Newsclips-

The Texas Energy Report NewsClips – January 17, 2020

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Lead Stories

 

Austin American Statesman – January 16, 2020

Council may pump $100K into Permian pipeline legal battle

Austin City Council members will vote on a resolution Thursday earmarking as much as $100,000 to the city manager to participate in civil litigation against the Permian Highway Pipeline.

The 42-inch, 430-mile buried natural gas pipeline would run from just north of Fort Stockton in West Texas through the Texas Hill Country en route to the Houston area. It has drawn the ire of landowners and local governments along its route who have raised concerns about both property rights and environmental consequences.

Council members approved a resolution in June opposing the pipeline and directing city staffers to conduct a study of the potential impacts to Austin’s water quality related to the pipeline, including threats to the endangered Austin blind salamander and Barton Springs salamander.

 

 

El Paso Times – January 16, 2020

Pending El Paso Electric sale approved by Texas Public Utility Commission; more OKs needed*

The Public Utility Commission of Texas on Thursday approved the pending $4.3 billion sale of El Paso Electric.

The three-member commission at its regular monthly meeting, with little comment, approved a settlement agreement between the J.P. Morgan Chase-tied Infrastructure Investments Fund, or IIF, which is buying the utility, El Paso Electric and eight intervenors in the case, including the city of El Paso.

The stipulated agreement of sale terms was filed with the PUC on Dec. 18. Some minor changes were made by the PUC in the final agreement, and the PUC will issue a final order in the pending sale in coming days.

 

 

Midland Reporter Telegram – January 16, 2020

Private equity adjusting to changing energy marketplace

Private equity has been investing in businesses for more than a century, but private equity funds targeting the energy industry didn’t appear until roughly 30 years ago.

Even in that short amount of time, the marketplace has changed significantly, according to David Hopson, a partner in PetroCap LLC.

Addressing members of the Society of Independent Professional Earth Scientists last week, Hopson said more than $178 billion is looking for a home in upstream or midstream assets.

Those billions will have a hard time finding a home, and Hopson detailed several reasons why.

 

 

NPR – January 14, 2020

World’s Largest Asset Manager Puts Climate At The Center Of Its Investment Strategy

BlackRock, the world’s largest asset manager, says that it will now make climate change central to its investment considerations. And not just for environmental reasons — but because it believes that climate change is reshaping the world’s financial system.

That was the message in BlackRock Chairman and CEO Larry Fink’s annual letter to CEOs published on Tuesday.

“The evidence on climate risk is compelling investors to reassess core assumptions about modern finance,” he wrote, explaining that climate change is the top concern that investors raise with BlackRock. “In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.”

See also: Australia — Climate-change disasters threaten credit ratings: Moody’s

 

Oil & Gas

 

Reuters/New York Times – January 17, 2020

Oil prices edged higher on Friday but were set to end the week broadly steady as sluggish economic growth in China, the world’s biggest crude importer, raised concerns about fuel demand and countered optimism from the signing of a China-U.S. trade deal.

The world’s second-largest economy grew by 6.1% in 2019, its slowest expansion in 29 years, government data showed on Friday.

“A well-expected fourth-quarter China GDP rate (6%) provided little clue for oil price trading on Friday morning, and mounting downward economic pressure will perhaps limit oil’s upside in the mid- to long-term,” said Margaret Yang, market analyst at CMC Markets.

Brent crude futures were up 44 cents at $65.06 by 1014 GMT.

U.S. West Texas Intermediate futures were up 35 cents at $58.87 a barrel.

 

 

Houston Chronicle – January 16, 2020

‘A sector in disarray’: Oil majors live beyond their means on investor payouts, study finds*

The largest oil and gas companies for years have lived beyond their means and paid more money to investors than they can reasonably afford, according to a new report.

The study from the Cleveland-based Institute for Energy Economics and Financial Analysis found that the five largest Big Oil majors — Exxon Mobil, Chevron, Royal Dutch Shell, BP and Total — spent $536 billion on shareholder dividends and stock buybacks since 2010 while bringing in just $329 billion in free cash flow.

“The oil majors are consistently under-performing the market and may believe that shareholders won’t notice, as long as they receive generous dividends,” said Tom Sanzillo, co-author of the report and director of finance for the institute, a think tank that supports renewable energy. “As these companies continue to sell off assets and acquire more debt, they reveal a sector in disarray.”

 

 

Houston Business Journal – January 16, 2020

Houston energy co. rolls midstream subsidiary into bankruptcy, completes auction*

The midstream arm of Houston-based Alta Mesa Resources Inc. filed for bankruptcy Jan. 12, following in the footsteps left by its parent company.

Kingfisher Midstream declared Chapter 11 bankruptcy to the Southern District of Texas’ bankruptcy court, which is based in Houston, about four months after Alta Mesa and the upstream side of its business filed for Chapter 11 in the same court. Alta Mesa’s midstream business was notably absent from its initial Sept. 11 bankruptcy filing.

Now Kingfisher has brought between $100 million and $500 million in debt, and the same range in assets, to the court as Alta Mesa prepares to sell substantially all of its assets as part of the bankruptcy process.

Alta Mesa had initial bids from BCE-Mach III LLC of $85.25 million for Kingfisher and $224.75 million for the rest of Alta Mesa’s assets, for a $310 million total.

 

 

Washington Times – January 16, 2020

Pipeline firm to pay another $2M fine in Pennsylvania

A Texas-based pipeline giant that is heavily penalized in Pennsylvania has agreed to pay another $2 million in fines for spilling drilling fluids into a reservoir during construction on a 350-mile multibillion-dollar pipeline carrying highly volatile natural gas liquids.

The consent agreement was made public Thursday after it was signed Jan. 3 by officials from Gov. Tom Wolf’s administration and a subsidiary of Energy Transfer LP.

The state Department of Environmental Protection said more than 208,000 gallons ( 787,400 liters ) of drilling fluids spilled into Raystown Lake in Huntingdon County in 2017 during construction on the company’s Mariner East pipelines.

 

 

Houston Chronicle -January 16, 2020

Sempra Energy has Texas-sized plans for the Lone Star State*

From building liquefied natural gas export terminals to accommodating the rise of renewables and boosting the adoption of electric vehicles, San Diego utility company Sempra Energy has big plans for Texas.

Sempra recently put its Cameron LNG export terminal in Louisiana into commercial service and has plans to build a similar facility about 90 miles east of Houston in Port Arthur.

Nearly a year after closing a $9.5 billion deal to buy an 80 percent stake in the Dallas-based electricity transmission and distribution company Oncor, Sempra also plans to tap into the state’s rapidly expanding market for renewable energy sources such as wind and solar. The company is also building a regional headquarters in Houston.

 

 

Houston Chronicle – January 13, 2020

Drilling Down: Birch Resources emerges as Permian Basin leader in new year*

Houston oil company Birch Resources is emerging as a leader of drilling activity in the new year.

Barely a week into 2020, the company is already seeking permission from the Railroad Commission for permission to drill 26 new horizontal wells in the Permian Basin.

Located about 9 miles southeast of the Upton County town of Lenorah, the wells target the Spraberry formation at total depths ranging from 7,800 to 8,600 feet.

 

 

Midland Reporter Telegram – January 16, 2020

RRC: Midland region dominates state in permits, completions

The Midland region again led the state in permits to drill oil and gas holes, new oil completions and new gas completions, according to numbers released for December from the Railroad Commission of Texas.

The RRC reported the Midland region also accounted for more than 50 percent of all permits to drill and new oil completions during the month. The number of new gas completions just missed the 50 percent threshold.

The RRC reported issuing 803 original drilling permits in December. Of those, 430 came from Midland’s district (53.5 percent). The next closest total for a district was 102 in the San Antonio area. The commission reported that original drilling permits was eight fewer than last year.

 

 

Carlsbad Current Argus – January 15, 2020

NM: Oilfield service companies continue to expand businesses in the Permian Basin*

Continued growth of oil and gas production in the Delaware Basin – on the western side of the greater Permian Basin – prompted service companies to expand their operations aside from oil and gas drilling to better serve energy companies in the region.

Target Hospitality, in response to growing demand for worker housing in southeast New Mexico and West Texas, announced a $4 million expansion at its workforce community in Orla, Texas in the heart of the Permian oilfield. …

A Dallas-based produced water infrastructure company sought to double its presence in the Permian Basin in New Mexico, acquiring 23 saltwater disposal wells and 300 miles of water gathering pipelines

Oilfield Water Logistics (OWL) and EOG entered into a long-term contract that would see OWL provide water handling infrastructure to the seller, while also providing the system to other customers in the region, read a news release.

 

 

Rigzone – January 13, 2020

Jude Clemente: Is the US Shale Boom Really Slowing Down?

Let us be clear: oil supplies some 33 percent of global energy and projections of absolutely declining demand are speculation since oil currently has no material substitute. Although lower in 2019, global oil demand usually rises at 1.3 million b/d.

Any slower growth in oil demand comes more from slower economic conditions than any structural change. Electric cars are overstated since they are not affordable. The average Tesla buyer, for instance, makes a whopping $400,000 per year. The rise of gas-guzzling SUVs in the still developing nations will likely compensate for oil demand reductions that come from electric cars.

Indeed, an ever-expanding U.S. oil export complex will mandate more domestic production. We already know that the oil is there: in December 2018, the “largest U.S. oil and gas discovery ever” was made in the Permian basin. Nationally, proven reserves have more than doubled over the past decade to 65 billion barrels. The resource available is many times that.

More: US shale oil productivity growth expected to slow in some basins

 

 

Wall Street Journal – January 16, 2020

Remembering the Mother of All Selloffs*

History doesn’t repeat, but it often rhymes.

Thursday marked the anniversary of the energy market’s greatest head fake of all time. Between Jan. 16 and Jan. 18, 1991, the price of U.S. benchmark crude plunged from $32 a barrel to barely $19 a barrel. Reading the headlines alone, that nearly 40% collapse seems odd. Coalition forces had just started Operation Desert Storm against Iraq, one of the world’s largest oil producers. Retreating Iraqi forces would set fire to hundreds of Kuwaiti oil wells, incinerating millions of barrels and crippling its output for months.

If they were even alive, today’s energy traders probably were more likely being doused with baby oil rather than following crude oil when these events unfolded. A little bit of historical study would have saved them a big headache this month, though: After surging above $63 a barrel following the killing of Iranian paramilitary boss Qassem Soleimani, prices fell by some $5 a barrel.

 

 

S&P Global Platts – January 16, 2020

US ethanol market unfazed by Mexican court ruling

The US ethanol market shrugged off the Mexican Supreme Court’s rejection of the government’s rule that would allow gasoline with up to 10 percent ethanol to be sold in some areas.

“We aren’t doing enough to Mexico to matter in the grand scheme of things,” the source said. “Production being 1,070 million b/d is a bigger issue than the Mexico headline.”

The court gave producers, who produce or sell 10% ethanol blends, 180 days to sell their products before the ruling comes into effect.

US ethanol producers saw Mexico as a potential new market for their products.

 

 

Houston Chronicle – January 16, 2020

Iraq Oil Supplies Vulnerable as Mideast Tensions Flare, IEA Says*

Oil supplies from Iraq, the Middle East’s second-biggest producer, are “potentially vulnerable” amid rising political risks in the country and the broader region, the International Energy Agency warned.

Crude prices briefly soared to a three-month high above $70 a barrel last week as tensions between the U.S. and Iran erupted in neighboring Iraq, where America assassinated an Iranian general and Tehran struck U.S. military bases in response. Though hostilities faded, the threat of escalation still menaces Iraq, which was already grappling with domestic protests that spread to its oil-rich southern region.

Iraq’s oil exports have doubled during the last decade to reach 4 million barrels a day, with half these volumes flowing to China and India, the two major centers of global demand growth, the Paris-based IEA said in its latest monthly report. The country relies heavily on shipping crude through the Strait of Hormuz, which Iran has periodically threatened to close.

 

Utilities

 

Houston Chronicle – January 16, 2020

CenterPoint’s rate increase request delayed*

The Public Utility Commission delayed until later this month consideration of CenterPoint Energy’s request to raise rates.

CenterPoint, the regulated utility that provides Houston-area electricity transmission and distribution, told commissioners Thursday morning that it is making good process wrapping up an agreement on the rate case but it hasn’t yet finalized the documents that the commission would need to consider the arrangement.

CenterPoint said in recent regulatory filings that it had reached an agreement with regulatory staff, large power users and a coalition of cities. No details were disclosed. The commission must approve the agreement before it can go into effect.

 

 

KLTV (Longview) – January 16, 2020

Possible energy bill increases could show up soon

Residents in East Texas could see an increase in their utility bill soon. CenterPoint Energy proposed an increase in rates for the Beaumont/East Texas division, which includes Tyler and Longview.

But, at a Longview City Council meeting last month, the city voted to postpone that increase for 90 days.

“Essentially all this does, is it is suspends the increase for 90 days,” said city spokesperson Shawn Hara. “That’s all that we are really able to do in this scenario. But, it’s one of the due diligence steps that we feel like is something we ought to do, and that is what city council put in place.”

The city and attorneys will take the 90 days to review exactly what is being proposed.

 

Alternatives & Renewables

 

January 16, 2020

Wall Street Journal: The Best-Laid Energy Plans*

Government planning and subsidies will make America the world’s green-energy superpower, create millions of jobs, and supercharge the economy—or so we’re told. The reality is closer to Crescent Dunes, a Nevada solar-energy plant that has gone bust after receiving a $737 million federal loan guarantee.

An inconvenient truth is that the sun sets each day, but the Obama Administration’s green planners had an app for that. They decided to invest in the Crescent Dunes facility that would use molten salt to store heat from the sun, produce steam, and generate electricity even at night. The utility NV Energy had already agreed to buy the electricity. Government support would carry the project to sunny success.

In September 2011, the Energy Department described how the 110-megawatt facility would “be the first of its kind in the United States and the tallest molten salt tower in the world,” powering more than 43,000 homes a year. The precedent was Solar Two, a small pilot plant decommissioned in 1999 that had shown it was technically feasible to use molten salt to store and generate power. But in a 2006 report the Energy Department said the 10-megawatt facility “was never expected to be a viable commercial-scale plant and, in fact, did not validate economic feasibility.”

No worries. It’s only taxpayer money, and the feds jumped into Crescent Dunes anyway.

 

Regulatory

 

Texas Tribune – January 16, 2020

New campaign finance reports help crystalize fight for state House majority

The fight for the Texas House came into focus Thursday with the release of the first major wave of campaign finance reports since the battlefield was set.

Across targeted districts, most incumbents in both parties are at least holding their own in the money race and staying ahead of potential general election challengers, some of whom have their own primaries to get through first. The latest filings, which covered the past six months in most cases, also illuminated the growing constellation of groups devoted to the House fight, which Republicans are regrouping for after the downfall of Speaker Dennis Bonnen a few months ago.

Democrats are effectively nine seats away from the majority, a major prize ahead of the 2021 redistricting process. They see as many as 22 pickup opportunities, eying seats where Republican incumbents won by less than 10 percentage points last time and where Beto O’Rourke won or came within 10 points as well.

 

 

Texas Tribune – January 16, 2020

Texas Sens. Ted Cruz and John Cornyn back new North American trade deal to replace NAFTA

U.S. Sens. Ted Cruz and John Cornyn, both Texas Republicans, joined with most of their colleagues from both sides of the aisle to pass the United States-Mexico-Canada Agreement, a new North American trade deal.

The new USCMA deal, negotiated by President Donald Trump, will replace the 1994 North American Free Trade Agreement. Among other changes, the new trade deal will strengthen enforcement of labor and environmental laws and increase the threshold for how much of a car must be manufactured in a country to avoid tariffs.

“This deal is a win for Texas farmers, ranchers, businesses, and manufacturers, and will ensure greater economic opportunity for every American,” Cruz said in a statement after the vote.

 

 

San Antonio Business Journal – January 16, 2020

Texas pins Bexar County’s ozone problem on emissions from abroad*

The Texas Commission on Environmental Quality is expected to open public comment this week on whether ozone emissions from other countries should justify not applying stricter federal air regulations to Bexar County.

The TCEQ will put forth a study for public comment at its hearing on Jan.15. The agency said the study demonstrates that Bexar County would meet federal standards on ground-level ozone emissions if not for emissions traveling from abroad. The agency will subsequently open the analysis and its associated request not to place Bexar County under further scrutiny to public comment before sending its request to the U.S. Environmental Protection Agency. Also, the TCEQ is scheduled to hold a hearing on the ozone emission study at the Alamo Area Council of Governments‘ San Antonio office on Feb. 18, one day before public comments close.

The county was designated as being in nonattainment in 2018 after it failed to meet new standards for allowable ozone emissions. In 2015, the Obama administration lowered the acceptable ozone level from an eight-hour average of 75 parts per billion to 70 parts per billion. If Bexar County can’t meet that standard by the end of this year, it will be moved from the category of marginal nonattainment to moderate nonattainment.

 

 

Rfi (France) – January 16, 2020

EU rolls out trillion-euro plan for green economy

The European Union has signed off on a trillion-euro financing plan for reaching net-zero emissions by 2050 – including a mechanism to fund the clean energy transition of coal-dependent regions.

Under the plan, European Commission president Ursula von der Leyen laid out how she intends to bankroll her signature European Green Deal – a complete revamp of the EU’s transport, construction and energy sectors.

Bringing together public and private money, the Sustainable Europe Investment Plan mobilises investment of €1tn over 10 years (or about €100bn a year) – roughly half of which will come from the EU’s long-term budget.

 

 

KSRO (CA) – December 20, 2019

US To Create $1B Fund For European Energy Projects, Countering Russia Influence

Bill co-sponsor Sen. Chris Murphy, a Democrat from Connecticut, pushes for bill to benefit fossil fuel companies, calling the Trump administration “criminally soft on Russia” despite Russiagate accusations

The U.S. is set to create a new $1 billion fund for energy projects in Europe and Eurasia to free countries like Ukraine from Russian energy dependence, which American lawmakers say Moscow uses to exert a malignant influence across the region.

The program, created with bipartisan support by Congress, dovetails with new sanctions on two Russian pipeline projects to Europe, while the Senate weighs even further penalties on Moscow.

But it may face headwinds from President Donald Trump, who continues to try to improve ties with Russia and increase trade and economic exchange. Just last week, Secretary of State Mike Pompeo promised “significant announcements about economic efforts” with Russia soon.

 

 

Waxahachie Daily Light – January 16, 2020

Contractor fined for Ellis pipe damage

The Texas Railroad Commission dropped the hammer Tuesday on a North Texas telephone utility contractor for more than two dozen recent incidents — including three in Ellis County — where damage was caused to underground natural gas pipelines.

Omar Utilities Company was fined a total of $74,500 for 26 infractions by the commission during its public meeting at the RRC offices in Austin. The penalties were default judgments, since Omar Utilities representatives did not attend Tuesday’s meeting. The amounts ranged from $1,000 to $6,500 for each incident, with the highest penalty being established in an Ellis County occurrence.

 

 

January 16, 2020

Beaumont Enterprise: Fines for air, water pollution must be sufficient

For a corporation like German Pellets, a $12,000 fine is not going to bother management or the board of directors very much. It’s just not a lot of money for company officials used to dealing with six- or seven-figure amounts. And to get a small fine like that for the 102-day struggle that Port Arthurans went through in 2017 is almost inconceivable. On top of everything, that fine by the Texas Commission on Environmental Quality board was reduced $3,000 from the original penalty. The ordeal was even defined — actually redefined — as four separate events instead of one long cycle of problems.

The cumulative effect of all this is breathtaking — like trying to breathe when smoke and ash particles are floating through your neighborhood for weeks at a time.

Port Arthur Community Action Network President and CEO John Beard correctly called the fine a “slap on the wrist.” It’s not the kind of sanction that will motivate a company to do what it should be doing all along — operating as safely as possible.

 

 

E&E News – January 15, 2020

Last August, an environmental group following a Trump administration proposal to open national forests and grasslands in Texas to oil and gas drilling noticed something odd in the Federal Register: two versions of the same notice for an environmental impact statement, appearing one day apart.

The first notice, posted Aug. 26, contained references to climate change and greenhouse gases. The second didn’t. Then the first one vanished online.

Now the group — the Center for Biological Diversity — knows why. A deputy in the Forest Service’s Washington headquarters ordered field staff in Texas to remove the references and republish the notice, an internal memo obtained by the center shows.

“The Deputy who is reviewing the NOI requested every reference to ‘climate’ and ‘greenhouse gasses’ be removed. We did,” said Robert Potts, the Forest Service’s natural resources and planning team leader in Lufkin, Texas, in a July 25 email to Forest Service and Agriculture Department officials.

 

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The Texas Energy Report NewsClips – January 16, 2020

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

S&P Global Platts – January 14, 2020

Gulf of Mexico seen springing back to life

After stirring for 18 months, the US Gulf of Mexico now appears to be springing back to life after years in virtual hibernation, as the region’s production rises and oil companies prepare for future growth even amid uncertain oil prices.

Crude output in the US Gulf is at an all-time high, currently around 2 million b/d, and it should roughly level out before rising again in 2021 from new deepwater fields coming online then, analysts say. Mergers and acquisitions have been brisk, operators are drilling more and have sanctioned a number of stand-alone facilities for the first time in some years.

As a further signal of the US Gulf’s promise, Chevron – in a much-awaited December move – gave the green light to development of its Anchor discovery, potentially opening up a new play in the region.

 

 

The Hill – January 14, 2020

Tom Steyer claims he divested from fossil fuels a decade ago, but it’s more complicated

Billionaire presidential candidate Tom Steyer boasted that he divested from fossil fuels during his time as a hedge fund manager when faced with questions during Tuesday’s debate on his environmental record.

But earlier reporting found that Steyer’s investments would fund coal mining and other fossil fuel ventures even after he decided to divest.

Steyer has repeatedly pegged himself as “the climate candidate,” but moderator Brianne Pfannenstiel asked him about his past investments in carbon-producing energy. ..

 

 

Reuters – January 15, 2020

Factbox: How China tariffs on U.S. commodities, energy stand after Phase 1 trade deal

China and the United States have agreed to terms of a Phase 1 trade deal on Jan 15 but Beijing has not reduced or waived tariffs on any commodities or energy further. …

China imposed a 5% tariff on U.S. crude oil shipments from Sept. 1, 2019, the first time U.S. oil had been targeted since the trade war between started more than a year ago. The 5% tariff was not affected by the Phase 1 deal. …

China already removed an additional 5% tariff on U.S. propane shipments that was set to take effect from Dec. 1, 2019. A 25% duty that China imposed on U.S. propane on Aug. 23, 2018, has remained in place. No new waivers came into effect on Jan 15. ….

China imposed a 10% punitive tariff on U.S. LNG shipments in September 2018, raising it to 25% in June 2019. LNG duties were not affected by the Jan 15 deal.

 

 

Wall Street Journal – January 9, 2020

Money-Losing Companies Mushroom Even as Stocks Hit New Highs*

Tesla Inc. shares have doubled in three months, while General Electric Co. shares are up 44%. The pair are the two most valuable loss-making companies, part of a shockingly high proportion of listed companies that have been losing money—despite, or perhaps because of, the long bull market.

While Tesla and GE couldn’t be more different, they are exemplars of two trends driving the rising number of loss makers. Tesla shows a desire by investors to back disruptive companies as they build their sales. GE represents a growing number of companies struggling to make money from traditional businesses—although GE bucks a third trend, which is that many of the unloved losers are small companies being squeezed by the growth of giant corporations.

The combination of forces has pushed the percentage of listed companies in the U.S. losing money over 12 months to close to 40%, its highest level since the late 1990s outside of postrecession periods.

 

Oil & Gas

 

Reuters/Nasdaq – January 16, 2020

Oil gains after U.S.-China trade deal, rise in inventories

Oil prices rose on Thursday after the signing of an initial Sino-U.S. trade deal that sets the stage for a surge in Chinese purchases of American energy products, while U.S. crude inventories fell more than expected.

Brent LCOc1 was 45 cents, or 0.7%, higher at $64.45 a barrel by 0310 GMT, while U.S. crude was up by 39 cents, or 0.7%, at $58.20 a barrel.

Under the so-called Phase 1 deal to call a truce in a trade war between the world’s two biggest economies, China committed to buying over $50 billion more of U.S. oil, liquefied natural gas and other energy products over two years.

 

 

MarketWatch – January 15, 2020

OPEC Raises 2020 Oil Demand Growth Forecast on Improving Global Economy Outlook

An improving outlook for the global economy will feed through into accelerated oil demand growth in 2020, the Organization of the Petroleum Exporting Countries said Wednesday.

In its closely scrutinized monthly oil market report, OPEC increased its 2020 world oil demand growth forecast by 140,000 barrels to 1.22 million barrels a day, while also nudging its global economic growth forecast to 3.1% for the year ahead.

The cartel’s boost to its oil demand growth figure “mainly reflect[s] an improved economic outlook for 2020,” the report said, with the developing world–especially China and India–expected to be responsible for most of that growth.

The report comes a month after OPEC and its allies completed a new production pact to deepen their oil-output cuts of 500,000 barrels a day to last through the end of March, bringing the coalition’s reduction to roughly 1.7 million barrels a day.

 

 

KRIS (Corpus Christi) – January 15, 2020

Port of Corpus Christi sees best year ever

The Port of Corpus Christi moved more tons of cargo last year than any other year of its existence.

“Twenty-nineteen was the best year in the history of the Port of Corpus Christi — in the 93-year history of the Port of Corpus Christi,” Port Authority Chairman Charles Zahn said.

The Port moved 122.2 million cargo tons in 2019 — 16 million more than the previous record-year of 2018. The main reason comes from the ground.

“We’re the energy port of the Americas,” Zahn said. “It’s petroleum and petroleum-based products.”

Oil from petroleum-rich West Texas became easier to receive at the port last year.

 

 

Associated Press/US News – January 15, 2020

Trial Begins Against Company in Oklahoma Oil Rig Explosion

The McAlester News-Capital reports that attorneys for the families of Parker Waldridge of Crescent; Matt Smith of McAlester; Roger Cunningham from Seminole; Josh Ray of Fort Worth, Texas; and Cody Risk of Wellington, Colorado, said in opening statements Tuesday that National Oilwell Varco in primarily to blame for the men’s deaths when the rig exploded in Quinton [in Southeast Okla.]

Attorneys for the families say NOV was primarily responsible because it failed to provide proper oversight of the operation. and now “refuses any responsibility for this incident.”

Houston-based NOV argues that another company working at the site, Red Mountain Operating, LLC, was at fault and that the company’s employee on site had no responsibilities at the time of the fire and explosion.

The families have reached settlements with Red Mountain Operating; Red Mountain Energy, LLC; Patterson-UTI Drilling Company, LLC; Patterson-UTI Energy Inc.

 

 

Rigzone – January 14, 2020

New Enterprise Plant Begins Service at Mont Belvieu

Enterprise Products Partners L.P. reported Monday that its isobutane dehydrogenation (iBDH) plant near Mont Belvieu, Texas, recently began service, adding that volumes should continue ramping up during the next two weeks.

“The completion of the new iBDH facility extends our butane value chain by allowing us to increase production of both high-purity and low-purity isobutylene to be used primarily as feedstock to manufacture lubricants, rubber products and fuel additives,” A.J. “Jim” Teague, CEO of Enterprise’s general partner, commented in a written statement.

 

 

BNAmericas – January 15, 2020

Valley crossing maintenance could push natural gas exports from Texas to Mexico: Platts*

Maintenance of the Valley Crossing pipeline in Texas will begin restricting shipments to the intrastat alduct starting this week, which could put pressure on natural gas exports to Mexico, S&P Global Platts reported.

From January 16 to January 22, planned maintenance at Valley Crossing will stop shipments along the Header Nuts and Brownsville portions of the pipeline, according to a recent critical notice issued by operator Enbridge.

 

 

Beaumont Enterprise – January 15, 2020

Port Neches sees two alerts in 18 hours from chemical row

Port Neches was the scene of two chemicals leaks in a span of about 18 hours between Monday afternoon and Tuesday morning.

The unified command handling the TPC Group plant site after a Nov. 27 explosion reported on Monday night that there had been a release of butadiene detected within the plant’s fence lines that had been tracked to a leak.

Early on Tuesday morning, the region’s emergency communication system, the Southeast Texas Alerting Network, sent out a targeted message to people in Port Neches alerting of a leak of latex from the Lion Elastomers facility behind TPC Group on Port Neches’ Main Street.

 

 

S&P Global Platts – January 15, 2020

Formosa Plastics’ new Texas cracker starts operating: sources

Formosa Plastics’ new 1.5 million mt/year cracker in Point Comfort, Texas, has come online and was seen ramping up through January, according to sources familiar with the company operations.

“Formosa cracker is running, and is shown to be ramping up to full rates by the end of January,” one of the sources said.

“The new unit was up last week and has been running smooth,” a second source said.

The company’s new 400,000 low density polyethylene plant at Point Comfort “should be ready in February for now,” the second source added.

 

 

Law.com – January 15, 2020

BP Loses Bid to Avoid Paying $15M to Walmart Over Oil Spill Losses

Oil giant BP has lost a bid to avoid paying $15 million to Walmart for losses the retailer suffered due to its 2010 oil spill in the Gulf Coast.

On Tuesday, the U.S. Court of Appeals for the Fifth Circuit affirmed payments to five Walmart stores in Florida, Mississippi and Louisiana that made separate claims as part of a 2012 class action settlement aimed at compensating businesses with economic losses tied to the Deepwater Horizon oil spill. BP, which unsuccessfully challenged its own settlement in a legal fight that went all the way to the U.S. Supreme Court, has continued to petition the Fifth Circuit to review individual payments to certain businesses in a settlement now estimated to have grown to more than $10 billion.

 

 

Freight Waves – January 15, 2020

Has the U.S. now reached a level of energy independence?

Is the US now energy independent?

President Donald Trump earlier in January made the following statement: “Over the last three years under my leadership, our economy is stronger than ever before and America has achieved energy independence.” Is this true?

We will concede that since the first energy crisis in the 1970s, the discussion of whether the U.S. is energy independent has generally focused on oil. “Energy” could mean other things. The U.S. is a net exporter of coal. With the explosion of LNG exports in recent years, it has become a net exporter of natural gas as well.

What has led some declarations of U.S. energy independence is the fact that for the last two months, the U.S. Energy Information Administration’s monthly statistical report has had a negative number under the category of net petroleum imports. It means that when you add in every barrel of petroleum shipped out of the U.S. — crude, products, natural gas liquids like propane and butane — there was more petroleum exported than imported. Hence, the U.S. is “energy independent” in the sense that it ships out more barrels of everything petroleum than it imports.

Is it that simple?

Far from it.

 

Utilities

 

Houston Chronicle – January 15, 2020

CenterPoint says it has a rate deal*

CenterPoint Energy said it has reached a deal with regulatory staff, large power users and a coalition of cities that would allow the utility to raise rates.

The details of the tentative agreement and the amount of the increase, which is scheduled to go before the Public Utility Commission Thursday, were not disclosed, according to a regulatory filing. The commission must approve the agreement before it can go into effect.

The deal came after administrative law judges proposed reducing CenterPoint’s return on equity, a proxy for profits, to 9.42 percent from the company’s currently allowed 10 percent rate of return which was set a decade ago. The judges criticized CenterPoint for not being responsive to customers such as the San Antonio based grocery chain H-E-B, which has repeatedly complained about service reliability problems.

 

 

Seeking Alpha – January 15, 2020

Xcel Energy to retire west Texas coal plant a decade early

Xcel Energy (XEL +1.3%) says it plans to shutter the Tolk coal plant, which provides power to Texas and New Mexico, by year-end 2032 – a decade early – because of concerns over water scarcity.

Xcel subsidiary Southwestern Public Service plans to submit an analysis on the plant’s abandonment and replacement to the New Mexico Public Regulation Commission by June 2021.

New Mexico lawmakers passed legislation last year setting the state on a path to generating 100% carbon-free electricity by 2045 and raising renewable portfolio standard requirements to 50% and 80% by 2030 and 2040, respectively.

Background: The owner of two Texas coal-fired power plants says its going carbon-free by 2050

 

 

Beaumont Enterprise – January 15, 2020

TCEQ accepts $12K penalty for German Pellets fire, commissioners unsatisfied

The board for the Texas agency charged with regulating air quality on Wednesday approved a $12,000 penalty against German Pellets for burning wood and smoke odors during a 102-day fire in 2017 at a Port Arthur terminal.

However, the majority of the members didn’t let the meeting end without expressing their displeasure at the outcome.

At the Texas Commission on Environmental Quality meeting, Commissioner Bobby Janecka and Chairman Jon Niermann questioned agency staff on a variety of issues that arose from the small penalty, including why certain periods for observing hazards created by the fire lasted for just two hours on some days and why the company was being penalized for four separate events instead of one issue that continued for months.

 

 

Oil Price – January 14, 2020

The Cannabis Industry’s Dirty Energy Secret

The $344 billion cannabis industry is one of the country’s most energy-intensive in the world, frequently demanding an array of heating, ventilation and air-conditioning (HVAC) systems, fans and 24-hour indoor lighting rigs at multiple growing sites.

Just how much electricity does the entire US marijuana industry consume?

The numbers are mind-boggling.

They’re also the bane of the cannabis industry, according to Joseph Maskell, founder and president of AAXLL, one cannabis company aiming to be a major disrupter of the short-lived status quo.

“The key in this emerging industry is to be asset-light,” says Maskell.

“With billions spent just on electricity in the US cannabis-growing industry, the companies that will survive the next culling, which is already in process, will be those with low capital outlays, no warehouses, no buildings, no machinery.”

 

 

S&P Global Platts – January 15, 2020

Southwest Power Pool committee looks at energy storage integration plans

The growth in energy storage is rapidly evolving the power industry and the Southwest Power Pool is the latest entity grappling with how to integrate the new resource.

Richard Dillon, SPP market policy technical director, discussed the findings of the grid operator’s Electric Storage Resources white paper at the Markets and Operations Policy Committee meeting Wednesday morning.

“It’s flexible in a lot of ways. It allows us to time shift energy,” Dillon said of energy storage resource technology.

 

 

S&P Global Platts – January 14, 2020

EIA forecasts 2020 coal production lowest since 1973

US coal production is expected to be about 597 million st in 2020, down 13.5% from the estimated 2019 output of 690 million st, the Energy Information Administration’s Short-Term Energy Outlook reported Tuesday.

The 2019 estimate was down 8.4% from 2018 production of 754 million st, and it was the first time, since S&P Global Platts began recording in 2013, output was forecast below 600 million st.

The last time the US produced less than 600 million st was in 1973, when output totaled about 599 million st.

For 2021, the EIA projected output of about 581 million st, the least amount of output since 1971.

 

Alternatives & Renewables

 

Dallas Morning News – January 15, 2020

Toyota sinks $394 million into a futuristic flying taxi maker*

Toyota Motor Co. is making a $394 million investment in Joby Aviation, one of the handful of companies with the seemingly implausible goal of making electric air taxis that shuttle people over gridlocked highways and city streets.

Toyota is the lead investor in Joby’s $590 million Series C funding, alongside Baillie Gifford and Global Oryx and prior backers Intel Capital, Capricorn Investment Group, JetBlue Technology Ventures, SPARX Group and its own investment arm, Toyota AI Ventures.

The deal, for now, makes the Santa Cruz, California-based Joby the best-funded “eVTOL” (electric vertical take-off and landing) startup in a booming category that must overcome significant regulatory hurdles and concerns about passenger safety and noise, bringing the total money it has raised to $720 million.

 

 

KTBS (Shreveport) – January 7, 2020

Solar energy system installed in Texarkana

Southwest Arkansas Electric Cooperative (SWAECC) is working with Today’s Power, Inc. (TPI) to begin building a 1-megawatt solar array near the headquarters of the cooperative in Texarkana, Arkansas.

Motorists can see the solar array from the Interstate 49 near the SWAECC headquarters.

Energy officials said it will potentially help co-op members save money on electrical costs during peak hours of use.

 

Regulatory

 

Houston Chronicle – January 14, 2020

Eric Schaeffer, Environmental Integrity Project: Is Texas cutting funding for environmental protection?*

TCEQ states it has “adequate resources.” But the question is adequate to do what? It certainly doesn’t appear that they are sufficient to adequately police industry and other polluters. Our examination of state records found that the agency penalizes less than 3 percent of illegal air pollution incidents reported by industry.

TCEQ does not dispute our data showing that the agency’s workforce declined from 2,884 to 2,615 positions (about 9 percent), during a decade when state’s overall budget grew by 41 percent. However, the agency argues that our numbers are misleading because we should have counted unfilled, vacant positions toward its workforce.

We disagree, because empty chairs can’t do anything to protect the environment. We honor the hard-working employees of TCEQ. We just think they need more support.

 

 

Houston Chronicle – January 12, 2020

Timothy Singer MD, Baylor College of Medicine: I’m a physician. We must act on climate change in Houston for our health.”

At a population-level, the health risks from climate change need to be included among the key social determinants of health, alongside poverty, race, employment status, housing and literacy. Individually, health-care providers can educate themselves about the impact of climate change on their patients; this is relevant to every field in medicine. Our health-care facilities must follow suit and become rigorously environmental. And, finally, all Houstonians can help protect their own health and that of one another by pursuing environmental stewardship in their daily lives.

Recognizing the link between environmental health and human health will provide the impetus to create a climate resilient health care system poised to meet the direct impacts of climate change on health and bring about a healthier Houston and Harris County for everyone.

 

 

New York Times – January 15, 2020

Who Controls Trump’s Environmental Policy?*

Among 20 of the most powerful people in government environment jobs, most have ties to the fossil fuel industry or have fought against the regulations they now are supposed to enforce.

A small number of people at a few federal agencies have vast power over the protection of American air and water.

Under the Trump administration, the people appointed to those positions overwhelmingly used to work in the fossil fuel, chemical and agriculture industries. During their time in government they have been responsible for loosening or undoing nearly 100 environmental protections from pollution and pesticides, as well as weakening preservations of natural resources and efforts to curb planet-warming greenhouse gas emissions.

