March 25, 2019
The Texas Senate has passed an eminent domain bill with a “two offer” requirement to be made during land condemnation proceedings that must also be entered into the Land Owners Bill of Rights from the state attorney general…
March 21, 2019
The news media struggled to explain the use of naphta and Xylene to the petrochemical process but it’s much easier to emphasize their danger than their usefulness; with government and industries in low esteem, rumors and conspiracies rampant, shouldn’t there be a higher profile for state jurisdictional agencies and the oil and gas industry as a whole?
An abundance of caution surrounds the alarming fire incident at the Intercontinental Terminals Company and there’s every indication that the aftermath is going smoothly, but there are two important takeaways:
The circumstances under which the inferno happened were actually fortunate for the public considering the height of the toxic plume of smoke — and the petroleum industry together with government should take a moment to note the public interest deficiencies.
It’s my contention that state agencies such as the TCEQ should have vocal representatives to inform the public during petrochemical incidents such as this one.
It’s also my contention that the oil and gas industries should have their own representative at worrisome scenes such as the ITC fire, not for public relations but for public comfort and information.
We Were Lucky
The weather was with us: The Harris County Meteorologist Jeff Lindner admitted that while the toxic smoke from the tank farm at ITC (owned by the Japanese industrial giant Mitsui) was being carried high above the Houston area, had winds and weather been different it might have been a disaster for people in the path of the smoke, especially the young, the elderly and the infirm.
People who live in the vicinity of the Houston Ship Channel petrochemical complex have always been aware of their vulnerability to the industry that surrounds them and they take incidents like the Saturday fire (extinguished quickly) at a Baytown facility in stride, and there are extraordinary precautions in place for all nearby residents, but even those protocols would have been severely taxed had there been the kind of weather that keeps the winds at ground level.
There Was Good Information Flow
At the scene of the fire there was no shortage of rumors floating like the billowing smoke: It was arson, some said, terrorism (because of the ExxonMobil fire the day before), there were unattended safety systems, there was outright carelessness, others said, none of these rumors proved to be true.
And there were the usual sensational headlines: “Massive Houston chemical fire burns indefinitely, spreading smoke across Texas” was among the more exaggerated (it would take a lot of smoke to spread across the whole state, and the ITC smoke didn’t even “cover Houston,” as some said), and there are those who said the fire burned for four days (how can you squeeze four days between 10 am Sunday and 2 am Wednesday?).
As late as Thursday there were rumors that winds had shifted and there was danger for those in fast-growing Pearland and points south of the tank farm, also not true.
But county and local officials and especially ITC kept the information flowing: Pollution monitors showed no real short-term danger, monitoring was continuous and there was the needed caution.
No one said everything’s wonderful, just that it appears to be under control, as the firefighting continued.
As with Hurricane Harvey, the Harris County Judge, in this case Lina Hidalgo, made frequent appearances, if only to be a comforting presence and to restate the opinions of experts.
The Railroad Commission’s Ryan Sitton was there to affirm the air safety pronouncements and the ITC spokeswoman, Alice Richardson, appeared prepared for questions and forthright with what answers she had.
“There Must Be Some Kind of Coverup”
But the lack of confidence in the wider scope of government and the oil and gas industry was palpable for those of us who were there: There must be a coverup of some kind, people kept saying, the smoke is too rancid-looking and the air too thick with chemical smell.
It would have helped, perhaps, to have an outspoken representative from the Texas Commission on Environmental Quality at news conferences to give comfort to residents, and it just seemed like there should have been some representation from the oil and gas industry to help calm fears and answer questions about the nature of the materials that were going up in flames.
News media struggled to explain the uses of naphta and Xylene in the industry and how exposure to it might affect those who might breathe the charred fumes — and the resulting warnings inevitably made the chemicals seem deadly.
The press conferences could have used a cool-headed expert, which both the TCEQ and the US Environmental Protection Agency could probably have provided, if not the oil and gas industry, but there was no one to reassure folks that there was no coverup underway.
It Could Have Been Worse, So Where Were Jurisdictional Agencies?
Yes, polls indicate a suspicion among most people of government and big corporations, but there’s no way of restoring faith among the public without concern, reassurance and cooperation.
The TCEQ has been under fire for some time by critics who claim it’s in cahoots with big industries,but again it’s a big state with a lot of territory to cover and the agency has a lot of responsibilities.
Public confidence in the EPA is also ebbing, especially in the era of President Trump simply because it appears the administration is weakening environmental protections, but the EPA appeared weak during Hurricane Harvey in 2017 when it, according to the Los Angeles Times two weeks ago, refused “Houston’s own” NASA’s attempts to fly a pollution-measuring plane over the city in the aftermath of Harvey.
