrels last week, according to Wednesday figures from the US Energy Information Administration, when compared to the previous week.

S&P analysts had expected a crude drawdown of 3.9 million barrels.

The Cushing, OK oil storage hub was up 202,000 barrels.

Gasoline inventories were up by 900,000 barrels, and distillate fuel was up by more than  500,000 barrels.

US refineries were operating at 84.5% of capacity, with inputs averaging more than 15 million barrels a day.

And crude oil imports were averaging 7.4 million barrels per day.

Supplies are about 21% higher than the five-year average even though oil exports continue to rise.

The Wednesday EIA figures conflict slightly with American Petroleum Institute figures released Tuesday, in which API reported a huge draw on crude oil of more than 7 million barrels last week, with a build in gasoline inventories of nearly 2 million barrels and a drop in Cushing supplies of 151,000 barrels.



October 18, 2017

South Texas Oil Tank Fire Under Investigation


TCEQ and Railroad Commission investigators are looking for the cause of an oil tank explosion Tuesday in La Salle County, about 80 miles south of San Antonio.

Two oil field workers were taken to San Antonio hospitals by airlift with non-life-threatening injuries, according to the La Salle County Sheriff’s Office, saying emergency crews arrived about 11 am to find “several” oil storage tanks engulfed in flames.

A new tank was being built at the Ledwig Ranch location, according to a spokesman for Carrizo Oil & Gas, Inc., based in Houston, which owns the tanks.

The fire investigation is being conducted by the sheriff’s office along with the Railroad Commission of Texas and the Texas Commission on Environmental Quality.



October 17, 2017

Environmentalists, Some Locals Come Out Against KM Pipeline Proposal


Environmentalists and some officials are opposing a planned shift in the more than 70-year-old Tennessee Gas Pipeline.

The Federal Energy Regulatory Commission has already approved the pipeline’s parent company, Houston-based Kinder Morgan‘s, request to sell the pipeline to another KM subsidiary, Utica Marcellus Texas Pipeline.

The line change was proposed more than two years ago to cease distribution of natural gas along the 964 miles pipeline that runs from Louisiana to Ohio and replace it with natural gas liquids (NGLs), reversing the flow from Ohio to Louisiana.

But along the route, the Kentucky Environmental Foundation has come out against the pipeline plan, with Program Director Craig Williams, saying “anyone who knows the basic principles of physics will realize it takes more pressure to move liquids than gas.”

He cast doubt that the pipeline in its current condition can handle it.

Also on the pipeline route, Madison County, Kentucky, County Judge Reagan Taylor has questioned the ability of the pipeline to handle the weight of NGLs, quoted in the Richmond Register as calling the risks “numerous.”



October 17, 2017

PUC Okays Oncor-Sharyland Asset Swap


The Texas Public Utility Commission has okayed a planned $400 million asset swap between Oncor and Sharyland Utilities.

Under the agreement, Oncor Electric Delivery Co. LLC will gain about 54,000 new customers and continue to maintain 122,000 miles of transmission and distribution lines.

Sharyland Distribution & Transmission Services LLC will gain 258 miles of 345 kV transmission lines in west and central Texas from Oncor.

The transaction is expected to close by the end of the year, with the electrical control transition expected to take up to six months.

As a result of the agreement, Sharyland’s customers are expected to see a considerable drop in their electricity rates, which were considered to have been exceedingly high.

When the agreement was announced in July, State Senator Kel Seliger called it “an important development in providing relief to the exorbitant rates Sharyland customers have experienced.”

And State Representative Drew Darby, in the Midland Reporter-Telegram, called it “welcome news for our constituents with savings on the horizon, and I’m grateful for Oncor’s progress here.”



October 17, 2017

California Energy Committee Resists NRG Power Plant Plan


A two-member committee has recommended that the California Energy Commission oppose the construction of a new gas-fired power plant that’s being developed by Houston’s NRG Energy.

In what the committee acknowledges as an unusual move, they recommended the state commission deny approval of the plant to be built in Oxnard, a suburb of Los Angeles, because the plant would not meet local and state regulations.

In a statement, NRG said it’s confident that the proposed $300 million plant (that would generate 262 MW) could receive regulatory approval and would make a good replacement for two units of the Mandalay Generating Station in Oxnard, which are being phased out.

Environmentalists have said the gas-fired plant could have negative effects on air quality, pushing for renewable energy instead.

NRG added that it “favors California’s move to a carbon-free electrical grid, but remains concerned about local reliability during the transition.”



Targa Joins With Blackstone, KM in Pipeline Ventures

October 17, 2017


Targa Resources has a new joint venture agreement to sell a 25% interest in the Grand Prix Pipeline to funds managed by Blackstone Energy Partners.

The Grand Prix, with completion expected by the second quarter of 2019, is intended to move 300,000 barrels per day of natural gas liquids (NGL) from the Permian Basin to Mont Bevieu, east of Houston.

Houston-based Targa has also signed a letter of intent with Kinder Morgan Texas Pipeline for Targa to own a 25% interest in the proposed Gulf Coast Express pipeline, which is expected to provide NGL from the Permian Basin to Gulf Coast markets.