Of 20 key officials across several agencies, 15 came from careers in the oil, gas, coal, chemical or agriculture industries, while another three hail from state governments that have spent years resisting environmental regulations. At least four have direct ties to organizations led by Charles G. and the late David H. Koch, who have spent millions of dollars to defeat climate change and clean energy measures.

 

______________________________

 

The Texas Energy Report NewsClips – January 15, 2020

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

Reuters – January 14, 2020

Crude exports boom on U.S. Gulf Coast, allaying bottleneck fears

U.S. crude exports from Corpus Christi, Texas, have surged to a record in recent weeks, often surpassing hubs such as Houston and Beaumont, Texas, thanks to faster-than-expected infrastructure additions.

The infrastructure boom at Corpus Christi helped push crude exports there to a weekly record of 1.59 million barrels per day (bpd) in late December, more than doubling levels that held for the first eight months of last year, and above Houston’s 2019 peak of 1.36 million bpd, according to vessel-tracking firm ClipperData.

The heavy flows suggest that fears of a bottleneck that would impede U.S. exports have not materialized.

 

 

Reuters/Yahoo! News – January 14, 2020

U.S. oil output to rise in 2020 more than previously expected – EIA

U.S. crude oil production is expected to rise by 1.06 million barrels per day (bpd) in 2020 to a record of 13.30 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, above its previous forecast for a rise of 930,000 bpd.

The output in 2021 is forecast to rise by 410,000 bpd to 13.71 million bpd, according to the EIA. “We forecast U.S. crude oil production will reach new records in 2020 and 2021, driven primarily by higher production in the Permian region of Texas and New Mexico,” EIA Administrator Linda Capuano said in a statement.

“Both global oil supply and consumption are expected to grow in 2020, with supply from non-OPEC producers, particularly the Unites States, Norway, Brazil, and Canada, more than offsetting declining production from OPEC.”

 

 

Talk Business & Politics – January 14, 2020

Oil, gas reserves increased to record levels in 2018

U.S. oil and natural gas proved reserves rose to record levels in 2018, according to the latest data available from the U.S. Energy Information Administration (EIA).

U.S. proved reserves of crude oil and lease condensate increased 12% to a record level of 47.1 billion barrels in 2018, from the previous record of 42 billion barrels in 2017. Meanwhile, U.S. proved reserves of natural gas increased 9% to a record level of 504.5 trillion cubic feet, from 464.4 trillion cubic feet. Proved reserves are volumes of oil and natural gas that geological and engineering data show to be recoverable from known reservoirs under existing economic and operating conditions.

Higher oil and natural gas prices contributed to the record oil and natural gas proved reserve levels, according to the EIA. Higher fuel prices can increase the reserves estimates because a larger portion of oil or natural gas resources can be produced economically.

 

 

Wall Street Journal – January 14, 2020

Energy Companies Seize the Day With Bond Refinancings*

A surprise rally in riskier corporate bonds is providing much-needed help to some energy companies with lower credit ratings, allowing them to issue new bonds to push back looming repayment dates.

Seven energy companies with speculative-grade ratings sold roughly $6 billion of bonds last week. That is the largest weekly total since September 2014, just before oil prices crashed that November, and it amounted to nearly 60% of total high-yield bond issuance over the five-day period, according to LCD, a unit of S&P Global Market Intelligence.

Companies including the offshore driller Transocean Ltd. RIG 0.64% and Texas shale company Laredo Petroleum Inc. LPI -1.16% are seizing the opportunity to borrow. A glut of oil and natural gas suppressing prices of those commodities and stressing U.S. energy producers had left many assuming for much of last year that debt markets were closed to all but the oil patch’s strongest companies.

 

 

S&P Global Platts – January 14, 2020

EIA forecasts declining natural gas consumption in US power sector in 2021

Competing renewables and expected higher natural gas prices have prompted the US Energy Information Administration to forecast that natural gas consumption in the power sector will fall 3.2% in 2021 after witnessing slower growth in 2020.

The agency, in its January Short-Term Energy Outlook, said electric generation consumed an average 31 Bcf/d in 2019, up 7% from 2018 because of new gas-fired generation capacity and competitive gas prices.

Declining power sector consumption in 2021 reflects competition amid continuing renewables capacity additions, the outlook said. The slowing consumption “also reflects a forecast of higher natural gas spot prices in 2021 compared with 2020, which would make natural gas less competitive against coal in power markets,” EIA added.

 

 

S&P Global Platts – January 14, 2020

Oil, gas infrastructure build-out in US Gulf to dramatically increase GHG emissions: UT study

Petrochemical facilities, LNG terminals, and other infrastructure being built along the US Gulf Coast in response to the ongoing US shale oil and natural gas boom, is forecast to cause the greenhouse gas emissions equivalent of 131 coal-fired power plants by 2030, according to a study released Tuesday.

The study, which the University of Texas at Austin published, found that the ongoing build-out in oil and gas infrastructure in the US Gulf and Southwest could cause an annual total emissions impact of 541 million mt of carbon dioxide-equivalent by 2030. That is equivalent to about 8% of total US GHG emissions in 2017 and roughly equal to emissions from those 131 power plants, the study states.

While the study found about 31% of these total CO2-equivalent emissions would come from new upstream projects, roughly 98.3 million mt from gas production and 71.1 million mt from oil output, more than 46% would come from downstream projects, including 206.3 million mt, or more than 38%, from petrochemical projects. The study claims that about 23% of emissions will come from midstream projects, including compressor stations and gas-processing facilities.

 

Oil & Gas

 

Reuters – January 15, 2020

Oil prices slip on concerns U.S.-China trade deal may not boost demand

Oil prices slipped on Wednesday on concerns that the pending Phase 1 trade deal between the United States and China, the world’s biggest crude users, may not lead to more fuel demand as the U.S. intends to keep tariffs on Chinese goods in place.

U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that the tariffs would remain even as a trade deal is set to be signed on Wednesday. That could temper China’s oil demand growth by limiting its access to its second-largest trading partner. Chinese demand has been the main driver of global fuel consumption growth.

Brent crude was down 16 cents, or 0.3%, at $64.33 per barrel by 0745 GMT. U.S. West Texas Intermediate crude futures were down 15 cents, or 0.3%, at $58.08 a barrel.

 

 

Rigzone – January 14, 2020

Peak Permian Oil Output Is Closer Than You Think, Investor Says

Such is the extent of the shakeout in the U.S. shale industry that Permian Basin oil production is closer to peaking than many forecasts suggest, according to one energy investor.

Adam Waterous, who runs Waterous Energy Fund, regards the sector’s financial position as unsustainable after years of disappointing returns for investors and negative free cash flow. With capital markets now largely shunning shale producers, the impact will begin to show in oil and natural gas output from the largest U.S. oil patch, he said.

“We think we are at or near peak Permian” production, Waterous said last week in an interview. “The North American oil market has been grossly overcapitalized, which is not sustainable.”

 

 

Oil & Gas 360/Reuters – January 14, 2020

U.S. oil growth to slow, may spur shale buyouts: Schlumberger’s Papa

U.S. oil output growth is expected to slow over the next five years, likely prompting oil majors to “gobble up” smaller shale oil producers, Mark Papa, shale pioneer and non-executive chairman of Schlumberger, told Reuters.

U.S. output surged to nearly 13 million bpd last year, making it the world’s largest producer.

The Energy Information Administration (EIA) has forecast U.S. oil production growth at 1 million barrels per day (bpd) in 2020, with shale accounting for most of the increase.

But Papa, boss of the world’s largest oilfield services company, expects U.S. output to grow by just 400,000 bpd in 2020 and by 100,000-500,000 bpd per year through 2025, depending on future oil prices.

“What we are seeing is that there has been a kind of inflection in the growth path for U.S. oil production, mainly due to inflection in shale oil growth,” Papa said in an interview in Saudi Arabia.

 

 

KUHF (Houston) – January 14, 2020

Texas’ Biggest Oil And Gas Industry Group Accepts Role In Climate Change

The head of the Texas Oil and Gas Association said Tuesday that his industry group agrees fossil fuels contribute to global warming but industry will find ways to reduce emissions.

“I think Texas is at risk if we don’t have a very real, factual-based conversation about our climate, about our environment, and about the progress that needs to be made,” Todd Staples, president of TXOGA, said in a media conference call. “I think Texas-based oil and natural gas companies are committed to making climate progress. They’re committed to a lower emissions future.”

Scientists have said for more than a century that emitting carbon dioxide by burning fossil fuels heats up Earth’s atmosphere. But, until recently, industry representatives and their political allies have avoided acknowledging the link publicly.

From the Texas Tribune: Texas oil and gas industry could see a major slowdown in 2020

And: Texas Governments Take In Record 2019 O&G Tax Revenues: TXOGA*

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Bloomberg News – January 14, 2020

Fink, Frackers and Putting the ‘G’ in ESG*

If you’re jazzed about the environmental, social and governance, or ESG, investing thing, then the energy sector is probably way down your list of priorities. On the other hand, if, like Larry Fink, you’re trying to wield a $7 trillion cudgel in the interest of getting folks to pay attention to this stuff, then energy is a top target.

The BlackRock Inc. CEO’s letters and associated media blitz on Tuesday morning can be summed up as one long, thinly veiled threat. Fink acknowledges climate change is real and its consequences potentially catastrophic and, therefore, capital markets will shift accordingly — whether individual investors and companies are prepared for it or not. So best get on with it. Moreover, should companies fail to adequately take the initiative, BlackRock “will be increasingly disposed to vote against management and board directors.”

There has always been a hefty dose of moral suasion at the heart of the (amorphous) ESG investing theme. Shame can be a powerful tool. BlackRock’s move appears to be at least partly a response to criticism it wasn’t living up to its earlier rhetoric. And it comes days after the CEO of Siemens AG felt the need to issue a response to climate critics that was both extraordinarily long and edited to a standard I can only describe as anguished.

 

 

Rigzone – January 14, 2020

Is Chevron’s $11B Write-Down an Oilpatch Warning?

In December 2019, American oil major Chevron announced a major write-down of some $11 billion in the value of its assets, including its gas holdings in the Appalachia region, a deep-water Gulf of Mexico project and its proposed Kitimat LNG export project in British Columbia. In fact, Chevron’s Appalachian shale projects contributed to more than half of a massive impairment charge that the company reported for the last quarter.

This write-down is in response to Chevron’s own long-term forecast for oil and gas prices, which predicted much lower energy prices than previously. In December Chevron Chief Executive Mike Wirth in an interview with the Wall Street Journal said: “We have to make the tough choices to high-grade our portfolio and invest in the highest-return projects in the world we see ahead of us; and that’s a different world than the one that lies behind us.”

Decision makers at Chevron have realized the company is facing a market surplus in both oil and gas worldwide, which is impacting profit margins.

 

 

Beaumont Enterprise – January 14, 2020

German Pellets could close PA fire case with $12,000 fine

A $12,000 penalty against German Pellets for “nuisance conditions” that resulted from a fire that blanketed Port Arthur in smoke for months is another example of the Texas agency charged with regulating air quality “trivializing” nearby residents’ suffering, a local activist charges. But this time, the company’s landlord has developed a process to keep it from happening again.

The Texas Commission on Environmental Quality board on Wednesday is expected to vote on accepting the penalty against German Pellets, down $3,000 from the original penalty assessed. A provision included in the company’s bankruptcy proceedings shows the matter, which previously required the company to suspend operations and remove all wood pellets, had already been largely finalized, complete with a signature from representatives for both parties.

 

 

Bloomberg News/Houston Chronicle – January 14, 2020

Shipping’s big bang sends two global industries spinning

Two weeks ago, the vast majority of the world’s ships were forced to change the fuel they use. Some big winners — and potential losers — are starting to emerge from what was a historic switch for the world’s oil refining and maritime industries.

…But the cost of the new fuel has skyrocketed to the point where it recently surpassed diesel and gasoline in Singapore, Asia’s oil-trading hub. The dynamic adds to the cost of transporting goods and raw materials — a potential impediment to global supply chains since fuel represents the maritime industry’s single-biggest expense. ….

Before the rules took effect, some shipowners plowed billions of dollars into exhaust-gas cleaning systems that prevent the sulfur from being released into the air. The equipment allows their vessels to keep using the old fuel without breaking the rules.

Those who invested appear to be gleaning a competitive advantage because the discount for the old fuel is so big.

Supertankers hauling 2 million barrels earned about $20,000 a day more so far this year if they were fitted with scrubbers, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker. That’s about $7 million a year in savings if the current market were to continue.

 

 

Huntsville Item – January 14, 2020

County seeks cash for damaged roads

Walker County, whose location has had a large boom in oil and gas line construction but also degraded many area roads, is looking for help from the Texas Department of Transportation.

Last year, the 86th Texas Legislature doled out $250 million in an effort to help counties repair the crumbling roads that have been damaged by the energy industry across the state. It’s a lengthy application process, and now the Walker County Commissioners Court are looking for outside help.

On Monday, the commissioners gave authorization for county officials to issue a request for proposals to grant management agencies, looking to help the county acquire some of the need funding.

 

 

Associated Press/News Dakota – January 14, 2020

Two Separate Oil Spills Confirmed in North Dakota

State environmental officials say a spill of oilfield wastewater caused by a faulty valve has affected some pastureland in western North Dakota.

The state Department of Environmental Quality said the 12,180-gallon produced water spill happened on Saturday at a well pad about 14 miles east of Watford City. State environmental scientist Bill Suess said only about 168 gallons of produced water escaped the well site. …

Another pipeline spill of oilfield wastewater has affected cropland in northwestern North Dakota.

State environmental scientist Bill Suess said regulators were notified Monday of the 8,400 gallon pipeline leak in Renville County. The pipeline is operated by Wichita Falls, Texas-based Cobra Oil and Gas. The spill of produced water happened 2 miles north of Sherwood, and within a 1 mile of the U.S.-Canada border.

 

Utilities

 

S&P Global Platts – January 14, 2020

US power generators set for another big year in coal plant closures in 2020

U.S. coal consumption is likely to decline sharply again in 2020, though the current roster of planned and completed coal plant retirements suggests the year may not be quite as rough as the past two.

At 13,703 MW, 2019 marks the highest level of annual coal capacity retirements in the U.S. since 2015, a new S&P Global Market Intelligence analysis of federal data shows. The amount of coal capacity planned for retirement in 2020 is expected to exceed the amount retired in each of 2014, 2016 and 2017. Another retirement has already been announced.

Tri-State Generation and Transmission Association Inc. said Jan. 9 that it was closing its 247-MW Escalante power plant in New Mexico by the end of 2020. Since 2014, U.S. power generators retired nearly 62,000 MW of coal-fired generation capacity, with another 26,947 MW of retirements teed up through 2025.

 

 

E&E News – January 14, 2020

Xcel Energy Inc. once ran its coal plants regardless of whether they made money. In the past, the practice made sense. Coal plants were usually in the black. But these days, the Minneapolis-based power company has so much wind, it is planning to idle some of its coal plants for large parts of the year.

The change has the potential to provide a rare win for climate hawks: a move that promises significant consumer savings and immediate emissions reductions. Xcel estimates that idling two Minnesota coal units in the spring and fall will save $55 million over the next three years and cut carbon emissions by about 5 million tons annually.

“This is the emissions equivalent of shutting down a few years early,” said Joe Daniel, a power sector analyst at the Union of Concerned Scientists. “I don’t want to say this is the destination. But this helps create a track to a smooth transition and ramp down some of these power plants.”

 

 

Houston Chronicle – January 13, 2020

Yet another way to buy power: Flat monthly fee*

Real Simple Energy, an electricity shopping website in Houston, has launched plan that charges consumers a flat monthly fee for power.

Consumers can use as much power as they like but if they’re conservative with their use, they can get up to 20 percent back on their next contract renewal, according to Real Simple Energy’s website. The company said they’re the first electricity broker to offer a flat monthly fee for power.

The plan is targeted to renters and lower-than-average users of electricity. The company is betting it can estimate how much a customer will use, based on the size and age of the apartment and how many people live there.

 

 

Austin American Statesman – January 14, 2020

UT professor wins prestigious Wolf Prize in physics for work in ‘Twistronics’*

Allan MacDonald, a professor of physics at the University Texas, was named one of the recipients of the 2020 Wolf Prize in Physics on Monday for his work developing twisted bilayer graphene, a super-thin conductive material that scientists say could lay the foundation for an “entirely new generation of technologies.”

The newly developing field is called twistronics, and could lead to revolutionary advancements in the electronic and computer industry, the Wolf Foundation said.

Graphene is a two-dimensional material that is only one atom thick. Since it was discovered in 2004, scientists have been working to understand how to best utilize it in a variety of technologies. In 2011, MacDonald discovered something peculiar: by layering graphene using a high-powered computer, at a slight angle — 1.1 degrees to be exact —electrons could funnel between the layers with no impedance and no energy loss. The discovery would lead to a new type of superconductor, described as a type of material that conducts electricity perfectly. Hypothetically, an electrical current could travel around a superconducting wire for billions of years without degrading or dissipating.

 

Alternatives & Renewables

 

Greentech Media – January 14, 2020

Three-Quarters of New US Generating Capacity in 2020 Will Be Renewable, EIA Says

The U.S. Energy Information Administration has confirmed what it and industry watchers predicted a year ago — that wind and solar power will expand on their already-large share of new U.S. generation capacity in 2020.

According to EIA data released Tuesday, wind and solar will make up 32 of the 42 gigawatts of new capacity additions expected to start commercial operation in 2020, respectively, dwarfing the 9.3 gigawatts of natural-gas-fired plants to come online this year.

EIA’s numbers also break records for both wind and solar in terms of annual capacity additions. The 18.5 gigawatts of wind power capacity set to come online in 2020 surpasses 2012’s record of 13.2 gigawatts and pushes total U.S. production well past the 100-gigawatt milestone set in the third quarter of 2019.

 

 

Dairy Reporter – January 6, 2019

Danone signs 12-year renewable energy deal with Enel*

Enel Green Power is constructing a new 500 megawatt (MW) plant worth $720m in Texas. Danone North America signed a power purchase agreement with the wind farm for a 12 year deal.

The new plant will generate around 1.9 terrawatt hours annually and avoid the emission of more than 1.2m tons of CO2 per year. Work on the High Lonesome wind farm is under way in Upton and Crockett counties in Texas.

 

Regulatory

 

Houston Chronicle – January 14, 2020

Trump official accused of ‘climate censorship’ in plans to drill on U.S. lands in Texas*

Environmentalists are accusing the Trump administration of committing another act of “climate censorship” after a U.S. Forest Service administrator allegedly directed agency employees to remove references to climate change and greenhouse gas emissions from plans to open national forests and grasslands in Texas to new rounds of oil and natural gas drilling.

The agency denies the allegations but is seeking to overturn an Obama-era moratorium on new drilling on federal property. The Trump administration proposes to lease large areas of Sam Houston National Forest, Davy Crockett National Forest, Angelina National Forest, Sabine National Forest, Caddo National Grasslands and LBJ National Grasslands to oil and natural gas companies.

Environmentalists contend that a draft notice of the plans mentioning climate change and greenhouse gases was posted by the U.S. Forest Service to a federal website on Aug. 26 but was replaced the next day with a version without that language.

 

 

Texas Observer – January 10, 2020

Christopher Collins: Trump Has Kneecapped Another Environmental Safeguard. Could That Spur Expanded Uranium Mining in South Texas?

Donald Trump fulfilled his vow to slash “intrusive” environmental regulations in favor of monied energy conglomerates. Shortly after taking office, he announced the United States’ withdrawal from the Paris Climate Agreement. In 2018, he moved to formally replace Barack Obama’s landmark Clean Power Plan. Trump lowered limits on methane emissions from drilling operations on public lands; stalled stricter rules for power plants that discharge mercury and other toxic contaminants into waterways; and intervened on behalf of Alaskan miners eyeing deposits beneath the country’s largest salmon run.

Altogether, The New York Times counts at least 95 environmental rules the president has rolled back, many of which are seen as a boon to the county’s energy sectors. Now you can add another reversal to the list: On Thursday, Trump announced that his administration will weaken a longstanding set of regulations designed to assess the environmental impact of proposed highways, oil and gas pipelines, and other large-scale projects. The president has taken aim at the National Environmental Policy Act (NEPA), which for the past 50 years has required federal agencies to conduct comprehensive environmental reviews of projects before giving their seal of approval.

 

 

Politico – January 14, 2020

Trump set to gut water protections

The Trump administration is preparing to further dismantle environmental regulations by vastly reducing the reach of federal protections for streams and wetlands — delivering a major win for farmers, developers, miners and oil and gas producers.

The announcement could come as soon as the upcoming holiday weekend, when President Donald Trump is scheduled to deliver the keynote address at the annual convention of the American Farm Bureau Federation, the most vocal advocate of the rollback of water protections. The officials scheduled to accompany him Sunday at the convention in Austin, Texas, include Environmental Protection Agency chief Andrew Wheeler, whose agency has said it plans to finish the new water rule this month.

 

 

The Hill – January 5, 2020

Brad Page, Global CCS Institute: US leads new wave of carbon capture and storage deployment

As we ring in the new decade, it has become ever more apparent that the next ten years will be crucial to leaping on decarbonization efforts. Time is not on our side. We cannot favor one technology over another. An all-of-the-above approach is necessary. Carbon capture and storage (CCS) technologies must be part of the portfolio of solutions to decrease emissions from energy-intensive sectors and existing infrastructure, as well as remove CO2 already present in the atmosphere.

CCS has long been recognized as necessary to address climate change, yet its scale-up has been lagging. A new report by the Global CCS Institute on the global status of CCS in 2019 shows that the tide is turning. The next wave of CCS facilities is well underway, with U.S. paving the way for the deployment of several new innovative CCS projects.

There are now 19 large-scale CCS in operation globally, four under construction, and 28 in various stages of development. The facilities pipeline has replenished over the past 24 months, with close to 100 million tonnes of CO2 annual capture capacity.

 

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The Texas Energy Report NewsClips – January 14, 2020

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Lead Stories

 

Hellenic Shipping News – January 13, 2020

Permian Basin 2020 forward gas prices hit fresh record lows

As Permian output continues to build, hitting a record high at 12.4 Bcf/d recently, market jitters over midstream constraints have re-emerged. Concerns about the possible return of negative prices this year were exacerbated following Kinder Morgan’s third-quarter earnings call when executives announced a three-month delay to startup of the company’s 2.1 Bcf/d Permian Highway Pipeline.

Regulatory approvals for the project, which have been slower in coming than previously anticipated, have delayed the pipeline’s estimated in-service date to first-quarter 2021.

Markets are watching the major expansion project closely, but a distant and much smaller pipeline project in central Mexico could offer a more immediate outlet for at least some Permian gas this year.

 

 

Inside Climate News – January 13, 2020

David Hasemyer: Emails reveal US Justice Dept working closely with oil industry to oppose climate lawsuits

Obtained emails do not reveal the substance of discussions that took place during the meetings, they bespeak the unapologetically close relationship between the Trump administration and the oil industry.

In early 2018, a few months after the cities of Oakland and San Francisco sued several major oil companies over climate change, attorneys with the U.S. Department of Justice began a series of email exchanges and meetings with lawyers for the oil companies targeted in the litigation.

At one point, Eric Grant, a deputy assistant attorney general in the Justice Department’s Environment and Natural Resources Division, sent an email to Indiana’s solicitor general saying that his “boss” had asked him to set up a meeting to go over a plan for the government to intercede in the cases on the companies’ behalf.

The cities were arguing that oil companies should be held liable for catastrophic flooding, sea-level rise and other harmful consequences caused by climate change. The DOJ was preparing an amicus brief in support of the industry, and the Indiana solicitor general was leading the charge by Republican attorneys general from 15 states to also file a court brief supporting the industry.

 

 

The Tyee – January 10, 2020

Canada: The Quake Threat to Dams Posed by Fracking Was Long Warned

“Why is this so difficult?” a BC Hydro dam safety engineer plaintively asked his superiors seven years ago.

He’d been stymied again in proposing that because the risks of earthquakes caused by fracking were clear, preventing disaster required creating “no frack” zones around dams.

His sense of urgency runs through a long thread of discussions within BC Hydro and the Oil and Gas Commission surfaced by investigative researcher Ben Parfitt.

For years now the two crown agencies have been reluctant to publicly talk about the risks earthquakes triggered by the oil and gas industry pose to critical dam infrastructure throughout northeastern B.C.

 

 

National Interest – January 12, 2020

Energy Idiocracy: Global Policymakers are Creating More Problems Than Solutions By Embracing Renewables

What we are seeing is “a first-world problem” that is obsessed with global warming/climate change instead of being concerned with the two billion people globally without electricity.

The United Nations Environment Programme and partner organizations determined in a recent report “the world’s nations are on track to produce more than twice as much coal, oil, and gas as can be burned in 2030.” The British Petroleum (BP) Statistical Review of World Energy 2019 states that “Total global proved reserves of oil—that is the volumes that can be recovered from known reservoirs under existing economic and operating condition—stood at 1.730 trillion barrels at the end of 2018.”

Peak oil projections have been proven false and consumption is growing according to the International Energy Agency’s (IEA) latest projections. Moreover, America’s CO2 emissions rose in 2018 by 2.7 percent for the first time over increased economic growth since 2014, according to the Energy Information Administration (EIA). The uptick came from “higher natural gas-related emissions, but coal emissions fell by 4 percent.”

 

Oil & Gas

 

Reuters/New York Times – January 14, 2020

Oil prices steadied on Tuesday, after recent declines, as investors focused on the signing of a preliminary trade deal between the United States and China, the world’s top oil consumers, and on expectations of a drawdown in U.S. stockpiles.

However, price gains were capped by receding Middle East tensions, with both Tehran and Washington desisting from any further escalation after this month’s clashes.

Brent crude was up 2 cents at $64.22 per barrel by 0738 GMT. U.S. West Texas Intermediate crude futures <CLc1> were down 4 cents at $58.04 a barrel. The benchmarks lost about 5% and 6%, respectively, last week. [O/R]

“Oil prices are modestly rebounding, following four days of intense selling,” Edward Moya, analyst at brokerage OANDA, said pointing to trade-deal optimism and fading concerns over the U.S.-Iran conflict.

 

 

New York Times – January 13, 2020

With President Trump facing an impeachment trial over his efforts to pressure Ukraine to investigate former Vice President Joseph R. Biden Jr. and his son Hunter Biden, Russian military hackers have been boring into the Ukrainian gas company at the center of the affair, according to security experts.

The hacking attempts against Burisma, the Ukrainian gas company on whose board Hunter Biden served, began in early November, as talk of the Bidens, Ukraine and impeachment was dominating the news in the United States.

It is not yet clear what the hackers found, or precisely what they were searching for. But the experts say the timing and scale of the attacks suggest that the Russians could be searching for potentially embarrassing material on the Bidens — the same kind of information that Mr. Trump wanted from Ukraine when he pressed for an investigation of the Bidens and Burisma, setting off a chain of events that led to his impeachment.

 

 

Houston Chronicle – January 13, 2020

Democrats call out Marathon Petroleum for ‘relentless lobbying against climate action’

A trio of Democratic Senators is asking some of Marathon Petroleum’s largest shareholders, including JPMorgan Chase and Blackrock, to warn the Ohio-based refining company that it needs to stop lobbying against climate action.

“Marathon is one of the leading forces in Washington opposing efforts to limit carbon pollution and fight climate change, ” the letter reads. “As a major financial institution, we believe that you have a critical role to play in shaping the lobbying and influencing activities of the companies you own to ensure that this considerable influence is not condoned against the climate action you claim to support.”

 

 

Houston Chronicle – January 10, 2020

Exxon Mobil labeled ‘explorer of the year’ as global discoveries reach 4-year high*

Exxon Mobil led the way with new finds off the coasts of Guyana and Cyprus as global oil and gas discoveries in 2019 hit a four-year high, according to a new report.

Energy companies discovered about 12.2 billion barrels of oil equivalent in 2019 — the highest since nearly 20 billion barrels in 2015 — from more than 25 discoveries of at least 100 million barrels each and mostly from international drilling offshore, according to the Norwegian research firm Rystad Energy. And Rystad believes that new discoveries in 2020 will exceed the volumes found last year.

 

 

Environmental Health News – January 12, 2020

The battle over pipelines, population and property rights in Texas’ Hill Country

In Texas, where oil and gas fuels the economy, this is a new kind of fight. Between 2010 and 2018, the state grew from 25 million to nearly 29 million residents. The area surrounding Austin, including Travis and Hays County, has been the fastest-growing metro area in the nation for the last eight years. Residents of Hill Country see this moment as an inflection point—with a growing population, oil and gas interests are becoming more at odds with landowner rights. Opponents of the Permian Highway Pipeline hope to set a precedent, shifting power away from Kinder Morgan before other energy infrastructure companies follow them to the Hill Country.

The scale of this fight is unprecedented—and so is its power to unify. The landowners, local governments, and advocacy groups cover a vast spectrum of attitudes and political identities. Some are environmentalists, while others are pro-development. “But in this case we’re all aligned with a common enemy,” Travis Mitchell, the mayor of Kyle, told EHN. “Having a common enemy has a uniting effect.”

“It created a strange set of bedfellows.”

Background: Kinder Morgan mobilizes for pipeline construction in Central Texas; opponents prepare to sue

 

 

Courthouse News – January 13, 2020

Pipeline Fights Class Certification in California Oil Spill Suit

A company responsible for an oil spill that dumped more than 123,000 gallons of crude oil off the California coast in 2015 asked a judge Monday to decertify a federal class action brought by beachfront property owners and business owners seeking damages from the environmental disaster.

On May 19, 2015, thousands of gallons of crude oil flowed into the Pacific Ocean along the Gaviota Coast north of Santa Barbara. The ruptured pipeline, owned by Texas-based Plains All American Pipeline, spewed oil through a storm drain under Highway 101 and into the ocean for several hours. ….

On Monday, attorneys for Plains All American Pipeline argued an analysis by class witness Igor Mezić, a University of California, Santa Barbara, professor, on the dispersion of crude oil is inaccurate. Mezić’s analysis involves the amount of oil that washed ashore after the disaster, what areas it covered and where it became submerged on the ocean floor.

 

 

KBMT (Beaumont) – January 13, 2020

Officials say leak found, stopped Monday as ‘evacuation-only’ claims deadline approaches

A ‘high number’ of evacuation claims have already been settled

Officials say a leak was found inside the fence line of the TPC Group facility Monday, a little more than six weeks after the Port Neches plant exploded.

The leak caused elevated levels of VOCs in the air inside the fence line. The source of the leak was quickly found and ‘mitigated’ according to a news release from Port Neches Response Unified Command. The all-clear was given around 2 p.m.

The company is continuing to remove material from the plant by barge, rail and pipeline.

 

 

Associated Press/Albuquerque Journal – January 10, 2020

Partners aim to solve ‘produced water’ dilemma

A partnership between an agriculture company and a West Texas farm could create a solution to the Permian Basin’s oil and gas waste water dilemma, and the region’s scarce water supplies for farming and ranching.

Produced water is brought up to the surface during extraction. Traditionally, that water is pumped back underground via an injection well, and some oil and gas producers found ways to treat the water to a quality that could be reused in hydraulic fracturing. But as fracking and the American oil and gas industry boomed in the desert region of southeast New Mexico and West Texas – an area also known for heavy agricultural activity – scientists, companies and government agencies began studying how to treat and reuse produced water outside of oil and gas.

Wyoming-based Encore Green Environmental and Wilson Farms of Midkiff, Texas, plan to use solar energy to treat the water and use it to grow crops at the cotton farm.

 

 

S&P Global Platts – January 13, 2020

Cheniere advances efforts to bring Sabine Pass LNG storage tanks back online

Cheniere Energy has received approval from the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration to prioritize the return to service of one of the two storage tanks at its Sabine Pass LNG export facility that have been offline since a leak nearly two years ago, a company spokesman said Monday.

The efforts come as US liquefaction facilities see record utilization, with total feedgas deliveries approaching 9 Bcf/d amid peak winter demand and positive, albeit weak, netbacks.

 

 

Midland Reporter Telegraph – January 4, 2020

Analyst: Geopolitical risks, higher demand will boost crude

“Relative to gas, liquefied natural gas, coal and most agricultural products – other than sugar – oil will perform relatively well,” Chris Midgley, global head of analytics at S&P Global Platts, said in an email.

Offering a boost to the crude oil outlook are geopolitical risks that are expected to remain high, especially tensions between the U.S. and Iran and possible supply declines from Iraq, Libya and Nigeria. ….

“The demand boost will last for a while, but as the industry learns to make more low sulfur fuel and use less gasoil, the impact will weaken and other impacts, such as the growth of LNG and increased biofuels displacing gas oil in sectors other than shipping, resulting in the demand boost quickly getting eroded,” he wrote.

 

 

S&P Global Platts – January 3, 2020

US oil sector could face headwinds amid 2020 election uncertainty

Oil markets may be underestimating the risks to US production and export growth from the upcoming 2020 US presidential election, analysts told S&P Global Platts.

Analysts expect that if a Democrat wins in November, the incoming administration will likely introduce new regulations limiting fracking, flaring, offshore drilling, and possibly exports, but it remains unclear how far these initiatives may go.

“The market has become a little complacent in pricing in re-election for President Donald Trump,” OANDA senior market analyst Edward Moya said. “The risks are pretty high. While Trump is still favorite, we still could see a progressive candidate come out with the nomination. It would be bad news for the US oil industry.”

 

 

Houston Chronicle – January 7, 2020

Worried about the air quality, Pleasantville residents came up with a one-of-a-kind solution

The warehouse fire of 1995. That’s the first thing many in Pleasantville point to when asked about air quality in the historic neighborhood east of downtown Houston.

It was June 24, 1995, when warehouses stacked with drums of chemicals caught fire, sending thick, black smoke thousands of feet up into the sky and forcing residents to evacuate. The fire reignited three times over the next month. …

Pleasantville residents hope that will change soon. The neighborhood is launching its own community-owned air monitor network, one of the first of its kind in Texas, they say. ….

The project, made possible with a $10,000 grant from the Environmental Defense Fund and through a partnership with Texas Southern University, consists of seven solar-powered air monitors designed to detect a range of airborne toxic substances, including fine particles that can travel and lodge deep inside the lungs or even the blood.

 

 

Houston Chronicle – January 6, 2020

Lubbock company rolls out mobile app to remotely control oilfield water systems*

Lubbock oilfield service company SitePro has rolled out a new mobile app that allows users to monitor and control wastewater systems in the oil patch.

The company rolled out its new mobile phone app on Monday. Going beyond the company’s mobile phone website, the mobile app allows users to monitor their oilfield water systems as well as adjust pump speeds and set tank levels for alarms and notifications.

“SitePro’s technology is fundamentally changing how the industry manages fluids across the energy landscape, and we’re excited to be a part of the digital revolution taking place in oil and gas,”SitePro CEO Aaron Phillips said in a statement.

 

Utilities

 

Houston Chronicle* – January 13, 2020

Why Texas missed a nationwide drop in power prices*

In most of the U.S., average annual wholesale prices fell 15 to 30 percent in 2019 compared with the previous year, a reflection of lower natural gas prices, according to the Department of Energy.

But in Texas, day-ahead wholesale electricity prices averaged $38 per megawatt hour in 2019, an increase of 13 percent over the 2018 average, according to the Energy Department. The higher average price was caused by the state’s tight power supply cushion, record demand and surcharges.

Monthly wholesale prices in Texas were the highest in August, a month when punishing triple-digit temperatures and record-setting demand forced the state’s grid operator, the Electric Reliability Council of Texas, to issue emergency alerts, including voluntary conservation measures, to prevent rolling blackouts. The surge in demand set off price signals that prompted power generators to produce more power and for consumers to use less, according to the Energy Department.

 

Alternatives & Renewables

 

pv magazine – December 27, 2019

Six-year-old solar power plant partially repowered with new trackers and bifacial solar modules

At the end of 2018, there were 690 ground mounted utility-scale solar power plants totaling greater than 25GWac in commercial operation in the United States. These projects represented tens of billions of dollars of installation costs and hundreds of millions of ongoing annual operations and maintenance work.

And now, a $20 billion revenue stream is arising — upgrades of racking, inverters, and solar modules that maximize the amount of electricity that can be delivered through already existing interconnection approvals.

OCI Solar Power has repowered a portion of its 39.2MWac/49.4MWdc Alamo 1 solar power plant in Bexar County, Texas. The plant has been upgraded to Array Technologies trackers and bifacial solar modules. Existing inverters, manufactured by Kaco New Energy, concrete foundations, and balance of system gear were left in place.

 

 

CNBC – January 7, 2020

Texan wind power grows again as huge turbines start spinning

Turbine blades have started spinning at Duke Energy Renewables’ 200 megawatt Mesteno Windpower project in Starr County, Texas.

In an announcement Monday, Duke Energy said that the facility, with its 56 3.6 megawatt (MW) wind turbines from Danish firm Vestas, would generate energy to power roughly 60,000 typical homes each year.

While the announcement was made this week, commercial operations actually began on December 31st.

Duke Energy said at 590.5 feet, the turbines were “some of the tallest” in the U.S. and able to “harness stronger winds,” producing more energy in the process.

 

Regulatory

 

Houston Chronicle – January 13, 2020

IRS delay threatens carbon capture projects

Almost two years after Congress passed a law more than doubling tax credits for power and industrial plants that build systems to prevent carbon dioxide emissions, efforts to begin construction are on hold.

Companies have announced plans to build more than 20 so-called carbon capture facilities, but all are waiting for the Internal Revenue Service to issue guidance on the specifics of how the tax credit can be claimed. Considering the law requires construction to begin before 2024, and getting financing and government permits can takes years, the delay threatens to shut down many of the projects all together, said Kurt Waltzer, managing director at the Clean Air Task Force, a nonprofit working on climate change solutions.

“If you were to start a large power plant or steel plant today after the rules came out, it would be almost impossible to reach commenced construction in that time frame,” he said. “It’s not that there aren’t projects we think are going to go forward, but it’s the larger projects.

