Author: Shiloh

May 24, 2023 — Governor Greg Abbott has signed into law a bill that creates a cause of action and details a process governing “bad faith washouts” in releasing O&G royalty leases.

HB 450 from state Rep. Tom Craddick and others spells out how a person may file a lawsuit if that person can establish that he or she possessed was an overriding royalty interest right in an O&G lease and that the entity being sued and controlling the lease caused a washout of the overriding royalty in question — and it must be reasonably proven, then, that the entity being sued intentionally or knowingly caused that washout….
 

On a 119-21 (unofficial) vote with 2 (Moody, Phelan) voting present this evening, the Texas House passed its version of Senate Bill 7, low-interest loans meant to create incentives for gas-powered power plants — the bill limits net pricing built into the PCM to $1 billion a year

The House has also passed its version of SB 2627, allowing a bonus if plants are completed and hooked to the ERCOT grid by 2029 (with day-ahead and real-time pricing also part of the bill) — this bill was only introduced three weeks ago

And the House has passed …
 

May 19, 2023 — The Railroad Commission of Texas assessed $3,515,243 in fines involving 283 enforcement dockets against operators and businesses at the Commissioners’ Conference on Wednesday. The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety.

Thirty-seven dockets involved $1,204,493 in penalties after operators failed to appear at Commission enforcement proceedings. Master Default Orders can be found on the RRC Hearings Division webpage.

Operators were ordered to come into compliance with Commission rules and assessed $1,625,800 for any oil and gas, LP-Gas, critical infrastructure, or pipeline safety rule violations. Pipeline operators and excavators were assessed $684,950 for violations of the Commission’s Pipeline Damage Prevention rules. Master Agreed Orders can be found on the RRC General Counsel webpage.

In the absence of timely motions for rehearing, decisions are final as stated in these final orders.

Texas Energy Report NewsClips Friday May 26, 2023 Asterisk (*) denotes news stories that may be inaccessible because portions are behind a paywall   Top Stories   Houston Chronicle – May 25, 2023 …

May 17, 2023 — The EIA estimates that U.S. propane consumption averaged 0.986 million barrels per day (b/d) during the 2022–23 winter heating season (October through March), the least for a winter heating season on record, starting in 2010. Reduced average winter U.S. propane consumption was influenced by less consumption during the coldest winter months of December, January, and February. Based on our recently released Petroleum Supply Monthly, U.S. propane consumption during those three months averaged 1.07 million b/d

May 17, 2023 — The Port of Corpus Christi says it’s preparing a nationwide search for a new CEO after Sean Strawbridge resigned Tuesday, effective June 2nd**, following what’s described as a “heated” meeting with the port board — word is there were “questions over spending”…
 

May 17, 2023 — No injuries were reported when a fire broke out at Valero‘s West Plant refinery at Corpus Christi on Wednesday.

Valero’s Corpus Christi refinery, which averages 293,000-barrel-a-day, is made up of East and West plants just a few miles from each other, working with different types of crude oil.

…
 

May 15, 2023 — Governor Greg Abbott has signed into law the first Texas energy bill of the session, with SB 505, requiring new EV owners to pay $400 to register their vehicles …

May 15, 2023 – The Texas Legislature today gave preliminary approval to the Sunset legislation for the Texas Commission on Environmental Quality, an agency criticized for its light touch with corporate polluters at the expense of vulnerable people.

Senate Bill 1397 renews the TCEQ for another 12 years. The bill, which already cleared the state Senate, received initial approval from the Texas House today. Adrian Shelley, Texas director of Public Citizen, issued the following statement:

“Communities across Texas live with polluted air and water and the threat of chemical spills – or worse. During the past year, members of these communities pleaded with their elected officials to overhaul the TCEQ and finally protect their health. Lawmakers ignored the pleas, preferring the status quo in Texas — protection of polluters over people. Legislators passed on a once-in-a-decade opportunity to address a wide range of issues with a TCEQ that many say is not merely a reluctant regulator but a broken agency.