Once completed in 2019, the Gulf Coast Express will be a new 300,000 barrel per day common carrier NGL pipeline from the Permian Basin to Mont Belvieu, Texas.



October 17, 2017

Chaparral Energy Inc. is exiting Texas to go all-STACK


The Oklahoma City-based company said it’s sold its North Burbank and Texas Panhandle EOR interests for $170 million, making Chaparral what it now calls a “pure play STACK operator.”

Proceeds are expected to pay down debt, “increase liquidity and strengthen our already strong balance sheet,” according to CEO Earl Reynolds.

“The sale will also materially lower our overall total operating cost structure, which we view as critical in this volatile commodity price environment.”

The deal is expected to close next month.

Chaparral did not name the buyer, but Oil & Gas Investor said Monday that U.S. Securities and Exchange Commission documents list the purchaser as Perdure Petroleum LLC, a Delaware company.



October 17, 2017

Gulf Oil Spill May Be Largest Since Deepwater Horizon


It turns out that a Gulf of Mexico oil spill that occurred last week may be the largest since the 2010 “Deepwater Horizon” spill.

The Delta House floating production facility about 40 miles (64 kilometers) southeast of Venice, Louisiana, released 7,950 to 9,350 barrels of oil from early Wednesday to Thursday morning, according to closely held operator LLOG Exploration of Lafayette, Louisiana, Bloomberg reports.

This spill may be large, but it’s a fraction of the millions of barrels spilled in the 2010 incident.

Yet data from the US Bureau of Safety and Environmental Enforcement indicate this may be the largest spill in more than seven years.



October 16, 2017

Another Conservative Group Objects to Perry’s Power Plan: The Hill


An analyst for the American Action Forum (AAF) said the proposal, announced this month by Energy Secretary Rick Perry, aims to address a “real problem” with “not the best solution.”

Philip Rossetti, an AAF data analyst, said the plan “does not promote a policy that would necessarily achieve” a more stable electricity system, and instead would “arbitrarily value nuclear and coal power above their market rates,” he was quoted as saying in The Hill.

“The only effect of the [proposal] is to set an arbitrary target of on-site fuel requirements that values coal or nuclear power, regardless of if those sources are able to provide resiliency and reliability at least cost,” Rossetti’s analysis says.

Perry’s proposal has run into headwinds since he unveiled it earlier this month.

The Institute for Energy Research, an energy think tank whose political side endorsed Trump, last week called the plan “excessive and unnecessarily distortive.”



Wind Could Surpass Coal


October 16, 2017

Wind could surpass coal by almost 10,000MW by end of next year in ERCOT: UT Austin Energy Institute

Wind capacity is estimated to overtake coal capacity in ERCOT given recent retirement announcements and planned additions; from Dr. Joshua Rhodes, research fellow at UT Austin’s Energy Institute



October 16, 2017

US Electricity Production Mix Forecast: 2026

Source: BMI Research



October 16, 2017

US Smashing Clean Energy Targets: NRDC

Source: @wef, @josephncohen; Read full article



October 15, 2017

Oil Rig Explosion in Lake Pontchartrain, Louisiana


An oil rig reportedly owned by New Orleans-based Clovelly Oil Co. exploded in Lake Pontchartrain just north of Kenner, Louisiana on Sunday night.

One person is reported missing and six hospitalized following the blast that occurred about 7:20 pm, according to Jefferson Parish officials, who said they suspect that cleaning chemicals ignited on the surface of the platform.

There were no fatalities reported, but the one person listed as missing is an oilfield worker said to have been on the platform at the time of the explosion.

Kenner police said they’re working with city firefighters and the US Coast Guard to put out the flames from the blast.

The New Orleans Advocate newspaper said Sunday night that there are reports that parts from the oil rig were sent flying by the explosive force, and some of those parts hit homes in the nearby city of Kenne



October 13, 2017

DOE, EPA Take On Energy, Environment Issues


By Alex Mills

The U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA) introduced recently two significant policy changes regarding energy following the release of studies that methane and carbon dioxide emissions continue to decline.

Energy Information Administration (EIA) said on Oct. 12 “energy-related carbon dioxide (CO2) emissions fell in both 2015 and 2017, and they are expected to fall again in 2017, based on forecasts in EIA’s Short-Term Energy Outlook.”

EPA announced on Oct. 6 declines in methane emissions during the past five years.

Apparently, the release of this data was coincidental to Energy Secretary Rick Perry’s proposal to the Federal Energy Regulatory Commission (FERC) to implement a new market pricing policy allowing certain coal and nuclear plants to gain a competitive advantage on wholesale electric rates.  Perry said this proposal would make the electric grid more reliable because coal and nuclear can stockpile fuel sources on site.

Other energy sources that provide power to utilities for electricity generation – such as natural gas, wind and solar – objected to Perry pushing the adoption of such a rule that would give some energy sources a competitive advantage dictated by the federal government.  Opponents also pointed out that even though the FERC is a part of DOE, it has separate commissioners who are appointed by the President and act independently of the Energy Secretary.  Two of the three current FERC commissioners questioned Perry’s proposal and one, Commissioner Rob Powelson, said that FERC “will not destroy the marketplace.”