 

 

KMID (Midland-Odessa) – January 12, 2020

Railroad commission candidate wants to regulate oil and gas industry

Railroad commission candidate, Chrysta Castaneda hopes to win one of Texas’ top races in 2020.

Castaneda has been working in the oil and gas industry for over 30 years, and she says the industry needs to be regulated.

“We need to deploy the alternative technologies that will help us reduce the flaring in the Permian,” she says. “Which will have the benefits of increasing the safety and protection for workers decrease the risk of lungs and human health.”

Castaneda says West Texas experiences so much pollution because of flaring and it’s a detriment to people’s health.

 

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The Texas Energy Report NewsClips – January 13, 2020

Subscriber’s Edition

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Lead Stories

 

Nasdaq – January 10, 2020

U.S. refinery sales hit the brakes, with 5% of capacity on block

From coast to coast, U.S. refineries are available for the taking, but nobody is buying.

With the news that Royal Dutch Shell Plc RDSa.L is looking to unload its Anacortes, Washington, facility, there are seven different U.S. refineries on the block now, accounting for about 5% of U.S. crude oil processing capacity, according to data compiled by Reuters.

U.S. energy production is at an all-time record, but there are concerns that refineries that don’t attract buyers could suffer from lack of investment and maintenance that could lead to accidents down the road.

These properties, from Washington state to Pennsylvania, are having trouble finding bidders because of unfavorable locales, worries about falling margins, and the coming restart of nearby facilities in the Caribbean that will add to competition, bankers and analysts said.

 

 

ZD Net – January 9, 2020

These hacking groups are eyeing power grids, says security company

Cyber security company Dragos said that political and military tensions in the Gulf appear to coincide with a rise in interest in hacking groups targeting electricity grids, power companies and other systems related to utilities in the US.

“The threat landscape focusing on electric utilities in North America is expansive and increasing, led by numerous intrusions into ICS networks for reconnaissance and research purposes and ICS activity groups demonstrating new interest in the electric sector,” warned its North American Electric Cyber Threat Perspective report.

The report notes that the security researchers are tracking seven groups that target electrical facilities in North America and that three of these have demonstrated the capability to “infiltrate or disrupt” electrical power networks.

While Dragos doesn’t attribute which nation states or cyber-criminal groups could be behind these attacks, the company has outlined three operations that show evidence of disruption capabilities: Xenotime, Dymalloy and Electrum.

 

 

Dallas Observer – January 10, 2020

Texas Produced More Energy from Renewable Sources Than Coal Last Year

Last year Texas generated more energy from renewable sources than from coal, according to data from the Electric Reliability Council of Texas.

Texas produces the most wind energy of any state in the nation, and its solar energy capacity is growing rapidly.

Earlier this year, as the Dallas Observer reported, Texas’ wind energy output surpassed its coal energy production for the first time. At the time, ERCOT said the trend wasn’t likely to hold through the rest of the year.

 

 

Common Dreams – January 10, 2020

Climate Movement Takes Aim at Wall Street, Because ‘Money Is Only Language Fossil Fuel Industry Speaks’

Climate activists on Thursday announced a new campaign that aims to send a message to Wall Street: “Stop financing fossil fuels and deforestation and start respecting human rights and Indigenous sovereignty.” …

While the campaign’s broad demand is that “banks, asset managers, and insurance companies stop funding, insuring, and investing in climate destruction,” the advocacy organizations have identified three primary and initial targets: JPMorgan Chase, BlackRock, and Liberty Mutual.

“As the world’s largest investor in fossil fuel companies, BlackRock is effectively financing disinformation campaigns that have delayed climate action for decades,” declared Kathy Mulvey, a campaign director at the Union of Concerned Scientists. “Investors need to expect more and tolerate less from fossil fuel companies—and tell them to swiftly get on board with climate action, or get out of the way.”

BlackRock announced Thursday that it is joining the Climate Action 100+ investor initiative. Members of the BlackRock’s Big Problem network responded by calling the move a “first step in the right direction” and urging the firm to “go beyond words and actually make meaningful changes to the way it wields its power.”

 

Oil & Gas

 

Reuters/New York Times – January 13, 2020

Oil prices rose slightly on Monday as investors shift their focus away from easing Mideast tensions to this week’s scheduled signing of an initial U.S.-China trade deal which could boost economic growth and demand.

Brent crude was up 20 cents at $65.18 per barrel at 0946 GMT, while West Texas Intermediate (WTI) crude <CLc1> was up 16 cents at $59.20 a barrel from the previous session.

Oil prices surged to their highest in almost four months after a U.S. drone strike killed an Iranian commander and Iran retaliated with missiles launched against U.S. bases in Iraq. But they slumped again as Washington and Tehran retreated from the brink of direct conflict last week.

 

 

Odessa American January 10, 2020

Rig count dives as oil prices drop

The rig count in the Permian Basin was down six this week, the latest count Friday by Baker Hughes shows, with 397 rigs active in the region. A year ago, 488 rigs were active in the region.

Nationally, the oil and gas rig count is down 15 from last week at 781 rigs. A year ago, 1075 rigs were active. The count shows that 659 rigs sought oil, down 11 from the previous week, and 119 explored for natural gas, down four from the previous week.

 

 

Kallanish Energy – January 13, 2020

Texas well completions dropped 15.9% in 2019*

The Railroad Commission of Texas issued a total of 803 original drilling permits in December 2019, down slightly from 811 permits issued in December 2018, Kallanish Energy has learned, a drop of just under 1%.

The December 2019 total includes 743 permits to drill new oil or natural gas wells, eight to re-enter plugged wellbores and 52 for re-completion of existing wellbores. The breakdown of well types for those permits is 162 for oil, 37 for gas, 571 for oil or gas, 23 for injection and 10 “other” permits.

Last month, the state agency processed 491 oil, 98 gas, 17 injection and three other completion permits. That compares to 564 oil, 156 gas, 27 injection and three other completions in December 2018.

 

 

Marshall News Messenger – January 10, 2020

Slight decrease shown for oil, gas permits last month throughout state

The Railroad Commission of Texas (Commission) issued a total of 803 original drilling permits in December 2019 compared to 811 in December 2018.

The December 2019 total included 743 permits to drill new oil or gas wells, 8 to re-enter plugged well bores and 52 for re-completions of existing well bores. The breakdown of well types for those permits is 162 oil, 37 gas, 571 oil or gas, 23 injection, zero service and 10 other permits.

In December 2019, Commission staff processed 491 oil, 98 gas, 17 injection and three other completions compared to 564 oil, 156 gas, 27 injection and three other completions in December 2018.

 

 

Midland Reporter Telegram – January 11, 2020

RRC: Eight of top 10 oil producing counties in Permian

Midland and Martin were again Nos. 1 and 2, with the neighboring counties accounting for 21.795 million barrels – or 21.4 percent of the statewide total of 101.675 million barrels. That was an increase from September when the two counties combined for 20.092 million barrels.

Joining Midland and Martin were Reeves (third), Howard (fifth), Upton (sixth), Loving (seventh), Ward (ninth) and Reagan (10th). Ward cracked the list of top 10 counties statewide for the first time in recent memory. Combined, the eight Permian counties accounted for 51.261 million barrels during the month of October. That was 50.4 percent of the state production reported. In September, the seven Permian counties in the top 10 accounted for 44.84 percent of the preliminary production.,

 

 

Wall Street Journal – January 12, 2020

Exxon Considers Sale of Oil Assets in Equatorial Guinea*

Exxon Mobil Corp. is in talks to sell its oil assets in Equatorial Guinea, the country’s oil minister said, and might be replaced there by a Russian company—among other options—as U.S. companies retreat to shale projects and Moscow strengthens its foothold in African resources.

Speaking to reporters on the sidelines of an energy event Sunday, Gabriel Obiang Lima said he was in talks with Exxon about a sale of its assets in Equatorial Guinea, including its operating stake in the Zafiro field. At 90,000 barrels a day, the field makes up the bulk of Equatorial Guinea’s output.

A spokesman for Exxon said the U.S. oil company is “providing information to third parties that may have an interest in these assets, but no agreements have been reached and no buyer has been identified.” The spokesman added that a potential transaction wouldn’t affect the company’s exploration activities in Equatorial Guinea.

 

 

Hellenic Shipping News – January 13, 2020

Constraints to Gulf Coast natural gas market to drive widening basis discounts

Emerging pipeline constraints into the Louisiana and East Texas gas markets could see steep basis discounts appearing at neighboring and even more distant US pricing locations next summer as competition among shippers for access to the premium demand region continues to rise.

In recent trading, forwards prices at nearby hubs like Carthage and Columbia Gulf Mainline are averaging 10 cents and 24 cents/MMBtu behind Henry Hub for the June, July and August contracts.

Farther afield in the Midwest and the Northeast – which continue to supply increasing volumes of gas to the Gulf Coast market – summer 2020 forwards prices are at even steeper discounts to the benchmark.

 

 

Water Technology – January 10, 2020

Hydraulic fracturing market forecasted to grow $17B per year through 2028

Water management spend for hydraulic fracturing is forecasted to average $17 billion per year from 2019 through 2028, according to new market forecasts from Bluefield Research. Emboldened by growing demand for scaling water supplies and disposal needs, a host of midstream water companies backed by private equity and sovereign wealth funds are positioned to seize the opportunity going forward.

According to Bluefield’s new report, Midstream Water Management: U.S. Hydraulic Fracturing Strategies, Solutions, & Outlook, water management for the fracking sector has maintained a steady clip since 2017. Spend on water supply, transport, treatment, storage, and disposal has increased 12% per year from $11.74 billion to a projected $15.49 billion by the close of 2019.

 

 

Victoria Advocate – January 11, 2020

Regional experts cite Eagle Ford Shale, Alcoa, Harvey as sources of job decline*

Layoffs resulting from the oil field slump contributed to Victoria being named the city with the fifth-greatest job loss between 2014 and 2019 by 24/7 Wall St., an online publication. The article used data from the Bureau of Labor Statistics to determine the nationwide rankings.

But one quirk set Victoria apart from other cities on the list.

Victoria has an unemployment rate of 3.2%, lower than the national average of 3.4%, according the bureau’s statistics.

Because the unemployment rate doesn’t directly measure job loss but reflects the number of unemployed residents who are actively seeking work, the rate indicates that people left Victoria after their jobs moved or were eliminated.

 

 

Mexico News Daily – January 10, 2020

Little transparency in selection of companies to supply new refinery

Mexicans are back at work, including the esteemed politicians running the country, and this past week has conjured up some rather interesting developments in the energy sector.

It is well known throughout Mexico that the country does not produce enough of its own refined products — gasoline, diesel etc. These are topics I have discussed in previous articles. With six refineries running at an average of 30% capacity, as well as being engineered to produce more heavy fuel, Mexico sits at the beck and call of its northern neighbor, the United States.

Alas, the Morena government came up with a strategic plan to change the dynamics of refined products production in Mexico by announcing the construction of the Dos Bocas refinery in Obrador’s home state of Tabasco. Initially the government discussed building four new refineries which dwindled to half that number and finally it settled on this one, its flagship energy infrastructure project.

 

 

Wall Street Journal – January 12, 2020

Behind Maduro’s Latest Power Play: Reviving Venezuela’s Collapsed Oil Industry*

A recent tussle between Maduro loyalists and the U.S.-backed opposition for control of Venezuela’s National Assembly descended into a melee of competing claims that left neither side with clear authority over the assembly.

Behind the messy scramble, energy consultants and diplomats say, is a government attempt to ensure its long-term survival by bringing in Russian, Chinese and other investors to revive the country’s collapsing crude production.

The assembly, the last independent institution in Venezuela, is the only government body legally able to approve oil-licensing deals. The government’s attempted takeover was partly a strategy to draft a law that would give foreign companies the legal power to run day-to-day operations of oil projects in Venezuela, according to two oil-sector consultants close to Russian and Chinese energy companies.

 

 

 

Observer Reporter (PA) – January 10, 2020

PA Revenue from impact fees projected to drop 21%

Pennsylvania is expected to collect $198.2 million in impact fees from unconventional natural gas operations in the Marcellus and Utica shales last year, the state’s Independent Fiscal Office reported Thursday. That is a $53.6 million decrease from the record $251.8 million that production companies paid in 2018.

That means Pennsylvania counties and municipalities likely will take a hit. They are projected to get $108 million, down from $140.1 million a year ago. Washington and Greene typically are among the top impact fees beneficiaries among the state’s 67 counties.

Low natural gas prices are the culprit, said IFO, which does revenue projections for the Legislature and residents of the commonwealth. The average price in 2019 was $2.63 per million British thermal units, a three-year low, according to the New York Mercantile Exchange. When the price falls below $3, gas producers pay $5,000 less for each horizontal well than they did a year earlier.

 

 

Middle East Eye – January 10, 2020

Jordanians hit streets for second week calling for end to $10bn Israeli gas deal

Hundreds of Jordanians protested on Friday calling for the end of a $10bn gas deal with Israel for the second week in a row, local media reported.

In the cities of Amman, al-Zarqa, Irbid, al-Aqaba and al-Karak, protesters demanded that the government end the “treasonous deal” struck in 2016, which saw Jordan start importing gas from Israel’s largest offshore field last week.

Jordanian protestors have told Middle East Eye that they refuse to light their county’s streets with gas “stolen from occupied Palestine”.

On 1 January, according to the terms of the deal between Jordan’s state-run National Electricity Company (NEPCO) struck with Texas-based Noble Energy and other partners, gas from the offshore Leviathan field first started to be pumped into Jordan for an experimental three-month period.

 

Utilities

 

San Antonio Express News – January 10, 2020

Greg Jefferson: Iran wants to hack our power grid. Can CPS Energy prevent it?*

“That is our greatest vulnerability in this city: the electric grid,” said Pelaez, chairman of [San Antonio] City Council’s Innovation and Technology Committee. …

City-owned CPS Energy is a tempting target. The utility sells electricity to 841,000 residential and business customers, and natural gas to 353,000 households and workplaces. It’s a big repository of personal data, and a widespread network outage would bring the seventh-largest U.S. city and many of its neighbors to their knees — to say nothing of the statewide power grid and the regional economy.

Shanna Ramirez is CPS Energy’s interim chief integrated security officer, responsible for protecting the utility’s digital network and physical assets, which are valued at $11.5 billion.

Ramirez chooses her words carefully. She says “I can’t comment on that” a lot. Which means she has the personality firewall you find in many executives responsible for safeguarding networks.

 

 

Houston Chronicle – January 10, 2020

Breaking down Reliant’s energy plans: When ‘free’ really means more expensive*

Reliant Energy, the retail electricity provider owned by NRG Energy, expanded its line of bargain-sounding power plans with “Truly Free 7 Days,” a new option that covers the cost of electricity for the seven highest use days each month. The company already has plans that provide free nights and free weekends.

But are they bargains when they work out to an average of 14.5 cents per kilowatt hour for households that use 2,000 kilowatt hours of power each month? Especially since the three “free” electricity plans offered by Reliant are the most expensive 12-month plans the company sells. …

But the freebies may not be so free after all. On the free nights plan, for example, the cost of power from 8 p.m. to 6 a.m. doesn’t cost anything, including transmission and distribution utility charges. But outside of those hours, electricity is 24.6 cents per kilowatt hour, about double the 12 cents per kilowatt hour residential customers pay on average in Texas. Reliant estimates that the average customer uses 42 percent of total power consumption during the nighttime hours, according to the electricity facts label.

 

 

Clean Technica – January 9, 2020

US Electricity: Solar Up 15%, Wind Up 9%

At the end of 2018, there were still apparently large areas of the US where natural gas had the lowest long-term cost (LCOE) — if you didn’t take the cost of CO2 or other pollution into account. Here’s a detailed map based on research from the Energy Institute of the University of Texas (the data was last updated on Sept 20, 2018):

[With the accompanying map] you can see that with a modest price on CO2, renewables are cheaper almost everywhere (dominated by utility-scale solar and wind). Even without the price on CO2, renewables had become competitive in what seems like more than half the country. However, new power plants installed in 2019 weren’t necessarily started in 2019. It takes a long time (years) to build a fossil power plant. So, 2019 installations were mostly led by decisions from previous years. Nonetheless, the market had enough sense to install more renewable energy than fossil energy.

 

 

KPRC (Houston) – January 10, 2020

Hempstead Mayor indicted on felony charge in connection with $10K owed in utility bills

After months of investigation, the mayor of Hempstead has been indicted by a Waller County grand jury on a felony charge relating to utility bill payments. Michael Shayne Wolfe, 58, was indicted on one count of theft of service by a public servant which is a third-degree felony.

Prosecutor Warren Diepraam said an audit of city finances in early 2019 triggered an investigation by the Texas Rangers. Diepraam said the audit revealed irregularities in utility payments to the city.

“The allegation, in this case, involves Mayor Wolfe essentially not paying his water and electricity bills to the City of Hempstead to the tune of approximately $10,000,” said Diepraam. “In addition, his daughter owed roughly $10,000 dollars as well, he ensured her accounts were zeroed out as well.”

 

 

Yahoo! News – January 12, 2020

False alarm sets off nuclear scare in Canada

An alert signaling an incident at a major nuclear power plant near Toronto in Canada was sent in error to millions of residents Sunday, causing a scare and prompting calls for an investigation.

The emergency alert went out shortly before 7:30 am (1230 GMT). Though intended for residents living within a 10-kilometer (six-mile) radius of the Pickering Nuclear Generating Station, it went to all residents in Ontario province.

About an hour later, the Ontario Power Generation company that manages the nuclear plant announced on Twitter that the alert was issued by mistake.

“There is NO active nuclear situation taking place at the Pickering Nuclear Generating Station,” it said.

 

Alternatives & Renewables

 

Windpower Engineering – December 24, 2019

Enel Green Power North America’s 450-MW wind farm comes online

 

 

Maritime Executive – December 26, 2019

Port of Corpus Christi Nears Second Year on Renewable Energy

The Texas Port of Corpus Christi is celebrating its second consecutive year of operating on 100 percent renewable energy.

The Port began shifting toward using renewable energy sources to power its operations in 2017, when nearly half of its energy consumption was purchased from renewable energy, specifically from wind-generation. That moved to 100 percent in 2018, when the Port claimed nearly 9.5 million kWh’s of green energy credits.

In addition to its renewable energy initiative, the Port has recycled 1.1 million pounds of materials since 2005.

The Port of Corpus Christi was the first Texas port to achieve Green Marine certification in 2016, and in September met ISO-14001 Certification for the 12th consecutive year.

 

Regulatory

 

KUT (Austin) – January 10, 2020

As Drought Persists, Texas Ranchers Take Stock

According to figures released by the U.S. Drought Monitor this week, nearly 38% of the state is in drought. At least one-third of the state has been experiencing some level of drought since late August. That figure peaked at just over 50% in September, the hottest September on record for cities throughout Texas, including Austin. On Jan. 3, Gov. Greg Abbott even issued a state of disaster declaration for 17 counties. …

John Nielsen-Gammon, the Texas state climatologist, says drought conditions normally improve in the fall and winter because there is typically more rainfall.

“But that hasn’t really worked out that way,” he says. “We’ve gotten some improvement in some parts of the state, but so far, for the most part, the fall and winter have been below normal so we’ve seen drought persisting in large areas.”

 

 

Austin American Statesman – January 12, 2020

5 Republicans vying for Rep. Goodwin’s seat in Central Texas*

Republican voters will choose between five candidates in March to determine who will have a chance to take back a Texas House seat in western Travis County that went from red to blue in 2018.

Rep. Vikki Goodwin, D-Austin, represents one of four Central Texas seats that changed party hands in 2018, and state GOP leaders identified it as one of 12 seats they’ll target in 2020. Goodwin narrowly beat incumbent Paul Workman, an Austin Republican. She doesn’t have a primary opponent. …

[Attorney Jennifer] Fleck, 47, general counsel for oil and gas firm R Construction Company, has worked to oppose efforts in school districts around the state to move away from abstinence-only sex education. Fleck supported three bills — none of which passed — that would have restricted what schools can show online and in sex education classrooms. …

[Attorney Aaron] Reitz, chairman of the conservative Texas Public Policy Foundation’s Liberty Leadership Council, said he would focus on restricting the authority of cities, a priority of Republicans — including Gov. Greg Abbott — for several years.

 

 

Brownsville Herald – January 10, 2020

Ex-lawmaker gets probation in DWI case

Oliveira was one of the 2015 House co-sponsors of HB 40, known as the “Denton fracking bill” (the exclusive jurisdiction of this state to regulate oil and gas operations in this state and the express preemption of local regulation of those operations)

Former state Rep. Rene Oliveira, D-Brownsville, pleaded no contest to his 2018 DWI charge in county court in Friday morning in Brownsville.

Oliveira appeared before County-Court-at-Law No. 1 Judge Arturo A. McDonald, Jr. alongside attorney Ed Stapleton, where he was advised of his rights before asking to enter his formal plea.

The case was scheduled to go to trial Monday.

Stapleton told McDonald that his client stipulated the facts of the case. He made note that no evidence of drug use should be included in the records. “Those were rumors,” he said.

 

_______________________________

 

The Texas Energy Report NewsClips – January 10, 2020

Subscriber’s Edition

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

The Hill – January 9, 2020

White House aims to roll back bedrock environmental law to speed development

The White House on Thursday issued sweeping changes to one of the nation’s bedrock environmental laws, allowing greater industry involvement in environmental reviews of projects and diminishing the role climate change plays in those assessments.

The changes target the 50-year-old National Environmental Policy Act (NEPA), which requires agencies to evaluate how pipelines, highways and some oil and gas development affects the environment and nearby communities.

The law has been a repeated target of President Trump, who has vowed to speed the construction of fossil fuel infrastructure and eliminate barriers to construction projects.

Opposition: Democrats, greens blast Trump rollback of major environmental law

 

 

S&P Global Platts – January 9, 2020

Permian Basin 2020 forward gas prices hit fresh record lows

Permian Basin forward gas prices are testing new lows this month as the 2020 market outlook for available pipeline capacity exiting the West Texas basin continues to deteriorate.

At market close Wednesday, the balance-2020 curve at Waha dipped to its lowest on record at 63 cents/MMBtu. Shoulder-season prices for this year have faced even more downward pressure, with April and May calendar-month contracts falling to an average of just 15 cents/MMBtu earlier this month, S&P Global Platts M2MS data shows.

The cash market hasn’t fared much better. After dipping into negative territory in late December, next-day prices at Waha have averaged about 74 cents/MMBtu so far this month.

 

 

Houston Chronicle – January 9, 2020

Apache, 2 other Houston oil companies cut nearly 600 jobs*

Three Houston oil and gas companies Thursday said they would slash nearly 600 jobs in Texas, a day after Occidental Petroleum began a massive staff reduction.

Oil and gas producer Apache Corp. announced the largest of the cutbacks, saying it would eliminate more than 270 positions as it closes its regional San Antonio office.

Meanwhile, oil field services company Enterprise Offshore Drilling said it would lay off around 60 workers, part of a planned release of a Gulf of Mexico oil rig.

A third company, Valerus Field Solutions, said it’s closing an oil and gas equipment plant in Sealy, west of Houston, in March and eliminating about 250 jobs.

 

 

Hellenic Shipping News – January 9, 2020

Middle East Tension Will Bring More Oil Market Speculators And Yet More Barrels

Add it all up, and it has presented oil market speculators, ever keen on geopolitical risk premiums, with a very unique set of circumstances to take a punt on. Unlike other high profile take-downs of recent years, including that of Al-Qaeda leader Osama Bin Laden (2011) and ISIS leader Abu Bakar Al-Baghdadi (2019), the geopolitical ramifications for the market are visible and direct. Both were wanted terrorists but Solemani was an Iranian state actor.

Iran and the U.S. have renewed hostilities since Trump withdrew Washington from the 2015 Iranian nuclear settlement brokered by European governments and the Obama administration in 2018. Since then, the President’s sanctions have squeezed Iran’s oil exports from an average of ~3.2 million barrels per day (bpd) in the wake of the settlement down to 2.15 million bpd, going by S&P Global Platt’s OPEC survey for November 2019.

Related: Energy infrastructure attacks are ‘probable’: Oil traders fear supply disruptions in the Middle East

 

 

Wall Street Journal – January 9, 2020

Oil Producers Are Setting Billions of Dollars on Fire*

Relatively clean and flexible, natural gas has been described as “the champagne of hydrocarbons.” Lately, though, energy companies are treating it about as sparingly as a team that just won the World Series.

Tremendous quantities are intentionally burned off to make way for oil production. The problem is likely to get worse in the U.S., the number four flarer of gas behind Iran, Iraq and world-leader Russia. It is more than an issue of waste: Flaring may be responsible for 1% of global greenhouse gas emissions according to Raymond James.

Even as more and more gas gets supercooled and shipped around the world in expensive, liquefied form, an estimated 5.1 trillion cubic feet of gas was flared world-wide in 2018, according to The World Bank—equivalent to the combined consumption of France, Germany and Belgium.

Why waste so much valuable fuel? Because it is often an unwanted byproduct of an oil well, and it isn’t worth enough to sell.

Geography determines whether it is worth something or not.

Related: New Mexico releases methane emissions report*

 

Oil & Gas

 

Reuters/India Times – January 10, 2020

Oil prices extend declines as Middle East war concerns ease

Oil prices dipped on Friday as the threat of war in the Middle East receded and investors switched their attention to rising US crude oil and product inventories.

Brent crude fell 4 cents to $65.33 by 0732 GMT, and was heading for its first decline in six weeks, down nearly 5 per cent.

WTI was down 8 cents at $59.48 and was also on track for its first weekly drop in six, falling nearly 6 per cent from last Friday’s close.

Oil is now below where it was before a US drone strike killed a top Iranian general on Jan. 3, with Iran responding with a ballistic missile attack on Iraqi air bases hosting US forces this week that left no casualties.

 

 

Center Square – January 8, 2020

Reports point to robust Texas economy in 2020

Texas’ economy should remain robust in 2020 after the Lone Star State added more than 336,000 jobs in 2019, the Federal Reserve Bank of Dallas says in its latest report.

The Fed found that retail and wholesale sectors showed strong increases in part-time employment and average workweek length at the end of the year.

The Dallas Fed’s State Production Index also found that factory output in Texas grew in December, and the majority of those surveyed expressed optimism that business in 2020 will be better than it was in 2019. …

The Texas labor market continues to look strong in 2020, the Texas Workforce Commission also reports.

The state’s seasonally adjusted unemployment rate was a historical low 3.4 percent in November, the sixth consecutive month at that rate.

 

 

Houston Chronicle – January 9, 2020

Enterprise Offshore Drilling laying off dozens of offshore oil workers*

Houston oilfield service company Enterprise Offshore Drilling is laying off more than five dozen oil-rig workers in the Gulf of Mexico.

In a letter filed with the Texas Workforce Commission, Enterprise reported that the company is laying off 61 people working aboard Enven Energy’s DD 202 offshore drilling rig about 100 miles off shore. Enven is shutting down the rig Jan. 31, Enterprise Offshore Drilling Vice President of Human Resources Amy Warner wrote in her letter.

The layoffs began in November and are expected to be completed by the end of February.

 

 

Houston Chronicle – January 9, 2020

Shell brings fuel to Mexico in push for 15% of retail market

Royal Dutch Shell Plc is seeking a bigger share of Mexico’s fuel market, even as regulatory changes make it harder for foreign companies to compete.

The Anglo-Dutch oil major, which already owns about 200 gasoline stations in 12 states in Mexico, plans to grow its share of the retail fuel market to as much as 15% from 1% now. The company also plans to import more of the fuel it sells in Mexico, reducing its reliance on state-owned Petroleos Mexicanos. Today, about 30% of that fuel is imported by train into the state of Guanajuato.

“When you think of the market in Mexico we have the chance of being fully integrated,” Murray Fonseca, Shell’s downstream director for Mexico, said in an interview. “If the conditions stay the same, Mexico will become a heartland for Shell.”

 

 

Rigzone – January 9, 2020

Permian Oil and Gas Employs 87,000 People in 2019

Direct oil and natural gas employment in the Permian basin totaled 87,603 people in 2019, according to a new report from the Texas Independent Producers and Royalty Owners Association (TIPRO).

The report, which outlined that this figure represented an increase of nearly 43,000 jobs since 2009, highlighted that the largest Permian basin counties by oil and natural gas employment in 2019 included Midland (33,328), Ector (14,791), Lea (8,356), Eddy (7,766) and Hockley (2,765).

The largest increase in oil and gas employment between 2009-2019 occurred in Midland County (20,802), followed by Ector (7,693), Eddy (4,985), Lea (2,407) and Hockley (1,513), according to the report.

 

 

Hellenic Shipping News – January 6, 2020

Fundamentals show multiple possible outcomes to US natural gas storage volumes in 2020

US natural gas storage volumes look to exit winter 2019-20 at nearly 300 Bcf above the five-year average and about 600 Bcf above last year, painting a bearish picture barring the arrival of colder-than-normal temperatures during the last half of the heating season.

However, increasing LNG feedgas demand coupled with a recent dip in US production could lead to lower storage volumes than expected and provide support for higher gas prices in 2020, according to S&P Global Platts Analytics.

US natural gas inventories started out the winter of 2018-19 at the lowest levels reported by the US Energy Information Administration in at least five years. Not that you could tell by looking at Henry Hub, which yawned at the prospect of low winter stocks, comforted by the cushion of gas coming out of Appalachia and the Permian.

 

 

Butane-Propane News – January 3, 2020

Energy Transfer, SemGroup complete merger transaction

Energy Transfer LP (Dallas) and SemGroup Corp. (Tulsa) have announced the completion of their merger. The terms of the agreement were approved by holders of a majority of SemGroup’s outstanding voting stock Dec. 4.

As a result of the merger, Energy Transfer issued about 57.6 million of its common units to SemGroup stockholders.

Effective with the opening of the market Dec. 5, SemGroup ceased to be a publicly traded company and its stock was no longer traded on the New York Stock Exchange.

 

 

Anchorage Daily News – January 8, 2020

After calls for transparency, Hilcorp and BP say Alaska pipeline deal needs no public hearing

The companies involved in a proposed $5.6 billion sale of some of Alaska’s biggest North Slope oil field assets sent a letter to state regulators pushing back against what they called “certain misconceptions and misinformation” contained in public comments about the deal.

Seller BP and buyer Hilcorp Energy also told the Regulatory Commission of Alaska that no public hearing is required for the portion of the deal involving the 800-mile trans-Alaska pipeline, according to a Dec. 20 letter to the agency.

On Tuesday, the agency announced it will give itself another month, until Feb. 11, to consider Hilcorp’s request to keep its financial records out of the public eye.

 

 

Houston Chronicle – January 9, 2020

Chris Tomlinson: Oil lobby spreads disinformation*

Oil and gas lobbyists are finally feeling the heat on climate change, but sadly, they remain committed to misleading the American people.

The American Petroleum Institute, the premier industry organization that establishes standards and engages politicians, is out with a nationwide advertising campaign. Oil and gas companies, the group would have you believe, have been fighting climate change and possess the solution.

“Our paths are not all the same, we have different perspectives on the best way forward,” a new television ad says. “But on issues that matter, like climate change, we’re more alike than we think. We want cleaner solutions, and that means working with each other.”

 

 

The Oklahoman – December 27, 2019

American Petroleum Institute highlights energy net-export accomplishment in quarterly update*

In September, the U.S. became a net exporter of total energy, something it hadn’t been in nearly 60 years. Meanwhile, production has remained strong as midstream service providers have added pipeline capacities to move product out of key producing basins.

In November, the U.S. set an average production record of 12.8 million barrels of crude oil per day.

“Never before has a major energy-consuming nation also become a top global exporter of total energy — usually, it’s the other way around,” Dean Foreman, chief economist at the American Petroleum Institute, said earlier this week.

“The fact that U.S. production has been able to simultaneously satisfy strong domestic demand and supply continued international demand for U.S. exports, while maintaining relatively low and stable prices, is remarkable.”

 

 

Inside Climate News – January 3, 2020

2020: A year of pipeline court fights, with one lawsuit headed for the Supreme Court

After years of mounting opposition to the increasing build-out of oil and gas infrastructure, 2020 is shaping up to be the year that pipeline opponents get their day in court.

One case headed to the U.S. Supreme Court takes a closer look at whether parts of the Appalachian Trail are off-limits to fossil fuel infrastructure and may determine the fate of two multi-billion-dollar pipelines. A defeat there, the industry argues, would severely limit its ability to get natural gas from the Marcellus shale to East Coast cities and export terminals. Another case weighs state sovereignty against pipeline interests and could have implications nationwide.

Meanwhile, a question of potentially greater significance looms: Can pipeline companies continue to justify taking private land as the public benefits of fossil fuel pipelines are increasingly questioned and the risks they pose to the environment and climate increase?

 

 

Houston Chronicle – December 24, 2019

Family memento depicts life and loyalty to oil in Baytown, Texas*

Flipping through the watercolor and pencil illustrations in Thomas Claud “T.C.” Smith’s retirement book from the Baytown refinery is a bit like flipping the pages back in time.

The book, full of dozens of illustrations by two artists who worked for the Humble Oil (now Exxon Mobil) refinery, Henry Rosser and Luther Mackrell, depicts both the rise of the oil industry in Texas and the men who made it possible.

At the time, the modern city of Baytown had yet to be knitted together from three communities: Baytown, Goose Creek and Pelly. There were two major churches (one Baptist and one Methodist), but just one employer: Humble Oil. Everyone who lived in the town was employed by Humble. Oil provided you a house. Oil provided your friends. Oil provided your church. Oil was family.

 

Utilities

 

S&P Global Platts – January 9, 2020

SWEPCO to shut Louisiana coal plant by end of 2026, explore retirement of 2 others

Southwestern Electric Power Co. is shutting down the 642.1-MW lignite-burning Dolet Hills power plant in De Soto County, Louisiana, as part of a rate case settlement approved by the Arkansas Public Service Commission.

Under a settlement reached with Sierra Club and other intervenors, the American Electric Power Co. Inc. subsidiary agreed to retire the power plant no later than the end of 2026. SWEPCO will be entitled to recover decommissioning and other associated costs. (Docket No. 19-008-U)

In announcing the settlement January 8, the Sierra Club said the Dolet Hills decision was the 300th to retire a coal-fired power plant since the environmental advocacy group began its “Beyond Coal” campaign in 2010.

 

 

Pew Trusts – January 9, 2020

Electric Cars Will Challenge State Power Grids

Electricity demand fluctuates throughout the day; demand is higher during daytime hours, peaking in the early evening. If many people buy electric vehicles and mostly try to charge right when they get home from work — as many currently do — the system could get overloaded or force utilities to deliver more electricity than they’re currently capable of producing.

In California, for example, the worry is not so much with the state’s overall power capacity, but rather with the ability to quickly ramp up production when demand is high, said Sandy Louey, media relations manager for the California Energy Commission, in an email. About 150,000 electric vehicles were sold in California in 2018 — 8% of all state car sales.

The state projects that electric vehicles will consume 5.4% of the state’s electricity, or 17,000 gigawatt-hours, by 2030.

 

 

Florida Phoenix – January 9, 2020

FL Supreme Court tosses electric utility deregulation proposal off the 2020 ballot

The proposal was closely modeled on Texas’ deregulation under former Gov. George W. Bush.

The Florida Supreme Court on Thursday rejected a proposed state constitutional amendment that sought to deregulate Florida’s electric utility market, saying the ballot summary would be misleading to voters.

The unanimous decision from the state’s highest court removes the measure from the 2020 general election ballot.

The proposal, sponsored by the group Citizens for Energy Choice, called for Florida to deregulate wholesale and retail electricity markets to give customers “meaningful choices among a wide variety of competing electricity providers.”

Related: Virginia Lawmakers Move to Dismantle Energy Monopoly

 

 

Clean Technica – January 5, 2020

Utility-Scale Solar Has Led U.S. Solar Since 2012

The utility-scale solar sector has led the overall U.S. solar market in terms of installed capacity since 2012. In 2018, the utility-scale sector accounted for nearly 60% of all new solar capacity, and is expected to maintain its market-leading position for at least another six years. More than three-quarters of all states, representing all regions of the country, are now home to one or more utility-scale solar projects.

This report — the seventh in an ongoing annual series — provides in-depth data-driven analysis of the utility-scale solar project fleet in the United States. Drawing on empirical project-level data from a wide range of sources, this report analyzes technology trends, installed project prices, operating costs, capacity factors, power purchase agreement (“PPA”) prices, the levelized cost of solar energy (LCOE), and the market value of solar.

 

Alternatives & Renewables

 

Energy Voice – January 6, 2020

German firm powers up solar farm in heart of Texas oil field

German utility RWE has completed construction of a 100-megawatt solar farm in heart of the West Texas oil patch.

The facility, southwest of Midland-Odessa in the Permian Basin, has a long-term contract with SK E&S a South Korean natural-gas and renewable-power company.

The project is RWE’s first solar project in Texas, the company said in a statement on Monday.

 

 

Power Technology – December 10, 2019

Innovative Solar Systems to divest two solar PV projects in US

US-based Innovative Solar Systems (ISS) is all set to divest two large-scale solar photovoltaic (PV) projects in Texas.

The first 125MW solar PV farm project is located in Fisher County while the second one with 300MW capacity is located in Jones County. The two projects are expected to be commissioned in December 2021 and February 2023 respectively.

ISS said in a statement: “These projects’ locations, proximity to major transmission assets, economies of scale, lucrative offtake, and economic position in the ERCOT market make them ideal projects for development by an investor.

 

Regulatory

 

The Hill – January 9, 2020

Trump says ‘nothing’s a hoax’ about climate change

President Trump said Thursday that “nothing’s a hoax” about climate change, the same day that he announced a rollback to a major environmental law.

“Nothing’s a hoax about that. It’s a very serious subject. I want clean air; I want clean water. I want the cleanest air with the cleanest water. The environment’s very important to me,” Trump told reporters.

“I also want jobs. I don’t want to close up our industry because somebody said you have to go with wind or you have to go with something else that’s not going to be able to have the capacity to do what we have to do,” he added.

