The Texas Energy Report NewsClips – February 14, 2018
CNBC – February 13, 2018
Big oil-producing nations have nearly achieved their goal of draining a prolonged oil glut after taking some bitter medicine: cutting the crude production that funds their governments.
But with victory in sight, U.S. drillers are poised to spoil OPEC’s plans for the second time in three years.
On Tuesday, the International Energy Agency warned that surging U.S. production could delay OPEC’s bid to balance the long-oversupplied oil market. It’s another sign that the 14-member cartel will have to adjust to a market whose ups and downs are increasingly influenced by U.S. shale oil.
Dallas Morning News – February 13, 2018
We recommend former state Land Commissioner Jerry Patterson over incumbent George P. Bush and two first-time challengers in the Republican primary, giving Patterson the chance to return to the job he held for 12 years.
When Patterson, 71, stepped aside to run for lieutenant governor four years ago, voters chose from among a weak field of candidates to put Bush in office. Since then, the General Land Office has been at the center of several troubling controversies. Bush cut staffing at the agency and forced out some experienced staffers to make room for political allies he called “top-flight individuals.” Some of those who left got payouts for agreeing not to sue. He’s undertaken an ambitious remodel and restoration of the Alamo area but has come under fire for mismanaging the project. The office’s response to Hurricane Harvey, particularly in providing housing help for victims, seemed slow to take off. And he’s fumbled on issues of transparency.
San Antonio Express News – February 13, 2018
Lawyers for state Sen. Carlos Uresti wrapped up their defense in his criminal fraud trial Tuesday, deciding against calling the lawmaker or any of the big names that they previously submitted as potential witnesses on his behalf.
Uresti lead lawyer Michael McCrum rested the San Antonio Democrat’s case after the lunch break on the 14th day of the trial.
Uresti’s lawyers filed a December court document listing a powerful collection of judges, politicians and lawyers to potentially testify on Uresti’s behalf, including Lt. Gov. Dan Patrick, former San Antonio Mayors Julián Castro and Henry Cisneros, state Sen. José Menéndez, state District Judges Peter Sakai and Solomon Casseb III, and Bexar County District Attorney Nico LaHood.
“We didn’t think it was necessary,” McCrum said on why the decision not to call Uresti or any of his character witnesses. He also stood by his previous statement that the government hadn’t proven its case.
Wall St. Journal – February 13, 2018
A top oil executive walked into the marble lobby of an exclusive Milan hotel on a chilly winter night. His dinner date was a former Nigerian oil minister offering to sell one of Africa’s biggest untapped oil discoveries.
Eight years later, the question of whether the $1.3 billion paid for the license to that prized oil field was mostly a bribe is at the heart of one of the biggest bribery scandals the oil industry has ever seen.
Part of a broader crackdown, the case has reached into the highest levels of the executive ranks of Royal Dutch Shell PLC, the second-largest Western oil company—including wiretaps on its chief executive—and into Eni SpA, Italy’s state-backed oil company.
Oil & Gas
CNBC – February 14, 2018
Oil prices were stable on Wednesday, supported by healthy economic growth and expectations that a weaker dollar could spur fuel demand.
Despite this, crude prices remain well below recent highs due to signs of lingering oversupply, including rising U.S. inventories and ample physical flows globally.
U.S. West Texas Intermediate (WTI) crude futures were at $59.17 a barrel at 0123 GMT, down 2 cents from their last settlement. WTI was trading above $65 in early February.
Brent crude futures were at $62.77 per barrel, up 5 cents from their last close. Brent was above $70 a barrel earlier this month.
Xinhuanet – February 13, 2018
Shale oil production from the U.S. Permian Basin was estimated to be 2.92 million barrels per day (bpd) in February, and output in March is projected to increase by 75,000 bpd, according to a report by the U.S. Energy Information Administration (EIA) released on Monday.
The EIA’s Drilling Productivity Report also said that gas production from the Permian Basin in March will be 9.97 billion cubic feet (282.2 million cubic meters) per day.
The Permian Basin, known for its shale oil and gas, is a sedimentary basin largely contained in the western part of the U.S. state of Texas and the southeastern part of New Mexico.
Wall St. Journal – February 13, 2018
A giant U.S. crude import terminal is moving closer toward loading large vessels that could carry oil abroad, a move that would allow bigger shipments to Asia and other lucrative overseas markets.