With low confidence in public agencies such as these, it would seem intuitive to send knowledgeable representatives to help calm public fears at times of potential crisis such as the ITC fire, which could have been so much worse that the EPA and TCEQ absence from the public discourse could have been anger-provoking.
Please Send Experts to the Scene to Give the Public Better Answers
And it could have been worse — the plume of smoke was already circling south of Houston and up northwest into the Brazos Valley and to Austin, where an accumulation of smoke would have been hard for lawmakers in session to ignore.
If the Houston Chronicle reporting is true that the cause of the ITC blaze was a malfunctioning manifold at one tank that erupted in fire because of a spark, then ITD’s dispatch of a special firefighting team from Louisiana, which apparently resulted in a more aggressive stance against the fire, was a prudent move, if perhaps late, and the Red Adair method of fighting wellhead fires using dynamite would have been out of place in hot zones such as the ITC fire.
But when all measurements are taken and the investigation into the cause of the fire is finished, it would also seem necessary for the oil and gas industry and its representatives to consider an emergency dispatch for an on-call expert who can be there when potential disasters such as the ITC fire occur.
It’s not enough for an industry so vital not only to Texas but, considering the world economy is based on petrochemicals, for the world that local officials try to assuage public fears during petrochemical emergencies.
The lack of an expert opinion in these situations only drives suspicion, conspiracy theories and outrage.
“Do You Want to Negotiate a New Deal? Perhaps a Green One?”
The ITC fire was visually spectacular, an invitation for video news, image addicted as it is, to spread the story around the world, and we all know that as stories are spread details are embellished and facts can get mangled.
This would not be a time to call for better public relations for the oil and gas industries, but it certainly would be time to call for an industry-wide decision to take better control of the industry as a whole during the inevitable disasters when human error or the unknown or even failing equipment can bring unforeseeable environmental disaster.
A breach by an outlying company such as ITC can easily reflect on the industry as a whole, and in this case it probably has.
As Houston Chronicle columnist Chris Tomlinson pointed out, the thick black smoke is a reminder that we have to get our nail polish remover and gasoline processing chemicals somewhere, and the bargain the world has made for cheap gasoline and natural gas includes the occasional problem — sometimes huge — that makes the “Green New Deal” look better to some, possibly including Tomlinson.
Perhaps the greatest single lesson for the oil and gas industries and the agencies that oversee them, in this case, is that it doesn’t take another Macondo Prospect-Deepwater blowout to spell public relations disaster — it could be a blown manifold at a chemical tank farm.
Or some other small thing, until it’s not so small anymore.
— Mike Shiloh
Mike Shiloh is publisher and an editor at The Texas Energy Report
March 20, 2019
An extension of the Joint Interim Committee to Study a Coastal Barrier System was passed to the full Senate on Wednesday…
March 20, 2019
She may be a former district court judge, but state Sen. Joan Huffman is a practitioner of the language of the people.
When standing in for Lt. Governor Dan Patrick following the passage of important disaster planning and response legislation Wednesday afternoon, Sen. Huffman was presiding before the Senate in procedure for a bill from Sen. Kirk Watson on the floor.
When Sen. Huffman made a procedural proclamation, she appeared to gavel too soon.
“Oh sh–,” she said, her voice dropping off-microphone.
Spectators might not have heard the word.
After mild laughter from the floor, she said, “I think I just lost my job.”
“You’ve certainly made this bill more exciting,” Watson quipped.
She recovered quickly, got through the procedure, then introduced a bill to protect free speech and assembly rights “central to the mission of public institutions” that Sen. Paul Bettencourt called a “model for the nation.”
Strategies and money for coastal erosion research and oil spill response included.
March 20, 2019
The Texas Senate has passed a trio of bills aimed at clarifying preparation for future disasters and organizing future state response to disasters.
Senate Bills 6, 7 and 8 included floor amendments….
March 19, 2019
The Texas Senate has passed SB 554 bill that increases the requirement that governmental entities demonstrate progress that land taken by eminent domain is actually put to public use….
March 18, 2019
The Texas House Energy Resources committee on Monday heard bills that would alter primary funding method of the Railroad Commission of Texas (RRC), the way the RRC handles purchasing under a federal program and handles licensing of LNG, CNG and LPG container and systems retailers….