 

___________________________________

 

The Texas Energy Report NewsClips – January 9, 2020

Subscriber’s Edition

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

Reuters – January 8, 2019

Occidental Petroleum slashing jobs ‘significantly’ in cost-cutting move

Occidental Petroleum Corp said on Wednesday it would begin dismissing workers in a new cost-cutting move following its $38 billion acquisition of Anadarko Petroleum.

The company has already “significantly” cut staff through a voluntary program, spokeswoman Melissa Schoeb said in an email. She did not respond to requests for information about the number of employees to be cut or any potential charge to earnings.

The combined company had about 16,000 workers when it merged.

Occidental has been selling assets and cutting costs since it outbid Chevron Corp last year for Anadarko, quadrupling its debt to $40 billion. In November it said it planned to slash spending by about $3.6 billion this year, or by 40% of the 2019 total, and trim production goals to meet dividend and debt payments.

 

 

Power Engineering – January 7, 2019

Sempra Energy solidifies $10B in Texas investment with Houston regional HQ plan

San Diego-based utility holding company Sempra Energy will build a “Center of Excellence” facility in Houston.

Sempra’s emergence in the liquefied natural gas (LNG) business has led it to opening a new regional headquarters in Houston. The new office is expected to open later this year.

“We are committed to building the premier energy infrastructure company in North America, and creating a regional headquarters in Houston advances our business strategy,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy. “Texas is a remarkable market, and our Houston Center of Excellence will allow us to add hundreds of new engineering and construction positions to support our growing liquefied natural gas (LNG) business in the Gulf region, while also allowing us to showcase our company’s commitment to innovation, technology and leadership within the energy industry.”

 

 

Houston Chronicle – January 8, 2019

Nearly $1B Gulf Coast Ammonia plant in Texas City to begin construction

A nearly $1 billion Gulf Coast Ammonia plant to help manufacture fertilizers received final approval to begin construction this year in Texas City near Galveston, the companies said Wednesday.

The plant would produce 1.3 million tons of ammonia per year from nitrogen gas and hydrogen feedstock with an estimated completion date in 2023. The project would create more than 40 permanent jobs and about 1,000 temporary construction positions.

The project, which has faced opposition from environmentalists, the seafood industry and more, was developed by Miami-based Agrifos, but has now been acquired and jointly funded by the Connecticut-based private equity firm Starwood Energy Group and the German energy trading firm Mabanaft. The new backers are providing the influx of capital to commence construction.

 

 

Wall Street Journal – January 8, 2020

Jason L. Riley: Be Prepared for President Sanders

Bernie Sanders significantly outraised his Democratic presidential rivals in the final three months of 2019. He is very much in the hunt for the first three contests of the primary season. He has run second, behind Joe Biden, in national polls for most of the past year and matches up better head-to-head against President Trump than either Elizabeth Warren or Pete Buttigieg. When Sanders supporters complain that the political press isn’t giving their guy the attention he deserves, they have a point.

Odds are that the Vermont senator won’t be the next president, but it isn’t out of the question. The RealClearPolitics polling average has him leading in Iowa and New Hampshire and less than a point out of second place in Nevada, the third contest. If he were to win a couple of these early races, he could lose the fourth in South Carolina, where he trails badly, and still have some momentum going into Super Tuesday on March 3.

 

 

Oilfield Technology – January 8, 2020

US EIA: Crude oil prices were generally lower in 2019 than in 2018

The price of Brent crude oil, the international benchmark, averaged US$6/bbl in 2019, US$7/bbl lower than its 2018 average. The price of West Texas Intermediate (WTI) crude oil, the US benchmark, averaged US$57/bbl in 2019, US$7/bbl lower than in 2018.

Compared with recent years, both crude oil prices traded within relatively narrow price ranges throughout the year. Brent prices reached an annual daily low of US$55/bbl in early January, rising to a daily high of US$75/bbl in late April. The resulting range of US$20/bbl is the narrowest since 2003. WTI prices ranged from US$47/bbl to US$66/bbl.

More recently, crude oil prices have increased following the 3 January US military operation in Iraq, likely reflecting an increase in geopolitical risk.

 

Oil & Gas

 

Reuters – January 9, 2020

Oil steadies a day after Iranian missile strike knocks prices

Oil prices steadied on Thursday a day after tumbling on concerns raised by an Iranian missile strike on Iraqi bases hosting U.S. forces.

Brent crude futures were down 5 cents at $65.40 a barrel by 0728 GMT after a 4.1% fall on Wednesday.

They are now lower than they were ahead of the Jan. 3 killing of Iranian military commander Qassem Soleimani in a U.S. drone attack in Iraq, which prompted the Iranian response.

West Texas Intermediate futures were up 1 cent to $59.63 a barrel after falling nearly 5% a day earlier.

“An 8% range in the last 24 hours has probably cleaned up all the short-term positioning, long or short, and left market participants a bit breathless,” said Jeffrey Halley, senior market analyst at OANDA.

In Thursday’s attack, two rockets fell on Baghdad’s Green Zone, which houses foreign missions and government buildings.

 

 

Wall Street Journal – January 8, 2020

Iran Strikes Reverberate Across Persian Gulf Economy

Two major tanker operators, including Saudi Arabia’s state-controlled Bahri, suspended crossings in the Strait of Hormuz Wednesday, as the economic fallout from rising U.S.-Iranian tensions, including an Iranian military strike on U.S. bases in Iraq, rippled throughout the region.

Hours after Iran’s attacks, the economic reverberations jolted the Persian Gulf region. Strikes between the U.S. and Iran now threaten to disrupt vital travel and trade routes in what would be a devastating blow for Gulf countries seeking to diversify from a dependence on oil.

A third operator, oil giant Saudi Aramco, was considering diverting tankers carrying its products to avoid the Strait of Hormuz, according to people close to the oil giant. Aramco didn’t immediately respond to requests for comment. Aside from Bahri, Brazilian oil company Petrobras also kept some of its tankers away from the Strait.

 

 

North American Shale – January 7, 2020

Solar-infused water treatment system set for Permian

Economically treating oilfield produced water for agricultural use may become a reality in the prolific Permian Basin through a new partnership’s vision.

Currently, more than 90 percent of produced water is injected into disposal wells, with the rest minimally treated and used in hydraulic fracturing. Removing enough impurities for agricultural use is generally deemed possible, but prohibitively expensive.

Cheyenne, WY based Encore Green Environmental has entered into a Memorandum of Understanding with Wilson Farms in Midkiff, TX to host a cutting-edge process utilizing produced water in concentrated solar power (CSP) to generate the electricity whose sale into the grid would fund the operation. Spent steam from the CSP would be condensed back into liquid, creating water clean enough for conservation and agriculture. Ongoing solar tax credits would boost profitability.

 

 

Houston Chronicle – January 8, 2019

Newly formed Houston pipeline company lands $400 million in financing

A newly formed Houston pipeline company has landed $400 million in financing from San Antonio private equity firm EnCap Flatrock Midstream.

Launched just before Thanksgiving and headquartered off Post Oak Boulevard in Houston’s Galleria district, Edgewater Midstream is seeking to build crude oil, refined products and other bulk liquid pipelines.

The company plans to use the $400 million to buy, build and operate pipelines and storage terminals in petroleum trading hubs and demand centers in North America where development in the shale basins in Texas and elsewhere has allowed the United States to grow production and exports.

 

 

Houston Chronicle – January 8, 2019

Enterprise exports first ethylene cargo from Morgan’s Point*

Houston pipeline operator Enterprise Products Partners and British liquefied gas shipping company Navigator Holdings have exported their first cargo of ethylene from their newly completed dock at Morgan’s Point.

A Liberian-flagged tanker named the Navigator Europa left the Enteprise’s docks on Jan. 2 with a 25 million pound shipment of ethylene for the Marubeni Corporation in Japan. The liquefied petroleum gas tanker is currently waiting to move through the Panama Canal before heading to Asia.

The cargo marks the first ethylene export shipment for Enteprise and its Morgan’s Point facility.

 

 

Associated Press/Midland Reporter Telegram – January 8, 2019

Company eyes Texas-New Mexico fracturing sand transport system

A [Loving, NM] company is seeking to build a multi-mile conveyor belt system that could bring sand for hydraulic fracturing from West Texas into southeast New Mexico.

The Atlas Sand Company wants to erect a 16.5-mile (10.4 kilometer) covered conveyor belt system to carry the sand from an offloading facility in Loving County, Texas, to a proposed 140-acre (56.6 hectare) loadout facility near Loving, New Mexico, the Carlsbad Current-Argus reports.

The company is seeking a permanent, 70-foot-wide (21.3-meter-wide) right of way across an area managed by the Bureau of Land Management. The project was intended to reduce truck traffic in the area, the main method of transporting sand to well sites.

 

 

KXAN (Austin) – January 8, 2020

Texas’ ties with Iran more than just oil

The Texas economy is tied directly to the oil trade coming out of Iran. Texas actually produces more oil than Iran. In 2018, the state produced more than 4.8 million barrels per day, while Iran produced 4.7 million barrels. Just last year, Texas produced more than five million barrels per day.

“We have become energy independent in the U.S. and I think Texas has led the way in that independence”, said Texas Representative Michael McCaul. “That really does impact our foreign policy.” ….

Texas has one of the largest Iranian American populations in the country, with the largest population center found in Houston. 6-10% of Iranian Americans live in Texas, according to the University of Texas.

 

 

Houston Chronicle – January 8, 2019

EOG Resources sells saltwater disposal wells in New Mexico

Houston oil giant EOG Resources has sold nearly half of its saltwater disposal wells in the New Mexico side of the Permian Basin.

EOG Resources confirmed the sale of 23 saltwater disposal wells and 300 miles of oilfield wastewater gathering pipelines in southeastern New Mexico to Dallas-based Oilfield Water Logistics.

Financial terms were not disclosed but under the deal, EOG entered into a long-term contract with Oilfield Water Logistics for wastewater disposal services.

 

 

Houston Chronicle – January 9, 2020

Texas oil and gas greenhouse pollution could negate progress on emissions, report says

Oil and gas industry expansions could add as much greenhouse gas pollution as the equivalent of 50 coal plants by 2025 — with much of that increase coming from Texas and Louisiana — at a time when pressure to slow down global warming rises, a new report found.

Over the next five years, the industry plans to build or expand 157 plants, in addition to more drilling that could release up to 227 million tons of greenhouse gas emissions — up to 30 percent more more than 2018, according to the Environmental Integrity Project’s new report, “Greenhouse Gases from Oil, Gas, and Petrochemical Production.”

Although greenhouse gas emissions in the United States fell about 2 percent last year, mostly as a result of a decrease in coal consumption, that modest progress is being undercut by the expansion in the oil and gas industry, said Eric Schaeffer, executive director of the Environmental Integrity Project, a Washington, D.C.-based nonprofit organization that advocates for enforcement of environmental laws. It was founded in 2002 by former Environmental Protection Agency attorneys.

 

 

Dallas Morning News – January 8, 2020

CES 2020: You’ll soon be able to pay with Alexa at Exxon and Mobil stations*

The annual CES technology conference in Las Vegas runs through Friday and offers a forum for big companies and startups to unveil their products and services for the coming year. …

Later this year, people who have Amazon’s voice assistant Alexa in their cars will be able to drive into gas stations owned by Dallas-based Exxon Mobil and say, “Alexa, pay for gas.” Alexa will ask you to confirm the station and which pump you’re using, and your Amazon card will get charged.

Sorry, but Alexa won’t pump your gas for you. You’ll have to get out of the car for that.

The new feature is part of Amazon’s push to get into more cars. At CES, the online shopping giant announced several deals with automakers, including bringing Alexa to Lamborghinis and its Fire TV streaming service to BMWs.

 

 

Community Impact Newspaper – January 7, 2020

Summit Midstream Partners to move headquarters from The Woodlands to Houston this spring

Summit Midstream Partners, LP announced Jan. 6 that it plans to relocate its headquarters from Hughes Landing in The Woodlands to downtown Houston this spring. According to a press release, the move will be effective March 1.

Summit said the relocation will include its corporate teams from offices in both The Woodlands and Atlanta, where the company was founded. Summit’s new office will be located across two floors at the One Shell Plaza tower at 910 Louisiana St., Houston. …

Summit’s relocation notice comes about one week after another The Woodlands-based energy company, Occidental Petroleum Corp., announced it would be retaining its local office presence. Occidental said it would continue to occupy space at the property and landmark towers in The Woodlands Town Center formerly occupied by Anadarko Petroleum Corp. after selling the towers to The Howard Hughes Corp. in December. Occidental acquired Anadarko and its assets last August.

 

Utilities

 

The Texas Energy Report – January 9, 2019

New Report Lauds US Power Sector for Significant Drop In Greenhouse Gas Emissions*

The US power sector was outstanding last year in the fight against greenhouse gas emissions, with a year-over-year decrease of about 10%, the largest in decades, according to a new report.

In the overall economy, greenhouse gas emissions were down by more than 2% during 2019, largely because of the closing of coal-fired power plants, based on preliminary data, following a 2018 increase.

New York City global trends research and policy company Rhodium Group‘s report said overall emissions in the power-providing sector dropped significantly last year, with coal-fired power generation down by 18% in 2019.

 

 

Hays Free Press – January 8, 2019

Kyle votes to challenge gas increase

The Kyle City Council on Tuesday voted to challenge a natural gas rate increase proposed by the Texas Gas Service Company (TGS) that was scheduled to take effect Feb. 6.

TGS has filed an intent to change the rate with the Railroad Commission of Texas “and in all municipalities exercising original jurisdiction,” which includes approximately 441 residential and 27 commercial customers, all located on the east side of Interstate 35.

The proposal would raise the price by 9.43 percent including gas costs or 15.64 percent excluding gas costs and would also consolidate the Central Texas Service Area, the Gulf Coast Service Area and the city of Beaumont into a new service area called the Central-Gulf Service Area (CGSA).

 

 

Bloomberg News/Yahoo! News – January 7, 2020

World’s Largest Bitcoin Mine Lures New Clients to Texas Hotspot

SBI Holdings Inc. and Japanese internet-service provider GMO Internet Inc. are about to start extracting Bitcoin at the world’s largest crypto mine, located in the industry’s new hotspot: Rockdale, Texas.

The two firms have in principle agreed with Northern Bitcoin AG subsidiary Whinstone Inc. to process cryptocurrency transactions at the German company’s facility within the coming months, according to people familiar with the matter.

Renting out capacity to SBI Crypto, a unit of SBI Holdings, and GMO may help Northern Bitcoin to get further large, crypto-savvy investors on board, the people added, asking not to be identified because the matter is private. Spokesmen for Northern Bitcoin, GMO and SBI declined to comment.

 

 

Wall Street Journal – January 8. 2020

Most of Puerto Rico Without Power as Aftershocks Continue

Power returned to parts of Puerto Rico after a series of earthquakes caused widespread blackouts, toppled homes and schools and killed one person.

The Puerto Rico Electric Power Authority said it restored power for nearly 500,000 customers—about a third of the company’s 1.5 million customers—by Wednesday morning. It said it continued to make progress throughout the day, but didn’t specify figures. On Tuesday night, power had been restored for just 100,000 customers, as well as to the island’s primary hospital in San Juan.

Gov. Wanda Vázquez said Tuesday the utility company was deploying personnel and resources to restore power as soon as possible.

 

Alternatives & Renewables

 

January 8, 2019

Longview News Journal: Wind farms a worthy alternative natural resource*

Wind is one of Mother Nature’s most powerful resources.

Its unruly momentum can unleash an unforgiving force of destruction that can severely damage everything in its path. But when its plentiful force is harvested through modern technology and converted into electricity, wind is an unlimited natural resource that can provide jobs, strengthen economies and encourage investments. …

No wind farms are online in East Texas, but at least one private Longview firm has expanded to service the industry in the state.

Though some wind generating facilities are popping up in the Coastal Bend region of South Texas, most of our state’s facilities are well to our west, stretching from Central Texas north into the Panhandle. And three of the top 10 largest wind farms in the world are in Texas: Roscoe Wind Farm southwest of Abilene, Horse Hollow Wind Energy Centre in Taylor and Nolan counties, and Capricorn Ridge Wind Farm in Sterling and Coke counties.

 

 

CNBC – December 16, 2019

US has only one offshore wind energy farm, but a $70 billion market is on the way

Just three years ago five giant wind turbines in the waters off Block Island, Rhode Island, started spinning 30 MW of electricity to that tiny community of about a thousand residents. While it remains the only offshore wind farm in the U.S., that’s about to dramatically change.

According to the Department of Energy, offshore wind has the potential to generate more than 2,000 GW of capacity per year, nearly double the nation’s current electricity use. Even if only 1% of that potential is captured, nearly 6.5 million homes could be powered by offshore wind energy within the next decade. …

“We are in an incredible growth period,” said Laura Morton, a senior director at the American Wind Energy Association in Washington, D.C. She cited a recent white paper from the Special Initiative for Offshore Wind that projects a $70 billion business pipeline in the U.S. by 2030.

 

 

Bloomberg News – January 7, 2020

A $1 Billion Solar Plant Was Obsolete Before It Ever Went Online

The Crescent Dunes solar plant looks like something out of a sci-fi movie. Ten thousand mirrors form a spiral almost 2 miles wide that winds around a skyscraper rising above the desert between Las Vegas and Reno. The operation soaks up enough heat from the sun’s rays to spin steam turbines and store energy in the form of molten salt.

In 2011 the $1 billion project was to be the biggest solar plant of its kind, and it looked like the future of renewable power. Citigroup Inc. and other financiers invested $140 million with its developer, SolarReserve Inc. Steven Chu, the U.S. Department of Energy secretary at the time, offered the company government loan guarantees, and Harry Reid, then the Senate majority leader and senior senator from Nevada, cleared the way for the company to build on public land. At a Washington celebration of SolarReserve’s public funding, Chief Executive Officer Kevin Smith told the assembled politicians, “We’re proud to be doing our part to win the future.”

SolarReserve may have done its part, but today the company doesn’t rank among the winners. Instead, it’s mired in litigation and accusations of mismanagement at Crescent Dunes, where taxpayers remain on the hook for $737 million in loan guarantees. Late last year, Crescent Dunes lost its only customer, NV Energy Inc., which cited the plant’s lack of reliability. It’s a victim, ironically, of the solar industry’s success over the past decade. The steam generators at Crescent Dunes require custom parts and a staff of dozens to keep things humming and to conduct regular maintenance.

 

Regulatory

 

Dallas Morning News – January 7, 2019

Key Senate panel approves USMCA, with John Cornyn backing a ‘good’ but ‘not a perfect’ trade deal*

The Senate Finance Committee on Tuesday approved President Donald Trump’s revamp of the North American Free Trade Agreement, with Texas Sen. John Cornyn among those voting in favor of a deal that has significant implications for the Texas economy.

The bipartisan 25-3 vote came despite some grumbling from Cornyn and other Republicans, who felt the Trump administration of late had made too many concessions to Democrats.

“This is a good agreement. It’s not a perfect agreement,” Cornyn said ahead of the committee vote, which saw only two Republicans and one Democrat oppose the U.S.-Mexico-Canada Agreement. “On net, it deserves my support.”

Also: Analysis: Natural gas exports to Mexico rebound, but volatility likely to continue

 

 

S&P Global Platts – January 8, 2020

‘Deja vu’ for Colorado’s oil and gas industry as group files new ballot initiatives

Last April, Colorado Governor Jared Polis (D) said, “…it is our hope that the oil and gas wars that have enveloped our state are over,” but the conflict appears far from over as the same group behind Proposition 112 has filed six new ballot initiatives with the state, with five of those pushing for longer drilling setbacks.

Proposition 112, which called for drilling setbacks from occupied structures and vulnerable areas to increase from 500 feet to 2,500 feet, failed at the ballot box 57% to 43% in November 2018. The victory for the state’s oil and gas industry was not without costs, though, as major companies such as Extraction Oil and Gas, Anadarko, Noble Energy and others spent a combined $40 million-plus to campaign against the proposition.

Similar to Prop 112, most of the proposed ballot initiatives, filed Tuesday, involve drastically increasing setbacks for all new oil and gas development.

“The people of the state of Colorado hereby establish that all new oil and gas development not on federal land must be located at least 2,500 feet from an occupied structure or vulnerable area,” reads one of the propositions proposed by the group Colorado Rising.

 

____________________________

 

The Texas Energy Report NewsClips – January 8, 2020

Subscriber’s Edition

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

Bloomberg News -January 7, 2020

The Permian Gas Problem Is Just Getting Worse*

Natural gas has long been a nuisance in the Permian, where a massive glut weighs on prices, with crude producers sometimes having to pay to get it hauled away or burn it off in a controversial practice known as flaring. Now the problem is intensifying as wells age and fewer new wells are drilled.

Shale wells produce a spew of oil when they’re first fracked, but over time, production falls — sometimes as much as 70% in the first year — and gas becomes a bigger part of the mix.

“Activity levels are no longer what they were,” said Artem Abramov, head of shale research at Rystad Energy. “The oil ratio is no longer sufficient to offset gas in older wells, so we’re seeing some increase in basin-wide” gas-to-oil ratios.

It’s an issue that’s made worse when subsequent wells are drilled too close to the initial one, or when there’s interference from another producer’s neighboring wells.

 

 

Wall Street Journal – January 7, 2020

U.S. Oil Company Confirms Big Find in Mexico*

One of Mexico’s largest oil discoveries of the last two decades, the Zama field in the shallow waters of the southern Gulf of Mexico, likely contains 670 million barrels of recoverable oil, according to new estimates released by a consortium of drilling companies that owns rights to it.

First production from the find is expected within three years, although investors are concerned that the project could be delayed by negotiations with the Mexican government over the joint development of an adjacent field owned by state oil company Petróleos Mexicanos, or Pemex, according to people familiar with the matter.

Talos Energy Inc., TALO 1.23% a Houston-based driller, said Tuesday that the evaluation of Zama’s resources by the oil-and-gas consulting firm Netherland, Sewell & Associates put reserves at the high end of the initial estimated range.

 

 

Dallas Morning News – January 7, 2019

Texas officials fear Iranian cyberattack attempts may be increasing*

Cyberattack attempts originating in Iran are increasing, Texas officials said Tuesday.

Over the previous two days, as many as 10,000 “probes” of state agencies’ IT systems per minute came from Iran, according to Gov. Greg Abbott and state Department of Information Resources executive director Amanda Crawford.

“It’s very important that everybody be particularly vigilant right now about what may happen out of Iran,” Abbott said.

He revealed the potential cybersecurity threat in remarks to reporters after the quarterly meeting of a group he created to combat domestic terror after the Aug. 3 mass shooting in El Paso that left 22 people dead.

In recent days, after the federal Department of Homeland Security urged increased monitoring for possible cyberattacks from Iran, the department looked more closely at whether attempts from Iran were increasing, Crawford said.

 

Laredo Morning News – January 7, 2020

It’s ‘gas and oil,’ as oil lobby addresses climate

Meet the “gas and oil” industry.

In an ad campaign launched Monday to highlight oil and gas companies’ efforts to address global warming, the American Petroleum Institute, the sector’s biggest lobbying group, reversed the industry’s traditional moniker to focus on natural gas, a fossil fuel with lower carbon emissions than oil.

“This is natural gas and oil,” the ads read, “This is energy progress.”

Within the oil industry, natural gas has long been secondary to crude, regarded with so little value historically that it was burned off at the wellhead — a practice that continues to this day in areas without adequate pipelines. But with gas now flowing to power plants, chemical facilities and even to fueling stations for vehicles, it is a lucrative part of the industry and one expected to grow as the world moves to reduce emissions.

 

Oil & Gas

 

Reuters – January 8, 2020

Oil gains trimmed as tensions on Iran strike recede – for now

Oil markets calmed on Wednesday after prices had jumped to their highest in months in the wake of a rocket attack by Iran on American forces in Iraq that raised the spectre of a spiralling conflict and disrupted crude supplies.

Prices gave up a large part of their gains after the early surges as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks. Tweets by U.S. President Donald Trump and Iran’s foreign minister also appeared to signal a period of calm – for now.

Brent crude futures LCOc1 were up 97 cents, or 1.4%, to $69.24 by around 0403 GMT, after earlier rising to $71.75, the highest since mid-September 2019.

West Texas Intermediate crude futures CLc1 climbed 82 cents, or 1.3%, to $63.52 a barrel. It earlier reached a high of $65.85, the most since late April last year.

 

 

CNBC – January 7, 2020

Trump responds to Iranian attacks: ‘All is well!’

President Donald Trump has responded to Tuesday night’s attack by Iran on US and coalition forces stationed at bases in Iraq.

“All is well! Missiles launched from Iran at two military bases located in Iraq,” Trump tweeted. “Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far! I will be making a statement tomorrow morning.”

Shortly after 5 p.m. on Tuesday, Iran launched more than a dozen ballistic missiles against U.S. military and coalition forces in Iraq. It was not immediately clear if any U.S. service members were hurt in the strikes.

Also: Middle East tensions have put a floor under oil prices, says Marathon Oil CEO

 

 

Wall Street Journal – January 7, 2020

Escalating tensions in the Middle East are boosting oil prices, but some investors are skeptical the rally has legs after other recent geopolitical flare-ups in the market quickly eased.

Crude futures shot up as much as 4.9% Friday after President Trump ordered a strike in Baghdad that killed Iranian Maj. Gen. Qassem Soleimani. A top Iraqi paramilitary commander, Abu Mahdi al-Mohandes, also died. ….

“A lot of traders are selling geopolitical events,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “If you bought any geopolitical rally last year, you were wrong.”

In one striking example, crude spiked 15% in September after attacks in Saudi Arabia took out a large portion of the kingdom’s production capacity. They returned to preattack levels in less than two weeks, causing some investors to conclude the amount of oil flooding global markets was overriding geopolitical considerations.

 

 

Reuters – January 7, 2020

Apache shares jump 27% on major discovery in Suriname with Total

Apache Corp and Total SA said on Tuesday they had made a major oil discovery in a closely watched area off the coast of South America’s Suriname, sending Apache’s shares surging nearly 27%.

The discovery, dubbed “among the most anticipated in the world” by one brokerage, is seen as central to Apache’s efforts to reduce its reliance on the Alpine High venture in Texas’ Permian basin, which has suffered from diving natural gas prices.

Analysts said it was impossible to ascertain as yet how much oil the well would generate but it is just over the border from Exxon Mobil-led discoveries off Guyana that are estimated to hold more than 6 billion barrels of oil.

 

 

Houston Chronicle – January 6, 2020

Port Arthur LNG takes step forward with Saudi support*

A proposed liquefied natural gas export terminal in Port Arthur took a step forward following a new agreement between the developer and Saudi Aramco.

In a joint statement released on Monday morning, San Diego utility company Sempra Energy and Saudi Aramco announced the signing of an interim project participation agreement, which details how the two companies will work together on pre-final investment activities.

Details of agreement were not immediately available but Saudi Aramco had previously entered into a May 2019 deal where the company agreed to buy a 25 percent stake in the proposed export terminal as well as 5 million metrics tons per year of its LNG production.

 

 

S&P Global Platts – January 7, 2020

BP to sell North Sea Andrew, Shearwater assets to Premier Oil

BP is to sell its stakes in the UK Andrew area oil facilities and the Shearwater gas and condensate hub to independent Premier Oil for $625 million, the companies said Tuesday.

The announcement means a further withdrawal of BP from the core North Sea as it concentrates mainly on West of Shetland fields such as Clair and Schiehallion.

“We are confident that Premier Oil, already a significant operator in the North Sea, is the right owner of these assets as they seek to maximize their value and extend their life,” BP regional president Ariel Flores said in a statement.

Premier said the assets it is purchasing from BP represented current production of 23,000 b/d of oil equivalent, with potential for increases from a possible additional development.

 

 

San Antonio Express News – January 7, 2020

Hackers post Iranian General Soleimani’s photo on Texas Ag website*

The FBI is investigating a cyber attack on Tuesday that replaced the Texas Department of Agriculture website with pro-Iranian messages and a photo of General Qassem Soleimani, who was killed by a U.S. airstrike that has sparked escalating conflict with Iran.

A message posted along with the image of Soleimani read “Hacked by Iranian Hacker” and “Hacked by Shield Iran,” according to Vice News, which was first to report the website defacement.

“Our system immediately caught it. We immediately shut it down,” said Texas Agriculture Commissioner Sid Miller, who confirmed the FBI investigation.

 

 

Epoch Times – January 7, 2020

China Hits Record Oil Imports as Iran Crisis Risks Energy Security*

China is hitting all-time records for daily crude oil import volumes, just as the military confrontation between the United States and Iran threatens China’s energy supply security.

The General Administration of Customs announced that China’s monthly oil imports on a daily basis hit a record 11.13 million barrels per day (bpd) in November, up from 10.72 million bpd in October and 9.61 million bpd in November last year. At the current pace, China has passed the U.S. peak crude oil import level of 10.1 million bpd in 2005.

 

 

Carlsbad Current Argus – January 7, 2019

Fracking sand transport system to bring sand to southeast New Mexico from West Texas*

A multi-mile conveyor belt system could bring sand for hydraulic fracturing from West Texas into southeast New Mexico, where a boom in oil and gas production was led by the practice known as fracking.

Fracking is used to break up underground shale rock by pumping water and sand underground so that oil and gas can be extracted.

Each shale well uses millions of pounds of frac sand or other proponents to achieve the fracking process.

Atlas Sand Company is hoping to capitalize on this need in New Mexico by building an about 16.5 mile covered overland conveyor belt system to carry the sand from an offloading facility in Loving County, Texas to a proposed 140-acre loadout facility in Lea County.

The project was about 29 miles southeast of Loving.

 

 

Houston Chronicle – January 7, 2020

Manufacturing activity in Texas rebounded in December

A slowdown in the oil and gas industry has meant that companies are buying fewer local manufactured goods

Growth in the Texas manufacturing sector rebounded in December, according to a survey of business executives conducted by the Federal Reserve Bank of Dallas.

After dipping into negative territory in November, the manufacturing production index, a measure of the state’s manufacturing conditions, was up to 3.6 in December. Positive readings generally indicate expanding activity in the sector, while negative readings generally indicate contraction.

 

 

Kallanish Energy – December 30, 2019

O&G companies adopting virtual reality: GlobalData

Oil and gas companies are finding innovative ways to capitalize on the benefits of virtual reality (VR) technology, according to data/analytics company GlobalData.

The new report Virtual Reality in Oil & Gas – Thematic Research, details how oil and gas companies using VR for subsurface studies, training and simulation, and for developing and improvising processes and products, Kallanish Energy reports.

Among the oil and gas companies adopting virtual reality trends, according to GlobalData are:

Baker Hughes deploys VR technology to simulate oil and gas facilities within training rooms. VR helps the company to focus on the digital design of the equipment down to the minute details. It offers a higher level of accuracy and clarity about the equipment and working mechanism before the installation phase.

 

 

Mineral Wells Index – January 7, 2020

No injuries reported following explosions, fire at oil company

Several chemical explosions rocked the Industrial Park area near Mineral Wells High School early Monday afternoon.

No injuries were reported to workers or firefighters as a result of three explosions at Buckley Oil Company on S.E. Industrial Parkway, off U.S. Highway 180 East adjacent to Southwire, Reeder Distributors and Mineral Wells Fire Department Station No. 2. ….

Mineral Wells Fire Chief Mike Pool said five workers were inside a large covered, but not totally enclosed, area preparing what he described as two 600-gallon totes containing volatile chemicals heptane and toluene. Heptane is a main component of gasoline, while toluene is a gasoline additive and is used as a solvent.

 

 

Houston Chronicle – January 6, 2020

Chris Tomlinson: 2020 offers little promise for oil and gas*

The same supply and demand dynamics that crushed so many companies in 2019 show no signs of evolving, which is terrible news for the Texas economy. Professional analysts vary widely in their exact predictions for the energy industry, but few see any evidence of higher profits.

“Crude oil prices will be lower on average in 2020 than in 2019 because of forecast rising global oil inventories, particularly in the first half of next year,” the U.S. Energy Information Administration said last month.

Politicians and industry boosters love to brag about how Texas ingenuity led to horizontal drilling and hydraulic fracturing of shale rock to release valuable energy molecules. Today Texas produces more oil and gas than ever, but sadly, the world does not need it.

 

 

Carlsbad Current Argus – December 28, 2019

Permian Basin natural gas operators work to cut waste water costs, up capacity*

A pilot project to treat waste water from oil and gas operations was completed this month in the Permian Basin, while oil and gas operators continue work to address water issues in the desert region.

Gradiant Energy Services announced the completion of the project using the company’s Carrier Gas Concentration (CGC) technology in a Dec. 17 news release.

The CGC technology is used in remote areas with water disposal constraints and was expected to go into full service in the region by 2020.

Traditionally, produced water is disposed of via injection wells, but companies recently began looking into new ways to treat and reuse produced water brought to the surface during the extraction process.

 

 

Wall Street Journal – January 7, 2020

Iraq Oil Industry’s Progress Is Threatened by Tensions*

Iraq’s hopes of rivaling Saudi Arabia for regional oil dominance, already hurt by a pullback in foreign investment, are facing new challenges from escalating conflict and threats of sanctions from President Trump, say oil executives and Iraqi officials.

Iraq was expected to be the third largest contributor to global oil-production growth in the decade up to 2030, behind the U.S. and Brazil, according to the International Energy Agency, but the U.S. airstrike last week that killed Iranian Maj Gen. Qassem Suleimani in Iraq has raised risks for foreign oil companies operating there.

“Iraq’s success story is at risk,” said Helima Croft, global head of commodity strategy at Canadian broker RBC.

 

Utilities

 

Las Cruces Sun News – January 7, 2020

New Mexico agencies, Las Cruces, reach agreement in pending El Paso Electric sale

The pending $4.3 billion sale of El Paso Electric has cleared another hurdle.

The J.P. Morgan Chase-tied Infrastructure Investments Fund, or IIF, and El Paso Electric have made a settlement agreement on sales terms with seven New Mexico government agencies and organizations, including the city of Las Cruces, and a Las Cruces resident that intervened in the review of the pending sale with the New Mexico Public Regulation Commission.

El Paso Electric and IIF announced the agreement Monday. It was filed with the New Mexico commission Jan. 3.

The agreement still must be approved by the New Mexico commission, which has scheduled a hearing on it for Jan. 16 in Santa Fe.

 

 

KTSM (El Paso) – January 7, 2020

Clock ticks for El Paso City Council to vote on proposed El Paso Electric merger, franchise agreement

El Paso City leaders are moving forward with the El Paso Electric (EPE) sale to IIF, however still have many questions yet to be answered when it comes to finalizing the proposed franchise agreement.

The clock is ticking for El Paso City Reps. to make a decision whether or not they will approve the proposed franchise agreement.

City staff warned council the potential loss it could face if choosing to ultimately deny it.

 

 

El Paso Herald Post – January 7, 2020

Ryan Brown: El Paso Electric Plan — Record Low Solar Price, Unnecessary Gas Plant

El Paso Electric’s (EPE) agreement with Hecate Solar is not only a good deal, it may be record-setting.

In a November 18, 2019 filing with the New Mexico Public Regulation Commission (NMPRC), EPE applied for the approval of three Purchase Power Agreements (PPA), which are long-term contracts for the purchase of electricity.

The December 19 El Paso Herald-Post article entitled “El Paso Electric plans to add Utility-Scale Battery Storage, 100s of MWs of Solar Energy by 2023,” the capacity additions are highlighted but not the terms of the agreements.

 

 

Concord Mirror (VT) – December 30, 2019

David Brooks: Freezing air in Vermont may be a key to long-term electricity storage

I was excited to hear about another idea that’s also neat but we might actually see fairly soon: Freeze a lot of air so that it compresses, then let it thaw and have it spin a turbine as it expands.

“Yes, that’s about it,” said Salvatore Minopoli, vice president of U.S. operations for Highview Power. This British firm wants to build the country’s first “air liquefaction” storage site by 2022 in northern Vermont, where grid congestion sometimes occurs when wind farms are over-producing.

Although the technology sounds straightforward, it has taken Highview more than a decade to turn storage via freezing air into utility-scale reality. The company has a plant in the U.K. operating since 2018 that can generate five megawatts of electricity for three hours and says they’re ready to move up an order of magnitude.

Their Vermont proposal could store enough energy in liquid air to generate 50 MW for eight hours, according to Highview. Fifty megawatts isn’t a game-changer – Seabrook Station can generate 1,200 MW – but it isn’t trivial. It’s equal to almost all the large hydro dams in New Hampshire, combined.

 

Alternatives & Renewables

 

Power Technology – January 7, 2020

Pattern Energy starts construction works at 271MW wind facility in US

US-based renewable energy company Pattern Energy Group has started construction works at its 271MW Gulf Wind facility in Kenedy County, Texas.

Pattern Energy will remove the existing wind turbines at the facility and replace them with 118 new Siemens Gamesa SWT-2.3-108 turbines.

Siemens Gamesa Renewable Energy Onshore Americas CEO José Antonio Miranda said: “Repowering provides an opportunity to increase the efficiency, reliability and longevity of existing wind farms.”

The clean energy generated by the wind turbines will be sufficient to meet the electricity demand of approximately 80,000 Texas homes.

 

 

Popular Mechanics – December 11, 2019

Here’s What’s in Elizabeth Warren’s Blue New Deal

Elizabeth Warren’s “Blue New Deal” is a 17-point plan to restock, protect, and harness the world’s oceans.

All three big sections are close in length, but this one is the longest. That’s because the first bullet point, “Expand Offshore Renewable Energy,” is the longest in the entire plan.

Warren calls for $2 trillion in clean energy spending, partly to finance a dramatic expansion of wind and water energy gathered offshore. She also wants to invest $400 million in research into emerging energy technologies. This, she says, will benefit more than just our carbon bottom line: “By 2030, offshore wind energy development from Maryland to Maine could support more than 36,000 full time jobs.” Finally, the polar vortex can be your literal as well as emotional boss.