A supertanker recently pulled up to the Louisiana Offshore Oil Port to test loading up on crude at the facility, the port announced on Tuesday. The test is significant because no other Gulf Coast ports have the capability to fully load the large crude carriers that can more profitably export oil to Asian markets.
A successful test run is likely to be followed by carriers shipping crude abroad from the port, providing U.S. producers with better access to fast-growing foreign markets. That has become increasingly important since U.S. companies have been ramping up their production of crude to some of the highest levels ever.
Seeking Alpha – February 13, 2018
Oil and gas stocks led for a good part of the recent rally.
The new, but old, narrative is that frackers will cause a new, maybe the same as the old, oil glut.
Frackers could not and would not cause an oil glut, not in a box, not with a fox, not in a house, not with a mouse.
Inflation and oil supply disruptions are very high risks in the not-too-distant future.
Buy oil and gas stocks on this correction to appropriate asset allocation levels for your risk level.
Dallas Morning News – February 13, 2018
As climate-change lawsuits against the oil industry mount, Exxon Mobil Corp. is taking a bare-knuckle approach rarely seen in legal disputes: It’s going after the lawyers who are suing it.
The company has targeted at least 30 people and organizations, including the attorneys general of New York and Massachusetts, hitting them with suits, threats of suits or demands for sworn depositions. The company claims the lawyers, public officials and environmental activists are “conspiring” against it in a coordinated legal and public relations campaign.
Exxon has even given that campaign a vaguely sinister-sounding name: “The La Jolla playbook.” According to the company, about two dozen people hatched a strategy against it at a meeting six years ago in an oceanfront cottage in La Jolla, Calif.
San Antonio Express News – February 13, 2018
San Antonio-based Andeavor expanded its asphalt business Monday with the $75 million purchase of four California and Arizona asphalt terminals.
Andeavor, the nation’s fifth-largest refiner, bought the terminals from Brentwood, Tennessee-based refiner Delek U.S. Holdings Inc. The deal includes three terminals in California , one in Arizona, and a 50 percent interest in a fifth terminal, the Paramount Nevada Asphalt Company joint venture terminal in Fernley, Nevada.
The company currently operates terminals in New Mexico, Arizona, Texas, Minnesota and Alaska.
The purchase brings Andeavor’s asphalt capacity to more than 430,000 tons spread across 10 terminals, the company said.
Oil Price – February 11, 2018
Bottom line: Unconventional oil producers have yet to demonstrate that they can consistently make profits.
According to oil industry consultancy Wood Mackenzie, that won’t occur until WTI is routinely trading at $63 per barrel, which they believe is unlikely until 2020.
There’s also considerable pressure being applied to shale oil companies by institutional investors to exercise restraint and avoid the excesses of the shale oil boom. Excesses of the shale oil boom and the sharp decline of oil prices were also subjected to by shareholders and institutional investors. That has seen industry leaders promise far greater restraint and to take a disciplined approach to the deployment of capital as well as drilling in an attempt to reduce debt and generate returns for shareholders.
If they follow through on their promises, which according to Goldman Sachs is highly likely, it’s another factor that reduces the likelihood of any substantial uptick in U.S. oil production occurring.
Bloomberg – February 12, 2018
Oil demand in India rose 10.3 percent in the first month of 2018, the fourth straight monthly gain.
Total oil consumption expanded at the fastest pace in 14 months to 16.9 million tons from 15.3 million a year ago, according to the oil ministry’s Petroleum Planning and Analysis Cell. Improvement in road freight transport following the stabilization of the new nationwide sales tax and growing use of cars and scooters boosted the consumption.
San Antonio Express News – February 13, 2018
San Antonio-based midstream investment fund EnCap Flatrock Midstream is committing $400 million to a new crude oil infrastructure development company.
EnCap, which helps fund midstream oil and gas investments such as pipelines and storage terminals, committed the funds to Sugar Land-based Lotus Midstream, which was formed in January by former executives from Sunoco Logistics to develop new crude oil gathering and transportation pipelines.