While Perry was trying to smooth the troubled waters, EPA Administrator Scott Pruitt on Oct. 10 signed a document beginning the process to change the regulations to the Clean Air Act implemented by the Obama Administration, which are called the Clean Power Plan.

The proposed changes will be published in the Federal Register with a 60-day comment period.

“The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule, preventing its devastating effects to be imposed on the American people while the rule is being challenged in court,” said Pruitt.  “We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate.  Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule.

“EPA will respect the limits of statutory authority.  The CPP ignored states’ concerns and eroded longstanding and important partnerships that are a necessary part of achieving positive environmental outcomes. We can now assess whether further regulatory action is warranted; and, if so, what is the most appropriate path forward, consistent with the Clean Air Act and principles of cooperative federalism,” Pruitt said.

The regulation adopted by Obama’s EPA required each state to develop plans to reduce emissions from electric utilities.

The rule has been on hold since February 2016 when the Supreme Court put an unprecedented halt on it while litigation brought by Republican states and industry groups proceeded.


Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely those of the author.




October 12, 2017

Speaker Straus Announces Economic Policies Study Committee


It’s time to highlight what makes Texas a great place to do business, Texas House Speaker Joe Straus said Thursday.

At a breakfast with the Austin Chamber of Commerce, the San Antonio Republican said he’s named a committee to identify policies that attract business to the state.

The House Select Committee on Economic Competitiveness will be chaired by Corsicana Representative Byron Cook, with Houston Democrat Senfronia Thompson as vice chair.

Straus said he hopes the committee will help bring the state forward from what he called “wedge” politics that included the “bathroom bill” steered by Lt. Governor Dan Patrick during the 2017 legislative session and the special session that followed.



October 12, 2017

Oil Inventories Down, 2018 Demand Bearish: EIA


US commercial oil inventories fell by 2.7 million barrels last week, according to new figures from the Energy Information Administration on Thursday.

Many analysts had expected a drop of only about 800.000 barrels.

Gasoline stockpiles were up by 2.5 million barrels, about five times more than many analysts expected, while distillate inventories were down by 1.5 million barrels, while analysts expected a 2.2 million barrel drop, EIA figures show.

Cushing, Oklahoma crude stocks, however, were up last week by 1.3 million barrels.

The American Petroleum Institute said Wednesday that U.S. stockpiles were up by 3.1 million barrels.

Crude runs by refineries were up by 229,000 barrels a day, with utilization rates up by 1.1& to 89.2% of total capacity.

The weekly EIA report, usually released on Wednesdays, was one day late because of the Columbus Day holiday on Monday.

And the IEA said on Thursday that demand for OPEC oil would be 32.5-million barrels per day (bpd) next year — about 150,000 bpd lower than the group pumped last month, indicating that OPEC needs to cut its production even more than it has in order to boost the oil markets.

The estimate indicated that crude stockpiles may not continue falling much longer.

Despite OPEC efforts, oil stockpiles are still running 13% higher than five-year averages.

British Investment Group Buys Into Del Rio-Area Wind Farm


Great Britain’s John Laing Group is buying a majority stake in the partnership that controls the upcoming Rocksprings 150 MW wind project north of Del Rio in Val Verde County.

French renewable power investor Akuo Energy is selling its stake in Rocksprings for $85 million. The company purchased the project from SunEdison as part of the latter’s bankruptcy.

Rocksprings will be 53 General Electric 2.3 MW turbines and 16 1.72 MW units, with corporate commitments for output sales that include Wal-Mart Stores Inc.

The project is expected to be completed by the end of the year.

The British company has already acquired major interests in two renewable power projects outside Texas.



October 12, 2017

Fieldwood Wants to Be Reach Milestone In Private Mexico Offshore Drilling


It would be something of a milestone — the first private offshore driller to produce oil in Mexico in 80 years — and Houston’s Fieldwood Energy LLC is plunging ahead.

The four-year-old company already claims to be the biggest shallow-water operator on the US side of the Gulf of Mexico, investing $5 billion to buy up offshore assets.

Now the company’s president and CEO Matt McCarroll says Fieldwood, backed by Riverstone Holdings LLC, will likely begin drilling on the Mexico side of the border in 2018, with plans for 2019 production.

The company won rights in Mexico’s second-ever oil auction last year to develop crude in two shallow-water offshore fields, bidding in a joint venture with Mexican company Petrobal.

The blocks are expected to potentially contain more than 400 million barrels of oil, McCarroll said.



October 12, 2017

Williams Partners Increases Gas Delivery to NYC


Williams Partners LP has completed an expansion of its Transco pipeline system, resulting in increased natural gas delivery to New York City.

Williams has upped capacity delivery with its New York Bay Expansion Project by 115,000 dekatherms per day, just as the winter season begins to move in to the northeast.