 

Regulatory

 

Austin American Statesman – January 7, 2020

Herman: Unsticking Texas Ag Commissioner Sid Miller’s gas pump stickers*

One could credibly argue that the Tuesday event at an H-E-B gas pump on East Riverside Drive was the biggest state government announcement of this genre since the 1989 reveal of the official Texas pot stickers.

What? Texas had an official version of the popular Asian dumpling? No, get your brain out of your belly. (Remember that new year’s resolution?)

Stick around, and we’ll get to pot stickers. First, let’s stick to the new state stickers that stuck it to Texas Agriculture Commissioner Sid Miller.

A little history about this odd cranny of state government: The Texas Department of Agriculture has regulated fuel pumps since the 1930s. Miller is not the first commissioner to stick his name on the stickers to pump up his name recognition a tankful at a time at Texas’ fuel pumps, which now number more than 400,000.

You might remember that his predecessor, Todd Staples, had his name on the stickers, albeit in smaller print. Actually, you probably don’t remember Staples. You’re pretty sure he merged with Office Depot.

 

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The Texas Energy Report NewsClips – January 7, 2020

Subscriber’s Edition

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Lead Stories

 

MarketWatch – January 6, 2020

Oil tycoon Harold Hamm predicts 19% jump in U.S. oil prices within six months, ‘regardless of what happens’ in the Mideast

Shale-oil baron Harold Hamm says prices are headed to $75 a barrel, regardless of the outcome of rising aggressions in the Middle East that has sent crude to multimonth highs: “I think we’re probably headed for $75 oil price in the next six months. That’s where the market’s going, and we’ll get there. It’s not too much to ask.”

Hamm said during a CNBC interview Monday that the market is headed toward a “tightening of supplies” regardless of what happens in the Mideast. “I’m not terribly worried what’s going right down in Iran,” he said. ….

Hamm on CNBC said that he doesn’t see a move to $75 a barrel by U.S. benchmark WTI as a big jump, given the health of the U.S. economy. He did say that he believed that members of the Organization of the Petroleum Exporting Countries want to see oil at $80. He didn’t clarify as to whether he meant U.S. oil or the global benchmark Brent.

 

 

Houston Chronicle – January 6, 2020

Chevron pulls employees out of Iraq amid escalation*

Chevron said Monday it will pull its employees out of Iraq temporarily amid an escalation in tensions following the United States’ targeted killing of Iran’s top military general.

Chevron said it was evacuating its workers and contractors from the Kurdistan Region in northern Iraq after the U.S. State Department urged Americans to flee Iraq because of concerns from Iran-backed militias and the potential targeting of Americans in the area.

“The safety of our people and facilities is Chevron’s top priority globally,” a Chevron spokeswoman said. “As a precautionary measure, Chevron’s expatriate employees and contractors have left the Kurdistan Region of Iraq for the time being.”

Also note: OPEC+ says will respond to any oil emergency from Iran crisis, but spare capacity tight

 

 

Texas Public Radio – December 31, 2019

Smart Home Experiment May Change How We Conserve Water, Build And Live

“We’re engineering a social change,” said Carol Lindquist, Texas Tech University associate professor of sociology and one of five co-investigators on the HUMS project (Home Utility Management System), which draws on disciplines ranging from social science to engineering to atmospheric science. They will do it with a spacious four-bedroom house, built by San Antonio startup Braustin Mobile Homes.

It looks like something you’d find on Airbnb under the post heading “Cabin in the country” or “You’ll love this quaint rural gem,” with descriptors like “off the beaten trail.” ….

Despite a nondescript exterior and isolated surroundings — it’s located on Texas Tech’s Llano Field Station — it will have something none of those other houses have: a smart-home system that monitors every drop of water and every watt of electricity, and then it tells you how to use it. It’s something that doesn’t currently exist in regular homes.

Lindquist said to influence people’s behavior, the end of the month water bill isn’t enough. People have to see their use in real-time. Subjects living here will know exactly how much water they have in their tanks, how they’re using it, how much rain is coming and, most importantly, suggestions on how to make the water last.

 

 

E&E News – December 23, 2019

Texas provides a case study. E&E News traveled 736 miles in the Lone Star State in September using up 205 kilowatt-hours of electricity that had to be replaced. When we charged overnight, we took advantage of Texas’ wind, nuclear and other zero-carbon power. They accounted for 37% of generation at the 2 a.m. hour, on average in September.

It is a much different picture on days when we charged at the 6 p.m. hour that same month. With electricity demand high, power from gas turbines surged more than 400% and coal generation climbed 78%, according to Electric Reliability Council of Texas data. Production from Texas’ nation-leading wind farms fell.

The road trip also dramatized the impact on EV charging of reducing power plant carbon emissions. Recharging our EV in Kentucky, with its coal plants, poured out nine times more carbon emissions per kilowatt-hour of energy charged than in Washington state, with its abundant zero-carbon hydropower, according to EIA data.

 

Oil & Gas

 

Reuters/New York Times – January 7, 2020

Oil prices slid on Tuesday as investors reconsidered the likelihood of Middle East supply disruptions in the wake of the United States killing a top Iranian military commander.

Brent crude <LCOc1> fell as much as 1.5% to $67.86 a barrel and was at $68.14, down 77 cents, at 0550 GMT. U.S. West Texas Intermediate (WTI) crude futures <CLc1> were at $62.62, down 65 cents, after earlier dropping 1.5% to an intra-day low of $62.30.

Prices surged during the previous two sessions, with Brent reaching its highest since September while WTI rose to the most since April. The gains followed fears of escalating conflict and potential Middle East supply disruptions after the Jan. 3 drone strike in Baghdad that killed Iran’s Qassem Soleimani. But, some analysts have tempered expectations for a widespread conflict.

 

 

The Deal – January 3, 2020

Alta Mesa Set to Test Lead Bid for Assets

Mach Resources LLC and Bayou City Energy Management LLC once again look to pick up assets in Chapter 11.

Court papers show Houston upstream energy company Alta Mesa Resources Inc. on Jan. 15 is set to auction its assets in connection with a $310 million stalking-horse offer from joint venture BCE-Mach III LLC. Bayou City, a Houston upstream-focused private equity firm, already is a backer of Alta Mesa.

The lead bid covers both Alta Mesa’s assets and those of its nonbankrupt Kingfisher Midstream LLC unit, which provides midstream energy services, including crude oil and gas gathering, processing and marketing and produced water disposal in the Stack play. Kingfisher would file for Chapter 11 by Jan. 15 to complete the sale, which would reserve $85.25 million for Kingfisher’s estate, with the remainder of proceeds allocated to Alta Mesa.

 

 

Houston Chronicle – January 6, 2020

Enbridge withdraws application for Texas COLT offshore crude oil export terminal

Canadian pipeline operator Enbridge is setting aside plans to build an offshore crude oil export terminal that would have been able to receive supertankers in the Gulf of Mexico just southwest of Houston.

In a filing over the holidays with the U.S. Department of Transportation’s Maritime Administration, or MARAD, Enbridge withdrew the company’s permit application to build the Texas Crude Offshore Loading Terminal, or Texas COLT project off the coast of Brazoria County.

Enbridge’s decision to scrap the Texas COLT project came shortly after the company decided to join forces with Houston pipeline operator Enterprise Products Partners to build the Sea Port Oil Terminal, or SPOT terminal.

 

S&P Global Platts – January 6, 2020

Aramco’s cash could keep US LNG projects on the bubble from bursting

US LNG export terminal developers are stepping up their courtship of Saudi Aramco to secure investments in their projects, following the state-owned oil and gas company’s IPO last month.

Aramco has vowed to pump almost $160 billion into growth in the natural gas sector over the next decade, with a sizable portion of that money to be designated for LNG projects overseas. Beyond the Middle East, Russia and Africa, it also has been looking intently at the US, where S&P Global Platts Analytics expects LNG export capacity to more than double to roughly 13.7 Bcf/d by 2025 versus 2019.

Seizing that opportunity, Sempra Energy’s proposed Port Arthur LNG export project in Texas reached a preliminary deal in May 2019 for Aramco to take a 25% stake, including a long-term commitment for 5 million mt/year of offtake from the facility.

 

 

Houston Chronicle – January 6, 2020

Oxy to make Western Midstream independent, reduce ownership*

Occidental Petroleum said Monday it will make its pipeline arm, Western Midstream Partners, an independent company and reduce its ownership stake in the firm in order to cut its overall debt load.

Houston-based Oxy acquired Western as part of its massive $38 billion purchase of Anadarko Petroleum last year, and a potential sale of Western was considered one of the best ways to help Oxy pay off the deal.

However, Western’s market value plunged by about 30 percent last year, putting any possible sale on hold. Western’s market value is currently about $10 billion.

 

 

Reuters/WSAU – January 3, 2020

These Houston residents dream of moving to where the air is clear

On the east side of Houston, the white plumes of the Texas oil and chemical refineries are a constant backdrop for residents of the Manchester neighborhood.

Late at night or early in the morning when plants burn off excess gases, the flames light up the whole sky in the neighborhood.

Some residents say the air has a chemical-based smell that they find hard to describe but disappears once they drive a few miles away from the homes that stretch along the Houston Ship Channel, a waterway connecting the plants to the ocean. They claim that the pollution is taking a toll on their health, although the scientific evidence does not prove that.

“I want to get out of here and go to the country and find some cleaner air,” said Eugene Barragan, a 56-year-old electrician who has lived most of his life by the refineries. “It would be better for me and the kids.”

 

 

CNBC – January 6, 2020

A lasting US-Iran conflict would cause ‘broad economic, financial shock,’ Moody’s says

“A lasting conflict would have wide-ranging implications through broad economic and financial shock that significantly worsen operating and financing conditions,” Moody’s senior analyst Alexander Perjessy wrote in a note to clients Monday.

“A protracted conflict would potentially have global repercussions, in particular through its effect on oil prices,” he added.

Following Thursday’s death of top Iranian commander Qasem Soleimani, on Sunday an Iranian state-run television broadcast said that the nation would no longer respect uranium enrichment restrictions set forth in 2015′s nuclear deal. Also on Sunday, the Iraqi parliament passed a resolution calling for an expulsion of foreign troops, which raises question about the future of the allied mission that has successfully fought the “Islamic State,” or ISIS, in recent years.

 

 

Oil Price – January 6, 2020

British Navy To Escort UK-Flagged Ships In Strait Of Hormuz

The British Royal Navy will escort UK-flagged vessels going through the world’s most vital oil choke point, the Strait of Hormuz, amid a sudden spike in tensions in the Middle East after the U.S. carried out an air strike in Baghdad that killed a high-ranking Iranian general.

“The government will take all necessary steps to protect our ships and citizens at this time,” Defence Minister Ben Wallace told media, as quoted by Reuters. To this end, the HMS Montrose and the HMS Defender will be deployed in the region again, after last year they escorted UK-flagged ships through the Strait of Hormuz following the seizing of an Iranian oil tanker by Gibraltar with the help of the UK that angered Tehran.

In retaliation, Iran captured a UK-flagged vessel in the Strait of Hormuz. The deployment of the HMS Montrose and the HMS Defender followed, with the UK and the United States urging other countries to join a coalition for the protection of vessels sailing through the vital oil chokepoint.

 

 

Reuters – January 6, 2020

Oil tanker flotilla steams toward U.S. as freight rates surge -sources, data

A flotilla of oil tankers is sailing empty from Europe and the Mediterranean toward the U.S. Gulf Coast to take advantage of surging shipping rates, according to shipping sources and Refinitiv Eikon data.

Eight tankers, an unusually high number, are in the Atlantic and steaming to the United States, with capacity of up to 5.6 million barrels of oil combined, the people said. Freight rates for Aframax vessels out of the U.S. Gulf coast hit record levels last month, drawing more vessels to the region.

The United States exported a record 4.46 million barrels of crude oil per day (bpd) in the week ended Dec. 27, according to the U.S. Energy Information Administration, as shale producers continued to deliver more oil than U.S. refiners can consume.

 

 

Houston Chronicle – December 30, 2019

Digital Roughnecks: Oil & gas industry grows tech workforce

A young and diverse class of tech workers are filling a new jobs such as scrum master, data scientist, cloud architect and user experience designer.

Like other companies in the industry, Canadian pipeline operator Enbridge recently opened a Silicon Valley-style tech lab at its Houston office.

Floor-to-ceiling windows, rows of standing desks, stylish furniture, free snacks, caffeinated drinks, toys, touch-screen TVs, video conferencing rooms, lounging areas and collaboration tables at the Houston lab allow employees drafted from different departments to come together and solve real-world problems for the pipeline company and its customers.

 

 

Analytics India – January 1, 2020

How leading AI solution providers are helping the oil & gas industry

The energy sector comes with huge concerns over the environmental impact, and therefore oil and gas companies are using innovative technologies to curb the environmental impact as well as achieve business goals. New technologies like directional drilling and hydraulic fracturing are aimed at increasing yields and boost the industry.

According to a report, the AI in the oil and gas market, worldwide, is expected to grow at a CAGR of 12.66%, to reach a market size of $2.85 billion by 2022. Currently, North America is leading the market followed by Europe and the Asia Pacific.

AI consists of various tools, such as machine learning, artificial neural networks, fuzzy logic and expert systems, which can help in transform data into actionable insights, which can be further used across various stages of exploration and production. These stages include seismic insights, drilling, metro physics, reservoir management and energy production.

 

 

Houston Chronicle – January 6, 2020

Drilling Down: Top 10 injection well operators in Texas*

Some 200 companies filed for 741 injection permits with the Railroad Commission in 2019. That’s slightly down from the 210 companies that filed for 800 permits in 2018.

The Permian Basin of West Texas accounted for nearly 89 percent of the injection well permits filed during 2019. Saltwater disposal well projects accounted for more than half of the permits.

Houston exploration and production company Occidental Petroleum led the pack with 81 permits filed by four subsidiaries. Known as Oxy, the company’s oil field wastewater disposal arm filed for 18 permits to develop vertical wells that would serve as saltwater disposal sites in Loving and Reeves counties. The remaining 63 permits appeared to be for projects to inject carbon dioxide underground to boost the productivity of the company’s oil and natural gas wells in the region.

 

 

Inside Climate News – December 30, 2019

Nicholas KusnetzL What’s Behind Big Oil’s Promises of Emissions Cuts? Lots of Wiggle Room.

The oil and gas industry seems to have entered a state of cognitive dissonance. Like never before, energy companies are publicly acknowledging the threat posed by climate change and the need for society to reduce greenhouse gas emissions. At the same time, oil and gas production in the U.S. and globally continues to soar.

Major oil companies have announced a series of commitments to reduce their emissions, even as they continue to invest in new projects that will boost production of the very fossil fuels that are driving climate change.

This tension has given rise to statements that seem to defy logic. In October, Michael Rubio, Chevron’s general manager for environmental, social and governance engagement, told The New York Times that “you can increase your fossil-fuel production, deliver superior returns for your shareholders, and still be compliant with Paris.”

 

 

Houston Chronicle – January 3, 2020

Jordan Blum, Reporter’s Notebook: Will 13 million barrels a day be lucky for US oil industry?

In late 2017, the United States crossed the threshold of producing 10 million barrels of crude oil per day and hasn’t looked back, surpassing Russia and Saudi Arabia as the world’s largest energy giant.

That 10-million-barrel mark was one reached only once before during a brief one-month blip way back in 1970. The United States lost its position as the top oil producer in the 1970s and it once seemed like the United States would never get there again.

After all, as recently as a decade ago, the nation was only churning out about 5 million barrels of oil per day, which is only marginally more than Iraq’s output. The shale revolution changed all of that as its focus switched from natural gas to crude oil.

 

Utilities

 

Daily Energy Insider – January 6, 2020

North American Electric Reliability Corporation releases 2019 Long-Term Reliability Assessment

Capacity resources are projected to meet increasing peak demand over the next 10 years, and the addition of new generation and storage will require continued improvements to system planning and operations, according to a recent report from the North American Electric Reliability Corporation (NERC).

According to NERC’s 2019 Long-Term Reliability Assessment, the installation of more than 330 gigawatts (GW) of solar and wind capacity is planned through 2029. The report also found that the rate of transmission infrastructure development required to support these resources will decrease from approximately 40,000 circuit miles earlier this decade to less than 15,000 circuit miles over the next ten years.

 

 

Corpus Christi Caller Times – January 6, 2020

Who is the Pattern Energy Group and why is it becoming more of a player in Texas?*

The Pattern Energy Group plans to bring new life to its 118-tower wind farm near Kenedy County, a move that promises to add to Texas’ growing wind energy portfolio.

Pattern Energy, a San Francisco company, on Monday announced it has closed financing and started construction on the repowering of its Gulf Wind facility. Doing so involves removing the current wind turbines and replacing them with new Siemens Gamesa SWT-2.3-108 turbines.

The new turbines are expected to generate 271 MW — or roughly the same amount of energy to power 80,000 Texas homes in a year. Mike Garland, Pattern Energy’s president/CEO, said repowering Gulf Wind with brand new turbines made “strong economic sense” because of the complex’s proximity to the Gulf Coast, an area known for high winds.

 

 

Houston Chronicle – December 27, 2019

Texans paid 9.6 cents per kilowatt hour for power in August*

Power prices have been coming down steadily since the August peak, according to the Energy Department.

The average retail price of electricity Texans paid in August jumped to 9.6 cents per kilowatt hour, the highest since 2015, reflecting triple-digit temperatures and record-setting wholesale power prices, according to a report released Friday.

The average retail price in Texas was 8.8 cents per kilowatt hour the year earlier, according to the Department of Energy, which issued the report tracking electricity prices back to 2015.

 

 

S&P Global Platts – December 31, 2019

2020s US electric sales to pivot on EVs, rooftop solar

Sales in the next decade [for US utilities] will pivot largely on two distinct energy transition wild cards: the rollout of electric vehicles, which boost demand for grid power, and continued growth in rooftop solar, which reduces it. Economic output will also play a large role, as will the spread of energy efficiency measures, which curb overall electricity demand, and the electrification of other sectors of the economy, which could expand it dramatically.

For investor-owned utilities in select states, there is the added uncertainty of customer migration to local government-run retail power agencies known as community choice aggregators, or CCAs.

Diverging scenarios in California, the leading U.S. market for electric vehicles and distributed solar arrays, highlight the planning challenges that, to varying degrees, will affect the power sector nationwide over the next decade.

 

 

The Hill – January 6, 2020

Shuttering of coal plants has saved 26K lives in US: study

The decline of coal could be saving thousands of lives as power plants reduce air pollution by switching to natural gas, according to a study published Monday.

More than 26,000 lives in the U.S. were saved over the course of a decade as a result of a drop in carbon emissions, along with smog and other pollutants tied with asthma and other ailments, according to a University of California, San Diego study published in the journal Nature.

Coal has been losing ground to both natural gas and renewable forms of energy like wind and solar, despite efforts by the Trump administration to bolster the industry.

 

Alternatives & Renewables

 

Victoria Advocate – December 30, 2019

Interest in solar grows as federal tax credit for wind is extended*

Papalote Creek Wind Farm extends for miles between Taft and Odem.

There, about 200 turbines stretch almost 300 feet into the sky and produce enough clean energy to power more than 100,000 homes. The turbines are among thousands that have been installed across the country in the past few decades, particularly in Texas – the nation’s largest wind power producer.

More than 27 gigawatts of wind capacity are online in the state, which has provided more than $46 billion in capital investment and built 46 wind equipment manufacturing facilities, according to the American Wind Energy Association.

A primary federal tax incentive that helped the wind energy industry rapidly grow was set to expire Dec. 31, but was extended through 2020 in a late change to the Further Consolidated Appropriations Act of 2020, which President Donald Trump signed into law Dec. 20.

Tom Kiernan, president of the American Wind Energy Association, said the move was a win for American consumers.

 

 

Wall Street Journal – December 5, 2019

GM, LG to Spend $2.3 Billion on Venture to Make Electric-Car Batteries*

General Motors Co. GM -0.31% and South Korea’s LG Chem 051910 +0.51% plan to build a large battery factory in Ohio, the latest example of an auto maker plowing money into the development of electric cars.

The new plant would be among the world’s biggest producing battery cells for electric cars, rivaling Tesla Inc. ’s Gigafactory in the Nevada desert. GM and the LG Corp. 003550 +2.54% subsidiary said Thursday they would invest a combined $2.3 billion in their joint venture.

Auto makers have been joining forces with battery makers as they gear up to spend about $225 billion to develop new electric-vehicle models over the next several years, according to consulting firm AlixPartners LP. Tightening fuel-efficiency and emissions regulations, especially in China and Europe, are prompting auto makers to electrify their vehicle lineups.

 

Regulatory

 

Carlsbad Current Argus – December 30, 2019

New Mexico congresspeople to improve electrical transmission, amid push for renewable energy*

New Mexico congresspeople hoped a federal bill intended to improve energy transmission infrastructure could provide a path to the state’s efforts to increase renewable energy.

U.S. Sen. Martin Heinrich (D-NM) introduced the Interregional Transmission Planning Improvement Act of 2019 earlier this month. The legislation was intended to strengthen the Federal Energy Regulatory Commission’s (FERC) interregional transmission planning process.

U.S. Rep. Deb Haaland (D-NM) introduced companion legislation in the U.S. House of Representatives. She said energy infrastructure throughout New Mexico and the country is outdated and could stymie the transmission of energy from new sources such as wind or solar facilities. The act, if passed, could support the planning process and allow more energy from renewable sources to be transmitted around the country and in remote areas, she said.

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The Texas Energy Report NewsClips – January 6, 2020

Subscriber’s Edition

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

 

CNBC – January 3, 2020

Why the killing of Iran’s top military leader could be a longer-term catalyst for oil prices

“I think we’re in unchartered waters,” said Helima Croft, head of RBC global commodities strategy. “This is not a run-of-the-mill general being assassinated. This is where it becomes really challenging for the market. I don’t think this is a one off. You may have a reprisal. It may be quiet for a period, then there could be another incident.”

Analysts say Iran’s unpredictability and web of proxies, like Hezbollah, creates an unmeasurable risk factor for the price of oil that the market is not reflecting, and it makes for an even bigger wild card because Iran can operate through them like a rogue nation. …

“The Iranians can’t lose face over this. They have to do something,” said John Kilduff, partner at Again Capital. He expects the upper range for WTI crude to be $70 per barrel, and Brent to be $80 to $85 per barrel. “There’s still a big cushion and a ton of spare capacity in Saudi Arabia. We’re not in the dire tightly supplied market we were in a few years ago.”

Also note: With hours’ notice, US fast-response force flies to Mideast

 

 

Barron’s – January 2, 2020

Oil Mergers Could Pick Up in 2020. Here Are 7 Possible Targets.

Enverus expects much of the acquisition activity to occur in the Permian Basin, the largest U.S. shale-oil play, which is mostly located in Texas. While picking acquisition targets is tricky, the trend toward buying small and midcap energy companies with valuable Permian acreage is likely to continue in 2020, Dittmar wrote in an email. Oil remains more attractive than natural gas, whose value continues to decline because of a glut of the commodity.

Several companies “meet that criteria” for an acquisition target, Dittmar wrote. Among them are Centennial Resource Development (CDEV), Matador Resources (MTDR), QEP Resources (QEP), SM Energy (SM), WPX Energy (WPX), Laredo Petroleum (LPI) and privately held Halcon Resources.

 

 

Associated Press/Dallas Morning News – January 3, 2019

Energy Transfer fined $30M but can resume construction*

Pennsylvania fined Dallas-based Energy Transfer more than $30 million on Friday but will allow it to resume construction on its problem-plagued natural gas pipelines.

The state Department of Environmental Protection issued one of its largest-ever civil penalties in the wake of an investigation that found that the pipeline giant had violated numerous regulations during construction of the Revolution pipeline in western Pennsylvania. A 2018 landslide along the pipeline’s route in Beaver County triggered a gas explosion and fire that destroyed a home, a barn and several cars, and prompted an evacuation.

The financial penalty was part of a settlement agreement between the department and Energy Transfer subsidiary ETC Northeast Pipeline LLC. In return, the department agreed to lift a statewide moratorium on construction permits it imposed on Energy Transfer nearly a year ago.

 

 

ProPublica – December 27, 2019

How Oil Companies Avoided Environmental Accountability After 10.8 Million Gallons Spilled

In the aftermath of Hurricane Katrina in August 2005, while stranded New Orleanians flagged down helicopters from rooftops and hospitals desperately triaged patients, crude oil silently gushed from damaged drilling rigs and storage tanks.

Given the human misery set into motion by Katrina, the harm these spills caused to the environment drew little attention. But it was substantial.

Nine days after the storm, oil could still be seen leaking from toppled storage tanks, broken pipelines and sunken boats between New Orleans and the Mississippi River’s mouth. And then Hurricane Rita hit. Oil let loose by Katrina was pushed farther inland by Rita three weeks later, and debris from the first storm caused damage to oil tankers rocked by the second.

 

Oil & Gas

 

Reuters/New York Times – January 6, 2020

Oil prices rose a further 2% on Monday, pushing Brent above $70 a barrel, as rhetoric from the United States, Iran and Iraq fanned tensions in the Middle East after the killing of a top Iranian general.

Brent crude futures <LCOc1> soared to a high of $70.74 a barrel and was at $70.03 at 0747 GMT, up $1.43, or 2.1%, from Friday’s settlement.

U.S. West Texas Intermediate <CLc1> crude was at $64.15 a barrel, up $1.10, or 1.7%, after touching $64.72 earlier, the highest since April.

The gains extended Friday’s more-than-3% surge after a U.S. air strike in Iraq killed Iranian commander Qassem Soleimani on Friday, heightening concerns that a widening Middle East conflict that could disrupt oil supplies.

 

 

Midland Reporter Telegram – January 3, 2020

Rig count declines continue

The Permian Basin rig count fell by two to 403, while the Texas rig count dropped one rig, putting the state count also at 403. Texas still has more than half the nation’s active rigs and the Permian represents 60 percent of the oil-drilling rigs in the nation [according to Baker Hughes].

New Mexico also lost one rig, putting 104 rigs at work within state lines.

The U.S. rig count dropped back below 800 rigs, dropping nine to 796 rigs. That puts the national rig count at the lowest level since March 2017.The count has fallen 25 percent since the beginning of 2019

 

 

Dallas Morning News – January 3, 2020

Ex-Energy Secretary Rick Perry rejoins Energy Transfer’s board*

Former Texas Gov. Rick Perry is joining the board of the general partner that controls Dallas-based pipeline giant Energy Transfer LP.

The move puts Perry, who left his post as U.S. Energy Secretary in December, back at the table of one of the biggest pipeline operators in the U.S. Billionaire Kelcy Warren’s Energy Transfer has made headlines for pursuing large projects and transactions that sometimes irked shareholders and regulators.

Perry, a two-time U.S. presidential candidate who was Texas governor for more than a decade, was appointed to the board of LE GP LLC on Jan. 1, according to a regulatory filing late Friday. Energy Transfer is structured as a master limited partnership. The limited partner — Energy Transfer LP — is publicly traded, while the general partner is closely held, with Warren controlling a majority stake.

 

 

Wall Street Journal – January 3, 2020

Oil Firms Tighten Security After U.S. Strike on Iranian Commander*

Oil companies in the Middle East are tightening security as U.S. officials say American energy infrastructure in the region is a likely target for Iranian retaliation following the killing by the U.S. of Islamic Revolutionary Guard Corps commander Qassem Soleimani.

A call by the U.S. Embassy in Baghdad for all U.S. citizens to leave Iraq is expected to affect staffing at Exxon Mobil Corp. , which operates facilities in the country’s volatile southern region. The company should be able to maintain production with local workers, analysts said.

Exxon Mobil is closely monitoring the situation and has programs and measures in place to provide security to protect its people, a spokeswoman said.

The company produces around 400,000 barrels of oil a day at the West Qurna 1 field in Iraq. Amid rising tensions in the country, talks between Iraq and Exxon Mobil to build a roughly $50 billion oil operation have been stalled for months, according to people familiar with the matter.

Also note: Oil and gas shipping companies on high alert for Strait of Hormuz transits

And: US warns of possible attacks near Saudi oil as Iraq votes to expel troops

 

 

Business Times – December 30, 2019

Oilfield service firms have a bearish outlook for 2020 – Dallas Fed

With their business outlook worsening, about half of oil field service firms plan to cut spending in 2020, the Federal Reserve Bank of Dallas said on Friday in its quarterly energy survey.

Oil and gas activity and employment dipped in the fourth quarter in the Dallas Fed region, which includes the largest US shale field, the Permian Basin in Texas and New Mexico.

US oil prices have hovered below US$60 a barrel for most of the year, prompting many energy firms to cut staff and reduce budgets, even as major oil exporting countries have curbed production. About 36 per cent of oil and gas producers plan to cut budgets next year, the survey said.

 

 

Dallas Morning News – January 3, 2020

James Coleman: The Texas Railroad Commission must tap the brakes on oil and gas production*

Texas producers are now draining so much oil and natural gas that there aren’t enough purchasers to use all of the gas. Oil and gas often come from the same well. The industry sells the oil but cannot build pipelines fast enough to get all the new gas production to distant gas consumers. As a result, producers are burning off, or flaring, more and more gas — wasting this clean burning gas, which is prized by consumers and industry around the world.

The U.S. Energy Information Administration recently reported that the U.S. is flaring more gas than ever before. Texas alone now flares more gas than many states use. These flares, burning round-the-clock, can be seen from space — nighttime satellite pictures make the Permian Basin look like Texas’s biggest metropolis. This tremendous waste of resources is sparking both public concern and private lawsuits, with regulators, landowners and the industry all pointing fingers at different villains. But for solutions, Texas need only look to its past.

The Railroad Commission should moderate the pace of the current boom to ensure that Texas gets full value for its gas. It could reject some new flaring permits, although that kind of all-or-nothing regulation might be unfair to the rejected companies. It could also impose modest limits on gas production, forcing all companies to slow their production and also ensuring higher prices for all. The commission is properly cautious about intervening in one of the free market’s biggest energy success stories. But careful regulations can build on the commission’s legacy of using production limits to ensure the long-term health of the oil and gas industry.

 

 

Reuters – January 3, 2020

Enbridge says it may re-file U.S. permit application for deepwater oil terminal

Enbridge Inc will consider re-filing its application for federal permits to build a crude export terminal off Freeport, Texas, if market demand picks up, a company spokesman said on Friday.

The Canadian pipeline operator recently withdrew its proposal for a facility capable of handling supertankers, U.S. maritime officials said this week, taking the project out of the current race to export U.S. shale.

Enbridge last month said it would jointly develop a deepwater facility with Enterprise Products Partners LP, whose project had already been advanced by long-term agreements with oil major Chevron Corp.

 

 

The Center Square – January 2, 2020

Census Bureau: Texas continues to lead in international trade; Houston top metro export hub

The top manufactured commodities that Texas exports include crude oil and petroleum, liquified natural gas

Texas leads the U.S. in international trade, ranking first in exports of manufactured and non-manufactured commodities in the third quarter, according to the U.S. Census Bureau’s Exports by Metropolitan Area Report.

Texas’ exports account for 16.5 percent of all U.S. exports of manufactured goods and 34.9 percent of non-manufactured goods in 2019.

Houston was the highest-ranking U.S. metro export hub in the U.S. in the third quarter, the report notes, exporting $31.3 billion worth of goods. …

The majority of exports from Texas go to Mexico, worth roughly $109.7 billion in 2018 and 35 percent of all of Texas’ total goods exported, according to data from the Office of the U.S. Trade Representative and the Census Bureau. Canada trailed Mexico, receiving $27.5 billion worth of Texas exports.

 

 

Houston Chronicle – January 3, 2020

Houston company seeks to develop first 5G-enabled oil drilling site in Permian Basin*

Telecommunication companies will spend the next 12 months rolling out 5G service for cell phone users across the United States while a Houston company seeks to become the first to provide the ultra high-speed technology to oil and gas industry customers in the Permian Basin, the nation’s largest and busiest oil field.

Headquartered in Houston’s Galleria district, Infrastructure Networks provides wireless data service to drilling rig operators, fracking crews and production sites in oil fields across the United States. The company provides those services over vast distances using the last iteration of mobile phone technology known as LTE, or Long Term Evolution, technology.

In its bid to develop what could become the first 5G-enabled drilling site, Infrastructure Networks has spent the last year installing equipment to make its private cell phone network 5G ready. Stan Hughey, the company’s chief technology officer, said the strategy is not to light up its entire network at once with the technology but rather to focus on areas with the highest levels of oil and gas activity.

 

 

Yahoo! News – January 2, 2020

ExxonMobil Secures Exploration Acreage Offshore Egypt

Exxon Mobil Corporation recently announced the acquisition of oil and gas resources, spreading across more than 1.7 million acres, located off the coast of Egypt. Of the total acquired resources, 1.2 million acres are in the North Marakia offshore block, while 543,000 acres are situated in the North East El Amriya Offshore block.

In both the blocks, the leading integrated energy player will have operating interests of 100%. The company expects operations to commence in 2020. Notably, the takeover of seismic data is part of ExxonMobil’s operations.

ExxonMobil has primarily been involved in marketing fuels, lubricants and specialties in Egypt since 1902, representing the company’s leading downstream presence in the nation. Hence, with the award, the company has diversified its portfolio of energy business in Egypt.

 

 

Argus Media – December 27, 2019

Amanda Hilow: Corpus frenzy to propel US crude exports

US crude exports are poised to hit a fresh record in 2020 on the back of a series of infrastructure projects designed to add capacity to and from the Texas Gulf coast.

Corpus Christi could add at least 800,000 b/d of US crude export capacity by mid-2020 to US crude exports, which already hit a record high of 3.38mn b/d in October, with the startup of Buckeye Partners’ South Texas Gateway crude export terminal. The facility will include two deepwater docks capable of berthing very large crude carriers (VLCC) and a possible third dock in the future.

Phillips 66’s 900,000 b/d Gray Oak pipeline started initial service in the fourth quarter of 2019 and is expected to be in full service by the end of the first quarter of 2020, carrying Permian basin crude to Corpus Christi destinations. From there, shippers can connect to the future South Texas Gateway terminal as well as Kinder Morgan’s 300,000 b/d crude and condensate pipeline (KMCC) to the Houston Ship Channel.

 

 

Corpus Christi Caller Times – January 2, 2020

Corpus Mayor Joe McComb: Here’s why we can’t use street funds to pay for desalination plants, or vice versa*

At City Council meetings and in letters, citizens have raised questions about our seawater desalination effort and verbalized some inaccurate “facts.” As we begin 2020, I would like address these.

  1. No city tax dollars will pay for the costs of permits associated with our two planned seawater desalination plants. State permit fees will be paid through the “Future Water Supply Fund” (FWSF). Funding these permits has NO relation to the General Fund and Street Bond funds, which pay for maintenance and reconstruction of streets. The agenda item amount is a maximum; the fees likely to be less. Any balance will remain in the FWSF.
  2. Water produced by the desalination plants will be potable, public water. All water customers, residential, commercial and industrial, will benefit from this water, which will be integrated into our drinking water system. We are dedicated to maintaining our prized state rating as a superior public water system.

 

 

Dallas Morning News – December 31, 2019

What to watch in 2020: Has the magic run out in the Permian Basin?*

“This year was very difficult for the industry, and we’ve had another uptick in bankruptcies,” said Buddy Clark, co-chair of the energy practice at Haynes and Boone. About 200 oil and gas producers have filed for bankruptcy since the firm started tracking it in 2015. That represents about $110 billion in assets.

Next year is going to be painful too because acquisitions and divestitures — a way out — are down significantly, said Kraig Grahmann, head of the firm’s energy finance team.

Capital willing to finance debt in the oil space has shrunk, Grahmann said. A lot of borrowers are heavily hedged. In the past, lenders could count on recovery rates in the high 90% range.

Recovery rates are much lower today, he said.

And bigger companies aren’t rewarded for adding reserves, Clark said.

 

 

Houston Chronicle – December 27, 2019

Sergio Chapa, Reporter’s Notebook: Energy sector wins big when bipartisanship works*

We are living in partisan times.

As I type this story, members of the U.S. House of Representatives are speaking one by one on whether they favor impeaching President Donald Trump for his conduct in the Ukraine scandal.

Congress has become polarized but it wasn’t always that way.

Four years ago, President Barack Obama signed a bipartisan budget bill that also lifted a four-decade ban on U.S. crude oil exports. I remember that day well. It was Dec. 18, 2015 and I was traveling in Hong Kong where the news made the front page of the South China Morning Post. ….

Four years later, the results of that bipartisan bill are clear. The entire energy industry benefited to the tune of billions of dollars from that signing of that bill.

 

Utilities

 

Houston Chronicle – December 31, 2019

Vistra cuts jobs, says it’s Texas’ No. 1 power seller*

Vistra Energy, the Irving power company best known for its TXU brand, is cutting costs and jobs as it absorbs its latest acquisition and challenges NRG Energy for the biggest share of the state’s retail electricity market.

Vistra told state employment officials this week that it is trying to create efficiencies after buying Ambit Energy of Dallas, a company that sold electricity plans through a network of consultants. Vistra bought Ambit in November for $475 million in an all-cash deal.

Vistra is eliminating 50 jobs at Ambit’s call center in Plano, according to Vistra’s notice to the Texas Workforce Commission. The cuts are part of a reorganization as the two companies combine their operations, according to the notice.

 

 

San Antonio Express News – January 3, 2020

Greg Jefferson: San Antonians, get ready for higher water, electric bills*

Here’s an easy prediction for 2020: Mayor Ron Nirenberg’s plan to have the San Antonio Water System take over the city’s Edwards Aquifer protection efforts will crash headlong into ratepayer worries about higher water bills. …

And there’s a kicker, coming from the other city-owned utility. It’s likely that CPS Energy will seek its first rate increase in six years in 2020, according to a person familiar with the internal discussions.

Here’s what CPS chief executive Paula Gold-Williams has to say about it:

“Through broad focus, hard work on cutting costs, and the optimization of new technology to make our operations increasingly more efficient, we again did not need a rate increase in 2019. This all said, while we have not declared a rate increase in a very long time, we have consistently commented that one is inevitable.”