Houston Chronicle – February 8, 2018
While some conservative political leaders still deny that the Earth is heating up due to humans burning fossil fuels and releasing greenhouse gases, the people who produce those fuels and chemicals have recognized the imperative to limit global warming to a rise of 2 degrees Celsius. Many of these companies are recommending a carbon tax, and others are calling on governments to keep predictable environmental regulations. The pleas for reason coming from corporate boardrooms contrast sharply with the sloganeering coming from Republican politicians.
Sara Ortwein, the president of Exxon Mobil subsidiary XTO Energy, last week called for “sound policies and regulations” for methane emissions.
Sherman Herald Democrat – February 13, 2018
Three of the justices from the Texas Fifth District Court of Appeals convened in the Ida Green Communications Center at Austin College Monday to hear oral arguments in ERCOT vs. Panda Power, a case out of the 15th state district court in Grayson County.
In February of 2016, Panda Power Generation Infrastructure and its subsidiaries sued the Electric Reliability Council of Texas, Inc. saying the latter offered up flawed information about the scarcity of power in Texas to induce Panda and other companies to build power plants in the state. ERCOT eventually told the power companies that the numbers were off, but — Panda contends — not soon enough to keep Panda and others from making significant investments in the state.
Reuters – February 12, 2018
U.S. President Donald Trump on Monday asked Congress to allow federal power companies such as the Tennessee Valley Authority to divest transmission assets to state, local or private entities, as part of its outline for rebuilding infrastructure in America:
– Federal ownership of these assets can result in “sub-optimal investment decisions and create risk for taxpayers,” the White House said.
– Providing federal agencies authority to divest of federal assets where the agencies can demonstrate an increase in value from the sale would optimize the taxpayer value, the plan said.
Wall St. Journal – February 12, 2018
Giant batteries charged by renewable energy are beginning to nibble away at a large market: The power plants that generate extra surges of electricity during peak hours.
Known as peakers, the natural-gas-fired plants are expensive to run, and typically are called into service only when demand rises and regular supplies are insufficient. That makes them vulnerable to inroads from lithium-ion batteries, which have fallen in price in recent years, and are emerging as a competitive alternative for providing extra jolts of electricity.
Numerous big batteries are under construction or consideration in the U.S., especially in the Southwest, where some companies see a shiny future for “solar plus storage” projects.
Alternatives and Renewables
KXAS (Dallas-Ft. Worth) – February 13, 2018
The City of Denton is in the process of becoming the largest city in America, and only the second city in Texas, to buy all of its electricity from renewable sources.
“We want to make sure we are doing what we can for the environment, but it is also good business because of the market that we are in right now,” said Denton Mayor Chris Watts about his city’s effort to draw all of its power from wind and solar sources by 2020.
Last week Denton city council members approved an update to the city’s energy plan that calls for the change.
Windpower Magazine – February 10, 2018
It might be late coming to the party, and significant challenges remain in supply-chain and marine logistics, but the business case for US offshore wind is now convincing. The sector’s short history in the US was peppered with initial setbacks, but the potential is finally starting to turn into a reality. The bold commitment of global offshore-wind market leaders, combined with the American drive to boost volume, as already demonstrated in onshore wind, offers great opportunities to all stakeholders.
With Deepwater Wind’s Block Island, the US now has its first commercial offshore wind farm.
New Electronics (UK) – February 2, 2018
Thin and rigid silicon segments that are wired through interdigitated metal contacts are said to produce flexible, high-performance solar cells.
A strategy, developed by KLAST, that uses a screen-printed aluminium circuit to make silicon solar cells flexible could enable them to become portable power sources.
Demand for wearable and implantable devices, foldable displays and vehicle-integrated solar panels are among some of the technology that could benefit, KLAST says.
Rare – February 11, 2018
Today, thanks to effectively nonexistent federal oversight of its electrical grid, Texas and Oklahoma are two leaders when it comes to wind power; however, the states handle their wind power industries in different ways.
Last fall, wind farms across Texas reportedly generated 20,600 megawatts, surpassing the state’s coal-fueled plants for the first time in history.
Reports show Texas also allows wind farmers to take advantage of massive tax discounts; developers of wind, solar and other renewable energy projects can receive tax breaks of up to 80 percent for 10 years.
According to the Electric Reliability Council of Texas, the agency responsible for overseeing the state’s electrical grid, wind power provided nearly one-sixth of the state’s electricity in 2017.