“Though the Legislature could have done more, the bright spots of the legislation that people in fenceline communities pushed for will now offer a little more protection to all Texans.”

A Public Citizen analysis identified the following favorable provisions in SB 1397:

• An increase in the maximum daily fine from $25,000 to $40,000
• Permit applications are posted online, and the comment period following a public meeting increased to 36 hours
• Compliance history review or permit suspension of a facility based on exigent circumstances.

Favorable improvements that the Legislature chose not to adopt include:

• Directing the TCEQ to consider the cumulative effects on health of approving multiple air permits in the same neighborhoods
• Removing “economic development” from the agency’s mission statement, which has led the agency to protect industry interests over public health
• Requiring the agency to consider environmental justice in permitting and enforcement.

May 15, 2023 — One person has died after a fire at the Marathon Petroleum Galveston Bay refinery in Texas City southeast of Houston.

It started about 9:30 Monday morning with fire crews arriving quickly and immediately spraying down the fire, according to one witness, who added the fire appeared to be under control within a couple of hours.

The blaze sent black smoke rising from the plant but officials did not call for nearby residents to shelter in place.

There are no details on the cause of the fire or the circumstances involving the one death, no have Texas City police said whether there were others injured — and of course officials have not released the identity of the person killed.

KHOU’s Gerald Harris said this afternoon that there are two people described as contract workers “undergoing evaluation” as a result of the fire.

So far air monitors have reported no danger to those nearby.

The statement this afternoon from Marathon Petroleum:

“We are deeply saddened to report that a Marathon employee has passed away as a result of the fire today at Marathon Petroleum’s Galveston Bay refinery.

“We extend our deepest sympathies to our employee’s family, friends and co-workers, and our thoughts are with them as we all mourn his passing.

“The safety of our workers and the community is our top priority, and a full investigation will be conducted to determine the cause of the incident.”

May 11, 2023 — Today, the Biden administration’s Environmental Protection Agency (EPA) released new rules for coal and natural gas-fired power plants mandating that they must cut or capture nearly all their carbon …

May 10, 2023 — The Railroad Commission of Texas issued a total of 607 original drilling permits in April 2023. The total includes 525 to drill new oil or gas wells, 6 to re-enter plugged wellbores and 69 for re-completions of existing wellbores.

The breakdown of well types for total original drilling permits in April 2023 is: 139 oil, 36 gas, 396 oil and gas, 35 injection, and one other permit.

In April 2023, Commission staff processed 747 oil, 192 gas and 222 injection completions for new drills, re-entries and re-completions….
 

By Alex Mills

Gasoline and diesel prices are declining, and in many locations in Texas gasoline is below $3 per gallon and diesel is under $4.

The Energy Information Administration (EIA), the data collection agency at the U.S. Department of Energy, and AAA, an industry organization that monitors fuel prices at the retail level, both show declines ranging from 18% to 33%.

EIA reported on May 8 the average regular gasoline price in the U.S. was $3.533 per gallon, which is an 18% decline of $0.795 from a year ago of $4.328.

The average price in Texas was $2.993 down $0.994 (25%) from $3.987 a year ago, according to EIA.

AAA reported similar numbers for Abilene ($2.958), Wichita Falls ($3.013), and East Texas ($2.943)…..
 

May 8, 2023 — Oil and gas exploration and production activity slowed in the first quarter 2023, according to the Texas Alliance of Energy Producers Texas Petro Index (TPI). This monthly analysis of the statewide …

May 5, 2023 — Income to the State of Texas from petroleum severance taxes were down significantly in April when compared to the same month last year, according to the comptroller’s office. Natural …

May 5, 2023 — Nine people have undergone medical evaluations and then were released following exposure to heat during a fire that’s now under control at Shell‘s Deer Park Chemicals plant south of Houston.

The fire is said to have been caused by an unspecified leak at an Olefins unit.

There was no explosion, according to witnesses.

The blaze ignited late this afternoon but appears to be dying down as the night wears on, the Harris County Sheriff’s Dept. said.