The natural gas is delivered to National Grid Co., the largest northeastern distributor, serving 1.8 million people in Brooklyn, Long Island, Queens and Staten Island.

The expansion will help secure natural gas supplies in the New York City area,National Grid’s President Ken Daly said this week, “as we have seen with the recent storms that have devastated other states and neighboring regions, the security of energy supply needs to be protected and enhanced.

The enhanced pipeline “will help ensure safe, reliable and secure energy to meet our customers’ needs,” he said.



October 12, 2017

BlueCrest Planning 2018 Alaska Drill


Ft. Worth oil producer BlueCrest Alaska Operating intends to drill at least one new Alaska well in 2018 from its onshore pad, regulatory filings show.

The well would be between Anchor Point and Ninilchik, according to a plan of development it submitted Sept. 27 to the Alaska Department of Natural Resources’ Division of Oil and Gas.

BlueCrest previously halted drilling in August 2017 — after drilling two of the five wells it had planned that year — citing the state government’s nonpayment of about $75 million in refundable tax-credits owed under Alaska’s oil and gas tax credit program, according to the Kenai, Alaska, Peninsula Clarion.



October 12, 2017

Lilis Adds 4,000 Permian Acres


Permian Basin exploration and developer Lilis Energy has agreed to buy more than 4,000 acres that’ll be good for long-lateral development from an unnamed private seller.

The Permian contiguous or overlapping acreage price is $45.6 million and will raise San Antonio-based Lilis’ Delaware Basin acreage to more than 15,000 net.

Lilis said it has one rig operating and another is planned to start by the end of October.



October 12, 2017

Lubbock Oilfield Services Co. Buys Equipment Provider, Moves Office


Texas oilfield services provider Danos has acquired Renegade Backhoe Services of Levelland to augment Danos’ construction operations in West Texas and Eastern New Mexico.

Levelland is just west of Lubbock.

Renegade’s assets include dump trucks, heavy-haul trailers and backhoes.

General Manager of US Land Operations for Danos Jeremy Adkins said, “In addition to our well-established production and roustabout lines of services, Danos can now offer support for construction operations to customers in Western Texas and Eastern New Mexico.”

Closely-held Danos is moving its Lubbock office to a larger space in Levelland, closer to its northern Permian Basin field offices, to accomodate the acquired inventory.



October 12, 2017

BNP Paribas Makes Sweeping Announcement to Cut Business With Tar Sands, Pipelines and LNG: News Release


Groups have denounced BNP Paribas for its support of the Texas LNG export project in the Rio Grande Valley; announcement comes amid pressure from growing coalition of Indigenous groups and environmental organizations

Paris, France — BNP Paribas, Europe’s second largest bank, has announced that it would no longer do business with companies whose primary business activity is connected with oil and gas from shale and/or oil from tar sands.

BNP Paribas also announced that it will not finance any oil or gas projects in the Arctic region.

The announcement was welcomed by Rainforest Action Network (RAN), Save RGV from LNG, and Friends of the Earth (FOE) France, who put pressure on the bank for its support of extreme fossil fuel projects, which put the bank out of compliance with ambitions to keep global warming below 2°C by the end of the century.

“BNP Paribas’ new commitment is the most comprehensive oil and gas policy of any big bank, and represents a significant step forward in recognition of the devastating Indigenous rights and climate impacts that result from bankrolling the tar sands, fracked oil and gas from shale, and liquefied natural gas (LNG) terminals that export shale gas,” says Jason Disterhoft, Senior Campaigner at Rainforest Action Network.

“Other banks must follow BNP Paribas’ lead and stop extreme fossil fuels. Whether or not they continue to finance dirty energy will be a key test of their seriousness on climate change and human rights.”

RAN, FOE France, and Save RGV from LNG issued a report earlier this year entitled “BNP Paribas vs. Communities and Climate,” condemning BNP Paribas for its support of the Texas LNG export project in the Rio Grande Valley, Texas, and coordinated an Indigenous delegation that traveled from Texas to take their message directly to the bank in Paris.

“We traveled from Texas to France to tell the big banks directly that Texas LNG would destroy our sacred indigenous sites, spew pollution into our communities, and scar our pristine gulf coast,” says Rebekah Hinojosa of Save RGV from LNG.

“This is a huge victory for the indigenous and people of color communities in Texas that have been resisting the fossil fuel industry. The fight is not over: Société Générale, another large French bank, should follow BNP Paribas and end support for the Rio Grande LNG terminal proposed for our region.”

BNP Paribas now states its commitment to bringing its financing and investment activities in line with the Paris Agreement, which aims to keep global warming below 2°C by the end of the century.

Under the new policy, the bank will not support new exploration, production, transportation and export projects related to tar sands, shale gas, and oil projects in the Arctic.

Significantly, the bank has also committed not to finance companies where 30% or more of their business is in these activities.

BNP Paribas will therefore not finance TransCanada’s Keystone XL pipeline, Enbridge’s Line 3, nor any other tar sands pipeline project in North America.  BNP Paribas will also not finance Texas LNG or any other liquefied natural gas export terminal or gas pipeline in North America, as most gas for LNG production is slated to come from fracked shale gas.