 

 

PV Tech – January 2, 2020

Hecate Energy’s 100MW PV project in New Mexico selected by El Paso Electric Company

Hecate Energy’s proposed 100MW Santa Teresa solar project has been selected by El Paso Electric Company (EPE) as part of a 350MW solar and storage RFP process designed to add new clean resources to the EPE system.

Pending regulatory approvals, the project is anticipated to be in service by May 2022. It will be developed in Santa Teresa, New Mexico. EPE and Hecate have already entered into a long-term PPA for the output from the project.

The added generation from the 100MW installation will help EPE meet the 2022-2023 summer peak season and replace less efficient gas-fired generation as older units are retired.

 

 

Houston Chronicle – January 3, 2020

Elizabeth Killinger: Consumers win when electricity companies compete*

There’s been a lot of discussion recently around “power players” in the Texas electricity market and who’s benefiting from the state’s largely deregulated landscape — the customer or the industry? While everyone is entitled to their own opinion — and when talking about electricity, they are entitled to have choice — Houstonians should be given more than one side of the story.

Where are the headlines that focus on how the lights stayed on amid a record tight supply this past summer, or how a family new to Texas is excited to have innovative tools to help them understand and manage their electricity costs? What about the family that’s conscious of whom they do business with or chooses a provider that supports their favorite charity? Or the busy mom who, through use of voice commands, doesn’t have to lift a finger to pay her bill?

All of these innovations were made possible as a result of the Texas competitive electricity market. Consumers win when companies compete.

 

Alternatives & Renewables

 

Dallas Morning News – December 23, 2019

John Goodenough ushered in the mobile wireless revolution and is a Texan of the Year finalist*

When we flip the light switch, we expect the light to come on. And, when we pick up our smartphones, we expect to be able to connect to the Internet, watch cat videos, and even research complex subjects, all without plugging in to anything.

For years, the Nobel Committee and John Goodenough, currently a University of Texas professor, didn’t appreciate the impact his lithium-ion research would have on the world. But that changed this year when the Nobel Committee honored Goodenough with a Nobel Prize in Chemistry for refining a commercially viable lithium-ion battery in the 1970s with fellow prize co-recipients Akira Yoshino and M. Stanley Whittingham.

The breakthrough untethered us from our desks and made the entire world more productive, and for that accomplishment, Goodenough, 97, is a finalist for 2019 Dallas Morning News Texan of the Year.

 

Regulatory

 

Dallas Morning News – January 3, 2020

Scott Burns: Fear and loathing on the carbon footprint trail*

Beyond learning that most readers don’t think I’m a wacko for asking the question, here is the gist of what I learned from your many letters.

Here’s what I found:

  • A large majority of you believes that climate change is real.
  • Many people, often with technical backgrounds in engineering, chemistry or physics, have concerns about the science behind climate change. They are particularly concerned about the shortness of the time scale compared with other historical changes in earth’s climate. Most were quick to add that they believe it’s better to be safe than sorry. But several noted that we humans tend to think we’re a lot more important to the planet and the universe than we really are.
  • Anger about the political charging of the subject was expressed quite often, from both climate change believers and skeptics. The trouble with a world in which everyone has his or her 15 minutes of fame is that their numbers suck the oxygen out of all careful discussion.
  • Frustration with our paralyzed government and the behavior of both right and left was a related theme.

 

 

New York Times – December 31, 2019

How Top Refiners Have Prepared — Global Refiners Raise Cleaner Shipping Fuel Output Ahead of IMO 2020*

Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulphur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1. …

Chinese marine fuel suppliers have signed up short-term deals to buy very low-sulphur fuel oil (VLSFO) from companies like oil major Shell, Germany’s Uniper and U.S. commodities trader Freepoint. …

SK Chemicals has started tests on blending its biodiesel with petroleum-based fuels to create low-sulphur marine oil.

At SK Energy’s largest refinery in South Korea, engineers are rushing to complete a new processing unit ahead of schedule. …

Sales of low-sulphur marine fuel in the Singapore bunkering hub soared to an all-time high of 2.076 million tonnes in November, more than double the previous record, government data showed.

 

_____________________________

 

The Texas Energy Report NewsClips – January 3, 2020

Subscriber’s Edition

Click on each headline to read more of the story at the source.
Asterisk * following headline indicates news content may be limited or unavailable at the source because it’s password protected.

 

Lead Stories

CNBC – January 3, 2020

Iran vows to retaliate over the killing of its top military commander

Iran has vowed to retaliate over the assassination of the country’s top military commander Major-General Qasem Soleimani.

Iranian Foreign Minister Mohammad Javad Zarif warned Friday that the targeted killing of Soleimani was “extremely dangerous & a foolish escalation.”

“The U.S. bears responsibility for all consequences of its rogue adventurism,” Zarif said on Twitter.

Soleimani, head of Iran’s elite Quds Force, was killed in a U.S. military airstrike at Baghdad’s international airport. The move was directed by U.S. President Donald Trump, the Pentagon said Thursday. …

Eurasia analysts said Iran will likely “resume harassment of commercial shipping in the Gulf and may launch military exercises to temporarily disrupt shipping.”

“Beyond retaliation, Iran’s ultimate goal in Iraq is to make continued American presence unviable,” said Rome and Kupchan. “Iran is unlikely to immediately attack Saudi or Emirati oil infrastructure or US bases in Saudi Arabia, the UAE, Bahrain, or Qatar. These steps would have the effect of unifying the Gulf against Tehran; Iran will instead target its ire against Washington in the near term,” they said.

Analysts: Oil prices ‘could make a run at $80’ if US-Iran conflict intensifies

Peter Bergen: The killing of Iran’s General Soleimani is hugely significant

From Twitter Friday Morning: US State Dept. urges US citizens to leave Iraq immediately.

Twitter: Reporter Farnaz Fassihi says Ayatollah Khamenei calls for “forceful revenge.” Three days of public mourning. Iraq Hashed Shaabi to hold funeral on Saturday. Regional UN forces on high alert

Twitter: Israel’s Netanyahu cuts short Greece visit, returns to Israel. Israeli embassies worldwide on alert

 

 

E&E News – January 2, 2020

Dems want to kill public lands drilling. Will it backfire?

Oil companies have long enjoyed a bond with the Republican Party. But in past years, there was a cohort of Democrats who could be relied on to support the industry, such as former Louisiana Sen. Mary Landrieu or former Texas Rep. Gene Green.

Both are gone now, along with other pro-oil Democrats and Republicans who voted with environmental groups. And, in a bit of a twist, the country’s abundant oil supply has somewhat numbed politicians to fears of price spikes.

Industry leaders insist that they still have Democratic friends in Congress. The Democratic leaders Durbin pointed to, though, are governors such as Michelle Lujan Grisham in New Mexico who support drilling but also more regulations on it than their Republican counterparts.

 

 

Houston Chronicle – January 2, 2020

Tenaris closes $1.1 billion deal to buy pipemaking rival

The steel pipe maker Tenaris is making a billion-dollar bet on the health of the energy industry after acquiring a Houston manufacturer that specializes in making pipes and equipment for oil and gas wells.

Tenaris, an Argentinian company with two plants in the Houston area, closed on a $1.1 billion deal on Thursday to buy IPSCO Tubulars from the Russian steel manufacturer TMK. IPSCO, which employs close to 400 people in the Houston area, also owns steel and pipe-making plants in Pennsylvania in addition to other facilities in Arkansas, Ohio, Oklahoma, Iowa, Kentucky, Nevada and Canada.

With the deal finalized, Tenaris is considered he largest steel pipe producer in North America. The move expands Tenaris’ geographic reach and product lines while adding more steel-making capacity in the United States. That added capacity will help the company avoid Trump administration tariffs levied on foreign steel.

 

 

Energy Voice – December 31, 2019

Shell sells last of its Haynesville position

Royal Dutch Shell is officially moving out of the gassy Haynesville shale after selling its last package of acreage to a private Houston firm.

Houston-based Castleton Resources, which primarily focuses on the Haynesville in East Texas and Louisiana, will scoop up about 55,000 net acres from Shell that’s currently producing more than 100,000 cubic feet of natural gas per day. The companies are not revealing the sale price.

Shell previously sold most of its Haynesville position five years ago, but still had some piecemeal remaining acreage.

 

Oil & Gas

 

CNBC – January 3, 2020

Friday Brent jumps nearly $3 after US air strike kills Iran, Iraq officials

Brent crude futures jumped close to $3 on Friday to their highest since September after a U.S. air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies.

Brent crude futures jumped nearly $3 to hit a high of $69.16 a barrel, the highest since Sept. 17. The front-month Brent March contract was at $68.25 a barrel, up $2.00, or 3%, by 0258 GMT.

U.S. West Texas Intermediate (WTI) crude futures rose $1.76, or 2.9%, to $62.94 a barrel. Earlier, it touched $63.84 a barrel, highest since May 1.

“The supply side risks remain elevated in the Middle East and we could see tensions continue to elevate between the U.S. and Iran-backed militia in Iraq,” said Edward Moya, analyst at brokerage OANDA, in an e-mail to Reuters.

 

 

Argus Media – December 31, 2019

Exports keep WTI Houston aligned with global prices

Secondary benchmark West Texas Intermediate (WTI) at Houston, Texas, continued to be more reflective of global oil prices in 2019 than the Nymex Light Sweet futures contract in Cushing, Oklahoma, as US crude exports grew.

Argus-assessed WTI prices at Houston have an inherent tendency to reflect physical oil market fundamentals, as these will affect other global light sweet crude prices against which US exports have to compete. As US exports keep rising, it is imperative that WTI prices remain competitive enough to capture higher market share outside of the Americas.

US crude exports were at almost 3.1mn b/d in September, according to the latest monthly data from the Energy Information Administration (EIA) and hit a new record high of 3.38mn b/d in October, according to fresh data from the US Census Bureau.

 

 

Freight Waves – January 2, 2020

Texas-Based Flatbed Carrier With 260 Trucks Shuts Down, Citing Insurance Costs

Texas-based flatbed and oilfield truckload carrier Fleetwood Transportation hauled its last loads on Tuesday after deciding to shutter operations, citing insurance costs.

SaferWatch reports that the carrier had 252 trucks, 673 trailers and employed 240 drivers. The fleet, based in Diboll, Texas (100 mile north of Houston), primarily hauled building materials and oilfield equipment. The company had been operating for 63 years, having commenced operations in 1956.

The Lufkin Daily News first reported the news on Dec. 17, having received an email tip that the carrier planned to shutter. On the same day, the chairman of the board sent a letter to owner-operators of the carrier, citing the inability of the fleet to secure insurance as the primary reason for deciding to cease operations.

 

 

Wall Street Journal* – January 2, 2020

Exxon Wins Rare Reprieve From U.S. Sanctions Fine

Exxon Mobil Corp. won’t have to pay a fine for continuing to do business with a Russian state-run oil company amid increasing U.S. sanctions on the country, a federal judge ruled.

U.S. District Judge Jane Boyle’s ruling this week voids a $2 million fine the U.S. Treasury Department imposed on the Irving, Texas-based oil giant in July 2018 for allegedly violating U.S. sanctions on Russia when it entered into contracts with Russian oil firm PAO Rosneft.

“ExxonMobil acknowledges the court’s decision, which confirms we complied with the applicable sanction,” a company spokesman said in a statement.

 

 

Houston Chronicle – January 2, 2019

Kinder Morgan ends year with $2.5 billion sale, shipping first LNG cargo*

Houston pipeline operator Kinder Morgan is ending the year with two accomplishments — closing a $2.5 billion sale that will allow the company to exit the Canadian market and sending out the first cargo shipment from its Elba Island LNG export terminal in Georgia.

Kinder Morgan closed its sale of Kinder Morgan Canada and Cochin Pipeline to Canadian pipeline operator Pembina Corp.

Pembina is paying Kinder Morgan more than $1.5 billion in cash for the Alberta-to-Michigan crude oil pipeline and stock currently valued at $935 million to buy Kinder Morgan Canada. The proceeds of the sale will allow Kinder Morgan to pay down debt and give it the flexibility to buy back shares or invest in new projects.

 

 

Bloomberg News – January 2, 2020

Permian Pipeline Competition Heats Up as Capacity Outruns Supply*

Five new oil pipelines are set to open in the Permian Basin through 2021, expanding a gap between production and takeaway capacity that’s already spurring midstream rate cuts and could mean cutthroat competition ahead.

Producers in the West Texas and New Mexico oilfield are pumping about 4.72 million barrels a day, according to Rystad Energy AS. That compares with nearly 6 million barrels of pipeline capacity that could rise by about 3.5 million barrels in the next two years as planned new conduits come online.

Most of those planned projects were announced when the Permian was posting annual growth rates in excess of 1 million barrels a day. Now, some analysts see yearly growth slowing to as little as 650,000 barrels a day, with older wells producing less and oil companies preparing to curb spending this year to boost investor returns.

Competition will heat up particularly among pipeline companies seeking to renew long-term shipper contracts that are set to expire, including those seeking to proceed with new pipeline projects, said Sandy Fielden, director of research for Morningstar Inc. “There is a chance that some of the projects would get canceled or consolidated and that would depend on shipper commitment.”

 

 

Rigzone – January 2, 2020

Oxy Elects Former Schlumberger CEO to Board

Occidental Petroleum Corporation on Thursday announced the election of former Schlumberger Ltd. CEO Andrew Gould to its board of directors.

Gould comes with more than four decades of oil and gas industry experience, which includes titles as chairman and CEO of Schlumberger from 2003-2011; non-executive chairman of BG Group from 2012 to 2016; and a current member of Saudi Aramco’s board of directors as well as BJ Services.

“Andrew brings a valuable perspective to the board through his extensive experience as a chief executive in the oil and gas industry,” said Gene Batchelder, Occidental’s chairman of the board. “Throughout his long career, he drove significant value creation while managing a global business. Andrew’s knowledge and decades of operational and financial leadership in the industry will benefit the board and add valuable insight as Occidental continues to focus on generating returns for shareholders.”

 

 

Midland Reporter Telegram – January 2, 2020

Analyst: Geopolitical risks, higher demand will boost crude

“Relative to gas, liquefied natural gas, coal and most agricultural products – other than sugar – oil will perform relatively well,” Chris Midgley, global head of analytics at S&P Global Platts, said in an email.

Offering a boost to the crude oil outlook are geopolitical risks that are expected to remain high, especially tensions between the U.S. and Iran and possible supply declines from Iraq, Libya and Nigeria.

Global oil demand growth is expected to accelerate to 1.26 million barrels per day from 950,000 barrels a day in 2019, led by the International Maritime Organization’s 2020 standards requiring shippers to use low-sulfur fuel oils. These new standards will favor sweet crudes such as West Texas Intermediate, Midgley said.

 

 

CNBC – January 2, 2020

‘Big uncertainty’ over US oil output in 2020 will be critically important to oil prices, analysts say

The question of how much crude U.S. producers may be able to add this year could be pivotal for oil prices in 2020, analysts told CNBC, while warning of the potential for “vicious corrections” in the coming months.

Speaking to CNBC’s “Squawk Box Europe” on Thursday, Chris Weafer, a senior partner at Macro-Advisory, suggested three “critical factors” were set to have the greatest influence over crude futures this year.

The first two factors were identified as oil demand growth and the current deal between OPEC and its allied partners.

The group, often referred to as OPEC+, agreed to cut oil production by an additional 500,000 barrels per day (b/d) from Jan. 1, further deepening their previous cut of 1.2 million b/d.

 

 

Reuters – January 2, 2020

U.S. oil deals hit five-year high in 2019 on Occidental’s blockbuster Anadarko buy

The value of U.S. oil and gas mergers and acquisitions reached a five-year peak of $96 billion in 2019 on the back of competing bids for Anadarko Petroleum, energy data provider Enverus said on Thursday.

Occidental Petroleum Corp’s (OXY.N) $38 billion acquisition of Permian rival Anadarko countered a pullback in corporate deal-making the sector, driven by investor pressure to prioritize shareholder returns over growth, Enverus said.

Occidental last year won a takeover battle for Anadarko, topping Chevron Corp’s (CVX.N) $33 billion offer, after Berkshire Hathaway Inc’s (BRKa.N) Warren Buffett and France’s Total SA (TOTF.PA) came to its aid.

 

 

S&P Global Platts – December 27, 2019

Surging gas production to bring low prices back to Permian

Markets are expecting lower gas prices to return to the Permian Basin next year as surging production overwhelms West Texas again before key midstream capacity expansions enter service in 2021.

Over the past 10 months, the 2020 forward curve at Waha has witnessed a steady decline, with shoulder-season prices for April and May tumbling into the low 30 cents/MMBtu area — down from more than $1.70/MMBtu as recently as the first quarter, S&P Global Platts data shows.

That evolution has tracked the market’s optimism for the basin’s production growth potential, but also its doubts over producers’ capacity to efficiently move that supply to market next year.

Following the September 25 start-up of Kinder Morgan’s 2 Bcf/d Gulf Coast Express Pipeline, Permian producers have responded with a staggering 1.3 Bcf/d, or 12%, surge in output.

 

 

Wall Street Journal – January 1, 2020

Energy Producers’ New Year’s Resolution: Pay the Tab for the Shale Drilling Bonanza*

The bill is coming due for the shale industry’s price war with OPEC. North American oil-and-gas companies have more than $200 billion of debt maturing over the next four years, starting with more than $40 billion in 2020, according to Moody’s Investors Service.

It is a tab that producers, pipeline operators and oil-field service companies have run up battling the Organization of the Petroleum Exporting Countries for global market share.

It is unclear how they will repay it all. Shareholders and private-equity investors have been burned in recent years attempting to buy at the bottom. Banks are in retreat. Bond markets have shown little indication that they are open to any but the oil patch’s most attractive borrowers.

Analysts are predicting and investors hoping that the specter of debt maturities will prompt companies to do what low commodity prices and prodding from shareholders haven’t: stop drilling so many wells.

 

 

S&P Global Platts – January 2, 2019

Strong market fundamentals drive US gas liquefaction surge into the new year

High capacity utilization continued Thursday at US LNG export terminals, with feedgas deliveries near record levels, amid robust winter demand and strong market fundamentals in Asia and Europe, S&P Global Platts Analytics data showed.

The activity comes as the first cargo shipped from Kinder Morgan’s Elba facility in Georgia approached its destination in Pakistan.

A combination of positive netbacks throughout November and December, coupled with multiple facilities ramping up commissioning activities ahead of their expected commercial in-service dates, has incentivized strong dispatch of US LNG in the front months.

 

 

Dallas Morning News – December 27, 2019

Can an oil company boost production and cut carbon? Texan of the Year finalist Vicki Hollub thinks so*

Vicki Hollub has a bold strategy to change the company she leads, Occidental Petroleum. And if it works, she just might change the world.

This year, she bought Anadarko Petroleum, roughly doubling the size of Occidental and becoming the largest producer in the Permian Basin. Many scoffed at the deal, including some of her key shareholders, concerned about buying assets at a time when oil prices are middling and show little sign of rising. (Carl Icahn took his complaints to court.) But Hollub did not back off. Instead, she found friends to help pull it off. With an investment from Warren Buffett’s Berkshire Hathaway and an agreement to sell assets to Total, Hollub put the pieces together to finish the deal.

It’s a big merger and we hope Hollub’s confidence is affirmed, and not just because it would strengthen the Texas oil industry. It’s also because the key to Hollub’s business model is technology to inject carbon dioxide into oil wells to boost production, thereby sequestering the greenhouse gas underground.

 

 

Houston Chronicle – December 24, 2019

Cameron LNG begins production on Train 2*

San Diego utility company Sempra Energy has started making liquefied natural gas from the second of three production units at its Cameron LNG export terminal in Louisiana.

In a Monday morning statement, Sempra Energy reported that Train 2 and Train 3 are expected to commence commercial operations during the first and third quarter of 2020, respectively.

After months of delays, the facility’s first liquefaction train started commercial operations in August.

 

 

Houston Chronicle – January 2, 2020

Q&A: TXOGA’s 100 years reflect changes, challenges and advances in energy industry*

The Texas Oil & Gas Association, a statewide industry advocacy group headquartered in Austin, recently marked its 100th anniversary.

Today, the organization’s members account represent more than 90 percent of the oil and natural gas production in Texas and more than 80 percent of the state’s refining capacity. Known as TXOGA, the organization’s past members include the late President George H.W. Bush..

Q: You mentioned challenges and solutions. Can you give some examples?

TXOGA President Todd Staples: If it’s water quality, we have standards that require multiple layers of cement and steel to protect that water quality. If it’s air issues we developed efforts to reduce methane or reduce carbon dioxide. If it’s seismicity, we’ve developed recommended practices that industry partners should implement in their operations. We’re proud of the life changing impact this industry has had on our society. …

Q: Crude oil prices were stuck in the $50-per-barrel range creating what we’ve been calling a “shale slump.” Will the industry be able to survive?

A: Ups and downs or bumps in the road are not uncommon. We’ve had to weather these type of circumstances before. They’re not fun. They’re very challenging but the industry is resilient. These types of times should remind us all that we can’t take the good things for granted.

 

 

Oil & Gas 360 – December 31, 2019

Israel gets first gas from Leviathan with exports to follow

Israel’s $3.6 billion offshore Leviathan field started production on Tuesday, paving the way for multi-billion dollar gas export deals with Egypt and Jordan in the coming weeks.

Natural gas began flowing from Israel’s largest field despite regulatory delays and court petitions by groups opposing the project raised doubts that its operators would meet their end-of-2019 timeline.

However, Texas-based Noble Energy, Israel’s Delek Drilling and Ratio Oil said that operations had started, effectively doubling the amount of Israeli-produced gas and lifting shares in both Israeli firms.

 

Utilities

 

Los Angeles Times – December 23, 2019

America’s utilities are on a borrowing spree. Renewable energy is benefiting*

U.S. utilities are on a record borrowing spree this year, selling more than $90 billion in bonds for the first time ever.

The surge in debt from NextEra Energy Inc., Duke Energy Inc. and other power giants comes as interest rates are at historic lows, leaving investors hungry for the safe and relatively strong returns offered by utility bonds.

The flood of cheap cash from bonds is making possible a sweeping transformation by utilities to modernize grids and slash emissions by replacing coal plants with wind, solar and cleaner-burning natural-gas generators.

“Financing costs are lower than we ever thought they would be,” Morgan Stanley analyst Stephen Byrd said in an interview. “The low-interest rate environment helps the deployment of renewables.”

 

Alternatives & Renewables

 

Wall Street Journal – December 27, 2019

Why 2020 Is the Turning Point for Electric Cars*

IN AN INDUSTRY caught flat-footed by the rise of Tesla and China’s skyrocketing vehicle-emissions mandates of the past decade, 2020 came to be seen as the horizon of reasonable expectations, when global OEMs, startups, suppliers and investors could finally join the EV fray. That time has arrived… almost.

A slew of new battery-electrics will debut next year, most as 2021 models. Some announced prices could change; and the to-market dates for some products may be delayed, depending on outside events, like Brexit. Note: Earlier this week, Congress declined to expand the federal tax credit for EVs, which sets auto makers’ eligibility for the credit at 200,000 sales. The Tesla Model Y isn’t eligible for the credit. Here’s what’s coming:

 

 

Oil Price – December 2, 2019

The Race To Construct The First Solar Space Station

China aims to turn the dream of science fiction writer Isaac Asimov into reality by building a solar power station in space by 2035, according to Chinese researchers.

Scientists at the China Academy of Space Technology (CAST) plan to build a solar power station in space that would capture solar energy from the Sun and beam it wirelessly to the Earth via lasers or microwaves, China’s news agency Xinhua reported on Monday.

“We hope to strengthen international cooperation and make scientific and technological breakthroughs so that humankind can achieve the dream of limitless clean energy at an early date,” Xinahua quoted CAST research fellow with the space solar station program, Wang Li, as saying at a Chinese-Russian engineering event in China last week.

 

Regulatory

 

Associated Press/Oil City News – January 2, 2020

No Texans Left in the Presidential Race: Democrat Julian Castro Drops Out

Former Obama housing secretary Julián Castro on Thursday ended his run for president that pushed the 2020 field on immigration and swung hard at rivals on the debate stage but never found a foothold to climb from the back of the pack.

“I’m so proud of the campaign we’ve run together. We’ve shaped the conversation on so many important issues in this race, stood up for the most vulnerable people, and given a voice to those who are often forgotten,” Castro said in an online video. “But with only a month until the Iowa caucuses, and given the circumstances of this campaign season, I have determined that it simply isn’t our time.”

 

 

San Antonio Express News – December 31, 2019

Alaska governor establishes committee to oversee BP sale*

Alaska Gov. Mike Dunleavy has established an eight-member oversight committee to monitor the sale of BP Plc assets in Alaska, officials said.

The Republican governor said the panel will oversee the $5.6 billion sale to Hilcorp Energy Co., Alaska’s Energy Desk reported Monday.

“The purpose is to make sure the state of Alaska and its people are represented as this transaction moves forward,” Dunleavy said in a statement Friday.

 

 

Sydney Morning Herald – December 27, 2019

Fuel deal between Trump and Australia secures crucial backing

A bid by the Morrison government to avoid spending billions of dollars on a vast stockpile of emergency fuel has won crucial support from the world’s peak energy agency ahead of a possible deal with United States President Donald Trump.

But a complementary plan to shore up dangerously low domestic storages – by rewriting an international treaty – is struggling to gain momentum, leaving Australia exposed to price hikes and rationing should war or disaster strike the Middle East or South China Sea.

The Sydney Morning Herald and The Age revealed in August that the Morrison government was negotiating with the Trump administration to buy millions of barrels of oil from America’s tightly guarded fuel reserve under a new strategy to limit Australia’s exposure to a major crisis.

 

____________________________

 

The Texas Energy Report NewsClips – December 30, 2019

Subscriber’s Edition

Asterisk * indicates news content may be limited or unavailable at website because it’s password protected

 

Lead Stories

 

Grist – December 24, 2019

Big Oil spent $3.6 billion to clean up its image, and it’s working

If you’ve ever seen an ad featuring ExxonMobil scientists handling beakers of green goo, the algae that will supposedly fuel the future, you’ve been the target of an oil company’s advertisement. Exxon isn’t trying to sell you a product, exactly — but it is hoping to sell you on the idea that it’s committed to a greener future.

Over the past 30 years, the world’s five biggest oil companies have forked over more than $3.6 billion for reputation-building ads like this one. “When we looked at the dollar amounts, we were sort of blown away,” said Robert Brulle, a visiting professor of environment and society at Brown University.

Promotional ad spending from Exxon, BP, Chevron, Shell and ConocoPhillips has fluctuated a lot over the years, so Brulle’s research team decided to figure out why. The results, published in the journal Climatic Change this month, suggest that oil companies pour money into promotional campaigns for two main reasons: to boost their reputation when they’re getting negative media coverage, and to influence policymakers when Congress is considering climate legislation.

 

 

Houston Chronicle* – December 29, 2019

Race to the courthouse: Why Harris County and the state are rushing to sue after chemical fires

As chemical plant explosions and fires have disrupted lives and raised air-quality concerns in the Houston area this year, the state and its most populous county have been jockeying to take the lead in penalizing polluters.

The state’s more active role has aroused suspicions among some local officials and environmentalists, who believe state leaders with a record of pro-business actions may be trying to take control to soften the blow of any court rulings against major corporations.

“It’s obvious there’s been an attempt to limit Harris County legal office from pursuing these cases,” said Neil Carman, a former air inspector with the Texas Commission on Environmental Quality who now works with the Sierra Club’s Lone Star chapter.

 

 

Carlsbad Current Argus* – December 26, 2019

Permian Basin oil production could slow in 2020, 2021, report shows, as oil prices stabilize

It could take more wells to maintain the Permian Basin’s production levels into the new year.

A report from IHS Markit contended that newer, unconventional wells showed faster production declines during the recent surge in shale production led using hydraulic fracturing – or fracking.

Base decline rates, calculated by comparing the production of onstream wells at the start of the year with their decline by the end of the year, were analyzed for more than 150,000 producing oil wells across the basin.

Total U.S. oil production growth was expected to flatten by 2021, marked by a major slowdown in U.S. shale growth, the report read.

Modest growth could resume in 2022 but would likely be lower than the recent “boom levels” in recent years, said Raoul LeBlanc, vice president of unconventional oil and gas at IHS Markit.

 

 

Midland Reporter Telegram – December 29, 2019

Permian Highway Pipeline construction well underway

The Permian Highway Pipeline has been making tracks since Kinder Morgan, EagleClaw Midstream and Altus Midstream Processing launched construction in late summer.

Construction began on the western phase of the $2 billion 430-mile pipeline, which will carry up to 2.1 billion cubic feet of natural gas from the Waha Hub in Pecos County to the Gulf Coast. It is one of five construction phases for the project.

Allen Fore, vice president, public affairs for Kinder Morgan, said the project has reached a significant milestone of building more than half of the initial 100-mile route from Pecos County east.

 

 

Wall Street Journal* – December 26, 2019

A Sea Change in Fuel Prices Is Imminent

Much of the hand-wringing about cleaner fuel has to do with things we encounter daily—trains, planes and automobiles. But possibly the most significant issue, and certainly the most immediate one, is far out at sea.

That is where most transport by ton miles takes place. A looming change to rules for maritime fuel in January could cause a splash, making goods and travel of every type more expensive. The International Maritime Organization is about to reduce the limit on sulfur in fuel oil to 0.5% from 3.5%. While ships make up just 5% to 7% of global transport oil demand according to Goldman Sachs, they emit about half of sulfur from transport because they use the dirtiest fuel—literally the bottom of the barrel. The move will prevent over half a million premature deaths from pollution globally in the next five years according to a study cited by the IMO.

 

Oil & Gas

 

Reuters/New York Times* – December 30, 2019

Oil prices traded at three-month highs on Monday, underpinned by optimism over an expected U.S-China trade deal, while traders kept a close eye on the Middle East following a U.S. air strike.

Markets showed little initial reaction to news of the U.S. strikes in Iraq and Syria against an Iran-backed militia group, even as U.S. officials warned “additional actions” may be taken.

West Texas Intermediate (WTI) crude futures <CLc1> edged up 5 cents to $61.77 a barrel by 0529 GMT. The U.S. benchmark is up about 36% so far this year.

Brent crude futures <LCOc1> were at $68.36 a barrel, up 20 cents, or 0.3%. The international benchmark has risen around 27% in 2019.

 

 

Houston Chronicle* – December 27, 2019

Permian Basin leads decline in U.S. oil and gas rig count

The number of U.S. oil and gas drilling rigs fell by eight this week, according to the Baker Hughes rig count, bringing the nation’s total down to 805.

After increasing by 14 last week, the rig count backed off yet again. The number of oil and gas drilling rigs in the U.S. is down by more than 270 compared to the same time last year.

The Permian Basin led declines this week, with the West Texas oilfield losing a net nine rigs.

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Dallas Morning News* – December 27, 2019

Texas energy sector pulls back as shale producers cut spending, jobs

The contraction of the oil and gas industry in and around Texas continued in the fourth quarter as shale producers cut back on spending and jobs, the latest survey from the Federal Reserve Bank of Dallas showed.

The bank’s business activity index was -4.2 for the final three months of the year, compared with -7.4 in the third quarter, according to its report published Friday.

The survey covers the 11th Federal Reserve District, which includes not just Texas but energy-rich parts of Louisiana and New Mexico. The bank’s indexes for capital spending, employment and employee hours were also negative for the fourth quarter.

The data showed oilfield service companies bearing the brunt of the slowdown, while exploration and production companies reported a small uptick in business activity. Overall, the survey will likely reinforce the existing gloom surrounding oil and gas, with shale producers struggling — and largely failing — to achieve consistent free cash flow and investor returns in the face of stagnant oil prices and a plunge in the price of natural gas.

 

 

Wall Street Journal* – December 29, 2019

As Shale Wells Age, Gap Between Forecasts and Performance Grows

The early promises of blockbuster shale wells that many fracking companies made to investors are looking even more suspect as the wells age.

For years, frackers touted estimates of how much oil and gas their wells would produce as they sought to raise capital and entice shareholders. Many of those estimates are falling short.

Earlier this year, The Wall Street Journal reported that wells drilled recently in the four largest U.S. oil regions were on track to produce nearly 10% less oil and gas over their lifetimes than companies forecast.

The Journal collected well productivity forecasts from 29 of the largest shale producers between 2014 and 2017 and compared them to estimates from energy analytics firm Rystad Energy. Rystad uses public data on how wells have performed to date to model how much they’re on pace to generate over their lives.

 

 

Dallas Morning News* – December 27, 2019

Energy Transfer-led pipeline group wants to nearly double its pumping in Illinois

Oil has been flowing through the Dakota Access pipeline across Illinois since the summer of 2017, traveling underground from the Mississippi River to a hub in a tiny central Illinois town.

Every day, an average of 560,000 barrels of oil flows through the pipeline.

Now the Dallas-based company that jointly owns the pipeline, which begins in North Dakota, wants to nearly double the volume, pumping up to 1.1 million barrels from the oil-rich Bakken region through South Dakota and Iowa into Illinois. The Dakota Access pipeline and the Energy Transfer Crude Oil pipeline, which delivers oil to the Gulf Coast, are collectively referred to as the Bakken pipeline, a joint venture between Energy Transfer, MarEn Bakken Co. and Phillips 66.

To increase the flow, the company wants to build a series of new pump stations along the 1,172-mile route, including in western Illinois, and upgrade its facilities where Dakota Access links up with other Midwestern pipelines.

 

 

S&P Global Platts – December 24, 2019

Analysis: Oil will fuel the roaring 2020s

Platts Dated Brent averaged $79/b over the last decade. The financial crisis, an unforeseen surge in US shale production and the combustible Middle East defined the period for oil markets. The next 10 years could be even more volatile for the world’s most important fossil fuel.

Despite the dramas of the last decade, prices are set to close out 2019 well below the 10-year average.

In 2010, the outlook for demand looked just as uncertain as it does today in the wake of what became known as the Great Recession, when global GDP fell by 5.1% and oil consumption dropped by 1.6% in 2009. Low oil prices helped trigger the Arab Spring uprisings, which started as bread riots in Tunisia before China’s economic stimulus helped catapult the value above $120/b.

 

 

Forbes – December 27, 2019

Daniel Markind: The Marcellus Shale Region: 2019 Year in Review

2019 was the year in which reality smacked the Marcellus Shale Basin in the face. Long held assumptions about asset valuation and infrastructure development fell apart. By year’s end, some of the most famous names in the Basin, and in the industry, had exited, and desperately needed infrastructure projects remained stuck in the morass of legal and administrative challenges.

Still, the region remained awash in natural gas, but thanks to shortsighted thinking on the part of many political leaders the gas that was all around them could not be accessed, leaving their populations at risk for energy shocks come 2020. To paraphrase an old ditty, the refrain from New York State and New England could be: “Gas, gas everywhere, but not a drop to heat our homes.”

In early December, Chevron announced that it was taking a massive write down of its Marcellus assets and would be exiting the largely natural gas-rich Marcellus region to concentrate on more lucrative oil fields in Texas and New Mexico. There are two basic reasons for this.

 

 

Oil Price – December 17, 2019

The Best And Worst Oil Predictions Of 2019

Citi

Citi’s forecast for 2019, also made in December 2018, was more sober-minded, with the bank predicting that Brent would average $60 for the year. It, too, predicted a volatile market for the next year, largely because the U.S., Russia, and Saudi Arabia—the top three oil producers in the world–all had different views as to what that perfect oil price should be. The bank also predicted that oil production in the United States would continue to offset much of what OPEC would cut—a prediction that turned out to be close to reality: US production has increased 1.2 million bpd this year—precisely what OPEC agreed to cut.

How did they do? Not terrible. Its primary range was for Brent to trade between $55 and $65 per barrel–a generous $10 price range. Even with that big range, oil sat above $65 for the better part of February through May.

 

 

Houston Chronicle* – December 26, 2019

U.S. gas drillers saw record gains in 2018, EIA reports

U.S. natural gas production had its biggest one-year increase on record in 2018, the U.S. Energy Information Administration reported Thursday.

Driven by now more than decade-old advancements in hydraulic fracturing technology, production increased by 10 billion cubic feet per day last year – an 11 percent increase from 2017 – to 101.3 billion cubic feet per day. That led to a more 50 percent gain in gas exports, through LNG tankers and pipelines.

“In September 2018, the United States exported more natural gas by pipeline than it imported by pipeline for the first time in at least 20 years,” the EIA report read.

 

 

Rigzone – December 26, 2019

Is the US Shale Boom Really About to End?

If current crude flow data forms the basis of industry opinion, US shale oil production has shifted the tectonic plates of the market. Thanks largely to a massive output uptick in shale plays like the Bakken, Permian and Eagle Ford, the country has more than doubled headline crude production over the past decade.

At around 12.5 million barrels per day (bpd), the US is already the largest producer in the world and some forecasters are predicting a rise to 13.1 million bpd by 2020. Rising volumes have also given shale players the title of being buffer producers, largely insulating the market from price spikes caused by outages elsewhere.

For some, a continuation of the boom is not in doubt. According to the US Energy Information Administration (EIA), production from seven major American shale plays is forecast to climb by 49,000 bpd in December to 9.133 million bpd.

 

 

S&P Global Platts – December 26, 2019

US LNG projects on the bubble face possible shakeout year in 2020

On the cusp of 2020, a handful of proposed US liquefaction projects have commercial momentum toward final investment decisions, while others languish.

This was supposed to be a breakout year for US LNG export projects getting commercially sanctioned. But with 2019 wrapping up, just two new export terminals and an additional train at an existing facility made it over the line to construction. That means 2020 could be a shakeout year for the dozen or so projects actively being developed on the Gulf, Atlantic and Pacific coasts, amid a growing consensus among market observers that the window for independent projects to be advanced to construction is rapidly closing.

“It’s getting late. It’s getting dark. It’s much tougher,” said Michael Webber, an independent LNG analyst and managing partner of Webber Research & Advisory. “Liquidity issues are going to have real teeth to them next year. The rubber will meet the road for a lot of these projects.”

