Buzz Archives – June 2018

The Texas Energy Report Buzz — Archives June 2018

Articles are in chronological order

“Most Prosperous” Texas Cities List Will Surprise You Because Of the Reasons Why


June 1, 2018


The “most prosperous cities” in Texas will surprise you, simply because of the criteria.

Odessa, Midland, Brownsville, Pearland.. oil and gas are contributing to three of the four.

The national rental-listings website Rent Cafe has a new publicity-seeking way to categorize cities based on increased home values, employment, income and population to come up with the list of “most prosperous.”

The actual rule appears to be fastest-growing cities when measured decade-over-decade, in this case today versus about ten years ago, and by that definition the list makes sense.

Hence, Odessa tops the list nationally, followed by gentrifying Washington DC.

Number 3 is Charleston, SC and number 4, Fontana, California (a fast-growing incorporation toward the eastern edge of Los Angeles).

Number 5 is, well, North Charleston, SC.

Jersey City, NJ is number 6

Another Texas town is number 7: Fast-growing Pearland, south of Houston.

Number 8: Miami.

Then Brownsville is number 9, and with the expected growth of the port, it could be even higher on the next survey.

Number 10 is Midland.


— Mike Shiloh




Citizen’s Group Files Fed Suit Against Idaho Over Houston Drilling Company Mineral Rights Grant


June 4, 2018


A July hearing has been scheduled at an Idaho federal court in connection with a lawsuit involving Houston oil & gas explorer Alta Mesa Inc.‘s use of mineral rights for drilling.

The suit against the state of Idaho and the Idaho Department of Lands — but not against Alta Mesa — was filed by a group called Citizens Allied for Integrity and Accountability along with two of the group’s members, who claim Idaho’s granting Alta Mesa rights to drill under private property violated the US Constitution.

The landowners say they had refused to sell the natural gas or oil, claiming their mineral rights; in Idaho, owners can be forced to lease their mineral rights if they are not already leased, and the plaintiffs in the lawsuit say they were indeed forced, but without fair consideration of market value, which can amount to seizure of rights.

The suit says Alta Mesa applied for, and was granted, access to underground rights to drill on more than 600 acres near the Idaho-Oregon border northwest of Boise, land belonging to numerous property owners.

The suit also claims that the Idaho Department of Lands granted Alta Mesa rights to build pipelines, telephone and electrical lines and other structures without consideration to landowners, property values and air and water quality.

The Ontario, Oregon, Argus Observer newspaper said in May that the Department of Lands has filed a motion for the case to be dismissed since under Idaho law, landowners’ mineral rights are not defined as actual property so the state is not required to bring due process before requiring the sale of such rights.




Southern Company Subsid Joins Oklahoma-Arkansas Wind Farm


June 4, 2018
A Southern Company subsidiary is buying into an Oklahoma wind farm.

Southern Power, which provides electricity to eleven states including Texas, said it will take a general interest in the 29-wind-turbine Wildhorse Mountain Wind Facility, developed by Roaring Fork Wind — a JV between Renewable Energy Systems Americas Inc. and Vestas — in  Pushmataha County, more than 100 miles southeast of Oklahoma City.

The 100 MW farm won’t be finished until the fourth quarter of 2019, but Southern and the developers already have a 20-year power purchase agreement with Arkansas Electric Cooperative Corporation.

The coop said it “intends to sell the renewable energy credits associated with the electricity produced by Wildhorse Mountain.

“AECC does not claim that the electricity to be sold from this resource to its member cooperatives and others is ‘green,’ ‘renewable,’ ‘clean’ or has any other environmental attribute.”




Increasing Lateral Fracking Driving Booming Proppants Market Led By Texas Companies


June 4, 2018


Ft. Worth area frack sand provider Superior Silica Sands LLC, along with Texas’ Bagder Mining Corporation, Houston’s Saint-Gobain Proppants and CARBO Ceramics Inc. and Sugar Land’s Fairmount Santrol Holdings Inc. are named as key players in the proppant market, according to a new report from P&S Market Research.

The report projects the proppant market to reach well more than $10 billion in value by 2023, with increasing use of ceramic and resin-coated proppants for well productivity enhancement and a continually growing market for frack sand.

Increasing use of fracking techniques is the key trend in the proppants market.

Solid-material proppants, usually mixed with water, to help induce hydraulic fracture, are driving the market today, with sand accounting for 85% in 2017 because of both fracking activity (including LNG) and because of its use in oil filtration.

Shale gas extraction made up more than 50% of the proppant market value share in 2017, according to the report, with North America accounting for 70% of proppant market share.

Increases in the market are also being driven by a modest recovery in oil prices and increasing use of longer lateral wells, which require more sand materials.

And sand proppants are of increasing importance to drilling, the report added, as 2,712 Texas wells were completed during the first quarter of 2018 versus 1,925 wells completed during the same period in 2017, according to Railroad Commission of Texas figures.

The report listed several Texas companies, as well as Preferred Sands of Radnor, Pennsylvania, and Russia’s JSC “Borovichi Refractories Plant” as key players in the proppants boom.

Fairmount Santrol of Sugar Land, Texas, is merging with New Canaan, Connecticut’s Unimin to form the merged company Covia, according to the companies’ websites.





Nissan Moves Into Solar Energy


June 4, 2018


International automaker Nissan Motor Company Ltd. is entering the solar energy field.

Nissan calls it a natural progression since the company has been working in the electric vehicle market for years, introducing a redesigned Leaf electric automobile recently, as work continues on its xStorage home battery system.

The company pitches Nissan Energy Solar as an “all-in-one solution that combines solar generation with an energy storage system.”

They’re offering a semi-customizable assortment of products to “create, store, and consume energy via solar panels and battery storage (xStorage Home).”




JV Between Two Houston Companies Expands


June 4, 2018


Houston-based Sanchez Midstream Partners is expanding its midstream portfolio as part of its JV with Houston’s Targa Resources in the Eagle Ford.

Both have increased their holdings among gathering lines, and with Targa’s Silver Oak II, a 200 MMcf/d  gas processing facility, and the high pressure Carnero Gathering Line and Raptor Gas Processing Facility the two continue to establish the Carnero joint venture.

The latest action nearly doubles the JV’s processing capacity.




Ormand New Lilis CEO


June 4, 2018

Ronald D. Ormand has been appointed chairman and CEO of Lilis Energy.

James W. Denny III is now executive vice president of production and operations, and Michael G. Long has been appointed to the board.




Texas Supreme Court Will Review ExxonMobil Workers Comp Case


June 4, 2018


The Texas Supreme Court will review a request asking if a workers compensation payback waiver used by ExxonMobil is legal under state law.

The oil giant has claimed that thousands of other businesses in Texas use the waiver, under which companies can require workers comp insurers to forfeit their right to be reimbursed for benefits when the company caused the injury,  according to Law360.

The state high court accepted the request for review on Friday.

The court also accepted review of cases that consider whether recent cutbacks in public employee pensions are legal under the Texas Constitution.




Texas High Court Sides With Murphy In “Offset Well” Case


June 4, 2018


The Texas Supreme Court narrowly sided with Houston’s Murphy Exploration & Production Co. in a well contract legal case.

In a 5-4 decision, the court held that the “offset well” clause in two Eagle Ford shale leases simply required the company to drill a test well, but did not compel the company to protect the oil and gas under the property from drainage, Law360 reported Monday.

The high court reinstated a trial court’s earlier ruling in favor of Murphy, overturning an appeals court ruling that the term “offset well” has a standard and commonly-understood definition in oil and gas contracts.




Primoris Acquires Willbros Group, Expanding Into Canada


May 4, 2018


The acquisition of Houston specialty energy infrastructure contractor Willbros Group Inc. by Primoris Services Corp. of Dallas is complete.

Willbros is now split between two Primoris subsidiaries: Willbros Utility Transmission and Distribution is now a new segment of Primoris, while Willbros Canada joins Primoris’ Pipeline & Underground group.

Willbros stockholders approved the March 27th merger agreement at a special meeting May 31st; Willbros common stock is no longer traded.

The deal has a relative value of about $100 million.

Primoris CEO and President David King said Monday that the transmission and distribution “business provides Primoris with another avenue of growth, the Canadian operating centers expand our services into Western Canada, and the Oil & Gas Facilities business enhances offerings in our existing markets.

“We are pleased to welcome the Willbros employees to the Primoris family, and we look forward to working together to create additional value for our shareholders.”




Permian Presence As Ft. Worth’s Kimbell Lands Haymaker


June 4, 2018


Ft. Worth’s Kimbell Royalty Partners says it has an agreement to buy some royalty and mineral interests from a Houston company.

The interests totaling about $404 million in cash ($210 million) and shares (10 million) are being purchased from Haymaker Resources and Haymaker Minerals and Royalties.

The deal will give Haymaker’s sponsors, Kayne Anderson Capital Advisors and KKR joint ownership along with Haymaker management an approximately 37% interest in outstanding Kimball shares once the acquisition is complete.

Kimball Royalty Partners said the deal firmly establishes its presence in the Permian Basin.



Friday 3.1 Quake Felt In Eagle Ford Area


June 4, 2018


The US Geological Survey reports a 3.1 earthquake was felt by some early Friday morning south of San Antonio.

The center of the quake was located in the Eagle Ford area town of Christine near Jourdanton, about 40 miles west of Karnes City.

San Antonio Fox TV affiliate KABB meteorologist Brad Sowder said the quake may have been felt in the Pleasanton area, north of Christine, as well.

Residents who felt the quake about 6:15 am called the Atascosa County Sheriff’s Office, but reported no damage or injuries.




Luminant Solar Plant Online, Largest Such Operating Plant In the State


June 4, 2018


Vistra Energy‘s newest solar plant is online.

The Upton 2 Solar Power Plant in West Texas achieved commercial operation with 718,000 solar panels , the company said on Friday.

The 180 MW project is owned by Irving-based Vistra subsidiary Luminant, which says at nearly 1,900 acres — roughly the equivalent of 1,424 football fields — it’s the largest operating solar facility in Texas.

The project in Upton County, south of Midland, includes a platform for battery storage development.

Vistra President and CEO Curt Morgan said, “When we announced the project a year ago, we did so knowing that Upton 2 was the perfect fit for Vistra’s integrated business model.”