Jean-Laurent Bonnafé, Chief Executive Officer of BNP Paribas, says:  “We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world.

“As an international bank, our role is to help drive the energy transition and contribute to the decarbonisation of the economy.

“As we have announced, we’re committed to working with and supporting those energy sector partners who have decided to make environmental issues a central part of their business policy.”

By Rainforest Action Network



October 11, 2017

Dakota Access to Stay Open During Army Corps Review: Judge


The Dakota Access pipeline will continue operation while more environmental studies are completed.

A Washington DC federal judge ruled Wednesday that Energy Transfer Partners‘ pipeline can continue moving crude oil while the Army Corps of Engineers conducts its review of the portion of the line that runs under a North Dakota lake.

The judge agreed with Native American groups that a continued environmental study is appropriate, but decided that the pipeline can continue shipping along its 1,200 miles to Illinois, which has been underway since the line opened in June.

District Court Judge James Boasberg said he will be keeping an eye on the Army Corps to be certain its review is thorough.




October 11, 2017

EPA Begins Repeal of the Clean Power Plan


The head of the Environmental Protection Agency is taking steps to repeal the Clean Power Plan (CPP), which was put into place during the Obama administration.

Scott Pruitt said Tuesday that the 2015 law aimed at reducing carbon emissions from power plants said the repeal process is underway as part of plan to narrow the Clean Air Act.

Pruitt said he has signed a notice to propose a rollback of the plan, the start of a long process that is expected to include public and industry comments, lawsuits and controversial tweaks of already existing laws.

Recent studies have indicated that Texas would have to do considerably more than it already has to meet emissions standards established by the CPP.

The Clean Power Plan would have pressured states to move away from coal as an energy source, toward sources that produce fewer carbon emissions, but wasn’t expected to take effect until 2022 and is now tied up in the courts.

Still, a number of states have already been moving toward complaince with the plan.

In its plans to link the Obama plan with the Clean Air Act, the EPA would limit regulations exclusively to the emissions produced by individual sources.

But Pruitt is taking it one more step: his agency is asking for comments on whether it should even regulate carbon pollution at all, absent an assignment to do so by Congress.

The Obama plan set emissions reduction targets for states but left it to the states to decide how to meet the targets.

Still, the announcement by Pruitt is seen as a blow to carbon reduction efforts, even though trends toward renewable and sustainable energy are already underway nationwide.



October 11, 2017

Burnett Oil Back On the Search In Florida’s Big Cypress


Ft. Worth’s Burnett Oil Co. is back on the search for oil in Florida’s Everglades region after winning new state approval.

Burnett had requested permission from the Florida Department of Environmental Protection to finish testing in the Big Cypress National Preserve in far south Florida west of Ft. Lauderdale, but the agency deferred to a US National Park Service approval for the testing.

The Park Service had given the okay to Burnett during the Obama administration and that okay was upheld by the US District Court for the Middle District of Florida earlier this year.

The company sent in specialized trucks to find seismic evidence of oil underground but had to leave because of the rainy season.

Those trucks are expected to return under the supervision of the Florida EPA, over the objections of environmental groups that are worried about wildlife being threatened by the oil search.

Some of the groups have said that Burnett’s activities earlier this year had damaged some Big Cypress trees and wetlands, which are owned by the federal government, but the Florida agency said it’s watching the search activities closely to protect wildlife and wetlands.



October 11, 2017

5th Circuit Rebuffs Texas Rancher’s Challenge to Pipeline


A West Texas ranch owner challenging the use of eminent domain by Trans-Pecos Pipeline LLC, a private company, to build a pipeline across his property has lost his fight against the condemnation proceeding in a federal appeals court, Reuters reports.

In a decision last Tuesday, a three-judge panel of the 5th U.S. Circuit Court of Appeals said John Boerschig is not entitled to a preliminary injunction against the condemnation action because he has not shown he is likely to prevail in the end.

Boerschig challenged the constitutionality of Texas’ eminent domain proceedings, a battle that is “a long shot at best,” the appeals court said.

Boerschig’s attorneys argued that the Texas eminent domain law illegally delegated condemnation authority to a private party (Trans-Pecos Pipeline), and that the process failed to provide an opportunity for the plaintiff to participate in a “predeprivation hearing” where the condemnation can be challenged.

The Texas eminent domain laws “are longstanding and have withstood previous legal challenges,” including prior claims that the lack of a “predeprivation hearing” violated the law, according to Lexology.

“Boerschig’s legal reliance on the ‘private nondelegation doctrine,’ was described by the Fifth Circuit as having a place in Fourteenth Amendment law ‘long recognized but seldom invoked.'”

The legal tactic failed before the 5h Circuit Court because the few federal cases cited in connection with this proposition “cannot dictate how state governments allocate their powers.”




October 11, 2017

NextDecade Subsidiary Gets Cameron County Tax Abatements


A subsidiary of a Texas liquified natural gas development company has new concessions from Cameron County for a proposed LNG export project at the Port of Brownsville.