March 14, 2019
A Texas Senate vote is calendared for Monday that could have long-term effects on property rights law, eminent domain land condemnation procedures and the speed with which pipelines are built, as several lobbies hash it out
A group including the Texas and Southwestern Cattle Raisers Association, the Texas Farm Bureau and the Texas Wildlife Association (along with others) is speaking out in favor of an eminent domain bill that now contains substitute language from the Senate State Affairs committee.
And a group led by the Texas Oil and Gas Association (TXOGA) and the Texas Pipeline Association is speaking out against the revised SB 421 — now called CSSB 421, an amendment to the Texas Property Code — and is recommending legislators vote down the bill when it comes before the Senate, which could be as early as Monday, when it is calendared for a full Senate vote.
The intent of the bill as stated by the author is simply to increase fairness in the Texas eminent domain process.
The committee’s report was handed out to Senators on Thursday afternoon.
The committee’s changes to Sen. Lois Kolkhorst‘s introduced bill — following a lengthy public hearing — include re-defining who can attend the proposed required public meetings before land condemnation — meetings that are to be called by the government entity doing that condemnation.
This, along with changing the description of those who are to be notified of such meetings — open public meetings were changed, in the revised bill, to meetings of property owners who might be affected by the land acquisition, with notice of those meetings now limited to affected property owners rather than the general public.
The substitute bill also changed language referring to easements, and tried to narrow down some language in an attempt to avoid lawsuits.
See the bill, as amended, by clicking here.
But TXOGA and the Texas Pipeline Association (along with others) immediately said the substitute bill indeed does not use precise enough language and “allows the landowner to engage in prolific litigation due to numerous procedural gotchas.”
And they took issue with several specific portions of the amended bill, including what they call vague language including a special commissioners’ process as part of certification of land seizure “with little guidance or legal standard for the court,” allowing litigation to stifle infrastructure projects, according to a letter the TXOGA-led associations sent to Lt. Governor Dan Patrick.
Two Opposing Views Of SB 421
On one point the two groups take opposing interpretations of the revised bill’s language.
One of the concerns raised by many were the required “public meetings” to be called by the government entity overseeing the condemnation of property, which could be an open invitation to special-interest groups to turn the meetings into protests or standoffs…..
March 12, 2019
One of two bills aimed at penalizing companies that low balling landowners during eminent domain negotiations has made it out of committee….
March 9, 2019
While almost all the bills are in at the Legislature, we’re sifting through them for their pertinence to the energy industries in Texas.
These are the first of the bills we’re categorizing, but this list is temporarily incomplete — we will be adding to it over the next few days, so please check back with us shortly…..
March 7, 2019
With the deadline for submitting bills for the 86th state legislature almost here, expect our customary rundown of the bills we’re watching for you to appear this weekend.
Among them are bills calling for:
March 7, 2019
Controversy over a proposed Kinder Morgan pipeline that would run through Hays County south of Austin likely influenced the filing of a new bill by Democratic state Rep. Erin Zwiener…
February 27, 2019
Three state lawmakers are trying to bring high-speed Internet services to more areas of rural Texas…
February 25, 2019
Two West Texas lawmakers have new bills aimed at funneling state money to local governments that have energy-related activities for making much-needed repairs and expansions on roads along with increasing educational opportunities and increasing public safety…
February 25, 2019
Family members of a 12-year-old girl who was killed in a Dallas natural gas explosion are set to appear on the floor of the Texas House of Representatives this week…
February 20, 2019
The Texas Senate Select Committee on Texas Ports is being convened again, Lt. Governor Dan Patrick said on Wednesday…
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Cynthia and George Mitchell Foundation
February 7, 2019
With some experts saying Texas water will be a continually-more precious resource in the future, the joint House committees of Energy Resources and Natural Resources heard from companies and individuals on Wednesday about efforts to recycle water, a resource that’s now being used in the billions of gallons by Texas oil and gas industries.
Perhaps the most comprehensive effort to recycle used water comes from privately-owned West Texas Fasken Oil and Ranch Ltd., which has advantages over many of the larger oil producers, particularly in its large contiguous parcels of land and indigenous water supplies.
Facilities and Resource Manager Bo Farris said the Midland company’s management as early as 2013 called for ending the use of fresh water in the many wells the company operates, spurring experimentation in filtering and treating the water contaminated in the drilling process, called “produced water.”
Fasken’s company tried treating brackish water that no one wanted for other purposes, then tried “stand-alone oxydation” methods using peroxide, none of which was cost-effective, and tried using filters that Farris said were “high maintenance” and “not very efficient.”