“Through this project, we’re enabling our Texas retail brand, TXU Energy, to enhance its retail solar offerings, and we’re diversifying Luminant’s generation fleet, as well.

“This project makes strategic sense for us as a business, and we’re excited that it is officially powering Texas in time for the 2018 summer.”

Vistra announced the purchase of Upton 2 in May 2017 while the project was under development.




Hurricane worries prompt refiner Motiva to shift expansion plans: Report


June 4, 2018


Saudi Arabia-owned Motiva Enterprises says it’s not going to add processing capacity at its refinery in Port Arthur after all.

The company said the cause of the change is fallout from last summer’s Hurricane Harvey, which knocked out one-quarter of all US crude capacity for a short time.

The decision puts Motiva on a path to buy or build another refining plant in the United States, and is a significant and abrupt change in the refiner’s plans, Reuters reports.

Just two months ago, Motiva announced plans to add up to 90,000 barrels a day of processing capacity to it’s one US refinery, which is processing about 603,000 bpd.

Motiva, like other refiners hard-hit by inundating rains from Harvey, also is adding more pumps to remove water from the Port Arthur refinery to deal with future storms.

At ExxonMobil’s refinery in Beaumont, north of Port Arthur, the company is raising an existing 10-foot flood wall by four feet, said people familiar with its operations, Reuters reported Monday.





David Koch Steps Down Over Health Problems


June 5, 2018


Energy billionaire and famed libertarian David Koch is retiring from Koch Industries and affiliated groups and activities because of his health.

According to a memo quoted by CNBC, Koch will become director emeritus at the Wichita, Kansas-based company.

In the memo to employees, older brother Charles Koch said his brother’s health has continued to deteriorate.

“His guidance and loyalty, especially in our most troubled times, has been unwavering,” the 82-year-old brother said

Koch was diagnosed with prostate cancer more than two decades ago.

Over the years, he and his family foundation, along with other recipients of Koch philanthropic support, have donated millions to cancer research.

He’s a board member of the Prostate Cancer Foundation.




Electric contracts should be squared away before summer begins: PUC Chairman Walker


By Public Utility Commission of Texas Chairman DeAnn Walker


Texas gets hot in the summertime. According to the National Weather Service, this summer is predicted to be hotter than usual, which means Texans are more likely to crank up their air conditioners to get through the hottest parts of the day, increasing demand across the state. When that demand combines with a supply that has recently been reduced by the retirement of several power plants, the wholesale cost of electricity in Texas could rise. That means it is time for Texans who live in areas that allow for retail competition to get their electric contract squared away before summer begins. That process is based on a few key questions:


Will prices go up?

Texans have become accustomed to below-average energy prices thanks to our state’s competitive electric market and a surplus of generating capacity. When electricity demand increases in times of lower supply, the market follows timeless economic principles and prices trend upward, signaling the need for private-sector investment in more generation. This summer is likely to be an up-cycle moment.

How can I avoid the impact of increased wholesale energy prices?

First of all, customers should have a contract that meets their unique needs. Our state’s retail electric providers work hard to win customer business and keep it. Under rules written by the Public Utility Commission of Texas, they are required to offer an average payment plan to any customer who is not currently delinquent in payment. Many will even customize a plan to meet individual needs. Making payments of approximately equal amounts over the course of a year in such a plan is one way to reduce the impact of higher summer bills.


When should I look into my contract situation?

Customers should take a look at their current contract’s end date as soon as possible. A fixed rate contract that expires because it was not renewed or replaced could put a customer into a month-to-month arrangement that is more “financially dynamic” than they might want. Fortunately, REPs are required to notify customers of a pending contract expiration a month or two in advance.


Read the rest of this column here at the Victoria Advocate.




May Texas Oil & Gas Tax Income Up 56% Year-Over-Year: Hegar


June 5, 2018


Once again, state sales tax revenues were helped considerably by energy-related income, Texas Comptroller Glenn Hegar said Monday.

Oil and natural gas production taxes were up 56% year-over-year for the month of May at $416.5 million.

Motor fuel tax income for May 2018 was up 1.8% over May 2017, at $309 million.

And motor vehicle sales and rental taxes were up 11.7% over the previous year, at $424 million.


Total sales tax revenue was $2.76 billion in May 2018, up more than 10% from May 2017.

“Strong growth in sales tax revenue was apparent across all major economic sectors,” Hegar said.

“While the most rapid growth was in remittances from the construction and oil- and gas-related sectors, significant gains also came from information services, restaurants and retail trade.”

Hegar also said state franchise tax revenue for May was $3.23 billion, 1.4 percent more than in May 2017.

Year-to-date franchise tax revenue is up 11.3 percent.

As anticipated in the Certification Revenue Estimate, lower refund activity early in the fiscal year contributed to higher than average net franchise tax collections.


Total sales tax revenue for the three months ending in May 2018 was up 10.4 percent compared to the same period a year ago.

Sales tax revenue is the largest source of state funding for the state budget, accounting for 58 percent of all tax collections.





ERCOT Sets New June Electricity Demand Record


June 6, 2018


As a Spring heat wave continues in Texas, ERCOT continues to set electricity use records.

The grid manager registered a new June record for demand on the first day of the month, with usage exceeding 67.8 GW between 4 and 5 pm on Friday.

ERCOT said that broke the previous June record, set last year, in which demand reached 67.6 GW.

The Electric Reliability Council of Texas said it also hit a record for three hours straight on May 29th, 2018, when demand reached a high of 67.3 GW between 3 and 5 pm.

June is the fourth month so far this year in which electricity demand has set new records.




Petrobras Moves CFO Up To CEO


June 6, 2018


Petrobras‘ chief financial officer is now the new interim CEO.

The board of the Brazilian producer and refiner elected Ivan Montiero to head the company on Friday, Platts reports, completing the company’s “surprise transition of power.”

He’ll fulfill the “remaining portion of predecessor Pedro Parente‘s term, which is set to expire March 26, 2019, Petrobras said in a filing with local stock regulators late Monday.




Midstates Closes On Texas and Oklahoma Properties Sale


June 7, 2018


Tulsa’s Midstates Petroleum Company, Inc. says its closed on the previously-announced sale of Texas and Oklahoma properties.

The Anadarko Basin producing properties located in the Texas panhandle and western Oklahoma have gone to an undisclosed buyer for $58 million.

Midstates will retain its Northwest Stack undeveloped acreage in Dewey County, Okla.

The divested property has produced around 3,900 barrels of net oil equivalent per day as of fourth-quarter 2017, the company said, and had a proved developed PV-10 value of roughly $53 million at year-end 2017.

Midstates says the proceeds will be used to pay down a portion of the outstanding borrowings under the Company’s revolving credit facility and for general corporate purposes.




Botkin Named to PUC


June 11, 2018


ERCOT‘s Shelly Botkin has been appointed by Governor Greg Abbott to a seat on the Public Utility Commission of Texas.

The Austin resident is currently director of corporate communications and government relations for the Electric Reliability Council of Texas.

She replaces Commissioner Brandy Marty Marquez, who resigned effective April 7th.

Botkin has been at ERCOT for about eight years; her PUC term will expire on September 1st, 2019.

Botkin is an anthropology graduate of St. Louis’ Washington University.

“Shelly’s knowledge of electric market policy and the regulatory and legislative process has been a tremendous asset to ERCOT over the last eight years,” said ERCOT President and CEO Bill Magness. “We wish her continued success in her new role and look forward to working together.”

The PUC announced in March the hiring of its former director of government relations, John Paul Urban, as its new executive director, replacing Brian Lloyd, who resigned.




Austin Political Consultant Lands at H+K


June 11, 2018


After much speculation, it turns out Austin political veteran Jason Stanford has landed at H+K Strategies.

The Democratic consultant is now senior vice president of global communications for Hill + Knowlton, the worldwide PR company with offices in 92 countries.

He’ll stay in Austin.

The former columnist and author of Adios Mofo: Why Rick Perry Will Make America Miss George W. Bush left Mayor Steve Adler‘s office last month and was secretive about his destination.

He had been with Adler for about two and a-half years, which as Stanford told the Austin American Statesman, “clocks out to 84.36 Scaramuccis.”




Net Crude Oil And Petroleum Imports Drop To Historic Low


By Alex Mills


Net crude oil and petroleum imports declined in 2017 to a record low, and the federal government expects net imports to decline even further this year.

The Energy Information Administration (EIA) reported this week that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 million barrels per day (b/d) in 2017 to an average of 2.5 million b/d in 2018 and to 1.6 million b/d in 2019, which would be the lowest level of net oil imports since 1959.

Net imports peaked in 2005 at 12.5 million b/d and have decline 70 percent or 8.8 million b/d by 2017.

Exports of petroleum from U.S. have been a major factor in the U.S. trade deficit narrowing to a seven-month low in April.

The dramatic rise in U.S. crude oil production was a major factor in the rise in U.S. petroleum exports and the reduction in oil imports from foreign countries. Domestic oil production averaged 10.7 million barrels b/d in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019.

The EIA also noted that U.S. dry natural gas production increased last year and exports of liquefied natural gas (LNG) increased, too. Dry natural gas production averaged 73.6 billion cubic feet per day (Bcf/d) in 2017. EIA forecasts dry natural gas production will average 81.2 Bcf/d in 2018, establishing a new record. EIA expects natural gas production will rise again in 2019 to 83.8 Bcf/d.  

“Growing dry natural gas production supports increasing forecast LNG exports,” EIA stated. Exports averaged 1.9 Bcf/d in 2017, and EIA forecasts an average of 3.0 Bcf/d in 2018 and 5.1 Bcf/d in 2019.

EIA expects West Texas Intermediate (WTI) crude oil prices to average almost $70 per barrel, and natural gas spot prices at Henry Hub to average $2.99 per million British thermal units this year.

For the 2018 April–September summer driving season, EIA forecasts U.S. regular gasoline retail prices to average $2.87 per gallon, up from an average of $2.41 last summer. The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices. Monthly average gasoline prices are expected to reach a summer peak in June of $2.92 and are forecast to decline gradually afterwards to $2.84 in September.

EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 32 percent in 2017 to 34 percent in 2018 and 2019. The forecast electricity generation share from coal averages 28 percent in 2018 and 2019, down from 30 percent in 2017. The nuclear share of generation was 20 percent in 2017 and is forecast to be 20 percent in 2018 and 19 percent in 2019. Nonhydropower renewables provided slightly less than 10 percent of electricity generation in 2017 and are expected to provide more than 10 percent in 2018 and nearly 11 percent in 2019. The generation share of hydropower was 7 percent in 2017 and is forecast to be about the same in 2018 and 2019.


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




New DOE Analysis Of Future LNG Exports Details Economic Boosts; Consumer Group Concerned


Peer-reviewed Department of Energy report released Tuesday examines 54 possible scenarios for future LNG export growth through 2040, with mostly positive indicators — but will LNG exports provide overall public benefits beyond Texas ports?


June 14, 2018


Political, economic and market instabilities figure into analysis of future liquid natural gas (LNG) exports by the US, and for that matter into any future analysis, as the US Department of Energy acknowledges in its latest report, Macroeconomic Outcomes of Market Determined Levels of U.S. LNG Exports (click here to read the report).

The DOE has been issuing LNG-export-related reports for more than 5 years as it considers the public interest in the growing LNG markets, which have a strong potential for increasing economic benefits for Texas ports.

The DOE aims the new study to be considered along with 25 applications, currently pending, to export LNG to countries with which the US doesn’t have free trade agreements, so the agency filed notice on June 12th to take comments on the report until July 27th of this year.

The question the DOE hopes to resolve is whether such LNG exports are in the public interest, and will remain so through the year 2040.

The extensive report considers 54 different peer-reviewed situations into which domestic and international natural gas market uncertainties are introduced, in order to provide a wide range of possible solutions to LNG market complications over the 20 years beginning in 2020.

For example, the report concludes that a U.S. demand could be low in one scenario, should there be  an increasingly “aggressive national Renewables Mandate in line with California’s stringent RPS target,” in which case the new study calls for a likely 2040 LNG export range of between 8 and 30 billion cubic feet per day, roughly between 3  and 11 trillion cubic feet per year.

And while the conclusions of the report appear favorable for future LNG exports, there will be worries about long-term impact on energy prices, along with free-trade and security concerns.

One of the conclusions of the report is that “about 80% of the increase in LNG exports is satisfied by increased U.S. production of natural gas, with positive effects on labor income, output, and profits in the natural gas production sector.”

As to be expected, the DOE report indicates that “throughout the entire range of scenarios, we find that overall U.S. economic output is higher whenever global markets call for higher levels of LNG exports,
assuming that exports are allowed to be determined by market demand.”

One of the first reactions to the report comes from the Industrial Energy Consumers of America (IECA) and its President Paul N. Cicio, who on Wednesday complained that the report shows little if any benefit for US consumers in future LNG exports beyond trickle-down benefits from LNG exporters.

“Past DOE LNG studies show that essentially all of the economic benefits of LNG exports go to the natural gas producing and exporting entities, and there were no economic gains for the public interest.

“The last DOE NERA report stated that LNG exports increase energy costs and depress real wages and return on capital for other industries.

“Therefore, LNG exports to non-free trade agreement (NFTA) countries are in conflict with the public interest standard under the Natural Gas Act (NGA) and lowers these countries natural gas costs, which is a disincentive to enter into free trade agreements (FTA) and create a level playing field for U.S. manufacturing products.”

The IECA said, “It would be stunning if the DOE relied on market demand to determine U.S. LNG export volumes because the so-called LNG market is comprised of state-owned enterprise (SOEs) and foreign government-controlled utility buyers with automatic cost pass-through.

“This is not a market by any definition. Every member of Congress has manufacturing companies in their districts which share stories of unfair practices by SOEs.

“President Trump and his trade team understand how SOEs do not play by market rules.

The IECA concluded that, “Every time the DOE gives an LNG export terminal legal approval to ship for 20 to 30 years, it puts foreign government entities in control of a larger portion of our natural gas resources and decreases our energy independence.”


— Mike Shiloh






Houston Energy Lawyer Joins White & Case


June 14, 2018


Houston law firm White & Case continues building its new Houston office with the addition of a new partner.

David Strickland counts energy companies among his varied clients, a practice concentrating on infrastructure; he works mainly on construction project contracts.

White & Case’s co-head of its global oil and gas industry group Philip Stopford said in a statemen that Strickland brings complex oil and gas projects and construction transactions to his new firm.

“Adding him to our team will reinforce our global construction capabilities to support our clients’ objectives around the world.”

Strickland moves over from King & Spalding.

New York City’s White & Case opened its Houston office in February and now has about 20 lawyers in the office.




Noble Partner Delek Asks Shareholders To Okay $15 Billion Leviathan Deal


June 15, 2018


Houston’s Noble Energy Company has been negotiating along with Israel’s Delek Drilling to send natural gas to Egypt via a defunct pipeline.

Now Delek is seeking final approval of a $15 billion deal from its shareholders.

The line between Israel and Egypt once delivered gas to Israel, but militant attacks along the Sinai caused the pipeline to be abandoned; now Noble and Delek have an agreement to move natural gas the other way, from the Tamar and Leviathan reservoirs over a 10-year period.

Noble said the two companies could invest in the pipeline’s owner, East Mediterranean Gas, to deliver up to $15 billion in gas for Egypt’s Dolphinus Holdings.

Delek has yet to get the okay for the deal from its shareholders; a meeting is set for July 1st.

Noble and Delek have been partnered for years to develop the Leviathan field, one of the largest offshore Mediterranean discoveries in history, announced in 2010.




Oil States Names Holleck To Board


June 15, 2018


Oil States International, Inc.‘s board has named Darrell E. Hollek as a member of its board of directors.

Hollek is a retired executive vice president of operations for Anadarko Petroleum Corporation.

He’ll serve as a Class III Director with an initial term expiring in May 2019, according to Houston-based Oil States’ President and CEO Cindy B. Taylor, who said, “I’m happy to welcome Darrell to his new role as a Director of Oil States.

“Darrell brings extensive onshore and offshore energy industry experience to our Board and our Company, which will provide us with meaningful benefits as we continue to focus on our long-term growth and success.”




ETP’s Mariner East 1 Going Back Into Service; Update Expected On Leach Xpress After Explosion


June 15, 2018


Sunoco’s Mariner East 1 natural gas pipeline has the go-ahead to resume service, after a temporary shutdown by Pennsylvania’s Public Utility Commission on May 25th.

The commission voted on Thursday to allow Energy Transfer Partners LP’s natural gas liquids pipeline to resume shipping, after ending a safety-concern suspension.

Range Resources, among other companies, has been using alternative delivery pipelines from the Marcellus and Utica shale plays while the Mariner was shut.


Meanwhile, an update on when repairs might be completed on TransCanada‘s Leach Xpress pipeline is not expected until next week.

The pipeline was closed after an explosion along the line last week in Marshall County, West Virginia.

Leach XPress is part of the Columbia Gas Transmission system.

There were no injuries in the explosion, but the closing caused a number of companies to seek alternative distribution pipelines out of the Marcellus and Utica of Pennsylvania, West Virginia and Ohio, including Range Resources Corp. and Southwestern Energy Co.

The site of the explosion is being restored, TransCanada said this week, so a date for the pipeline’s return to service is unclear, but the company indicated Thursday that an announcement is expected next week.




Texas Is King Of Helium — For Now


Recoverable helium can be hard to find, tough to ship and expensive to process, but new tech and new uses are bringing the byproduct of natural gas exploration into a new market frontier in which profit — and common use — is beginning to soar.


June 15, 2018


Some Texas companies are working to supply a different kind of natural gas that’s increasingly in demand — helium.

The gas is extracted from natural gas deposits by fractional distillation, and only certain wells produce it.

With new technology supporting the transportation of helium from wellhead to processing plant, though, shortages of past years now look to be greatly reduced.

Past problems in the markets have included the inability to recover helium at natural gas well sites because the gas required quick processing and few wells were near processing centers, resulting in occasional shortages; a shortage last year resulted from the closing of two production plants in Qatar because of political squabbles, effectively shutting down 25% of the worldwide commercial helium supply.

The Qatar plants are back open, but demand is growing as the gas comes under increasing industrial use, like the cooling of semiconductors for use in cell phones and computers.

There are scientists who have said helium is so valuable they protested its use in kids’ balloons.

In fact, the gas is always in demand for its cooling properties, used on the newest large computers; space exploration projects have always used helium, which is in greater demand because of increasing exploration by several nations; imaging technology such as MRI machines use the gas; and fiber optic cables are manufactured in a pure helium atmosphere to guard against air bubbles trapping inside cables.

And if they can get off the ground, the next generation of nuclear reactors will use helium to pass through their uranium core, according to supplier Zephyr.

Houston’s Yuma Energy Inc. is involved in gathering natural gas, including helium, along the Gulf Coast and is also active in Permian Basin operations

Midland’s Ring Energy is also said to be involved with helium gathering in addition to its horizontal drilling operations in the San Andres formation and elsewhere in Texas.

Garland’s Rare Earth Exploration LLC said last year that the new break-even price on helium is about $1/mcf, with CEO Timothy Taylor noting that since Grade A helium can bring as much as $200/mcf, “the profit potentials are staggering.”

The market price of bulk liquid helium has risen more than 100% in the last ten years, according to one explorer in Norway.

Standard helium has been getting upwards of $125/mcf, with the US Bureau of Land Management getting $107.10/Mscf at an auction in Amarillo last July; the bureau’s auction this year will be its last, with only a limited amount to be auctioned to private industry.

The bureau has been paying off an internal fund by using the auctions to raise money; the agency says the fund has been paid so this year’s auction will end it’s involvement in the private helium market.

Amarillo is the location of a historic gas reserve that constitutes the US National Helium Reserve, from which federal auctions were drawing; 2015 Congressional action is keeping the remaining helium reserve under federal control while private companies are encouraged to boost exploration.

And Denver-based American Helium Inc. is among the companies drilling for new helium reserves in the four-corners area of Arizona, New Mexico, Utah and Colorado, and in Arizona’s Holbrook Basin, where the company announced last week it is beginning to drill in an area E&P companies are calling “the Saudi Arabia of helium.”

And Norwegian company Helium One is prospecting in Tanzania, a find that could contain contain as much as 54 billion cubic feet of the gas, or about twice the amount stored near Amarillo.