Rio Grande LNG, LLC — an affiliate of NextDecade Corp., based in The Woodlands north of Houston — says its receiving Chapter 312 tax exemptions from the county for its proposed Rio Grande LNG project that will remove county taxes in stages over the first ten years of each phase of the project.

In return, Rio Grande LNG has said it will pay $2.7 million each year of tax abatements to the county as payments-in-lieu-of-taxes, the company said.

The project is expected to result in spending of more than $15 billion in Cameron County on the Rio Grande and associated Rio Bravo Pipeline, direct creation of more than 6,000 jobs during the construction phases and the addition of 250 permanent jobs.

The company said the pipeline and port project will also indirectly support more than 3,000 permanent Cameron County area jobs after construction.

The projects are expected to complete the regulatory approval process by mid-2018 and, providing the project is finalized, should be completed in 2022, according to Rio Grande LNG.

The Rio Bravo pipeline, started in 2015, is to be a natural gas pipeline between the Brownsville Rio Grande LNG site and the Agua Dulce market hub area.




October 11, 2017

Alex Mills, President of Texas Alliance of Energy Producers, Announces Retirement


WICHITA FALLS, TX — The Texas Alliance of Energy Producers announced today that Alex Mills will retire effective Dec. 31, 2017 as President and Chief of Staff.

Mills became President of the Texas Alliance of Energy Producers in 2000, following the merger of the North Texas Oil & Gas Association (NTOGA) and the West Central Texas Oil & Gas Association (WeCTOGA). 

Mills moved to Wichita Falls in 1994 as Executive Vice President of NTOGA after living eight years in Washington, D.C. where he served as Vice President of the Independent Petroleum Association of America, the national organization for the independent oil and gas industry. He also served as Executive Vice President of the West Central Texas Oil & Gas Association in Abilene from 1981 to 1986.

He worked as Managing Editor of The American Oil & Gas Reporter, and for several newspapers, television and radio stations in Texas. He authors a weekly column concerning energy issues, which appears in newspapers across Texas.

He is a frequent speaker on energy topics, including speaking engagements at Texas Tech University and participated in the Distinguished Lecture Series at the Dillard Business School at Midwestern State University.

Texas Governor Ann Richards appointed him to the Interstate Oil & Gas Compact Commission in 1994 and Governor George W. Bush re-appointed him in 1995.

He serves on the Board of Directors of the Domestic Energy Producers Alliance and the National Stripper Well Association.

He earned a Bachelor of Arts degree from the University of North Texas, and served as President of the UNT Alumni Association in 1997-1998.

He served in the U.S. Army Security Agency from 1966 to 1970.

The Alliance won the Association of the Year Award in 2008 presented by Energy Advocates in Washington, D.C. and again in 2011. Also, the American Oil and Gas Historical Society presented the Alliance with the prestigious 2008 Oil Patch Preservation Award in Houston.

Based in Wichita Falls, the Alliance also has offices in Austin and Houston.




October 11, 2017

RRC Commissioners Appoint Interim Executive Director: News Release


Austin – Railroad Commission Chairman Christi Craddick and Commissioners Ryan Sitton and Wayne Christian Tuesday voted unanimously to appoint Wei Wang to serve as interim executive director, effective Oct. 16, 2017.

Wang currently serves as the agency’s Chief Financial Officer. Wang will serve in this dual capacity while the Commission conducts a search for a permanent executive director to lead the agency’s day-to-day operations.

Chairman Craddick said, “Wei has the experience and institutional knowledge necessary to fulfill the important mission of the agency.  We appreciate his assistance and anticipate the positive impact that his expertise will bring during this transition period.”

Commissioner Sitton said, Wei has done a phenomenal job as chief financial officer and I’m confident in his ability to serve as interim executive director. He has been an instrumental member of our leadership team and is fully committed to the Railroad Commission’s mission to serve and protect the public and environment.”

Commissioner Christian said, “Wei has proven himself to be an effective leader at our agency, and has earned the respect of his fellow team members across the Commission. Our agency is in capable hands with Wei in the interim as we move forward with the search for an Executive Director.”



October 11, 2017

BP Revives Amoco Brand


The long-dormant Amoco gasoline retail brand is being brought back by BP PLC, trademark owner.

US station owners will be given the option to switch their BP stations to Amoco in a move aimed at helping retailers compete when there are multiple BP-branded stations within close proximity, BP said.

Amoco was once the Indiana portion of Standard Oil Co.

BP bought the company in 1998 and phased out the brand in the early 2000s.




October 10, 2017

Apache Expands Alpine High Drilling, Delays Buildouts, Avoids Underground Water Systems


Apache Corp. is ramping up the number of drilling locations at the Alpine High play in southwest Texas, the company’s Delaware Basin discovery that was announced last year.

In September 2016 there were up to 3,000 spots where drilling was underway, but there are now more than 5,000 such drilling locations, according to Apache CEO and President John J. Christmann IV.

They consist of “3,500+ locations in the ‘wet gas’ window, 1,000+ locations in the dry gas window and 500+ locations in the emerging Wolfcamp/Bone Springs oil play. Each of these plays is highly economic at current commodity prices on a fully burdened development case scenario,” he said in a company statement.