In the search for a cost-efficient method of treating produced water, the company began using chlorine dioxide to remove iron, Ferris told commissioners, and is now able to recycle its oil and gas vertical well drilling water, treating 10,000 barrels per day at a cheap 75-cents per barrel.
The process does produce some byproduct that must be disposed of, but the company continues to ramp up and should be treating and recycling 50,000 barrels a day sometime soon, with two-thirds of its more than 3 million fracking-related barrels of water under treatment as well.
And Farris noted the company has been winning environmental awards along the way.
Cimarex Experimented With Different Methods Too
At Denver-based Cimarex Energy, efforts were a little slower, but then few companies have the ability to treat produced water using large nearby resources as the acreage-rich West Texas Fasken Oil and Ranch Ltd. has done.
Cimarex Water Resources Manager Robert Huizinga told commissioners on Wednesday that it pushed through the process of removing suspended solids and then dissolved solids in produced water to mixed results.
Suspended solids are, put too simply, the stuff you can see floating in water, dissolved solids are the stuff you can’t see.
The results weren’t cost-effective, Huizinga said, producing solid waste that had to go to landfills and using natural gas that was an added cost.
After years of trial and error that began in 2013, the company settled on removing only suspended solids from the produced water, then adjusting the chemical balance in its drilling methods to utilize the treated water, and putting the water through filters.
Unlike the previous methods that called for holding tanks and expensive water transportation, filters allowed the processing efforts to be mobile and treat the water faster for quicker recycling, creating an “on the fly” system.
Huizinga said Cimarex in 2016 pumped 3.7 million barrels of produced water, 23% of it recycled, with the rest brackish or fresh, upping that number to up 61% recycled in 2017 — upping that to 67% last year.
Marathon, Unlike Some Others, Has Wells All Over — A Challenge
For companies that have parcels of land here and there, even large ones, it can be a lot trickier recycling backflow or produced water, as Marathon‘s Water Management Technical Advisor Kerry Harpole told commissioners.
The Houston-headquartered company has assets in Oklahoma, the Permian Basin, the Bakken play and the Delaware in New Mexico, and they tried treating water in South Texas and recycling water in the Permian, but at hundreds of dollars per truckload using brackish water from near or far sources was not feasible for large fracking jobs, so recycling efforts continued.
Harpole said there is satisfying progress so far — Marathon’s only been in the Permian Basin for a year and a-half but has gone from half a million barrels of its water recycled a year ago to a full million recycled as of late.
The Economics
More than other factors, the economics of recycling produced water has been a major factor.
Like the slow elimination of coal from power production in America, the slow effort to recycle water in Texas signifies market forces at work.
Even when it’s cheaper to put used fracking water down a hole, companies have large concerns about the environment, about “seismic potential” (the possibility of earthquakes) and the economics of trucking in water from far away — which is a special concern in the dry and expensive Permian.
Recycling can potentially save a company money in the production process, which in the case of fracking, is staggeringly costly.
And then there’s what to do with the water once it’s recycled, which calls for intensified water management.
“When you make a lot of water, its a lot of money,” Harpole observed.
Industries are trying hard to work together as part of the recycling effort, Harpole also observed, and “if I have a bunch of water and another company needs it” they can talk about terms.
Some companies are making creative arrangements to procure cleaned water.
Pioneer Natural Resources even made a deal with the city of Midland in 2016 to make improvements to the city’s wastewater treatment plant, with the company getting reclaimed water from the plant in return.
That averted an increase in Midland taxes to improve the plant, reduced oil truck traffic as the water is piped out of the city and gave the city extra spending money.
And the number of permitted independent commercial produced water recyclers is growing pretty fast (see The Texas Energy Report article “RRC Permitting, Water Recycling and Earthquake Data Explained at Joint Texas House Commission Hearing” below).
Some Say Government Policy Isn’t Keep Up
There are of course other factors, speakers told commissioners on Wednesday, in getting produced water recycling up to speed.
Perhaps the most important is governmental policy.
While the Railroad Commission has made it easier for well operators to lay down some water delivery lines and eliminated in some cases the need for extensive permits in creating environmentally-friendly recycling pits (the specs for which are drawn by the RRC) recycling can be a bureaucratic challenge.
There are about 100 water conservaton districts in Texas, Marathon’s Harpole said, each with its own policies and procedures that can make permits and permissions take years.
More than one speaker to commissioners on Wednesday called for an entirely new outlook on water.
Streamlining the permit processes would help especially on a local basis, they said, but there are technologies already in place and growing that some government agencies aren’t even considering, such as desalination.