Popular Mechanics once called the Texas Panhandle the helium capital of America, where supplies of the gas have been abundant.

It still is, for now.


— Mike Shiloh




Anadarko Preparing To Leave Brazil: Report


June 18, 2018


Anadarko Petroleum is planning to transfer ownership of some Brazil assets to BP, according to an online report.

After disappointing results in once-promising exploration blocks, the Houston company intends offer its 30% stake in two blocks in the Campos basin, according to Upstream Online, which quoted unnamed sources.

Total was said to have expressed interest in such an arrangement, but Anadarko went with BP because of the two companies’ long relationship.

“Anadarko is said to have had a meeting recently with regulators at the Brazilian National Petroleum Agency (ANP) in order to provide details of its decision to transfer stakes in blocks BM-C-30 and BM-C-32 to UK supermajor BP,” the website said Friday.





Dickey Beats Asche For Republican Party of Texas Chairman


June 18, 2018


James Dickey won the hotly-contested race for Republican Party of Texas (RPT) chairman over the weekend, defeating by 65%-35% Frisco’s Cindy Asche, who was backed by Amarillo oil & gas consultant and former RPT chairman Tom Mechler.

Asche, a nurse and daughter of Austin attorney and Republican National Committee counsel Bill Crocker, is chaplain to the Texas Federation of Republican Women.

Dickey is the incumbent RPT chairman, who beat Mechler’s chosen successor, Rick Figueroa, last year.

Melcher gave up the chairmanship last year for personal reasons.

Austin American Statesman columnist Jonathan Tilove Saturday characterized Michler as “a classic West Texas business conservative,” contrasting him against Dickey, a founder of the Dallas Tea Party.




Gilmer Leaving Chairman Post At TIPRO


June 18, 2018


Longtime Texas Independent Producers and Royalty Owners Association associate Allen Gilmer is stepping down from his post as chairman at the end of the month.

The DrillingInfo co-founder and Rice-graduated geophysicist is completing his two-year term.

Gilmer will remain with TIPRO as immediate past chairman and will continue on the board, according to president Ed Longanecker, who passed along Mr. Gilmer’s “My Last Column as Chairman.” which appears below:



“Fellow TIPRO members,
It has been my great privilege and honor to serve the Texas Independent Producers and Royalty Owners (I spell it out, so that we are reminded of whom we serve) as its Chairman these last two years.  I first got involved in TIPRO over 20 years ago, and then President (now called Chairman) Roger Plank appointed me to the Board shortly thereafter. Most of you know me as “the Drillinginfo guy”, but, back when I joined, I was a producer. I was a member of that most trod upon cohort, one too feckless to even have an advocacy group… the non operated working interest owner. In fact, I still am.




Because TIPRO is a “Big Tent” organization.


The fights we fight are existential, and we represent the faces of big AND small producers AND mineral royalty owners. We represent the human face of our business. The real face. Not just the folks with the biggest wallets. Everyone. The REAL stakeholders. That is the reason why elected officials in our State ALWAYS ask first “What does TIPRO say?” concerning any issue concerning oil and gas production in Texas.


There are a lot of organizational voices for the various oil and gas interests in our State. Some may say too many. Some have MUCH bigger wallet share. NONE have more credibility or capability to publicly lead and advocate for our industry. Why? Because we speak for the most sympathetic of our various stakeholders… the independent oil and gas producer… many from the small towns close to where they produce and vote… and the mineral royalty owner, the several million strong cohort of private property owners that live and vote in every district in our great State. There couldn’t be a more effective counterpart to the largely mythical perception of “Big Oil” than our organization. I want you to remember that always.


During my tenure, I worked to increase the involvement in the organization of the Next Generation of oil men and women, and I leave enthused at the quality of the future leaders of this industry and organization in the years ahead. I leave behind a great staff, led by a great President, Ed Longenecker.


The conference room at the TIPRO headquarters on Congress Avenue in Austin , TX, close to the Capitol, is lined with pencil drawings of the previous leaders (now called Chairmen) of TIPRO, and it is to see that room that you realize you are in the presence of true greatness.  From it’s beginnings in 1946, when Glenn McCarthy, the role model for Jett Rink in Edna Thurber’s book “Giant” and Jack Porter (the organization’s first Chairman), decided to fight the Federal Government’s post war efforts to essentially nationalize US oil and gas, the previous Chairmen of this organization were able to solve problems of a scale that would boggle the modern sensibility because they realized that people of good faith could put differences aside to find the “middle way” that preserved and protected for the long term. The value of what they did lay largely in what did NOT find its way to the legislature! These were great men, and I feel small among them.


I followed an exceptional TIPRO Chairman, Ray Welder, Welder E&P, of San Antonio, and to San Antonio the TIPRO Chairmanship returns as home of my extraordinary successor, Eugene Garcia of Hurd Enterprises Production. Eugene is the first “3rd Generation Chairman” of TIPRO, following in the footsteps of his grandfather, Ambassador John G. Hurd (1960-1962) and his uncle, JR Hurd (2004-2006).


TIPRO has an amazingly storied past, and will have a storied future. It defends our right to produce the largest natural resource gift ANY state OR country has ever been granted… all the time creating low cost, reliable energy… the very building block of human flourishing as my friend Alex Epstein would say. My hope is that it remains in the control of the people who actually care about oil and gas. Be vigilant in keeping it from becoming a tool of the “mercenary class” of political operatives that sell access to the highest bidder… one day oil and gas, the next lizards and Luddites.


So long. It has been an honor.


Allen Gilmer, Chairman, Co-Founder, DrillingInfo”
Sen. Uresti Resigns Effective Thursday

June 18, 2018


Texas State Senator Carlos Uresti said Monday he will resign from the senate effective Thursday.

The announcement comes just over a week before the Democrat is expected to be sentenced in connection with what prosecutors called an oil frack sand company scam.

In a statement, Uresti said, “As you know, I am in the process of ensuring that justice is served.

“I need to attend to my personal matters and properly care for my family.

“So, keeping in mind the best interests of my constituents and my family, I believe it to be most prudent that I step down from my elected office to focus on these important issues.”




Hilcorp Agreement Filed In Suit With Louisiana Association


June 18, 2018


Houston-based Hilcorp Energy Company has filed an agreement with a Louisiana court to settle a lawsuit over alleged dredging south of New Orleans.

The consent judgment is aimed at concluding a lawsuit in which the Louisiana Oystermen Association claims (as noted in a press release) that Hilcorp used the propellers of a boat to create a channel by cutting into the bottom of Bataria Bay near Port Sulphur, Louisiana, attempting to access well sites.

The practice is called “wheel washing” or “prop washing,” and is technically a form of channel dredging, the lawsuit said, but Hilcorp didn’t have a permit for dredging or for discharging dredging material at the site.

The New Orleans Times Picayune reported the settlement amount to be $920,000, and if the agreement is accepted by the court, would be used by the Oystermen Association ” toward development of an alternative oyster fishing method, mitigation, monitoring and restoration.”




Former State Rep Joins Husch Blackwell


June 19, 2018


Former Round Rock area state representative and Texas Sunset Advisory Committee member Larry Gonzales has joined statewide law firm Husch Blackwell.

He resigned from the state house nearly two weeks ago after announcing he wouldn’t run for another term; he’d been a house member since 2011 and was previously a capital staffer.

His resignation triggers a special election to determine his successor.

In a statement, Gonzales said upon his hiring at Husch Blackwell, which has a thriving energy representation, that “their success and continued growth across the nation speaks to their ability to serve their clients.”




In Depth: Republican Party of Texas Platform Targets Smart Meters, Carbon Taxes, Ethanol and Flooding


June 19, 2018


“‘Climate Change’ is a political agenda promoted to control every aspect of our lives. We support the defunding of ‘climate justice’ initiatives and abolition of the Environmental Protection Agency and repeal of the Endangered Species Act [Federal/State]”


Note: All bold emphasis is added for clarity and to highlight energy-related content.


The Republican Party of Texas released its new platform statement over the weekend, following its state convention in San Antonio, taking a stand against smart meters, ethanol legislation, carbon taxes and excessive use of eminent domain laws.


Oil & Gas


Principle #17 of the platform supports the repeal of legislation “mandating ethanol as a fuel additive and/or primary fuel.”

Number 13 says “We oppose all efforts to classify carbon dioxide as a pollutant.”

It adds, “We further urge the US Senate to defeat the ‘cap and trade’ legislation, as it is outside the authority of the US Constitution.”

And the party supports, in Principle # 15, “free markets solutions and immediate removal of government barriers and direct subsidies to the production, reformulation, refining and distribution of energy.”


The party also “demands that the state of Texas and all coastal states enjoy and maintain jurisdiction and control of their offshore waters up to the international water boundaries as well as state inland waterways in regards to all natural resources therein, and that the federal government shall not set limits on harvesting or taking natural resources therein, nor allow foreign entities to harvest or take such natural resources therein, including minerals, game, fisheries and hydrocarbons. Also, we demand that no entity shall usurp Texas’ original tideland boundaries.”


Power & Utilities


Among electrical power initiatives, the platform calls on the state legislature to “harden the Texas electric power grid against:

“1. Cyberattacks on the grid’s computerized command and control system.

2. Physical attacks on substations and major high voltage transformers.

3. Geomagnetic storms created by solar flares from the sun.

4. Electromagnetic pulse (EMG).”


The Republican Party of Texas also “supports a no-cost opt-out for all Texas PUC customers, and the phase out of Smart Meters (AKA Advanced Meter Infrastructure), to be replaced with mechanical, non-transmitting analog meters when software upgrades are required or the computer smart meters require replacement due to mechanical failure or model upgrade requirements.”


Eminent Domain, Windstorm and Environmental


The platform calls for strong property rights laws (#338) adding that “The use of eminent domain must exclude the seizure of private property for private economic development or increased tax revenue.” (#329)


And the platform also urges “the Texas legislature to phase out the Texas Windstorm Insurance Association to reduce the liabilities it imposes on state taxpayers.”


Platform Item #16: “We oppose environmentalism that obstructs legitimate business interests and private property use, including the regulatory taking of property by government agencies. We oppose the abuse of the Endangered Species Act to confiscate and limit the use of personal property and infringement on a property owner’s livelihood.