The Hill – February 13, 2018
A government watchdog has found that a Texas energy company likely charged the Department of Energy $2.5 million in extraneous expenditures ranging from spa services to lobbying costs.
The Energy Department’s Office of Inspector General identified more than $2.5 million in expenses Summitt Texas Clean Energy charged to project that they considered potentially unallowable, according to an inspector general report released Feb. 8.
Houston Chronicle – February 13, 2018
There are six people vying to become the next Texas land commissioner, but voters wanting to ask incumbent George P. Bush some questions may discover he’s hard to find.
Bush has no public campaign events listed on his campaign website or Facebook page. He has not participated in any of the dozen forums with the other Republicans candidates. Jerry Patterson, his most outspoken opponent who served as Land Commissioner prior to Bush taking office, believes voters don’t know how to find Bush on the campaign trail.
Texas Tribune – February 14, 2018
My wife and I, along with hundreds of thousands of our fellow Texans, just paid our property tax bill, and just like many homeowners suffering from rising property taxes, we didn’t have the money to pay. So, we did what so many of us must do. We borrowed the money, just like we did last year, and paid our tax bill by credit card.
State leaders continue to hide the real reason behind rising local property taxes: the failure of state government to adequately fund public education. As a result, you and I will continue to see our local property taxes rise with no end in sight. … But I have a plan that would help you pay those rising property taxes until a solution to school funding is found. I am proposing that Texas place a $10 carbon fee on the monthly production of crude oil, condensate and total oil, gas well gas, casinghead gas and total natural gas, raising an estimated $6.5 billion dollars a year — a number calculated using production data supplied by the Texas Railroad Commission.
Austin American Statesman – February 13, 2018
U.S. Rep. Kevin Brady recently joined business and trade leaders in Dallas to champion the unparalleled success of the North American Free Trade Agreement to the Texas and U.S. economies. Unfortunately, on the heels of recent negotiations by leaders from Canada, Mexico and the United States — and despite continued leadership from Brady, his Texas colleagues in the U.S. House and Texas Sens. John Cornyn and Ted Cruz — there is a real possibility that the critical pact will be terminated.
Given NAFTA’s major role in expanding economic opportunity for vital U.S. economic sectors – including agriculture, energy and manufacturing in the Lone Star State – Texans should hope that the trilateral agreement does not deteriorate in the worthwhile process of modernizing it. Privately owned freight railroads – a primary means for transporting goods throughout the continent – will do their part to ensure we do not lose NAFTA.
The Hill – February 13, 2018
Three environmental groups teamed up to sue the Trump administration on Tuesday for allowing oil companies to dump leftover waste from drilling and fracking into the Gulf of Mexico.
The lawsuit, filed by the Center for Biological Diversity (CBD), Gulf Restoration Network and Louisiana Bucket Brigade, argues officials neglected to determine the potential dangers to water quality, marine life and the environment before allowing the dumping.
Houston Chronicle – February 12, 2018
In the years leading into the 1994 signing of NAFTA, the U.S. lost nearly 2 million manufacturing jobs. Within four years of the agreement’s signing, American manufacturers added more than 800,000 jobs. By almost any measure, NAFTA has been an incredible success for the U.S. economy and for the businesses that drive it. The trilateral agreement has cleared away trade barriers with Canada and Mexico, creating an environment of stability and facilitating greater investment between these North American partner nations. NAFTA’s important provisions for settling trade disputes, too, has been critical to offering the kind of legal backstops that businesses need to grow their businesses beyond their own borders.
Rolling Stone – February 9, 2018
Air pollution from burning coal, driving cars, and using fire to clear land, among other activities, is the fourth-leading cause of death worldwide, killing about 5.5 million people each year. Nearly everybody is at risk, with roughly 92 percent of us living in places with dangerously polluted air. That alone makes reducing air pollution a necessary goal.
And yet we can’t live without aerosols, at least some of them. Natural aerosols – bits of dust, salt, smoke, and organic compounds emitted from plants – are an integral part of our planet’s atmosphere. Clouds probably wouldn’t be able to make rain without them. But as with greenhouse gases, human activity has resulted in too many aerosols (the excess is air pollution), with the bulk of the human-emitted aerosols lingering in the lower atmosphere, worsening their impact on our health. The result is a devil’s bargain: Aerosols are necessary for normal weather and help moderate rising temperatures, but they’re also killing us.