And there are other reasons beside economics that make recycling produced water a challenge, speakers noted, such as differences in geography (especially for companies with diversified land holdings), disparate water sources, local laws, private property concerns, physical risk and insurance risk.
The Push For Out-Of-State Tech Is On, Environmentalist Is Not So Sure
Luke Metzger from Environment Texas reminded commissioners that a Duke University study found water use in the Permian Basin had increased 737% between 2011 and 2016, and 100 billion gallons of water will be used in oil exploration and production next year statewide — more than the total used by the city of Austin in one year.
He entreated commissioners to “not leap before looking very, very closely” in making changes in the treatment of produced water.
Drillers need to use more brackish water, he said, and reduce the amount of fresh water still being used, citing an expert who told him no more than 10% of produced water is being recycled today in the Permian Basin.
From Pennsylvania — a state where site disposal of produced water is not feasible, it’s either recycle or dispose of that water in another state, often Ohio — Daniel Ertel of Eureka Resources called for a new view of water, not just as a resource but as a potential commodity.
The iron, calcium chloride, lithium and residual oil that can be filtered out of produced water can be harvested for use in American markets, reducing the amounts of such commodities that are imported.
Ertel is the CEO of Eureka, which joined with Houston’s Haddington Ventures LLC for funding nearly eight years ago.
In Pennsylvania, where the company is headquartered, it already recycles 15,000 barrels per day of produced water, Ertel said, recovering minerals and removing contaminants, and it can do the same thing here in Texas.
He said his water recycling product — which can be treated at about 50-cents per barrel — is clean enough that it’s earned permits to discharge the water into the Susquehanna River, clean enough that it can recharge aquifers, replenish natural habitats and even create jobs along the way, he told the commissions.
And Mark Ellison spoke for desalination.
His IDE Americas, an Israeli company that began removing the salt and contaminants from water back in the early 1960s because Israel is so arid, is also looking to move into Texas by recycling produced well water.
He echoed Ertel in telling commissioners on Wednesday to stop thinking of used water from oil and gas wells as “waste,” when it can be recycled and components reused.
Ertel referred to the iron and other particles in such water not as byproducts but co-products.
At IDE, Ellison said his company is ready to use desalination to clean up water near the wellhead and is even working on the ability to use flaring natural gas to power that recycling.
The concept for the future, as Ertel put it, is a “closed loop.”
“Incentivize the product, then utilize the co-products.”
Ellison, too, called for governments to rethink the use of water, with technological advances now moving faster than bureaucracies and leaders can keep up.
Tech has overcome policies that were developed years ago, and in this case the question, he said, is not can we do it, but in what large volumes?
And how can the product of recycling be sold, and how can it be put to good use?
Environment Texas’ Metzger offered a different view, though: Right now, disposal wells need to be eliminated.
They can fail, just as they did in the Midland area in 2005, contaminating areas around them.
And produced water contains a lot more contaminants than we’ve considered here, he added.
There are “1600 chemicals in produced water,” he said as he wrapped up testimony before the commissioners.
“The EPA can detect only 400 of them, the Safe Drinking Water Act covers only 89 of those chemicals.
“Don’t buy the claims that treated water is fresh and safe until independent research proves its safe.”
The Texas House Energy Resources Committee Chair Chris Paddie and Natural Resources Committee Chair Lyle Larson called the joint meeting to refresh the committees’ memories on the state of water in Texas oil and gas production, and to introduce new committee members to the state of Texas water.
And with “water is the new oil” spoken so often it’s becoming cliche, committee members now have at least a session’s worth of questions to consider — and try to answer.
— Mike Shiloh
February 6, 2019
Efforts to recycle produced water in the oil fields, to speed up a well permitting process that’s been bogged down for years and to increase the reliability of data needed to find the causes of earthquakes in Texas — both natural and well-related — are showing results, but there’s plenty of work to be done.
That was the upshot of a joint hearing by the Texas House Energy and Natural Resources committees at the Capitol on Wednesday.
Well Permitting Process Getting Help: RRC
There have been concerns that permitting has been taking too long for wells that will dispose of water used in drilling, called “produced water.”
Railroad Commission of Texas Commissioner Ryan Sitton talked of adding employees at his agency to help speed up the permitting process, even as the RRC continues to move data from its old mainframe computer into new systems to help manage the flow of information needed for permitting….
January 25, 2019
Texas House members stepped into their committee assignments on Wednesday, with state Rep. Chris Paddie, the Marshall-area Republican, heading the Energy Resources Committee….
January 24, 2019
Dallas-area state Senator Bob Hall is the new chairman of the Agriculture committee, replacing Kel Seliger.…