“‘Climate Change’ is a political agenda promoted to control every aspect of our lives. We support the defunding of ‘climate justice’ initiatives and abolition of the Environmental Protection Agency and repeal of the Endangered Species Act [Federal/State]”


Flood Control and Risk


Finally, the platform strongly supports projects that will:

“1. Address river, bayou, reservoir and other flood threats to public and private property.

2. Seek the input of those most likely to be affected by a casualty to public and private property to include infrastructure and facilities that affect national security.

3. Address the risk of storm or tidal surge that affects the critical industries along the Gulf Coast.

4. Immediately create an early warning system that will immediately alert residents to an impending flood, wind or casualty weather event.

5. Establish regional Flood Control Districts where necessary for counties to resolve joint flooding issues.

6. Provide for funds to complete these projects from federal, state, and local funds to include specifically targeted taxes for the purpose and never for any other purpose.”


See DocumentCloud’s (slightly annotated) posted platform and resolutions statement here





Southwestern Energy’s Geiger Joins Denver Developer


June 19, 2018


Houston-area Southwestern Energy veteran Paul Geiger is the new COO of a Denver E&P.

Oil & gas HighPoint Resources Corp. operates in the Denver-Julesburg Basin, announcing Geiger’s appointment last week, with CEO and President Scot Woodall noting that Geiger’s “expertise will prove invaluable as we move to full-scale development mode across our acreage in the oil-weighted and rural core of the D-J Basin. I am excited to welcome Paul to our team.”

Geiger will start July 11th.

HighPoint resulted from the merger earlier this year of Fifth Creek Energy LLC and the Bill Barrett Corporation.





Targa Open Season For NGL Anadarko-To-Houston Pipeline


June 19, 2018


Open season got underway Friday for Targa Resources‘ proposed NGL pipeline from Oklahoma to Texas.

The company’s wholly-owned subsidiary Targa NGL Pipeline Company LLC is measuring interest on the part of shippers for a line from Coal and Hughes Counties, Oklahoma — along the Arkoma Basin shale play — to Mont Belvieu, east of Houston.

Final natural gas liquid (NGL) volume capacity on the possible interstate line will be determined after the open season ends on July 6th of this year, the company said.





Emergency Special Election Called To Replace Uresti


June 20, 2018


A Texas state district 19 special election has been called to replace Senator Carlos Uresti, who resigned from his seat on Monday after being convicted in what prosecutors referred to as a frack sand scam.

Governor Greg Abbott on Wednesday issued a proclamation ordering the emergency special election on July 31st.

Deadline to have names placed on the ballot is this Monday, June 25th at 5 pm, with early voting to begin on Monday July 25th.

In a statement, Governor Abbott said, “The indictment and ultimate conviction of Senator Uresti for fraud and money laundering has already left District 19 without effective representation in the Texas Senate for over a year.”




Houston Joins Cities’ Renewable Energy Group, Austin Energy Wins Renewable Energy Award


June 20, 2018


The city of Houston is joining in a coalition of cities to price renewable energy nationwide; meanwhile the city of Austin is being recognized for efforts to promote clean energy.

Boston Mayor Martin Walsh is leading the coalition that includes Chicago, Los Angeles and Orlando, Florida, asking renewable energy developers for price estimates that could meet the cities’ power demands collectively as a way of fighting climate change.

Walsh’s office said this month that it hopes to interest other cities in the energy group and will release a final list of participating cities by the end of the summer.

When announcing the project earlier this month, Walsh told American Windpower, “Our effort on renewable energy will not only help cities cut carbon emissions and get us closer to the goals of Paris Climate Agreement – it will help power our cities and create more clean energy jobs.”

While the initiative was welcomed by the Massachusetts Sierra Club, Director Emily Norton was critical of Walsh for not moving faster on other climate change initiatives.

Chair Deb Pasternak stated, “Mere months ago, Boston suffered record-breaking flooding and storm surges.”

Pasternak called for better leadership on climate change in Boston, adding that “While this new announcement is promising, the Walsh administration is still approving millions of square feet of new development without mandating climate mitigation or resiliency and approving massive new fracked gas infrastructure to luxury apartment buildings.


In the meantime, at the US Conference of Mayors in Boston earlier this month, Austin Mayor Steve Adler accepted first-place on behalf of Austin Energy at the 2018 Mayors’ Climate Protection Awards for a program that provides solar power generated locally to many of the city’s residential customers.

Austin Energy thanked Adler for taking in the recognition of Austin Energy’s Community Solar Program, for which much of the sun power is gathered at the La Loma Solar Farm east of the city.





Barnett Shale Mineral Owners’ Lawsuit To Proceed


June 21, 2018


A lawsuit by mineral interest owners against two oil companies will proceed, after a ruling by a Texas judge.

A summary judgment motion by Chesapeake Exploration and Total E&P to dismiss claims by North Texas mineral rights owners was rejected this month by a Tarrant County judge.

The owners in the Barnett Shale claim that the wellhead sale of gas between affiliates of the two oil companies should be disregarded in the calculation of royalties they paid, saying that the amount of those royalties should have been bigger.

Burns Charest (Dallas) lawyers for the owners claim that using wellhead sale prices are attempts to lowball royalties, amounting to a “sham” transaction, intended to circumvent fair market royalties that were intended in leases between their clients and the companies, while the companies say the wellhead prices are fair.

The multidistrict litigation is In re Chesapeake Barnett Royalty Litigation #2, MDL No. 48-000000-15 in the 48th District Court in Tarrant County.




Oil States Adds Wright



June 21, 2018


Houston’s Oil States International has added Concho’s Joe Wright to its board.

He’ll serve as a Class II director for a term ending in May 2021, filling a vacancy created with the departure of a board member earlier this year.

Wright is COO, exec vice president and a director at Concho Resources, a company he’s called home since its inception in 2004, and is an A&M graduate.

Oil States’ CEO and President Cindy B. Taylor said, “Joe brings extensive energy industry experience to Oil States which will provide meaningful benefits to our Company as we continue to focus on our long-term growth and success.”

Layne Christensen Becomes Subsid of Granite

June 21, 2018


The Woodlands-based water drilling, management and energy services company Layne Christensen is now a division of Granite Construction Inc.

The two companies announced their $565 million stock-for-stock merger back in February, with Granite shares exchanged at about a four-for-one rate for Layne shares (0.27 per Granite share).

The companies said the arrangement represents $17.00 per Layne share, or a premium of 33%, based on the volume-weighted average prices for Granite and Layne shares over the past 90 trading days.

The deal, which was controversial, closed last week.

Activist shareholder Cetus Capital was vocal in wondering whether Layne shareholders were getting proper value in the sale; Nokomis Capital LLC, another investor, wrote an open letter to Layne’s board, also questioning the sale’s value to stakeholders.

With the deal closed, Layne’s common stock stopped trading on the NASDAQ last week; Granite’s shares were eligible for trading as of last Friday.

Layne’s President and CEO Michael J. Caliel noted that “the merger with Granite is a recognition that Layne’s turnaround strategy, executed over the last several years, has created benefits for each of our stakeholders.

“We wish our employees, whose work and dedication enabled this success, all the best as our businesses continue to evolve.  It has been an honor to lead Layne over the last several years as we positioned the Company for long term success.”

Caliel came on board in 2014 and has been central in streamlining the company, selling its geoconstruction business in 2015 and merging its energy services into the water resources division during the oil and gas downturn.





Worldwide Energy Demand Expected To Grow


By Alex Mills


Crude oil and natural gas will continue to provide a major portion of the world‘s energy needs for the next 20 years, according to a study released by the Baker Institute for Public Policy at Rice University.

The authors of the study, Anna Mikulska Ph.D. and Michael D. Maher Ph.D., examined the trends in energy demand patterns by the U.S. Energy Information Administration (EIA), the International Energy Agency (IEA) and BP.

“Despite differences in assumptions, all outlooks see the developing world and it policies, economies, and energy consumption patterns as the leading driver affecting future global energy use,” the study stated. “The outlooks also agree that fossil fuels – coal, oil, and natural gas – will play a significant role in driving economic growth in the developing world through 2040.”

The authors cited the United Nations Department of Economic and Social Affairs predicting a rise in global population from 7.6 billion to 8.6 billion in 2030 and 9.8 in 2050, and 90 percent of this growth will come from Asia and Africa. As these countries “aspire to eradicate extreme poverty, including energy poverty,” demand for affordable energy will be critical.

Demand for energy will be strongest in China and India accounting for two-third to three-fourths of the expected growth.

Oil and natural gas demand growth is projected to continue. The study said overall increase in oil demand will almost double (from 9 million barrels per day to 17 million barrels per day) in 2040. Natural gas demand is expected to exceed 50 percent with strongest grown in China and India.

“Despite impressive growth rates in renewables, all three outlooks agree that fossil fuels will continue to be an important, if not predominant, source of energy consumption globally,” the paper noted.

“Policymakers and stakeholders should take into account that the future of the U.S. fossil fuel sectors will increasingly depend on foreign demand,” the study said. “This includes the need to invest in infrastructure that is conducive to energy exports. Thus, a careful consideration of the negative consequences of retreating from multilateral and bilateral free trade policies should be of utmost importance. Mercantilist policies could significantly hamper and/or disadvantage the United States’ position as a global energy exporter, slow global economic growth, and, in effect, decrease demand for U.S. oil and gas.”

Crude oil and natural gas exports from U.S. have increased since 2016, and that trend is expected to continue as oil and gas production from shale increases, too.

The study also addressed climate change efforts to reduce carbon dioxide emissions, which are expected to decline in the U.S. but increase about 10 percent worldwide because of increases in developing countries.

“In consequence, climate agreements with no enforcement mechanisms to limit emissions or transfer fund from OECD (Organisation for Economic Co-operation and Development) nations to the developing world to support renewable will face difficulties in implementation and achieving set goals,” the study said.

The chance of reaching such a global agreement “is not very high.”


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





Rep. Landgraf Says He’ll Try For School Funding Reform Again: Report


June 26, 2018


Texas state Representative Brooks Landgraf says he’ll try again for school system funding reform that included special provisions for energy-producing areas of the state.

He filed a bill in the last legislative session intended to allow energy-rich areas like the Permian Basin to consider inconsistencies among mineral property values when considering statewide school funding.