 

 

Forbes – December 20, 2019

Brian Murray: Top Five U.S. Energy Developments Of The Last Decade: From Drill Bits To Data Bytes

Revenge of the Nerds: Energy Data AnalyticsEnergy systems have always generated a lot of data, but the recent profusion of smart devices, smart meters, satellites, sensors, and other gadgetry has created terabytes upon terabytes of information. It’s a treasure trove—but one whose gems are often hidden from plain sight.

Advances in artificial intelligence have provided tools to locate these buried (literally, in some cases) energy treasures. Machine learning uses computational methods to explore large volumes of data without direct human guidance to glean patterns and insights that the human mind cannot detect. It’s being applied to answer questions about oil and gas discovery, the identification of solar energy capacity, optimization of wind power and building energy efficiency.

 

 

Oil Price – December 22, 2019

Nick Cunningham: Expect More Writedowns From Oil Majors

Looking forward, many analysts have few reasons to think that gas prices will rebound, with the slump expected to last into the early 2020s. According to the Wall Street Journal, ExxonMobil and BP are the most exposed, each with about 12 percent of their total production coming from U.S. gas. Chevron and Shell only have about 5 percent of their total production coming from American gas fields.

More write downs could be in the offing from the oil majors, the WSJ reported.

Meanwhile, the market seems to be excited by the OPEC+ deal. Bullish bets on oil futures surged in the week following the announcement from Vienna. Big money is betting on a revival.

But so, perhaps, are the drillers themselves. Baker Hughes reported on Friday that the oil rig count surged by 18 for the week ending on December 20, after rising by 4 the week earlier. Gas rigs still fell, however, down another 4 last week.

 

 

Houston Chronicle* – December 25, 2019

Oil sector may be entering final decade of growth

If the decade coming to a close will be remembered for a shale drilling revolution that transformed the United States into the world’s biggest oil producer, the oncoming 2020s may well go down in history as the decade when the world’s demand for crude peaked for good.

As concerns about climate change mount, electric vehicles are projected to gain ever-larger shares of auto markets, while the fuel efficiency of internal combustion is only expected to improve — all cutting into the demand for transportation fuels, oil’s primary product.

Virtually everyone agrees peak oil demand is coming. OPEC predicts demand will rise into the 2040s, but the European energy major Royal Dutch Shell and others say global oil demand could peak before 2030. So what will this mean to oil-centric Houston, the reigning energy capital of the world?

 

 

Bloomberg News/Houston Chronicle* – December 19, 2019

Aramco, Lebanon, Gulf Oil: A guide to Middle East risks in 2020

The possibility of a devastating war with Iran and its proxy militias across the region has prompted Gulf monarchies to undertake a strategic rethink. Any sign of reconciliation between Saudi Arabia and Iran, or an end to the embargo against Qatar, would give a powerful boost to the region’s investment case.

Despite faint hints of a thaw between Qatar and a four-nation bloc — comprising the United Arab Emirates, Saudi Arabia, Egypt and Bahrain — a patch-up in relations still seems far from guaranteed.

Qatar has held talks with Saudi Arabia, but no negotiations have taken place with the U.A.E. — and without them the 30-month split will be hard to heal. The emir of Qatar turned down an invite to attend the annual gathering of Gulf leaders held in Saudi Arabia in December, prompting a top U.A.E. official to say that the crisis with Doha “continues.”

 

 

Forbes – December 19, 2019

David Blackmon: 7 Things To Expect From The Oil And Gas Industry In 2020

In keeping with what has become an annual tradition, we took out our handy crystal ball – manufactured from petroleum-based materials, of course – for a look at expectations for the year to come in 2020. What the crystal ball revealed is a mix of projected outcomes, some of which were entirely predictable, others not so much.

Here we go:

The domestic rig count will be largely stable, at least through the first six months of the year. Indeed, we saw what had been a steady fall during the final six months of 2019 become arrested during the past few weeks as companies drove completion of their year’s drilling budgets and prepared the field to quickly execute on their budgets for the first half of the new year. The Enverus daily rig count actually added 33 newly-active rigs during the first two weeks of December, while the Baker Hughes weekly count also saw a slight rise. This trend will carry over into the new year, and we should see the situation remain relatively stable, at least until companies revise their budgets for the second half of next year.

 

 

Houston Chronicle* – December 19, 2019

Oilfield service sector closing year with mergers, asset sales & layoffs

Duane Dickson, an executive overseeing the U.S. oil, gas and chemicals arm of the global consulting firm Deloitte, said the struggling oilfield service sector can improve its earnings by dumping unprofitable business lines, improving profit margins on core products and services and embracing digital technology, among other methods.

“This is not expected to be an easy lift,” Dickson wrote in a recent report on the topic. “Many oilfield service companies rely on the same business models that worked for $100 plus per barrel of oil, which are stifling innovation and efficiency today.”

Stockholders with the two Houston oilfield service companies C&J Energy Services and the Keane Group voted in October to approve a $1.8 billion merger deal to create a new company named NexTier Oilfield Solutions.

Other oilfield service companies are responding to tough market conditions by stacking equipment and laying off employees. Houston services companis Halliburton, National Oilwell Varco and Pumpco Energy Services and the Houston oilfield equipment maker Stewart and Stevenson have announced a combined 1,015 layoffs over the past month.

 

 

Sky Statement – December 24, 2019

Hamm, McClendon — And Other Names Behind A Fracking Great Decade For American Oil And Gas

Aubrey McClendon: “America’s Most Reckless Billionaire” built Chesapeake Energy and died in a fiery crash, 2016. The cofounder of Oklahoma City-based Chesapeake Energy set the shale gas boom in motion by borrowing more than $10 billion to gobble up drilling rights to the gas under millions of acres of cow pastures.

Nearly all of his Chesapeake stock got wiped out in late 2008 margin calls (when shares collapsed from $62 to $15), but he clawed his way back onto the Forbes 400 list. In 2011 we put him on the cover of Forbes as “America’s Most Reckless Billionaire” and revealed how he enriched himself at the expense of shareholders via his “founders well participation” perk, which allowed him to take a personal 2.5% sweetheart equity stake in each of thousands of wells Chesapeake drilled.

McClendon’s modus operandi in a nutshell: use other peoples’ money to acquire massive swaths of land, then cherrypick the best locations for his own benefit. After Carl Icahn took control of Chesapeake’s board and finally booted McClendon in 2013, he moved down the street and built American Energy Partners, raising another $10 billion and nearly losing it all again.

 

Utilities

 

Houston Chronicle* – December 26, 2019

Will the real Power to Choose stand up?

The Public Utility Commission operates the online shopping website Power to Choose, which millions of Texans use each year to find the lowest priced electricity plans. But good luck finding the real Power to Choose website.

More than a dozen online electricity brokers in Texas have adopted the phrase “Power to Choose” to promote their own websites. Many shoppers get tripped up by the confusion, consumer advocates say, and sign up for power plans that appear to come from the government-run site, but are actually sold by commercial brokers who receive commissions. Consumers often end up paying more.

“Consumers don’t necessarily catch that kind of stuff,” said Paul Paras, co-founder of Real Simple Energy in Houston, an electricity shopping website that tracks prices.

Choose Texas Power, for example, an electricity broker owned by the South Carolina digital platform company Red Ventures, uses the phrase Power to Choose on online search engines to promote its electricity shopping website. The company did not respond to requests for comment.

 

 

El Paso Times – December 27, 2019

J.P. Morgan Chase deemed affiliate of El Paso Electric buyer in revised sale agreement

For months, J.P. Morgan Chase officials tied to an investment fund planning to buy El Paso Electric have insisted the fund is not an affiliate of one of the world’s largest banks.

That’s changed.

Now, J.P. Morgan officials tied to the Infrastructure Investments Fund, or IIF, have agreed the holding company, Sun Jupiter Holdings, set up by IIF to own El Paso Electric, can be treated as an affiliate of the bank when it comes to dealing with Texas utility regulations.

A stipulated agreement of revised sales terms, filed Dec. 18 with the Public Utility Commission of Texas, and approved by the city of El Paso and seven other intervenors in the PUC sale review, specifies that J.P. Morgan Chase will be treated as an affiliate of Sun Jupiter Holdings.

 

 

S&P Global Platts – December 26, 2019

Gas sector keeps watch as municipal gas ban battles play out in 2020

The year 2020 could reveal whether a smattering municipal bans on new natural gas hookups for buildings becomes a more widespread movement tied to de-carbonization efforts around the country.

Partly at stake for the natural gas sector is maintaining its share in the residential-commercial market. The res-comm sector makes up about 26% of US gas demand, according to S&P Global Platts Analytics.

While individual gas bans risk a small slice of overall gas demand, they are part of a larger movement that contends gas must be phased out of the fuel mix if global temperature increases are to remain within a range compatible with a stable climate.

 

 

Lubbock Avalanche Journal* – December 14, 2019

Xcel Energy boasts 200 miles of new line among progress in 2019

Xcel Energy is upgrading and expanding the electric grid in portions of New Mexico and Texas, in what officials with the utility hope will improve electric reliability, enable future economic development and meet the growing demand for new generation.

“We are committed to our customers, and finding affordable options to utilize our industry leading capabilities to make smart investments for future growth,” said David Hudson, president, Xcel Energy – New Mexico, Texas. “These projects are important for creating construction jobs and fueling future job creation for the region.”

Construction began this month on the new 34-mile, 345-kilovolt Eddy-Kiowa transmission line in Eddy County, N.M. Xcel Energy is investing $65 million to build the project, which will create additional capacity for electric load growth in the area, much of it due to oil and gas expansion.

 

Alternatives & Renewables

 

Greentech Media* – December 18, 2019

The US Residential Solar Market Is Set For Major Change in the 2020s

Residential solar PV has had a remarkable decade. From 2010-2020, more than 2 million residential solar panels have been installed in the U.S., supported in large part by the 30 percent federal Investment Tax Credit. But the ITC is of course only one part of the equation.

Though the ITC has provided foundational support to the solar industry across all segments, several states have gone further to provide additional in-state incentives for homeowners to purchase solar. Ranging from the early days of the California Solar Initiative to New York’s Megawatt Block program and the establishment of numerous lucrative SREC markets in the Northeast, these regions have benefited tremendously from supportive state-level solar policy and incentives.

 

Regulatory

 

Utility Dive – December 20, 2019

NERC: Grid operators must prepare for 330 GW of renewables by 2029

The North American Electric Reliability Corporation (NERC) sees potential capacity shortages in Texas and Ontario, Canada, over the next few years, but on the whole, believes that North American grid operators will have adequate reserves to meet growing peak electricity demand for the next decade.

The challenge for the nation’s electric system will be in accommodating a growing amount of renewable resources, according to NERC’s 2019 Long-Term Reliability Assessment, released Thursday. The analysis shows more than 330 GW of solar and wind capacity are planned for installation through 2029.

A robust transmission system will be needed to accommodate the new renewables and a growing volume of distributed energy resources. However, NERC warned development of transmission infrastructure has declined from nearly 40,000 circuit miles earlier this decade to less than 15,000 circuit miles planned over the next ten years.

 

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The Texas Energy Report NewsClips – December 27, 2019

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Lead Stories

 

Reuters – December 27, 2019

U.S. energy shareholders seek to leave behind a lost decade

Volatile commodity prices amid growing supply, poor financial performance and disfavor from some investor groups all contributed to the energy sector’s transformation from investor darling to investor outcast. …

But with the dawn of a new decade, some investors say the sun is also rising on energy shares.

The energy sector’s swoon defied a boom in U.S. domestic oil production, sparked by the advent of hydraulic fracturing, or “fracking.” Ten years ago, the United States was a net importer of about 10 million barrels per day of oil and fuels. It ends the decade poised to become a net exporter of oil and fuel products.

“It really is a great irony that at a time when the United States became the world’s biggest producer and has become a great exporter, that investors have become skeptical and have adopted a position of ‘show me the money,’” said Daniel Yergin, vice chairman of IHS Markit.

 

 

Wall Street Journal* – December 26, 2019

Big Investors Showing Love to Gas Fields Others Shun

Speculators have a dim view of natural gas, piling into the biggest bet that prices will fall since last decade’s financial crisis. Big investors, such as Dallas Cowboys owner Jerry Jones, are moving in the other direction, gobbling up unloved gas fields.

Mr. Jones invested more than $1 billion in Comstock Resources Inc. CRK -1.30% to help the producer consolidate drilling fields in the Haynesville Shale in Louisiana and East Texas. Comstock shares have soared 68%—a top performer in an otherwise rotten year for oil-and-gas stocks.

More recently, a venture financed by a Thai coal and power concern and run by Denver energy executives paid $770 million for gas fields around Fort Worth, Texas, where the shale drilling boom was born.

The venture’s purchase in Texas earlier this month—as well as more than $500 million it has spent on Appalachian gas fields—amount to a bet that natural gas futures prices don’t account for drillers who are easing production under pressure from investors to spend no more than they make selling oil and gas.

 

 

Yahoo! News – December 26, 2019

Texas No. 1 In Foreign Trade During Third Quarter

Texas continues to be a leader in international trade, ranking No. 1 in exports of manufactured and non-manufactured commodities for the third quarter, according to the U.S. Census Bureau.

Year-to-date, Texas has exported an estimated $155.8 billion in manufactured goods and $68.7 billion in non-manufactured commodities, ranking it No. 1 in both categories among U.S. states. …

The top manufactured commodities exported by Texas include crude oil and petroleum, propane, liquified natural gas and parts/accessories for automatic data processing machines. The top non-manufactured goods produced in Texas include cattle (beef), cotton, chickens, greenhouse and nursery products and dairy products.

 

 

The Hill – December 21, 2019

Robert Turkavage: The less-hyped, but more realistic threats to US national security

The generation, transmission and distribution of electricity within a grid is supported by “Internal Control Systems” (ICS), network-based systems that monitor and control grid processes such as opening and closing grid circuit breakers. Grids have become more vulnerable to cyberattacks, in part, due to less reliance on proprietary devices in ICS systems, in favor of more widely available devices that use traditional IT network protocols.

The U.S. Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) oversee federal efforts in grid operations including cybersecurity. According to a GAO report, DOE has conducted two assessments of a cyberattack on a single interconnection. Those assessments produced varying reports of the potential scale of power outages that could result from cyberattacks….

In 2018, the FBI and Department of Homeland Security issued an alert warning of Russian cyber intrusions targeting the energy sector. The alert linked the cybergroup “Dragonfly” to this activity, which included targeting ICS infrastructure. In another case, in 2018, nine Iranian citizens were federally charged in connection with cyberintrusions conducted at the behest of the government of Iran. FERC employee computers were among those hacked during this cyber campaign.

Our president, Congress, and intelligence agencies need to heed these “red flag” threats to our national security. Events of 9/11 serve as a reminder as to what may happen if they do not.

 

 

Phys Org – December 12, 2019

Scientists find cheaper way to make hydrogen energy out of water

Hydrogen-powered cars may soon become more than just a novelty after a UNSW-led team of scientists demonstrated a much cheaper and sustainable way to create the hydrogen required to power them.

In research published in Nature Communications recently, scientists from UNSW Sydney, Griffith University and Swinburne University of Technology showed that capturing by splitting it from in water can be achieved by using low-cost metals like iron and nickel as catalysts, which speed up this chemical reaction while requiring less energy.

Iron and nickel, which are found in abundance on Earth, would replace precious metals ruthenium, platinum and iridium that up until now are regarded as benchmark catalysts in the ‘water-splitting’ process.

UNSW School of Chemistry’s Professor Chuan Zhao says in water splitting, two electrodes apply an to water which enables hydrogen to be split from oxygen and used as energy in a .

 

Oil & Gas

 

MarketWatch – December 26, 2019

Oil prices end at 3-month high as report shows 7.9 million drop in U.S. crude inventories

Crude-oil prices settled solidly higher Thursday, in thin postholiday action, as a weekly inventory report indicated a bigger-than-expected decline in stockpiles for oil.

American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 7.9 million barrels for the week ended Dec. 20, according to sources. That was more than analysts’ consensus expectations for a draw of draw of 1.83 million barrels, according to Reuters.

The weekly inventory report also showed a 2.2 million barrel decline in key U.S. oil delivery hub Cushing, Okla.

The API data came after that report showed a major buildup in stockpiles last week and the current report could provide a lift for crude prices which have been steadily climbing lately, wrote Phil Flynn, senior market analyst at The Price Futures Group.

 

 

Reuters/New York Times* – December 23, 2019

Apache Corp and French rival Total have formed a joint venture to develop a project off Suriname, the companies said, in a deal that gives the U.S. oil and gas producer a cash injection.

Apache’s Suriname offshore prospect, near the border with South America’s newest oil giant, Guyana, is a long-shot for the U.S. company, with the Total agreement providing financing to continue exploration.

Apache reported this month it had reached its target depth at its first Suriname well but said only that it would drill deeper, knocking 17% off its shares in two days as investors took the news as a sign the well had no commercially viable oil.

 

 

Houston Chronicle* – December 23, 2019

Exxon begins commercial production in Guyana as it makes another find

Exxon Mobil began commercial production in Guyana as the Texas energy major announced its 15th discovery in the prolific oil fields off coast of the small South American country.

Exxon and its partners, Hess Corp. of New York and the Chinese oil company CNOOC, are beginning production about three months ahead of schedule. Output from the first phase of the development of the offshore field known as Liza is expected to reach 120,000 gross barrels a day in the coming months. The first cargoes of crude are expected to be sold in coming weeks, the companies said.

Exxon owns 45 percent of the Guyana project, Hess 30 percent and CNOOC Ltd. 25 percent. The discovery and production of oil has the potential to transform Guyana, a poor country of about 800,000 people on the northeast coast of South America, next to Venezuela.

 

 

Dallas Morning News* – December 24, 2019

The Permian Basin is getting gassier as wells age and oil output declines

“Activity levels are no longer what they were,” said Artem Abramov, head of shale research at Rystad Energy. “The oil ratio is no longer sufficient to offset gas in older wells, so we’re seeing some increase in basin-wide” gas-to-oil ratios.

In the Midland portion of the Permian, the average well produces about 2,000 cubic feet of gas for each barrel of oil in its first year, said Tom Loughrey, a former hedge fund manager who started shale data company Friezo Loughrey Oil Well Partners LLC. Over the lifetime of those wells, about 30 years or so, that rises to an average of about 5,000. It can climb as high as 7,000 in the gassier Delaware. …

Diamondback Energy Inc. emerged in November as a victim of this phenomenon when it reported third-quarter well results that were disappointingly gassy. The percentage of oil was 65%, the lowest since at least 2011, which it blamed on a nearby producer who took too long to frack its wells. The company also revised its expected crude ratio for 2019 to 66%-67% of production versus 68%-70% previously.

 

Laredo Morning Times – December 23, 2019

Drilling Down: Encana’s two-shale basin play in Texas

Canadian exploration and production company Encana is ending the year with a flurry of drilling permit filings in Texas, where its two-shale basin strategy continues to play out.

Over the past month, Encana has filed for 43 drilling permits with the Railroad Commission, the state agency that regulates the oil and natural gas industry.

Encana is seeking to drill 32 horizontal wells targeting the prolific Spraberry field in the Permian Basin of West Texas and eight targeting the Eagle Ford Shale and Austin Chalk in South Texas. The company is also seeking to reclassify three vertical wells in the Permian Basin.

 

 

Houston Chronicle* – December 23, 2019

Houston oilfield service company delisted from New York Stock Exchange

Houston oilfield service company Carbo Ceramics will now be traded as a penny stock after spending more than 30 days trading below $1 per share and being delisted from New York Stock Exchange.

In a late Friday afternoon statement, Carbo announced that its stock will begin trading on the OTC Markets under the stock ticker symbol CRRT when the market opens on Monday morning.

Specializing in ceramic particles used in the hydraulic fracturing process, Carbo has tried to diversify its products in other areas but falling demand from the company’s oil and natural gas industry customers continued to sting the Houston company’s financial performance.

 

 

Oil Price – December 23, 2019

Another Oil Major Bails On Marcellus Shale

Why is Chevron abandoning the Marcellus for the Permian? Let’s take a look at the isopach maps for both. In the graphic for the Marcellus, noted as Figure 2, you can see it is a relatively thin structure over most of its extent. And thins progressively the farther west it goes. The EIA comments thusly about production in the Marcellus:

“Most of the current production is located in areas where the formation thickness is greater than 50 feet.” – EIA

Well, that just makes sense! But, as you look at the map of the Marcellus, one thing that strikes you is… those areas are concentrated in just a few areas on the eastern edge of the play, that some call the “Sweet Spots.” As you will see in the acreage map obtained from Chevron, they are generally quite a bit west of these sweet spots in about 50 percent of the acreage shown.

By comparison, the Permian play that is drawing Chevron’s attention as it exits the Marcellus is thousands of feet in thickness across a broad swath of the Permian, as the EIA map below reveals.

 

 

World Oil – December 22, 2019

Decoupling of energy stocks from oil prices burns operators

This year has been one of moderate gains for the price of oil, but it has been bleak for producers.

West Texas Intermediate crude is heading for an annual increase of more than 30%, but the best performance among the global oil majors has been Chevron Corp., which has posted a gain of just 10%. The S&P 500 Energy Index has almost entirely decoupled from oil in 2019 and is on course to underperform crude by the most since the shale revolution began a decade ago.

The malaise is largely attributable to the gush of supply from quick-to-drill shale wells. The shale revolution has made the U.S. the world’s biggest producer of oil and natural gas. In 2019 it became a net exporter of crude for the first full month in at least 70 years. Production was at a record 12.9 MMbpd at the end of November, more than Iraq, Iran, Kuwait and United Arab Emirates combined.

 

 

Wall Street Journal* – December 24, 2019

Saudi Arabia and Kuwait End Dispute Over Shared Oil Fields

Saudi Arabia and Kuwait ended a five-year dispute over oil fields in a territory shared between the two countries, the latest sign of detente between Riyadh and its Persian Gulf neighbors.

The deal, disclosed in a statement issued by Riyadh and Kuwait City on Tuesday, has been a pet project of new Saudi Energy Minister Abdulaziz bin Salman, half brother to Crown Prince Mohammed bin Salman. He has spent years trying to broker differences between Saudi Arabia and Kuwait over land and environmental rights in what is known as the Neutral Zone. The stakes are especially high because the territory is the home to prodigious oil reserves.

 

 

Maritime Executive – December 13, 2019

NPC: U.S. Needs to Expand Fossil Fuel Infrastructure

The National Petroleum Council (NPC) has presented two reports, Dynamic Delivery and Meeting the Dual Challenge, to U.S. Secretary of Energy Dan Brouillette.

The reports demonstrate how the U.S. can address the dual challenge of providing affordable, reliable energy while addressing the risks of climate change by advancing carbon capture, utilization and storage (CCUS) and spurring investments in new energy infrastructure. They are the NPC’s responses to requests for advice from Secretary of Energy Rick Perry.

NPC found that America’s largest energy sources will continue to be natural gas and oil through at least 2040. Dynamic Delivery, in its analysis through 2040, finds that public and private investment in new and existing pipelines, ports, rail facilities and inland waterways will be essential in connecting America’s abundant energy supplies with domestic and global demand.

 

 

Oil Price – December 16, 2019

Wanted: Oil Workers With More Tech, Less ‘Roughneck’

Oil and gas’s love affair with digital technology is about to get serious. With digital tech’s proven capacity to contribute to the industry’s number-one priority in the post-2014 era—cost control—it’s no wonder that oil and gas companies are fast becoming the biggest fans of all things digital.

The change is already showing in job patterns and it could help oil and gas solve their talent shortage problem.

The problem is critical for the industry; in January this year, a survey from a recruitment firm in the UK found that many in the industry were concerned there wouldn’t be enough new oil and gas professionals to replace those that were retiring.

 

 

JD Supra – December 23, 2019

Texas Bankruptcy Court – Applying Oklahoma Law – Concludes That Gathering Agreements Created Covenants Running With the Land and Cannot be Rejected by the Alta Mesa Resources Debtors

On December 20, 2019, the United States Bankruptcy Court for the Southern District of Texas (Marvin Isgur presiding) entered a memorandum opinion and order finding that midstream gathering agreements created covenants running with the land under Oklahoma law that could not be rejected by bankrupt debtors. This decision reached the same conclusion as a Colorado bankruptcy court in September 2019.

Both decisions depart from the widely-reported 2016 decision in Sabine Oil & Gas Corp. v. Nordheim Eagle Ford Gathering, LLC, which held that a debtor could reject a midstream gathering agreement pursuant to section 365 of the Bankruptcy Code because it did not create a real covenant that ran with the land under Texas law.[

 

 

Houston Chronicle* – December 18, 2019

Denver company tests evaporation as solution for oil field wastewater

Denver oil field wastewater company Gradiant Energy Services is testing equipment that uses evaporation to reduce the amount of water that needs to be injected in disposal sites deep underground.

In a Tuesday evening statement, Gradiant Energy Services reported that the company successfully completed a pilot project using the technology on behalf of a “super major” in the Permian Basin of West Texas.

The company’s Carrier Gas Concentration, or CGC, technology receives oil field wastewater, which is known in the industry as saltwater, and separates the water from oil, natural gas, chemicals and other contaminants.

 

 

New Mexico Political Report – December 19, 2019

Report: New Mexico shale contributing to U.S. oil and gas expansion well beyond Paris climate goals

The U.S. has oscillated from being the largest economy to participate in the 2015 Paris Agreement on climate change to becoming one of the world’s strongest voices promoting the continued burning of coal and other fossil fuels.

New Mexico has had a front row seat to that change, of course. In 2019, the Permian Basin became the world’s most productive oilfield, and New Mexico has emerged as a top oil-producing state.

Oil and gas expansion across New Mexico and Texas will be a chief driver of future greenhouse gas emissions in the U.S., according to a recent report compiled by 15 global environmental groups that was released ahead of the U.N. climate-focused COP25 conference held in Madrid this year.

 

 

Oil & Gas 360 – December 18, 2019

Colorado is dead-last in survey of top spots for oil and gas investments

According to a recent survey of oil and gas executives released by the Fraser Institute, an independent Canadian think-tank, Texas is the most attractive location for oil and gas investment. Alarmingly, Colorado was the least-attractive on the list, finishing a dismal 20th out of 20.

The survey ranks 20 North American locations, including 15 states and five Canadian provinces, based on policies affecting oil and gas investment. Texas ranked 1st with only 9 per cent of survey respondents cited uncertain environmental regulations as a deterrent to investing in Texas.

Coming in at 13th out of 20, Saskatchewan was ranked the highest among the Canadian provinces for energy investments, with energy-rich Alberta ranking a lowly 16th out of 20.

 

 

Yale Environment 360 – December 19, 2019

The Plastics Pipeline: A Surge of New Production Is on the Way

America’s petrochemical hub has historically been the Gulf Coast of Texas and Louisiana, with a stretch along the lower Mississippi River dubbed “Cancer Alley” because of the impact of toxic emissions . Producers are expanding their footprint there with a slew of new projects, and proposals for more. They are also seeking to create a new plastics corridor in Ohio, Pennsylvania, and West Virginia, where fracking wells are rich in ethane.

Shell is building a $6 billion ethane cracking plant — a facility that turns ethane into ethylene, a building block for many kinds of plastic — in Monaca, Pennsylvania, 25 miles northwest of Pittsburgh. It is expected to produce up 1.6 million tons of plastic annually after it opens in the early 2020s. It’s just the highest profile piece of what the industry hails as a “renaissance in U.S. plastics manufacturing,” whose output goes not only into packaging and single-use items such as cutlery, bottles, and bags, but also longer-lasting uses like construction materials and parts for cars and airplanes.

 

 

Wall Street Journal* – December 19, 2019

James Freeman: Virtue Signal from Goldman Sachs

Gov. Mike Dunleavy (R., Alaska) says that he and his fellow Alaskans will have to decide “whether we want to do business” with Goldman Sachs anymore. And who can blame Alaska if it chooses to cut ties with the Wall Street megabank?

In an update to its environmental policy, Goldman says: “We will decline any financing transaction that directly supports new upstream Arctic oil exploration or development.”

The financial giant is receiving applause from green groups. But in a visit to the Journal this week, Gov. Dunleavy says the decision will have real costs for Alaskans and the U.S. economy while generating unintended environmental consequences. That’s because many oil-producing regions of the world have much less stringent environmental regulation than Alaska does. “You’re going to push jobs and wealth and revenues” to overseas areas and “exacerbate” ecological problems, adds the governor.

 

 

NBC News – December 25, 2019

U.S. has ‘no right’ to Syrian oil, adviser to President Assad says

A top adviser to Syria’s president says the United States has no right to Syria’s oil and has warned of “operations” against American troops guarding the oil fields.

Bouthaina Shaaban, who is a political and media adviser to Bashar al-Assad, recently told NBC News that the U.S. has “absolutely no right; it is our oil.”

“He’s talking about stealing it,” she added in her office at Syria’s presidential palace in Damascus, referring to President Donald Trump’s declaration earlier this year that the U.S. would “keep” Syrian oil.

 

Utilities

 

Houston Chronicle* – December 20, 2019

L. M. Sixel, Reporter’s Notebook: Just because it’s wholesale doesn’t make it a good deal

A basic principle of investing is that there is a trade-off between risk and reward. Take big risks like opening a business or investing in a start-up and you should get rewarded handsomely if the ventures are successful. Fail and you lose what you gambled. If you want steady returns, invest your money in a federally insured bank.

But that relationship between risk and reward has been skewed for consumers in Texas who are buying their electricity in the spot wholesale market — a risky place for even experienced investors. They face the risk of price spikes that can hit $9,000 per megawatt hour — or $9 per kilowatt hour, about 100 times typical residential rates. Such price spikes aren’t just an academic concern; wholesale prices soared to the $9,000 level, the maximum allowed by state law, repeatedly during last summer’s heat wave.

Many consumers in wholesale power plans howled when their normal daily electricity suddenly cost hundreds of dollars.

 

 

S&P Global Platts – December 24, 2019

Source and scale are biggest challenges as hydrogen interest grows

Hydrogen does not exist alone in nature. Rather, it combines with other elements to form well-known compounds such as water, natural gas and petroleum. Once separated, hydrogen is a colorless, odorless and highly combustible diatomic gas with the molecular formula H2.

The overwhelming majority of hydrogen is currently produced from fossil fuels, including natural gas and coal, using a process called steam methane reforming (SMR). A downside to this process is that it emits carbon dioxide as hydrocarbons are broken up. The CO2 emissions could be mitigated with CCS, but that is not standard industry practice at present. …

Replacing an additional 5% of global fossil-fired power generation with hydrogen-fired generation could increase emissions reductions to 9% globally, or over 2.8 billion mt CO2.

With this growth expected, S&P Global Platts is launching its first-to-market suite of hydrogen price assessments, which model the cost of production.

 

Alternatives & Renewables

 

Dallas Observer – December 20, 2019

Solar Co-op Launches in Dallas

A nonprofit dedicated to helping homeowners convert to solar electricity launched a Dallas operation this week.

The organization, called Solar United Neighbors, runs neighborhood co-op efforts in 12 states across the country and offers support to people installing solar panels on their homes. Banding together into co-ops allows people to share resources and information and to get a bulk discounted rate on the costs of solar panels.

“It is always cost- and commitment-free to be a member of the co-op,” said Hanna Mitchell, program director for Solar United Neighbors of Texas.

 

Regulatory

 

Houston Chronicle* – December 26, 2019

Permit challenge looms over LNG export terminals at Port of Brownsville

A legal battle is looming over the future of the liquefied natural gas industry in deep South Texas.

In separate Christmas Eve filings, the Sierra Club and several other opponents of three LNG export terminals and a related natural gas pipeline planned for development at the Port of Brownsville asked the Federal Energy Regulatory Commission to reconsider its Nov. 21 decision giving permits to the projects.

Requesting an immediate halt to any construction activities, the Sierra Club and the other opponents argue that FERC commissioners approved Texas LNG, Annova LNG, Rio Grande LNG and the supporting Rio Bravo Pipeline as individual projects but “failed to take a hard look” at the combined impacts they would have on other industries, air pollution, water quality, endangered species, a historic Native American site, neighbors living near the proposed plants and the broader impacts the projects could have on climate change.

 

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The Texas Energy Report NewsClips – December 23, 2019

Subscriber’s Edition

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Lead Stories

 

KOSA (Midland/Odessa) – December 20, 2019

Permian Basin roads gain $2 billion in additional funding

The Texas Transportation Commission voted unanimously on Thursday to provide an additional $2 billion in funding to improve Permian Basin roads.

The commission awarded the funding to the Odessa District of the Texas Department of Transportation.

Every year, the commission updates and improves the Unified Transportation Program, commonly referred to as the UTP. The UTP is TxDOT’s 10-year plan that guides the development of transportation projects.

 

 

Corpus Christi Business News – December 20, 2019

Wayne Squires stepped down from the Port of Corpus Christi Board of Commissioners on Thursday, December 19, 10 minutes before Corpus Christi Mayor Joe McCombs was to hold a media conference concerning Squire’s resume. Instead, McCombs announced the resignation.

The story leading to Squires’ resignation began with an anonymous letter to the mayor and an investigation by KRIS 6 News. According to the letter, Squires, who is one of the city’s three appointees to the port commission, did not actually graduate from Pennsylvania State University as stated on his resume. Penn State was unable to verify that Squires had a degree. KRIS 6 News ran a story about the discrepancy December 18, the night before the media conference.

 

 

Austin American Statesman* – December 20, 2019

Lawmakers: State should examine summertime power disconnections

Two Texas lawmakers want the state to reevaluate rules that allow private companies to disconnect customers’ electricity in response to a Gannett/American-Statesman investigation that found providers cut off power to millions of Texans during dangerously hot summer months.

Texas Sens. José Menéndez, D-San Antonio, and Judith Zaffirini, D-Laredo, who sit on the Senate Business and Commerce Committee, which oversees electricity regulators, said they want to hold public hearings on the Texas Public Utility Commission’s disconnection policies, which haven’t been updated since 2013.

“How can we as a state prepare for future summers so people don’t lose their power when it can endanger their lives?” Menéndez said. “Extreme heat is a growing reality that we all need to come to grips with.”

 

 

MarketWatch – December 19, 2019

Fossil fuels and biodiesel were tax-break winners while solar and electric vehicles lost

President Trump on Friday signed the two spending packages totaling $1.4 trillion that included changes in tax credits.

Biodiesel and renewable diesel were winners, on-shore wind power a conditional winner, and small-scale solar and electric vehicles counted among the losers for tax benefits in U.S. Congressional spending bills passed this week.

The $1.4 trillion spending package fails to include several measures to support power generation and transportation without burning the fossil fuels which are the main contributor to climate change. …

Car companies had hoped to extend the EV tax credit beyond the current ceiling of 200,000 autos per manufacturer, but that also failed. The current rule provides a tax credit of up to $7,500 for each of the first 200,000 EVs sold by each car company. Many companies are nearing that ceiling. …

 

Oil & Gas

 

CNBC – December 23, 2019

Oil steady amid optimism U.S.-China close to signing trade deal

Oil prices were mostly steady on Monday after three weeks of gains amid optimism the United States and China were close to signing a trade deal to end a tariff war, with President Donald Trump saying an agreement would be signed “very shortly”.

Brent crude was down 4 cents at $66.10 a barrel by 0100 GMT. West Texas Intermediate was also down 4 cents at $60.40 a barrel.

A so-called phase one deal was announced earlier in December as part of a bid to end the months-long tit-for-tat trade war between the world’s two largest economies, which has sent shockwaves through markets and roiled global growth.

 

 

Houston Chronicle* – December 20, 2019

U.S. oil and gas rig count up most since April

Texas led the gains, with producers adding a net 18 rigs, primarily in the Permian Basin.

The total number of operating U.S. oil and gas rigs is now 813. The gain this week erased some losses in recent weeks, but the total number of rigs is still more than 260 below its level at the same time last year, down about 25 percent.

 

 

Wall Street Journal* – December 22, 2019

Banks Get Tough on Shale Loans as Fracking Forecasts Flop

Some of the banks that helped fuel the fracking boom are beginning to question the industry’s fundamentals, as many shale wells produce less than companies forecast.

Banks have begun to tighten requirements on revolving lines of credit, an essential lifeline for smaller companies, as these institutions revise estimates on the value of some shale reserves held as collateral for loans to producers, according to people familiar with the matter.

Some large financial institutions, including Capital One Financial Corp. and JPMorgan Chase JPM -0.08% & Co., are likely to decrease the size of current and future loans to shale companies linked to reserves as a result of their semiannual reviews of the loans, the people say. The banks are concerned that if some companies go bankrupt, their assets won’t cover the loans, the people say.

 

 

Bloomberg News/Gulf News – December 21, 2019

Investors back oil’s jump above $60 with surge in bullish bets

Hedge funds boosted bets on rising US crude prices to the highest level in more than seven months, helping support oil’s first full week above $60 a barrel since May.

Their net-bullish wagers on West Texas Intermediate crude climbed 19 per cent in the week ended December 17, data released on Friday show. Optimism over a US-China trade truce and Opec cuts helped push futures to a three-month high, though the rally has fizzled somewhat.

“I expect to see more length in the market as a function of what looks to be the successful negotiation of Phase 1 of the US-China trade pact, as well as the Opec meeting with their pledge to reduce output,” said Andrew Lebow, senior partner at Commodity Research Group in New York.

 

 

Reuters – December 22, 2019

Israel’s Navitas buys stakes in 4 Texas oil fields from Denbury

Israel’s Navitas Petroleum said on Sunday it had purchased 50% of the rights in four producing oil fields in Texas from oil and gas company Denbury Resources for $45 million.

Navitas’ share in current production under the deal will be 1,363 barrels of oil a day, and it said it intends to carry out further development at the projects. (Reporting by Ari Rabinovitch; Editing by Tova Cohen)

 

 

Laredo Morning Times – December 20, 2019

Texas employers add 37,500 jobs as key sectors carry state through energy woes

Despite mounting job losses in a sluggish energy sector, Texas employers added 37,500 jobs in November from October, the Texas Workforce Commission reported Friday.

The state’s unemployment rate remained at its record low of 3.4 percent last month.