As part of an overview of the company, Christmann said Monday that an infrastructure buildout has been delayed at Alpine High, especially at two central processing facilities.

The startup of a planned Hidalgo facility in the south portion of the Alpine has been delayed until the final quarter of this year, while the Cypress north portion facility is delayed until the first quarter of 2018, because of production postponements in manufacturing facilities caused by Hurricane Harvey.

Apache also plans to bring three more pads to the southern Midland Basin by the end of the year, for 20 total wells in the area.

In Christmann’s statement, he emphasized that the company is looking closely at underground water systems in the Alpine High area, especially in the far western portion, and the complexities of drilling near the water supplies require Apache to “minimize any drilling activity in this area,” and the company’s location counts “have never included any wells in these areas.”

Apache is updating its 2018 plan, Christmann said, “which will incorporate our latest views on production volumes, industry inflation, continued operating efficiencies and possibly a lower oil price assumption. As a reminder, a five-dollar movement in oil prices impacts our annual cash flows by approximately $350- to $400-million dollars.”

He added that the company took a number of steps ahead of Hurricane Harvey to secure alternative distribution, avoid flaring and minimize material shut-ins, to assure continued production during the storm.




October 10, 2017

EPA Begins Repeal of the Clean Power Plan


The head of the Environmental Protection Agency is taking steps to repeal the Clean Power Plan (CPP), which was put into place during the Obama administration.

Scott Pruitt said Tuesday that the 2015 law aimed at reducing carbon emissions from power plants said the repeal process is underway as part of plan to narrow the Clean Air Act.

Pruitt said he has signed a notice to propose a rollback of the plan, the start of a long process that is expected to include public and industry comments, lawsuits and controversial tweaks of already existing laws.

Recent studies have indicated that Texas would have to do considerably more than it already has to meet emissions standards established by the CPP.

The Clean Power Plan would have pressured states to move away from coal as an energy source, toward sources that produce fewer carbon emissions, but wasn’t expected to take effect until 2022 and is now tied up in the courts.

Still, a number of states have already been moving toward complaince with the plan.

In its plans to link the Obama plan with the Clean Air Act, the EPA would limit regulations exclusively to the emissions produced by individual sources.

But Pruitt is taking it one more step: his agency is asking for comments on whether it should even regulate carbon pollution at all, absent an assignment to do so by Congress.

The Obama plan set emissions reduction targets for states but left it to the states to decide how to meet the targets.

Still, the announcement by Pruitt is seen as a blow to carbon reduction efforts, even though trends toward renewable and sustainable energy are already underway nationwide.




October 5, 2017

Harris County Judge Says Houston Needs Third Reservoir: QR


Hurricane Harvey needs to be the trigger for a more comprehensive Harris County flood control plan, and to look at the future the area must look at the past, the county judge told a state committee Wednesday.

Ed Emmett told the Texas House Natural Resources Committee that the Houston region should map the waterways of the past, noting reservoirs and development locations, according to the Quorum Report.

Another levee is needed to manage flood waters, state and Harris County officials have agreed, and several locations for it are being considered.

Emmett said that while a county bond issue is okay, tapping into the state Economic Stabilization Fund is a better idea.

“If this isn’t a rainy day, then what is…It’s $500 million to protect this entire region. To me, that would be a good investment,” he said.

“I believe very firmly that Harvey ought to be a redefining moment for the state of Texas,” Emmett told the committee. “We have to change the way we do a lot of things.”

Houston floods in 1935 led to the 1940s creation of the Harris County Flood Control District and the construction of the Addicks and Barker reservoirs, Emmett noted.

Plans to manage runoff from the Cypress Creek watershed, where much of the worst flooding occurred in Hurricane Harvey, never came to fruition, and ideas to manage flooding along Galveston Bay and the Houston Ship Channel are expected to undergo review, while a proposed coastal barrier, nicknamed the “Ike Dike,” is being studied by a legislative committee.




October 5, 2017

Permian Player Oryx Midstream Weighs Options


Oryx Midstream Services is weighing its options as a player in the red hot Permian Basin.

The three-year-old private equity-backed midstreamer could have an initial public offering, but there is also talk of a potential sale with Oryx expressing a preferred valuation of up to $3 billion, according to Bloomberg.

The news service recently noted that several energy giants have expressed interest in buying Midland-based Oryx, including the master limited partnerships Enterprise Products Partners and Magellan Midstream Partners along with refiner Valero Energy.

Among the attractions: Oryx’s growing footprint in the Permian Basin, where production is expanding at a rapid rate as producers tap into its treasure trove of oil, according to Motley Fool, and the company’s “visible growth prospects.”

“For example, the company can expand the Oryx Trans Permian pipeline system’s capacity up to 200,000 barrels per day in the near term. In addition, the company recently announced that it would build a new regional crude oil transport pipeline.”