It was part of Landgraf’s plan to overhaul the “Robin Hood” school funding system, which distributes state money from richer to poorer districts.

Both initiatives failed to generate enough support in the state House, but the West Texas District 81 rep says he’ll try again, probably combining the two ideas into one attempt to again repeal the Robin Hood system, the Odessa American reports.

Landgraf said he’d consider an increase in state sales taxes to fund schools along with an accompanying decrease in property taxes.

But state Representative Tom Craddick told the newspaper that similar ideas have been considered in the past, and high sales taxes could spur some border area consumers to cross state lines for purchases.

“There’s also an alternative out there to take all the growth in revenue out there for the next several years and have it to go reduce property taxes.

“The problem,” Craddick added, “is you have other needs and items that need to be funded, too.”

The District 82 rep said he agreed that the Robin Hood form of school funding needs to be changed.






RRC’s Craddick Teams With PUC’s Walker For Coordinated Pipeline Transmission In Peak Power Demand


June 26, 2018


Natural gas will be greatly needed during peak electricity demand periods over this summer, so the heads of the Railroad Commission of Texas and the Public Utility Commission are calling for coordination of pipeline testing.

The two agencies say they’re working together to ensure gas is available for power generation and have given notice to natural gas pipeline operators and electric generation plant operators, asking for their help.

The notice appears here.

In a statement, “Railroad Commission Chairman Christi Craddick and Public Utility Commission Chairman DeAnn Walker are urging natural gas pipeline operators and electric generation plant operators to work together to ensure availability of pipeline transmission capacity to meet electric generation needs at times of peak demand during the hot Texas summer.

“Craddick and Walker are asking stakeholders to work with the Railroad Commission’s Oversight and Safety Division to schedule required pipeline testing outside of peak demand months.

“During the required tests, pipelines are unable to deliver natural gas, which fuels electric generation plants across Texas.

“’Pipeline safety is one of the most important areas we regulate at the Railroad Commission,’ Chairman Craddick said.

“’Integrity testing of gas transmission pipelines is a critical part of our safety requirements and should be scheduled to maximize operational availability.

“‘We must all work together to make sure the citizens of Texas are able to keep their air conditioning running, fans blowing, and lights on during the hot Texas summer.’

“’Gas fired electric generation plants make up nearly 40% of our ERCOT’s electric generation, so we need to be sure they are online during times of peak demand,’ said Chairman Walker.

“’With our state’s robust economy and growing population, demand is higher than ever. Therefore, teamwork is the key to a successful summer for all Texans.’

Railroad Commission and Public Utility Commission staff are monitoring electric generation needs during peak demand months and assisting with necessary coordination of pipeline transmission capacity to best ensure natural gas availability for electric generation facilities, the statement said.





American Energy Alliance Applauds Dismissal of Broad California Climate Change Lawsuits: Press Release


June 26, 2018
WASHINGTON — American Energy Alliance commends Judge Alsup and the U.S. District Court for the Northern District of California for their dismissal of the climate change lawsuits filed by the cities of San Francisco and Oakland against Chevron Corp.

The ruling correctly concluded the complaint of climate change to be beyond the proper purview of the courts. Thomas J. Pyle, President of the American Energy Alliance made the following statement:

“These lawsuits were nothing more than a shakedown of energy companies designed to bail out financially mismanaged cities.

“This frivolous litigation ignored the benefits of affordable, reliable energy and should be seen as an insult to California residents, especially those who are already struggling to make ends meet.

“Judge Alsup’s judgement said it well: ‘our industrial revolution and the development of our modern world has literally been fueled by oil and coal. Without those fuels, virtually all of our monumental progress would have been impossible. All of us have benefited.’

“The U.S. District Court ruled correctly in dismissing these lawsuits, and Californians are better for it. We hope plaintiffs of similar litigation elsewhere take heed.”





Conserve North Texas website launches


June 26, 2018
The North Central Texas Council of Governments has launched the Conserve North Texas website, a regional clearinghouse of energy efficiency, water conservation and transportation programs.

With more than seven million people living in the Dallas-Fort Worth area, conservation and resource efficiency will be critical to accommodate this growth while also preserving existing regional resources, the council said.

And with the population expected to eclipse 11 million by 2045, access to climate-related information will be increasingly important.

“The Conserve North Texas website was developed to provide users a one-stop shop for a comprehensive inventory of programs, tools, case studies and other resources that address water, energy and transportation topics,” the council said in a statement.

“For example, visitors can use various tools to calculate their carbon footprint, energy savings, fuel economy and more.”





Saudi Plan To Pump Record Crude Appears To Compensate For US Allies’ Iran Import Reduction: Reports


June 26, 2018


Saudi Arabia is planning to pump a record amount of crude oil in July in an effort to deflate oil prices.

The kingdom appears to be doing on its own what OPEC failed to do at its weekend meeting in Vienna:  give oil markets a major boost, embarking on “one of the biggest-ever export surges,” as Bloomberg News put it in a Tuesday report.

Saudi oil giant Aramco is planning to increase production in July to about 10.8 million barrels a day, besting a record high output of 10.7 million in November, 2016, with a possibility of up to 11 million barrels, should it be needed to meet market demand.

An official OPEC report said Saudi Arabia pumped just over 10 million barrels a day in May, 2018.

At the same time as the Bloomberg report, the US State Department said it’s pushing US allies to end oil imports from Iran by November, with no US waivers to be granted, which could eventually pull one million barrels of oil per day from world markets.





Former State Senator Carlos Uresti Sentenced to 12 Years In Prison


June 26, 2018


Former San Antonio District 19 state Senator Carlos Uresti has been sentenced to 12 years in prison on convictions of fraud related to oilfield services company Four Winds Logistics.

He was also ordered to pay restitution to victims of $6.3 million.

Uresti, 54, will be free on bond until the resolution of his next trial, on unrelated charges, which begins October 22nd.

He made a public apology to each of his victims Tuesday’s sentencing, saying he feels “remorseful, ashamed, disappointed, disgraced, angry at myself and sad.”

Uresti told reporters after the sentencing that he’ll be filing an appeal within two weeks.

Federal prosecutors had originally asked for a sentence of up to 22 years.

Uresti resigned from the state senate last week under pressure from fellow Democrats.

Uresti was found guilty in February of wire fraud, securities fraud and conspiracy to launder money in connection with Four Winds, a company that ostensibly bought and sold sand for oil and gas fracking, but in reality was a Ponzi scheme.





New NY AG Says Exxon Withholding Climate Docs


June 27, 2018


The successor to New York Attorney General Eric Schneiderman is accusing ExxonMobil of withholding documents she says are related to her state’s investigation of the Texas oil company.

Barbara Underwood was confirmed in late May to take over for the disgraced Schneiderman, who had accused ExxonMobil of misleading the public and its investors on climate change, until a New Yorker article accusing him of sexual harassment forced his resignation.

Underwood, in a recent filing in New York, said the state securities investigation has turned up evidence that the Irving-based company used two sets of climate change risk information on its cash-flow spreadsheets: One for internal use and another for public consumption.

Underwood, 73, said her office has not received documents she believes contain the internal use data (“proxy costs”), which the company may use in calculating greenhouse gas emissions caused by its activities, as well as in the value of its assets.

The New York Post earlier this month said environmental activist Robert Kennedy Jr. sent a 2016 legal memo to Schneiderman urging that ExxonMobil be banned from doing business in New York state, a “corporate death penalty,” as Kennedy put it, because of the company’s “subterfuge” that “amounts to a crime against humanity.”

Kennedy confirmed the memo, adding that he had numerous conversations with Schneiderman about the Exxon investigation.

ExxonMobil has hundreds of gas stations in New York State with sales in the billions of dollars.

With similarities to other anti-fossil fuel campaigns being waged in the US, Kennedy’s memo drew a parallel in the effort against ExxonMobil with the 1990s legal campaign against tobacco companies for their denials of the dangers of smoking.




West Texas Legislative Summit To Focus On Energy


June 27, 2018


The West Texas Legislative Summit will focus on energy this summer, but plans for Energy Secretary Rick Perry to speak have been scuttled.

The former Texas governor recently said he had a scheduling conflict, so the San Angelo Chamber of Commerce says the Department of Energy‘s Office of Fossil Energy Depurty Assistant Secretary for Oil and Natural Gas Shawn Bennett will present the keynote address on Thursday August 2nd instead.

The Chamber’s Anne Flippen said Bennett has more than a decade of experience in public affairs and government relations in the coal, oil and gas industries.

There’ll also be a 2019 Legislative session preview presentation.

The summit, Energy: Landscape of Opportunity, will be August 1st and 2nd at Angelo State University.



Beaumont Plant Going Online, Adding Considerable US Methanol Production


June 27, 2018


Nederland-based OCI Partners LP is starting up its Natgasoline plant in Beaumont to produce nearly two million tons of methanol per year.

The plant is bringing a significant increase in methanol production to the US, which only a few years ago was dependent on imports.

OCI, which has joined with Consolidated Energy Limited (CEL) and Natgasoline LLC in the methanol plant, calls it the “largest in the US,” eclipsing the Celanese-Mitsui unit in Clear Lake, near Houston.

“The successful start of production at Natgasoline is a significant step forward in our capacity expansion program and marks the completion of OCI’s second major greenfield facility in the United States within as many years,”  Chief Executive Officer of OCI N.V. Nassef Sawiris said Monday.

OCI NV confirmed earlier this month that it has an unsolicited tender offer from its general partner and affiliate OCI Partners to buy up OCI NV common stock at a 10% premium.

The takeover target OCI Partners’ board’s conflict committee recommended on June 19th that shareholders accept the tender offer.

CEL is a subsidiary of Proman Holding AG (‘Proman’) and Helm AG.





Taking the Fizz Out of Coke and Beer: Higher Natural Gas Prices Feed European CO2 Shortage


June 27, 2018


In Europe, top beer and soft drink manufacturers are getting desperate for carbon dioxide (CO2).

All the major suppliers of liquid CO2 — including Praxair, Messer, Linde and Air Liquide — have been affected by problems in raw gas sourcing.

“Even ACP (recently acquired by Air Products) has been impacted by the downturn in CO2 output,” according to GasWorld.