In a statement Friday night, Shell said, “The ignited product includes cracked heavy gas oil, cracked light gas oil and gasoline,” in an area of the plant that had likely been undergoing routine maintenance at a heat exchanger.

Depressurization has been underway all evening.

“No injuries have been reported, though a small number [9] of contract employees who were exposed to product are undergoing medical evaluation as a precaution,” with any injuries likely caused by heat rather than contact with flames.

And a Harris County Fire Marshal’s spokesperson said the air around the plant is being monitored but there have been no harmful levels of chemicals detected, and a Shell spokesperson said there has been and is no danger to the surrounding community.

The Houston Advanced Research Center is said to be in charge of air monitoring, along with the Shell in-house air monitoring team….
 

Late last year, the Texas House put forth their goals and priorities for consideration during the upcoming legislative session. Included among those priorities was House Interim charge #3, which directed the House to …

May 4, 2023 — A University of Houston research team, the Selva Research Group, is one of seven teams that advanced to the final stage of the U.S. Department of Energy’s Conductivity-enhanced materials for Affordable, Breakthrough Leapfrog Electric and thermal applications Conductor Manufacturing Prize or CABLE Prize.

The three-stage DOE competition has committed up to $4.5 million to accelerate the development of affordable, manufacturable materials that conduct electricity more efficiently and help propel America into a clean energy economy.

The UH team’s “Super Cool Conductor,” a very thin wire, is a rare-earth, high-temperature superconductor that can be manufactured at half the cost of copper cables that are currently used for power transmission in most cities.

The Selva Group won the first stage of the CABLE competition in 2021 by successfully demonstrating its breakthrough conductive material – the UH high-performance superconductor – for electrical and thermal energy applications. In the second stage, the teams had to provide a sample of their material for evaluation by CABLE prize-approved testing labs. The UH conductor successfully competed in the Beat Copper contest and demonstrated the potential to replace copper in motors, cables and generators. In addition, the unique magnetic properties of the superconductor make it well-suited for use in compact fusion power plants and other similar uses according to the DOE website….
 

By Alex Mills

Natural gas production in the U.S. has increased for 23 consecutive months as electric power distribution and liquefied natural gas (LNG) exports continued to rise.

The Energy Information Administration (EIA) stated this week U.S. dry natural gas production in February averaged 101.5 billion cubic feet per day (Bcf/d), which is 7 Bcf/d (7.4%) higher than February 2022, “the highest level for any month since 1973 when we began tracking dry natural gas production.”

EIA also noted gross withdrawals of 123.1 Bcf/d, which is a 6.8% increase over February 2022 of 115.3 Bcf/d, and it is the “highest daily rate of gross withdrawals for any month since 1980, the earliest year in this data set.”

Even though consumption of natural gas for electric power increased 7% over February 2022, consumption declined in residential (13.6%), commercial (8.4%) and industrial (2.6%) categories.

The U.S. exported 20.6 Bcf/d of natural gas to 25 countries in February exceeding imports of 8.7 Bcf/d making the U.S. a net exporter….
 

There will be enough electricity and reliability to power Texas this summer, but the population has grown 24% in 14 years while “on-demand dispatchable power” has only grown 1.5%. ERCOT faces a new reality: Texas has an electricity supply-and-demand problem.

May 3, 2023 –The seasonal overview of grid preparedness for most of the State of Texas as released by the Public Utility Commission of Texas is very good but with a caveat — the grid is losing ground against population increases.

At a news conference Wednesday morning, PUC Chairman Peter Lake said, “The ERCOT grid is ready for this summer, the reliability reforms that were put in place have been tested and continue to work.”

But for the first time in memory, there is a very small possibility (possibly 1% according to ERCOT Chairman Pablo Vegas) that there won’t be enough “dispatchable power” (natural gas) to meet the state’s needs under some conditions, notably in mid-evenings on the hottest days when solar power ends for the day and there isn’t enough wind to augment fossil fuel generation.

Chairman Lake indicated that renewables are crucial to the grid unlike never before……