October 5, 2017

Dynegy Welcomes Proposed Illinois Pollution Reductions Rule Changes


Coal-fired plants have already been retrofitted to the tune of billions of dollars in the past 20 years, reducing sulphur dioxide emissions, company says

Dynegy Inc. says it supports a new ruling in Illinois that reduces pollution and simplifies regulations.

The Illinois Pollution Control Board is considering a plan from the state’s version of the EPA that would condense two sets of annual emission rate limits down to one, bringing them more in line with federal standards, Dynegy said Wednesday.

The “Multi-Pollutant Standard” rule change would affect eight of Houston-based Dynegy’s downstate coal-fueled generation plants.

The annual emissions tonnage limitations would by reduced by 20% under the new rules, but Dynegy said the simplified rules will make compliance easier and anyway, “these plants have already been retrofitted with approximately $2 billion in emission control technology that reduced sulfur dioxide emissions by 90% since 1998, with significant reductions of nitrogen oxides (NOx) and other emissions as well,” according to the company’s Executive Vice President of Regulatory Affairs, Dean Ellis.

By Mike Shiloh




October 5, 2017

Producers Midstream To Serve Delaware Basin With New Pipeline


A new natural gas gathering and processing system is in the works from Producers Midstream LP (PMLP), with 70 miles of pipeline and 40,000 horsepower compression to serve the Delaware Basin.

Dallas-based PMLP said the line will be anchored by Charger Shale Oil Co. and the pipeline will be handled through PMLP’s formation of Culberson Midstream LLC, which will be operated by PMLP and will include oil, gas and water services.

Producers also says its constructing a new cryogenic natural gas processing complex that will serve a capacity up to 260 million cubic feet per day, with sources in the Wolfcamp, Avalon and Bone Springs formations.

Producers Midstream CEO Jim Bryant, the company’s founder, said the “greenfield development will allow Charger and other operators in the area to take advantage of a best-in-class gathering and processing system designed specifically to meet the needs of the rapidly expanding Basin.”

Charger is a pure-play 48,000 net acre Delaware Basin oil and shale gas developer started last year that includes some Tall City Exploration executives (including founder Joe Magoto) and specialists and is based in Midland.

The system is expected to be operational by the end of the first quarter of next year.




October 5, 2017

Oil, Natural Gas Prices Pass Milestones


By Alex Mills

Crude oil and natural gas wellhead prices crossed a psychological price threshold last week as crude oil closed at $50.41 and natural gas closed at $3.094 on the New York Mercantile Exchange (NYMEX) on Wednesday, Sept. 20.

The Energy Information Administration (EIA) released its weekly oil inventory report on Wednesday showing crude inventories rose 4.6 million barrels during the week ending Sept. 15, which is more than what many traders expected.

A report by Bank of America Merrill Lynch pointed out that the increase in oil inventories can be attributed to a refinery utilization of just 73 percent.  Refineries on the Gulf Coast continue to struggle to get back in full operation following Hurricane Harvey.

Crude oil prices increased $1.11 over the previous week and up $6.97 compared to same period in 2016.

Gasoline inventories fell by about 2.13 million barrels, and distillate stockpiles fell by 5.7 million barrels. Gasoline for October delivery settled at $1.6551 per gallon.

Iraq’s oil minister commented last week just before a meeting of OPEC members in Vienna that Iraq and other OPEC members are considering options regarding its production-cut agreement, including an extension beyond March and a deeper output cut than the agreement reached in November of 1.8 million barrels per day.

Brent oil settled at $56.24 – up $1.10 – for November delivery on ICE on Sept. 20, which is $5.83 higher than the West Texas Intermediate (WTI) closing on NYMEX.

Natural gas prices on NYMEX have averaged $3.019 in September and closed at $3.094 on Sept. 20 an increase of $0.036 from last week and up $0.047 over the same week 2016.

Natural gas sales to Mexico have played an important part in price stability. Mexico gets more than half of its natural gas from Texas and U.S. Sending natural gas across the border to Mexico opens the door for an “incredible opportunity” for Texas, Ryan Sitton, a member of the Texas Railroad Commission, said during a meeting to discuss reforms in Mexico’s energy sector.

“We have an incredible opportunity in Texas to provide Mexico with much-needed energy resources while stimulating our own economy,” Sitton said in a statement.

Sitton has pointed out that Mexico imports about 60% of its natural gas from the U.S., and most of that comes from Texas. By 2019, U.S. natural gas exports to Mexico could double.

“Mexico’s energy reforms and demand coupled with near historic highs in U.S. production are creating an enormous opportunity from which both countries will benefit,” he said in comments.

Mexico’s government in July held its first auction to access capacity to natural gas infrastructure as part of the country’s sweeping energy reforms. Those reforms could bring in up to $415 billion in investments over the next 20 years as the country establishes links to the rest of the world.

President Trump wants to renegotiate the terms of the 23-year-old North American Free Trade Agreement. U.S. Trade Representative Robert Lighthizer said from Mexico City in early September a “new modern agreement” was on the table that could “address the needs of those harmed by the current NAFTA, especially our manufacturing workers.”

Alex Mills is President of the Texas Alliance of Energy Producers.  The opinions expressed are solely those of the author.