Some manufacturers in the UK are even calling it the “worst supply situation to hit the European carbon dioxide (CO2) business in decades.”

Ammonia plants have been one of the largest sources of food grade CO2 in Europe;  raw gas streams from chemical operations and bi-ethanol plants have been alternative sources in the past decade.

But ammonia remains the staple source, and plants have been servicing the fertilizer industries or doing maintenance since March — and this year the demand for CO2 is just too high, coupled with dropping ammonia prices which have kept ammonia plants idle.

To add to the misery in the soft drink and beer industries — which are highly dependent on CO2 flows for their “fizz” — the higher price of natural gas as a raw material for ammonia is keeping Ammonia plants idle because the margins in the ammonia business just aren’t that good these days.




CPS Customer Initiatives Bring Most Trusted Utility Brand Honor — Again


June 27, 2018


San Antonio’s CPS Energy is rated the 2018 Most Trusted Utility Brand in the US Southwest Region among combined gas and electric utilities by Market Strategies International (MSI), just like last year.

Top rated utilities that have earned the trust of their customer base are perceived to be industry leaders on innovation, according to MSI.

The marketing company also said utilities are also more successful at achieving customer adoption of the enhanced offerings and options they have developed.

CPS Chief Customer Engagement Officer Felecia Etheridge credited the utility’s employees for implementing customer service improvements.

“Our employees are dedicated, committed and care about our community and customers.

“Our employees are our brand.

“They live and breathe our People First philosophy and their actions every day demonstrate their commitment to provide the highest quality of service to our customers.”





Strong But Unpredictable On Energy Issues, US Supreme Court Justice Kennedy To Retire


June 27, 2018


Pivotal US Supreme Court Justice Anthony Kennedy has sent a letter to President Trump announcing his retirement.

Kennedy turns 82 next month; he is the longest-serving among current justices, having been nominated in 1988 by President Ronald Reagan.

His retirement gives the president a chance to name a conservative to the high court; any nominee, however, is likely to stir controversy.

Kennedy was often unpredictable in his views, characterized by some as a conservative and others as a moderate, expressing skepticism that the EPA had the power under the Clean Air Act to force greenhouse gases to be regulated under permits for power plants, factories and other sources.

He was sympathetic to Schlumberger earlier this year when the oil services company’s lawyers appeared before the high court to argue against a lower court ruling that barred it from recovering more than $93 million in profits lost when foreign companies infringed on Schlumberger patents.

However, in the 2007 Massachusetts v. Environmental Protection Agency, Kennedy joined with more liberal Supreme Court justices Souter, Ginsburg, Breyer and Stevens in a ruling that required the EPA to regulate carbon dioxide and other greenhouse gases as pollutants.

It’s been noted many times that Justice Kennedy was similarly unpredictable in most cases; he therefore gained a reputation for being the “swing” justice.

Just this morning but before his announcement, Mother Jones reminded readers that the New York Times once called Kennedy an “equal-opportunity disappointer.”

Vox notes that Kennedy was the “swing” vote responsible for 5-4 rulings “that legalized same-sex marriagepreserved Roe v. Wadeupheld warrantless wiretappingblew up campaign finance restrictionsoverturned DC’s handgun ban, and weakened the Voting Rights Act.”

He may be most remembered for siding with conservatives in deciding the outcome of the contentious Presidential Election of 2000.

In his letter dated Wednesday, Kennedy wrote to Trump, “For a member of the legal profession, it is the highest of honors to serve on this Court.

“Please permit me by this letter to express my profound gratitude for having had the privilege to seek in each case how best to know, interpret and defend the Constitution and the laws that must always conform to its mandates and promises.”

Senate Majority Leader Mitch McConnell said shortly after the announcement of Kennedy’s retirement that the Senate will move to confirm Kennedy’s successor before the midterm elections.


See: Kennedy exit gives Trump chance to reshape court for decades: The Hill


Also: see If Justice Kennedy Retires, His Replacement Could Undermine His Legacy: FiveThirtyEight


And: In a important opinion last week, Justice Kennedy expressed serious misgivings about the co-called “Chevron Deference,” the court case ruling in Chevron v. Natural Resources Defense Council, a major Supreme Court precedent requiring federal judges to defer to executive branch agencies’ “reasonable” interpretations of federal law in cases where the law is “ambiguous.” — Reason Magazine





Open Season Extended On DJ Basin-To-Mont Belvieu NGL Pipeline


June 27, 2018


Tulsa-based SemGroup, along with Colorado’s DCP Midstream, has extended open season on a natural gas liquids pipeline from the DJ Basin to Mont Belvieu, east of Houston.

The companies say shipper interest is causing the extension through July 2nd at 5 pm.

The capacity is available because of planned conversion of a portion of White Cliffs Pipeline (51% owned by SemGroup) and Southern Hill Pipeline (66% owned by DCP) between Weld County, Colorado, and the Gulf Coast, completion of which is expected by the 4th quarter of 2019.





Brownsville LNG Project On Track


June 27, 2018


Texas LNG Brownsville LLC continues on its path toward construction, having received regulatory letters okaying the project.

Suitability of the Brownsville Ship Channel for anticipated marine traffic was confirmed by a US Coast Guard Letter of Recommendation, Texas LNG said this week.

The company’s methodology for design spill review met those reuired by the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, according to a DoT letter.

And the US Department of Defense said in a letter that the project would only have minimal impact of military operations and training.

FERC approval is expected next year, with a final investment decision (FID) expected then, but pre-FID work continues, Texas LNG said, with engineering to begin upon closing of the current round of funding.

First phase production of LNG is expected in 2023.





Energy-Friendly Texas Supreme Court Judge On List of President’s Preferred Nominees To US Supreme Court


June 27, 2018


Texas Supreme Court Justice Don Willett, a friend of energy companies, is among those on President Donald Trump’s list of possible successors to US Supreme Court Justice Anthony Kennedy, who announced his retirement Wednesday.

Mr. Trump said Wednesday he intends to find a nominee to replace Kennedy from among an existing list of candidates, according to USA Today.

The White House published the list in November of last year; if it still holds true then former Texas Supreme Court Justice Willett, currently serving on the 5th U.S. Circuit Court of Appeals, is in the running, in spite of a number of teasing Twitter comments that fans of the president call “anti-Trump.”

Among his energy-related decisions, Willett was among the Texas justices ruling in 2007 that contract employees like oil rig workers cannot sue their “employers” for on-the-job injuries; contract workers are not afforded the same job protections as standard company employees.

In a 2008 case involving fracking, Willett noted that the increased technical ability of oil drillers to explore shale can be essential to reaching and extracting undeveloped energy sources.

The primary issue in the Coastal Oil & Gas Corp. v. Garza Energy Trust appeal case was whether subsurface hydraulic fracturing of a natural gas well that extends into another property is a trespass for which the value of gas drained as a result may be recovered as damages.

Willett agreed with other state justices that the Texas “rule of capture bars recovery of such damages.”

He wrote, “Amid soaring demand and sagging supply, Texas common law must accommodate cutting-edge technologies able to extract untold reserves from unconventional fields.”

And Willett delivered the majority opinion in Forest Oil Corporation v. McAllen (2007) in which the state high court agreed with Forest Oil that terms of a contract with the city of McAllen did not supercede a settlement agreement already reached.

The National Institute on Money in State Politics listed Justice Willett as having received more than a-quarter million dollars in campaign funds from energy companies over the past ten years.


On a lighter note, if you were to believe the online betting website PredictIt, Willet’s chances of getting the nod from Mr. Trump are rather slim.





Former Oil Company CFO Getting Push In Run For Lt. Gov


June 27, 2018


Texan Mike Collier is getting a push in his run for Lieutenant Governor, as the CPA who’s worked with a couple of oil companies goes up against incumbent Dan Patrick.

Collier, a longtime Republican who’s been a Democrat since 2011, started his career at Exxon and ended up as CFO at Layline Petroleum, LLC, and lately has an endorsement from the Houston Chronicle‘s moderate columnist Erica Grieder, who calls Collier a “problem-solver with a plan.”

Dissatisfaction with Republican Patrick may be a motivator in some of Collier’s endorsements, and Grieder admits that “perhaps Collier doesn’t have a chance” in the November elections, but the 56-year-old Collier has been picking up some friendly media coverage as his campaign builds.

The Dallas Morning News has already endorsed Collier as a Democratic nominee, and he says he’s backed by the Texas State Association of Firefighters — and the San Antonio Express NewsJosh Brodesky wrote in March that the state “race to watch” is “Collier-Patrick.”

Indeed, Collier ran for state comptroller in 2014 and lost to Glenn Hegar by more than 20 points.

But Collier may have an advantage this time around: he appears to be not as interested in social issues as Patrick and plans to run a “very policy-oriented, substantive campaign,” as he told the Texas Tribune earlier this year, and intends to focus on the campaign rather than running against President Trump as some Democrats are doing.

Mr. Collier was called out by PolitiFact in March for claiming that Texas “is set to recapture an additional $500 million in Robin Hood payments from taxpayers and not one penny of it will go to public education in Texas. Instead, the state government is confiscating our property tax dollars to pay its own bills,” which the fact checking service called “false.”

Still, he has the foresight to have already outlined a health insurance plan that calls for a “Patient Financial Bill of Rights,” a controversial notion to require insurance companies to provide a list to patients of costs for health care procedures up front, along with use of common language rather than medical codes in billing.

He’s also called for the use of state money to encourage Texans to buy insurance plans with hope that increased purchases will drive down the cost of insurance.

In the latest UT/Texas Tribune poll, Patrick is up six points over Collier, which Democrats and even some Republicans see as perhaps disappointing for Patrick, but then again the incumbent has a wide advantage in fundraising and incumbents usually have a natural political advantage.

A question in the minds of some political observers, though, is whether Texas voters will go for a relatively simple policy campaign versus the more complex and colorful but controversial campaign Patrick is expected to run.


— Mike Shiloh





Former Electricity Co-Op Board Member Now State Bar General Counsel


June 27, 2018


A onetime board member of the Pedernales Electric Cooperative has been named as General Counsel to the State Bar of Texas‘ board of directors.

Ross Fischer, a UT School of Law graduate, has specialized in campaign and legislative law, professional ethics and governmental integrity in his time as a partner at Austin’s Gober Group.

Pedernales in Central Texas is America’s largest member-owned electric distribution cooperative, where Fischer served on the board between 2010 and 2013.





Excavation, utility relocation for Capitol Complex expansion expected to kick off in July


June 27, 2018


“Construction of the $581 million first-phase addition the Capitol Complex Master Plan will kick off by the end of July, beginning the four-year process of adding 1 million square feet of new office space to the Texas Capitol and creating the three-block Texas Mall.

“This new construction, which will include officer towers at 1801 Congress and 1601 Congress, will put almost all current agency operation leased space into state-owned property.”

The Facilities Commission has also begun preliminary preparations for the $445 million, 1 million-square-foot North Austin Complex, Quorum Report said Tuesday.





Petroleum Industry Tries To Sort Out Market Uncertainties


By Alex Mills


Life in the oil and gas industry became more complicated in recent weeks when at least a half dozen major issues affecting supply and demand came into question.

Last week the Organization of Petroleum Exporting Countries (OPEC) announced it has agreed to increase crude oil production by an estimated 600,000 barrels per day (b/d). Some energy experts predicted that oil prices would decline because of the anticipated added production, but prices increased about 4 percent closing just above $70 per barrel on the New York Mercantile Exchange (NYMEX).

The implementation of sanctions on Iran by the U.S. also will have an expected impact on worldwide supplies. The federal government announced this week that it will begin enforcing the sanctions in November. However, it is uncertain if the two largest purchasers of oil from Iran – China and India – will comply.

Other factors impacting the petroleum industry include the economic and political turmoil in Venezuela, trade agreements with Canada and Mexico as renegotiations continue under the North American Free Trade Agreement (NAFTA), and tariffs on imported steel and aluminum and the potential for a trade war between countries that could impact economic activity and demand for petroleum products.

Rafael Ramirez, the former head of Venezuela’s government owned oil empire (PDVSA), told Bloomberg news that oil production has declined from 3.5 million b/d to 1.5 million b/d and he projects it will decline another 600,000 b/d this year. Once a major exporter of crude oil, Venezuela has been plagues in recent years by mismanagement, he said.

Some oil traders wonder if OPEC can make up the difference in production lost by the decline in Venezuela and sanctions against Iran, which has created a belief that worldwide supplies could be reduced putting more pressure on upward movement of oil prices.

NAFTA is an unknown at this point. Obviously, NAFTA has been a positive for the petroleum industry in Texas. However, the outcome of NAFTA’s renegotiation is not clear.

In recent weeks, the Trump Administration has set tariffs on steel and aluminum from countries even though the domestic petroleum industry objected. Petroleum economist Karr Ingham said the “futures price for U.S. Midwest domestic hot-rolled coil steel has increase by 40 percent  from $660 per ton on Jan. 2 to $924 per ton on June 4, including a $30 per ton price jump in one day from May 30 to May 31. Prior to that, prices had increased by 35 percent.”

Chevron CEO Mike Wirth and Exxon CEO Darren Woods also pointed out issues created by the tariffs. “The risk of trade skirmishes or trade wars starts to weigh on people’s perceptions of economic growth in the future,” Wirth said. “From a demand standpoint, I think that’s a risk.”

Woods pointed out that Exxon is involved in many projects around the world, and a trade war between countries could damage the economy and demand for petroleum, which would require re-evaluation of each project.

On the other hand, the Energy Information Administration at the Department of Energy and the International Energy Agency project demand for crude oil worldwide will continue to increase. Both project demand to double by 2040.

The EIA reported on Thursday that domestic oil inventories declined by 9.89 million barrels last week, and oil stored at Cushing, OK shrank for the sixth straight week. That news prompted another increase in U.S. oil price to $72.93.


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






TIPRO Commends Governor Abbott for Asking President Trump to Reconsider Steel and Aluminum Tariffs: News Release


June 28, 2018


Austin, Texas – The following is a statement from Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO), regarding a letter sent Thursday, June 28th from Governor of Texas Greg Abbott to President Donald Trump concerning federal tariffs against imported steel and aluminum products:


“We commend Governor Abbott for his support of Texas businesses being impacted by the Trump Administration’s recent tariffs on steel and aluminum imports. As described by the governor in his outreach to President Trump, these tariffs present negative consequences to American industries, including the oil and gas sector, and should be reconsidered. Such policy threatens to limit the recovery of the oil and gas industry from the downturn, jeopardizes well-paying jobs, and could adversely affect the economy of Texas and nation as a whole.


Since the tariffs were first proposed by President Trump last year, TIPRO has consistently communicated with state and federal officials on this issue, warning of the negative implications posed to the energy industry. As the leading producer of oil and natural gas in the country, operators in the state of Texas will continue to see a significant increase in the cost for material used in exploration and production activities, including Oil Country Tubular Goods (OCTG) and Line Pipe (LP), until the tariffs are removed. We join Governor Abbott in calling on the president to discontinue the levies against steel and aluminum imports.”






The “Prophet of Doom” On Climate Change — Was He Right?


A scientist famously weighed in 30 years ago on the threat of global warming, setting off a debate that rages to this day. Major newspapers now have their own self-interested retrospective interpretations of that scientist’s accuracy, demonstrating the disparate approaches to an important political debate and the controversies surrounding the data gathered since.


June 29, 2018


NASA scientist James E. Hansen moved to the forefront in the nascent debate over global warming on June 23, 1988 when he testified before the US Senate Committee on Energy and Natural Resources that he had a “high degree of confidence” that warming was a threat to the world.

He happened to deliver his theories on a 93-dregree day in Washington DC, in a year that turned out to be one of the hottest on record, so his notions were widely noted, and celebrated.

It’s been 30 years; were his theories accurate?

Like so much of science and energy, it depends on who you ask.

Hansen testified that day that he had discovered a “cause-and-effect relationship between the greenhouse effect and observed warming,” which, coupled with the 1988 heat wave and drought in the US, he characterized as evidence of a worldwide threat caused by man-made atmospheric emissions.

On the 20th of August of that year, he published a paper in the Journal of Geophysical Research on variations in the atmosphere caused by trace gases and aerosols, based on computer models, citing predictable changes to come.

In Congressional testimony, he described three future possibilities:


  1. If emissions into the atmosphere continued as they were through the 1970s and ’80s, earth’s atmosphere would heat one-degree Celsius by the year 2018.
  2. If emissions leveled off, the earth would warm by 0.70 degrees Celsius by 2018
  3. Constant emissions into the atmosphere would continue through the year 2000, raising temperatures a tenth of a degree or perhaps a little more, then plateau — a possibility Hansen described as “unlikely.”

    Hansen’s models were noted recently by the New York Times, which pronounced number 2 as having  “turned out to be a reasonably close match for fossil-fuel emissions as they actually occurred.”

The article by opinion writer Justin Gillis, though, admits that scenario number 2 overestimated global warming by as much as 30%.

Gillis then defers to an article in the Washington Post and another Gillis article in the Times to back his claims that man-made global warming is already having a profound effect on the worldwide terrain.

Another opinion piece from three days earlier in the Wall St Journal also refers to 30 years of information to sort out Hansen’s predictions, in this case citing number 3 as the most accurate.

“Global surface temperature has not increased significantly since 2000, discounting the larger-than-usual El Niño of 2015-16,” wrote Pat Michaels and Ryan Maue.

“Assessed by Mr. Hansen’s model, surface temperatures are behaving as if we had capped 18 years ago the carbon-dioxide emissions responsible for the enhanced greenhouse effect. But we didn’t.”

We did, as Mr. Gillis points out, bring refrigerant gases such as those used in air conditioners under control during the Reagan administration (the Montreal Protocol), and it seems to have made a difference in the rate of warming.


Times author Gillis raises procedural questions about how Hansen arrived at his warming estimate: computers were much slower then, so a clear picture of upper-atmosphere warming couldn’t be achieved, therefore the Hansen model likely overestimated the plant’s sensitivity to emissions.

Gillis is much more willing than the Journal writers to cite Hansen’s scenarios as accurate (though flawed), Gillis citing other climate change reporting as proof, while the Journal writers cite few if any sources to back their claims that most global-warming scenarios have proven to be wrong.


There is, then, reasonable doubt about the overall accuracy of Hansen’s predictions, especially given the now-known-to-be-flawed procedures he used in drawing his predictions, these opinion writers might agree.

Perhaps the bigger question is: Given the nature of scientific inquiry, are flawed conclusions based on science relevant?

If not, then Mr. Hansen is at least of importance for opening the climate change debate that continues to this day.

In other words, alarming as they were, no one expected him to be 100% accurate, and his defining the problem has proven to be a component in an extremely important debate over climate change and what action should be taken.

His pronouncement to reporters following his 1988 Congressional testimony that it’s “time to stop waffling so much and say that the evidence is pretty strong that the greenhouse effect is here” was accurate to some degree.

But climate models are still models, subject to interpretation.

A subject with the political and economic weight that the climate change debate has evolved into calls for much more scientific precision than the Hansen models.


It would appear, though, that expert conclusions on Hansen’s 30-year-old work are forthcoming.

And the recent retrospective looks at Hansen’s testimony can be seen through the prism of the different political approaches typical of the respective news organizations.

While columnist opinions are worthy of consideration, it appears that the New York Times writer has, as an environmental reporter, a continuing interest in framing the climate change debate as top news and the Hansen predictions as vaguely prophetic.

And the Wall St. Journal writers have a continuing interest in keeping the debate below any level of hyperbole — admitting only that earth since the Hansen testimony is only “modestly warmer” — given the serious nature of the debate to business interests.


And anyway, Times writer Gillis may have buried the lede in his story on Hansen.

Those of us closely watching the political aspects of climate change arguments may find his opinion of Mr. Hansen’s global warming predictions less interesting than his side note.

He notes that Mr. Hansen’s granddaughter is among the plaintiffs in a closely-watched lawsuit against the federal government filed by young people in Oregon, “contending that its failure to tackle climate change is a threat to their constitutional rights of life and liberty.”

The suit claims that because they’re young, government failure on the climate change issue “gives them standing to sue” based on possible future outcome (Hansen’s granddaughter is a resident of Pennsylvania).

And Mr. Hansen is an expert witness in the suit.


— Mike Shiloh