Sectors including health, education and manufacturing continued to see strong job gains despite the energy slowdown that has caused mining and logging employers, which in Texas are primarily oil and gas employers, to shed 2,600 jobs since the start of 2019.

 

 

Midland Reporter Telegram – December 22, 2019

New study details economic impact of fracturing ban

As the 2020 presidential election campaign heats up, some candidates have called for a total ban on hydraulic fracturing while other groups support a “keep it in the ground” policy against producing fossil fuels.

Such comments come as the Global Energy Institute, part of the US Chamber of Commerce, issued a new study on the economic impact of a hydraulic fracturing ban.

“We’re aware some things are said in a campaign don’t become reality,” Marty Durbin, president of the institute, said in a teleconference with media. “It’s early in the process and perhaps the conversation will change.”

 

 

Houston Chronicle* – December 20, 2019

Callon and Carrizo Shareholders Approve Merger

The acquisition of Carrizo by Callon in a merger-of-near-equals was tweaked in November and the shareholder votes delayed because of investor activism that threatened to scuttle the deal. The acquisition was sweetened in favor of Callon shareholders in order to ensure their support.

After the deal was adjusted in November, major Callon shareholder Paulson & Co., which owned about 10 percent of the Callon shares, sold off half of its stake and removed its opposition, and the shareholder votes were delayed until Friday morning.

 

 

Houston Chronicle* – December 20, 2019

Houston energy giants Halliburton, Kinder Morgan among companies that paid no taxes in 2018

[A] recent study by the Institute of Taxation and Economic Policy that reviewed corporate taxes in the first year of the tax law signed by President Donald Trump in 2017, revealed that some giant corporations, including some right here in Houston, didn’t have to pay taxes. What’s more interesting, is that many of these companies, which earn billions in revenue, were even given refunds.

According to the study, 379 of the Fortune 500 companies analyzed were profitable and paid a tax rate of 11.3 percent, more than half the statutory 21 percent tax. But 91 companies paid zero or fewer taxes, including many who had a negative tax rate, which essentially means they got a refund.

 

 

Dallas Morning News* – December 21, 2019

Dallas’ Lone Star Funds buys German chemicals business for $3.5 billion

Dallas-based Lone Star Funds is buying the construction chemicals business of Germany-based BASF for $3.5 billion.

The deal, announced Saturday morning, is expected to close by Sept. 30 following regulatory approvals.

BASF’s construction chemicals business operates production sites and sales offices in more than 60 countries and generated sales of nearly $2.8 billion in 2018. It has more than 7,000 employees.

 

 

10/12 Industry Report – December 16, 2019

The race for deepwater oil ports in the Gulf of Mexico is on—and Louisiana is already years ahead.

There’s a race afoot in the deep waters of the Gulf of Mexico. A host of companies and consortiums are pursuing the development of at least five separate deepwater oil ports off the coast of Texas, each hoping to tap into burgeoning worldwide demand for exports and a growing supply of inland oil.

It appears, however, that those facilities first to cross the regulatory finish line will stand the best chance of getting built, as future demand won’t likely support them all. Regardless, it’s going to be a while before they catch up with the only current oil exporter in the U.S. deepwater market—the Louisiana Offshore Oil Port, located some 30 miles south of Fourchon.

Originally constructed as an import facility, the decades-old LOOP needed only a few adjustments to add export capabilities to its portfolio, and the investment appears to be paying off in a big way. LOOP loaded a record six Very Large Crude Carrier, or VLCC, supertankers in a matter of weeks last summer— 283,333 barrels per day in June alone—for the transport of medium-sour crudes to China, India and Europe.

 

 

GovTech – December 13, 2019

Hazardous Liquids Training for First Responders Available in Texas

With miles of pipelines underground and crude oil storage tanks dotting the Permian Basin landscape, knowing how to react in case of disaster is critical for area first responders.

That’s why ExxonMobil is teaming up with the Texas A&M Engineering Extension Service (TEEX) to provide a hazardous liquids emergency response training course for firefighters. A $200,000 grant from the oil giant funded development of the course and participation of 150 firefighters at sessions in August and October. A third session is set for January 11-12, and 50 firefighters have already signed up to participate.

Nicolas Medina, public and government affairs manager for ExxonMobil Pipeline, is hoping to see firefighters from West Texas participate in the January session or additional sessions in 2020.

 

 

Houston Chronicle* – December 20, 2019

Harold Hamm invites Elizabeth Warren on tour of shale heartland

Billionaire wildcatter Harold Hamm invited Elizabeth Warren to the Oklahoma oil patch as the U.S. Democratic presidential candidate proposes a ban on fracking if elected.

In a letter dated Dec. 18, Hamm said he wanted Warren to tour “the economic engine that is our industry” while she visits her home state of Oklahoma for a town hall meeting over the weekend.

“Our domestic energy resurgence is making America an energy and economic superpower,” Hamm wrote. “We are keeping hundreds of billions of dollars out of the hands of rogue regimes and corrupt kleptocracies.”

 

Utilities

 

S&P Global Platts – December 20, 2019

Overpowered: Why a US gas-building spree continues despite electricity glut

When the Inland Empire Energy Center was announced in 2005, it was touted as a breakthrough power plant that would fill a critical shortfall in California’s electricity supply for decades to come. Located in Riverside, Calif., and based on a vaunted new gas turbine technology from General Electric Co., the 730-MW, $500 million power plant came online in 2009.

Only eight years later, however, in March 2017, GE shut down one of the plant’s two operating units. And in June 2019, the company said it would close the plant for good, only 10 years after starting it up.

Inland Empire was powered by a legacy technology that is “uneconomical to support further,” a GE spokesperson said.

 

 

KLBK (Lubbock) – December 30, 2019

Lubbock power & light smart meters help detect theft

Lubbock Power and Light (LP&L) said they see an average of five electricity thefts a month.

Spokesperson Matt Rose said LP&L has been working for the past four years to install smart meters that are able to detect tampering. He said they’re now 75 percent finished installing them.

Although he said there has not been an increase in theft cases since the smart meters have been installed, the meters are able to detect problems at a faster rate.

“We can get information that comes back from that meter in near real time that says, ‘something’s not operating properly please, you know, somebody needs to investigate this,’” he said.

 

 

Wall Street Journal* – December 20, 2019

Trump Administration Waives Tighter Rules for Less Efficient Lightbulbs

The Trump administration is intervening to protect old-fashioned incandescent lightbulbs from rising energy-efficiency standards, part of a deregulatory push that 16 states have already challenged to uphold their efforts to fight climate change.

The Energy Department is set to announce Friday that it won’t raise efficiency rules under a 2007 law it says would have effectively phased out the pear-shaped bulbs that were once ubiquitous in American households. Department officials say tightening those standards would be effectively illegal because doing so would push up costs for manufacturers and raise prices so high it would kill demand. They estimate such bulbs’ prices would rise to more than $8 each from less than $2.

“This issue comes down to preserving consumer choice and following the law,” said Undersecretary of Energy Mark W. Menezes, adding that the Trump administration is “focusing on innovation over regulation.”

 

Alternatives & Renewables

 

Inverse – December 9, 2019

Elon Musk revives his plan to power the United States entirely on solar

Could you meet the United States entirely from solar energy? Sure, claims tech entrepreneur Elon Musk.

The Tesla CEO, whose company provides solar panel solutions like the Solar Roof, shared a video via Twitter on Saturday of the electricity-generating tiles taking a beating from a hammer. One fan responded to Musk’s video with a 2011 quote from Bill Gates, who described solar and similar technologies as “cute,” but that the answer is in nuclear power.

Musk hit back at the quote by describing Gates’ assertion as “def wrong.” ….

Does it work? University College London explored Musk’s idea in 2015 to see if it would work. They used EIA figures that showed the United States used 3,725 Terawatt-hours in one year in 2013, or the equivalent of 425 gigawatts.

 

Regulatory

 

Houston Chronicle* – December 20, 2019

Sierra Club intervenes in public records dispute regarding cancer-causing chemical

The Sierra Club is suing the state’s environmental agency for records it says might show bias in favor of industry.

Last summer, the Texas Commission on Environmental Quality announced a proposal to raise the acceptable threshold for long-term exposure to ethylene oxide, a carcinogen, from 1 part per billion to 4 parts per billion.

It is significantly weaker than the Environmental Protections Agency’s cancer risk factor for the toxic chemical, but what Texas does could have national implications.

 

 

Austin American Statesman* – December 19, 2019

Texas Mayors Steve Adler, Ron Nirenberg, Sylvester Turner: Congress shouldn’t cut investments in clean energy

Great news: Congress has put together an end-of-year tax package to avoid a government shutdown. Bad news: The tax package does not include most of the critical incentives that have bolstered the growth of clean energy technology.

As Climate Mayors, we believe that we must prioritize renewable energy and other clean energy technologies like battery storage, electric vehicles and energy efficiency. An overwhelming number of Americans — 77%, according to Pew Research Center — agree that we must prioritize carbon-free energy sources instead of doubling down on fossil fuels. And 89% of voters across the political spectrum support extending clean energy tax incentives. But due to opposition from the Trump Administration, Congress will likely pass a package of tax bills this week that excludes most of these tax credits. One exception: a tax credit for wind power will be extended for one year.

 

 

Texas Observer – December 19, 2019

Christopher Collins: Report Says As TCEQ Sits Idle, Polluters Double Illegal Air Pollution in 2018

The oil and gas industry in Texas is largely responsible for doubling the amount of illegal air pollution in the state last year, according to a report released Wednesday. The Texas Petroleum Chemicals (TPC) plant in Port Neches—the same facility that caught fire last month, injuring three and prompting multi-day evacuations—was listed as a major emitter of butadiene, a known human carcinogen. That and other emissions, innocuously referred to as “upset events,” lead to the premature deaths of 42 Texans and $241 million in health care costs each year.

Last year, approximately 270 companies, including Chevron, Dow Chemical, and ExxonMobil, reported 4,590 unauthorized emissions incidents in the state, according to the report from advocacy group Environment Texas. Those resulted in 135 million pounds of illegal air pollution, double the amount emitted in 2017. Contaminants spewed into the sky include human carcinogens butadiene and benzene; smog-forming nitrogen oxides; and particulate matter, which can cause heart attacks, strokes, and congestive heart failure.

 

 

December 14, 2019

San Antonio Express News: USMCA is vital to Texas

Before we talk about the United States-Mexico-Canada Agreement, let’s talk about NAFTA.

The North American Free Trade Agreement has been given a bad rep in recent years. It’s often blamed for the loss of manufacturing jobs in the Rust Belt and acting as a drag on the U.S. economy. But research has shown NAFTA, which governs at least $1.2 trillion in trade, has been a modest benefit to the nation’s economy, as estimated by the Congressional Research Office.0 ….

As the nation’s leading export state, Texas had a lot to lose if this agreement faltered. In 2018, Texas exported more than $315 billion in goods globally. Our top two markets? Mexico and Canada.

Ratifying the USMCA means it is continuing this synergy. That’s good for North America, the United States and Texas. And it’s good for San Antonio, where NAFTA was signed in 1992. Whether it’s called NAFTA or USMCA, North America is stronger when our three countries are linked politically and economically.

 

 

Houston Chronicle* – December 20, 2019

FERC pushes back against state clean energy plans

Wind turbines, solar systems and nuclear plants that receive state subsidies promoting clean energy can be assessed a surcharge when bidding into the country’s largest power market, the Federal Energy Regulatory Commission ruled Thursday.

In a 2-1 ruling, FERC found at times of high demand those subsidies were suppressing power prices in PJM Interconnection, which provides electricity across 13 states and the District of Columbia, and regulators there needed to take steps to ensure clean energy sources did not have an advantage over power plants fueled by coal and natural gas.

 

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The Texas Energy Report NewsClips – December 20, 2019

Subscriber’s Edition

Asterisk * indicates news content may be limited or unavailable at website because it’s password protected

 

Lead Stories

 

Newsweek – December 17, 2019

Bernie Sanders calls out executives amid claims that ExxonMobil projected zero emissions reductions by 2040 — “prosecute the fossil fuel executives”

Democratic presidential candidate Bernie Sanders pledged to hold fossil fuel executives accountable in response to climate scientists sounding the alarm over ExxonMobil’s projection of zero overall reduction in industrial emissions through 2040.

“Here’s a prediction: we are going to win, pass a Green New Deal, and criminally prosecute the fossil fuel executives who destroyed the planet,” Sanders said, in a Wednesday tweet responding to an article published by the Bulletin of the Atomic Scientists—keepers of the Doomsday Clock.

Authored by climate scientists who have written for the U.N.’s Intergovernmental Panel on Climate Change, the Bulletin article outlines how ExxonMobil and other energy companies declare their support for the 2016 international Paris Agreement, even though their own projections fail to align with its global warming mitigation goals.

 

 

Oil Price – December 19, 2019

A Record Number Of Oil CEOs Dethroned In 2019

Nearly 1,500 chief executives vacated their posts in the first 11 months of the year–good for a 12% increase compared to last year’s corresponding period.

Some high-profile cases include Google parent company Alphabet’s Larry Page, Nike’s Mark Parker, Best Buy’s Hubert Joly, EBay’s Davin Wenig, McDonald’s Steve Easterbrook, HBO’s Richard Plepler and Expedia’s Mark Okerstrom.

The oil and gas industry has not been immune to this CEO melee, with scores of executives resigning or being ousted.

Unlike their contemporaries in other industries who have mostly faced the axe due to questionable ethics or for posing a threat to a company’s mission or reputation, ousted oil and gas CEOs have mostly taken the stick due to underperformance.

 

 

Midland Reporter Telegram – December 19, 2019

Permian Basin gas could help fuel natural gas-to-gasoline plant

Oil and gas producers seeking a market for their natural gas instead of sending it up in smoke may have a new option in the next two years.

Primus Green Energy, along with IHI E&C International Corp., have commissioned a Front End Engineering and Design (FEED) study for a natural gas-to-gasoline plant to be built in Texas.

“The really huge opportunity is that natural gas that is being flared could be captured, put into our unit and realize methanol and gasoline and products like diesel,” Steven Murray, chief executive officer of Primus, told the Reporter-Telegram in a telephone interview. It’s estimated the plant, which would be built with a global petrochemical company as a joint venture partner, would consume 28 million cubic feet of natural gas a day and produce 2,800 barrels a day of gasoline. Much of that gas could come from the Permian Basin, he said.

 

 

Freight Waves – December 19, 2019

Bad oil news piles up in the Permian and for companies serving it: Dallas Fed

Recent reports out of the Federal Reserve Bank of Dallas paint a gloomy picture regarding prospects in the U.S. oil industry.

Even as U.S. crude and total petroleum production continue to set records, that is happening while surrounded by cutbacks in operations that are leading to less spending and fewer jobs. That’s obvious in the recently released data and analysis from the Dallas Fed, contained in both the Permian Basin Economic Indicators and the bank’s Energy Indicators.

The most stunning number comes in its figure for October employment. The Fed reported that in October, the employment category of mining, logging and construction in the Permian Basin of west Texas was down 13.9% year-on-year. That sector, despite its name, is overwhelmingly oil & gas-related.

 

 

Power Magazine – December 19, 2019

NERC: Long-Term Reliability Uncertain Amid Rapid Changes to Bulk Power System

Significant and rapid changes that are reshaping North America’s power sector will likely leave Texas and Ontario, Canada, with supply shortfalls over the next decade, and energy deficiencies could also occur during off-peak conditions in the Midcontinent Independent System Operator (MISO) area and the Western Electricity Coordinating Council (WECC) region, the North American Electric Reliability Corp. (NERC) says in its newly released 2019 Long-Term Reliability Assessment.

The report released Dec. 19 from the entity tasked by the Federal Power Act to conduct periodic assessments of the North American bulk power system (BPS) also concludes the six North American regional entities that make up the Electric Reliability Organization (ERO) urgently need to gear up for more dramatic influxes of wind, solar, and natural gas resources between 2020 and 2029.

 

Oil & Gas

 

Reuters – December 20, 2019

Oil hovers near 3-month highs on trade deal progress; set for 3rd weekly rise

Oil prices held steady near three-month highs on Friday, heading for a third consecutive weekly rise, on the back of easing Sino-U.S. trade tensions that have weighed on demand as well as the global economic growth outlook.

Brent futures were up 5 cents, or 0.08%, to 66.59 a barrel by 0242 GMT, while U.S. West Texas Intermediate crude was down 8 cents, or 0.13%, at $61.10 per barrel.

Progress in a long-running trade dispute between the United States and China, the world’s two biggest oil consumers, has boosted expectations for higher energy demand next year.

China on Thursday announced a list of import tariff exemptions for six oil and chemical products from the United States, days after the world’s two largest economies announced an interim trade deal set to be signed at the beginning of January.

 

 

Denver Business Journal* – December 19, 2019

CEO explains why his Denver firm spent $770M on Devon Energy natural gas assets

A Denver company is buying Devon Energy Corp.’s 320,000 mineral acres and thousands of wells in the North Texas Barnett Shale region in a deal worth $770 million.

Denver-based Kalnin Ventures announced Wednesday that an affiliate of its investment vehicle, BKV Oil & Gas Capital Partners, reached the deal with Oklahoma City-based Devon Energy (NYSE; DVN).

The transaction makes BKV, with 4,200 wells, the largest natural gas producer in the Barnett Shale..

Denver-headquartered BKV is solely focused on long-term natural gas assets, which makes it unusual given the low prices of natural gas and the difficult economics face by many U.S. natural gas exploration and production companies.

“It’s like we’re buying downtown Denver real estate in 2009, and when you do that everybody looks at you like ‘what are you doing?’” said Christopher Kalnin, CEO and founder of Kalnin Ventures.

The current low prices surrounding natural gas create some enticing long-term investment opportunities, he said. BKV is focused on buying well-maintained operating wells.

“We think the way to win this market is to buy cash flow and optimize with technology,” Kalnin said.

 

 

Houston Chronicle* – December 19, 2019

Chevron buys Australia’s Puma Energy for nearly $300 million

U.S. energy giant Chevron will buy Australia’s Puma Energy for about $292 million to provide more fuel distribution support in the Asia-Pacific region.

Chevron, which has a large refining presence in Asia and large liquefied natural gas hubs in Australia, will scoop up Puma’s network of 100 storage terminals, 3,000 retail fueling sites and its roughly 8,000 employees, including regional locations in Singapore, Estonia, South Africa and Puerto Rico.

“The acquisition will provide Chevron with a stable market for production volumes from our refining joint ventures in Asia and create a foundation for sustainable earnings growth,” said Mark Nelson, Chevron’s executive vice president for downstream and chemicals.

 

 

Houston Chronicle* – December 20, 2019

Deepwater Gulf enters next phase of growth

For the first time since the Deepwater Horizon tragedy of a decade ago, the British oil major BP will ship a major oil platform to the Gulf of Mexico, where it will operate in some 4,500 feet of water nearly 200 miles south of New Orleans.

The Argos platform, which will reach its destination in the fall of 2020, is part of the next wave of oil production in the Gulf of Mexico as companies learn to reduce costs while operating with new technologies in more complex, deeper waters. Even as the onshore shale boom starts to slow and companies cut back onshore, global deepwater spending is back on the rise for oil and gas producers.

That has driven a mini-resurgence in the Gulf, where mix of legacy production and the development of new mega projects has offshore platforms pumping out record volumes of oil to the tune of about 2 million barrels a day.

 

 

S&P Global Platts – December 19, 2019

Catastrophe or short-term dip? Studies look at oil, gas impact of Democrat president

The US Chamber of Commerce’s Global Energy Institute said Thursday that a ban on fracking would be “catastrophic;” for the US economy, causing widespread job loss and significant increases in oil and natural gas prices.

“In a future where hydraulic fracturing is banned, the systemic shocks to the global oil and gas markets would be immense,&rdquo; the report states. “Oil and gas prices would be based on scarcity pricing, as supply would be significantly reduced and demand would be inelastic in the short-term.

With a fracking ban, WTI prices would reach $130/b in 2025 according to the study, roughly $60/b above where WTI prices would be without a ban.

 

 

S&P Global Platts – December 19, 2019

US refiners required to blend 20.09 billion gallons renewable fuel in 2020: EPA

US refiners will be required to blend 20.09 billion gallons of renewable fuel into gasoline and diesel in 2020, making up 10.97% of the nation’s transportation fuel supply, according to final volumes set Thursday by the US Environmental Protection Agency.

While EPA expanded an earlier proposal by 50 million gallons, biofuel groups and farm-state lawmakers criticized the final volumes as too small to make up for widespread waivers EPA has granted to small refineries in the past three years.

EPA set the 2020 advanced biofuel mandate at 5.09 billion gallons, up from 5.04 billion gallons proposed in July and 4.92 billion gallons in the 2019 mandate.

 

 

Houston Chronicle* – December 19, 2019

McDermott stock rallies to return back above $1 per share

A Wednesday afternoon rally ended with stock prices for troubled Houston oilfield service company McDermott International returning back above $1 per share.

Traded on the New York Stock Exchange under the ticker symbol MDR, shares of McDermott were at about 78 cents per share just before 1 p.m. Wednesday. Stock prices shot up with MDR closing the day at $1.08 per share, a roughly 38 percent jump in a matter of hours.

An exact cause of the stock price rally remains unclear but the movement came hours after the company announced the first export shipment from the second production unit at Freeport LNG, a delayed liquefied natural gas export terminal it is helping to build southwest of Houston.

 

 

MarketWatch – December 19, 2019

Apergy to combine with Ecolab’s upstream energy business in a deal valued at $4.4 bln

Oil and gas drilling services company Apergy Corp. APY, +5.97% announced Thursday a deal in which it will combine with Ecolab Inc.’s ECL, +3.28% upstream energy business, in a deal that values that upstream business at about $4.4 billion.

Under terms of the deal, Apergy will issue 127 million shares to Ecolab shareholders, which based on Wednesday’s stock closing price of $30.67 would be valued at $3.90 billion. Apergy will also assume debt of about $492 million.

 

 

Bloomberg News/Yahoo! News – December 19, 2019

Oil Trader Vitol Sues U.S. Demanding $52 Million Tax Refund

A subsidiary of Vitol Group, the biggest independent oil trader, is demanding that the U.S. government return more than $52 million in fuel taxes the Rotterdam-based company says was improperly collected.

The U.S. Internal Revenue Service failed to refund federal excise taxes paid by Vitol Inc., which is principally operated out of Houston, from 2014 through 2017, the company said Tuesday in a filing in federal court in Houston.

Vitol, which handles about 7.4 million barrels of crude and petroleum products per day, alleges the U.S. failed to classify fuel blends that included liquefied petroleum gas, butane and gasoline as “alternative fuel mixtures” eligible for tax refunds during the period.

 

 

Houston Chronicle* – December 19, 2019

Huge revisions show Houston’s economy wasn’t as hot as early numbers said

The Houston economy likely created jobs at a much slower pace than initially estimated as weakness in the energy and manufacturing sectors weighed on growth, according to the Federal Reserve Bank of Dallas.

The Dallas Fed calculated a huge downward revision to employment data reported in the second quarter, particularly in Houston. The revised figures show that employment in the Houston metropolitan region grew at an anemic rate of less than a half percent, compared to initial estimates of nearly 4 percent.

Early job growth estimates from the U.S. Labor Department are based on small samples, and data is often revised when more information is available, but they typically are not so dramatic. The Dallas Fed, for example, estimated that job growth in Texas from the beginning of the year is closer to 1.7 percent — still a healthy pace — but slower than the 2.1 percent originally reported.

 

 

Dallas Morning News* – December 19, 2019

Fort Worth oilfield services firm recruits its new CEO from Baker Hughes

Fort Worth-based Basic Energy Services is tapping a Baker Hughes executive as its next CEO, only two weeks after the New York Stock Exchange dropped the company’s stock.

Keith L. Schilling, president of Baker Hughes Canada, will become chief executive officer and president of the oilfield services firm on Jan. 2. He’ll replace T.M. “Roe” Patterson, who announced his impending departure in September after a 14-year run in the top job.

Basic Energy became a penny stock in early December when it was delisted by NYSE. It now trades on an over-the-counter market, where it closed Thursday at 24 cents a share. It was selling above $6 a share at the beginning of the year.

 

 

Oil Price – December 19, 2019

China Removes U.S. Oil Products From Tariff List

A few days after the United States and China announced a phase-one trade deal, Beijing announced it had removed six chemicals and oil derivatives from its list of tariffed U.S. imports.

The exemption will be in force for 12 months, ending on December 26, 2020, Reuters reports, citing a statement by the Chinese Finance Ministry.

The list of six products includes a type of high-density polyethylene and a low-density polyethylene—both petrochemical products—as well as white oil and food-grade petroleum wax.

Beijing has also removed an additional 5-percent tariff planned for U.S. propane imports, to have come into effect from this month. Another 25-perent tariff imposed on U.S. propane imports earlier, however, remain in place.

 

 

Alaska Public Media – December 19, 2019

About half of BP’s Alaska employees have accepted a job with Hilcorp

BP announced Thursday that about half of its more than 1,500 Alaska employees have accepted a job with Hilcorp, the private oil company that plans to buy BP’s entire Alaska business in a $5.6 billion deal.

Of the employees not going to Hilcorp, about half decided to take a severance package from BP. Others opted to transfer out of Alaska to stay with BP or took a job with another company.

That leaves nearly 300 employees who don’t have a job lined up yet, and are on track to receive “involuntary severance,” according to Damian Bilbao, a vice president for BP Alaska.

 

 

Reuters – December 17, 2019

Tough for China to buy enough U.S. crude, coal, LNG and soybeans: Clyde Russell

The big, unresolved question from the initial trade agreement between the United States and China is what happens if Beijing cannot meet the massive jump in required commodity purchases.

While the agreement is a welcome development in de-escalating tensions between the world’s two biggest economies, it apparently makes commitments that China will find almost impossible to fulfil.

Beijing has agreed to increase purchases from the United States by $200 billion over the next two years over and above the level of imports in 2017, according to U.S. Trade Representative Robert Lighthizer.

China imported about $130 billion in U.S. goods and $56 billion in services in 2017, prior to the start of President Donald Trump’s tariff dispute in 2018.

Also: China set to embrace Norway as regular crude oil supplier in 2020

 

 

Houston Chronicle* – December 17, 2019

Big Oil shows new commitments to offshore African projects

A bevy of Big Oil majors are making new commitments to developing oil and gas projects in West Africa, specifically in Senegal, Mauritania and Angola.

The British energy major BP said its three-well exploration campaign offshore of Senegal and Mauritania has proven successful, confirming the world-class scale of natural gas resources.

Likewise, a consortium led by the French energy giant Total, as well as Exxon Mobil and others, said they will extend their production license offshore of Angola through 2045 as they continue to see more future promise in the already-successful venture.

Also: The World’s Biggest Oil Hot Spot in Namibia Already Attracting Majors

 

Utilities

 

Houston Chronicle* – December 19, 2019

Battery storage on verge of changing Texas power grid

Texas is carving out a leadership position in adopting large-scale battery storage as battery prices fall, technology improves and electricity demand grows, potentially paving the way for renewable power to dominate the state’s energy mix.

The amount of storage on the state’s power grid is still small — just 100 megawatts in a system with a generating capacity of nearly 80,000 megawatts — but is expected to more than triple to about 360 megawatts in 2020 and grow even faster in coming years. The state’s grid manager, meanwhile, is considering proposals to develop some 7,200 megawatts of large-scale battery storage within the next five years or so, exceeding the amount of natural gas generation in the pipeline.

“It’s a stunning development,” said Sam Huntington, an analyst specializing in battery storage for the global consulting firm IHS Markit, “and nothing anyone would have predicted a couple years ago.”

 

 

KXAN (Austin) – December 19, 2019

Austin Energy increases program incentives deal, aims to conserve energy

One Austin Energy program aims to save customers money while helping the city save energy.

It’s a program called Power Partner. At present, Austin Energy is offering nearly $150 in rebates and incentives for customers who decide to invest in a smart thermostat and give the city access.

A $25 rebate for the purchase of the smart thermostat and a $130 incentive for joining the program.

“Across all of the state of Texas these conservation programs helped and once they got that alert we were able to drive that usage down and so it didn’t go and escalate to the next level of that alert,” Denise Kuehn, the energy company’s director of energy efficiency services said.

 

 

S&P Global Platts – December 19, 2019

Southwest Power Pool adds 160 MW of wind, 959 MW more on tap for December

The Southwest Power Pool had a 160-MW wind farm in Nebraska enter commercial operation in November, and another 959 MW of wind is on schedule to start commercial operation by the end of 2019, a Generation Interconnection Active Requests report generated Wednesday shows.

The other facilities to come online this month are in Kansas, Oklahoma, South Dakota and Texas.

So far in 2019, 1,119 MW of nameplate capacity has entered commercial service in SPP – all wind except for a 5-MW combuston turbine in Hale County Texas.

Of the generation that has started up, the largest total is in Texas, which in addition to the combustion turbine had a 478-MW wind farm start up in September in Abernathy County, Texas.

 

 

KTTU (AZ) – December 19, 2019

Buried powerlines & waveform analytics: Wildfire prevention discussed at DC hearing

The U.S. Senate Committee on Energy & Natural Resources met Thursday morning with the purpose of addressing prevention tactics when it comes to fires from electric grids.

To put in plain terms, what can electric companies do to prevent fires, and what would some solutions look like in the future?

Senator Lisa Murkowski, Chairwoman of the committee with West Virginia Senator Joe Manchin being the ranking member, listened to testimony from five witnesses. Notable witnesses include Bill Johnson, CEO and President of PG&E and Dr. B. Don Russell, Distinguished Professor and Director, Power System Automation Laboratory. …

Dr. B. Don Russell, a professor at Texas A&M and an expert in electric power engineering, highlighted how tech devices are being used to monitor, diagnosis and detect issues on lines and grids.

“We can do more because we need to use advanced diagnostics. Everything that everyone has said they want to do is good, “ Russell said, “I will tell you because I’ve looked at all the fires in California that are significant as well as in Texas, Oklahoma and other places many of the things we are doing are not addressing…we need more diagnostics.”

 

Alternatives & Renewables

 

BBC – December 11, 2019

‘World’s first’ fully-electric commercial flight takes off

An all-electric powered seaplane has taken flight in Vancouver, Canada, in what the operators describe as a “world first” for the aviation industry.

The short test flight by Harbour Air and magniX involved a six-passenger aircraft fitted with an electric motor.

The companies said it was a first step to building the “world’s first all-electric commercial fleet”.

The push to electric could help slash carbon emissions in the high-polluting aviation sector.

 

Regulatory

 

San Antonio Express News* – December 19, 2019

House passes bipartisan USMCA, in ‘win for Texas’

A breakthrough came earlier this month when Democrats announced they had reached a deal with U.S. Trade Representative Robert Lighthizer, including an enforcement mechanism that allows U.S. inspectors into Mexican factories to ensure they’re keeping up with stricter labor laws — a provision designed to stop the export of manufacturing jobs into Mexico by companies seeking to avoid regulatory costs. …

Since the 1990s North American trade has become integral to the Texas economy, which relies on a steady back and forth flow of everything from oil to agricultural goods across the border.

Last year the state exported more than $137 billion worth of goods to Mexico and Canada, its two largest markets, accounting for more than 40 percent of Texas exports.

 

 

Wall Street Journal* – December 19, 2019

Biofuel Groups Criticize EPA Ethanol Rule as Too Favorable to Oil Refiners

Environmental regulators held steady the amount of ethanol and other conventional biofuel that oil refiners must add to the country’s gasoline and diesel supply next year, a move that they said would help struggling corn farmers but that biofuel groups criticized as not going far enough.

The Environmental Protection Agency said Thursday that the biofuel requirement will ensure that oil refiners add at least 15 billion gallons of conventional biofuel, which is most often ethanol made with corn, into the transportation fuel supply next year.

For more than a decade, Congress has called for U.S. gasoline to be made with a greater proportion of renewable fuels, reducing the country’s reliance on foreign crude. The federal Clean Air Act calls for EPA officials to determine annual targets for the quantity of biofuels that are ultimately mixed into transportation fuel.

 

 

The Hill – December 17, 2019

Merrill Matthews: It’s time to hit the off switch for solar, wind power tax breaks

As billionaire investor Warren Buffet said in 2014, “we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

Well, at least now we know. ….

While most of the solar ITC is set to go away in 2022, commercial solar projects will still receive a 10 percent tax credit — in perpetuity. Wind energy’s PTC ends this year. If Congress extends the solar ITC, the wind energy lobby will want its credit extended too, essentially doubling the cost to taxpayers.

While Ronald Reagan may be correct that federal bureaus have eternal life, let’s make sure that doesn’t apply to federal tax subsidies. Let the solar ITC and wind PTC pass away. It may upset billionaire Buffet, but taxpayers will be much better off.

 

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The Texas Energy Report NewsClips – December 19, 2019

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Lead Stories

 

Texas Tribune – December 18, 2019

Texas regulators want stiffer penalties for company whose Port Neches plant exploded

Environmental and watchdog groups have long criticized the Texas Commission on Environmental Quality for taking it too easy on polluters — and the TCEQ has often countered that its job is to coax industrial facilities into compliance rather than slap them with big fines.

But on Wednesday, agency officials openly acknowledged that a proposed fine against Texas Petroleum Chemicals Group, known as TPC — the Houston-based company whose Port Neches chemical plant exploded last month — for more than a half-dozen unrelated violations that occurred in 2018 wasn’t high enough and that its general enforcement approach may not be stringent enough.

In a unanimous vote, the agency’s three commissioners rejected a fine against TPC that had been whittled down to $22,302 and kicked it back to agency staff, asking that the executive director refer the cases to the Texas Attorney General’s Office for “comprehensive enforcement action” — a move that will presumably result in a more stringent penalty and could result in a criminal investigation.

Related: Report cites TPC Group for unauthorized butadiene release in 2018

 

 

Houston Chronicle* – December 18, 2019

The top company in Texas’ birthplace of shale exits for $770M

Devon Energy is selling its position in Texas’ Barnett shale for $770 million, leaving the birthplace of the shale revolution without any top industry players. …

After selling other parts of its Barnett position previously, Devon will exit the region with the $770 million sale to a Denver-based private equity firm called Kalnin Ventures, which is primarily backed by the Thailand coal-mining and power giant Banpu. The shale position will be operated by BKV Oil & Gas Capital Partners.

 

 

Oil & Gas 360 – December 16, 2019

Goldman Sachs to invest $750 billion in clean energy, ‘sustainable’ industries

The investment bank Goldman Sachs is committing to make available $750 billion over the next decade to invest in and finance cleaning up the energy industry, along with making farming more sustainable and reducing poverty, the company said Monday.

In an op-ed in the Financial Times, Goldman CEO David Solomon wrote, “companies have traditionally treated sustainability as a peripheral issue, focusing narrowly on the way they manage their impact on the environment.”

“We don’t have the luxury of that limited perspective any more. The evidence of climate change is clear,” he said. “Profitability will always matter… But finance must also address climate transition and inclusive growth while achieving and sustaining those returns.”

The move comes amidst increasing calls from corporate America to move on reducing the use of oil and other fossil fuels to address climate change.

 

 

Texas Tribune – December 19, 2019

How the Texas Legislature saved John Paul DeJoria $123 million

As 2017 dawned, Texas billionaire John Paul DeJoria had a $123 million problem.

The shampoo and liquor magnate had swept into Morocco nearly two decades earlier to drill wells and reap profits in a coastal kingdom that had never struck it rich on oil. He had ample reason for optimism: a history of professional serendipity, millions in personal investment, and, perhaps most importantly, a budding business partnership with Moroccan royalty.

But the oil never materialized, and the deal disintegrated. DeJoria’s Moroccan business partners sued him for fraud. After years in the Moroccan courts, a judge ordered DeJoria and his partner to pay 969,832,062.22 Moroccan Dirhams — $123 million.

It wasn’t that he couldn’t afford it. DeJoria founded the hair care giant John Paul Mitchell Systems, with annual revenue now estimated at over $1 billion, and Patrón Tequila, which sold last year for $5.1 billion. In 2017, when his Moroccan bill was coming due, he was worth $3.1 billion.

 

 

Grist – December 18, 2019

Oil money has fueled the arts for ages. Can museums survive without it?

The Getty’s collection of ancient Greek sculptures, thousand-year-old manuscripts, and irises painted by Vincent van Gogh might be one of the best protected in the world. In the case of a wildfire, a tank filled with more than 1 million gallons of water can soak the perimeter, creating a modern-day moat. (Before the Getty Fire, it snuffed out the Skirball Fire in 2017.) The museum has thick walls made of travertine, a flame-resistant material used for fire pits. And if smoke manages to creep into the museum, a special air-pressure system can push it out.

The Getty can afford these protections because it’s one of the richest museums in the world — and that’s all thanks to oil money. The museum owes its existence to J. Paul Getty, the famous oil tycoon and self-described art-collecting “addict.” The Getty Trust, which he founded in 1953, is worth more than $10 billion.

ExxonMobil, for instance, is one of the most charitable corporate donors on the planet, as well as the fourth-biggest polluter. The company has contributed more than 3 percent of total global carbon dioxide emissions since 1965. Last year, it gave $2 million to arts and culture organizations in the United States. Most of the recipients are in its home state of Texas — like the Nasher Sculpture Center in Dallas or the Austin Symphony Orchestra Society — but Exxon spreads its largesse around, supporting the Anchorage Museum in Alaska and recently giving $850,000 to the Smithsonian Institution for a traveling exhibit about African-American motorists in the mid-20th century.

 

Oil & Gas

 

CNBC – December 19, 2019

Oil prices surf US-China trade thaw to three-month highs

Oil prices remained atop three-month peaks on Thursday, extending a robust streak that began a week ago, as thawing trade relations between the United States and China supported global markets.

Brent crude futures edged up 8 cents to $66.25 a barrel by 0645 GMT, while U.S. West Texas Intermediate (WTI) crude gained 4 cents to $60.97.

Trading volume was thin, with not even news of President Donald Trump’s impeachment by the U.S. House of Representatives stirring the oil market. …

According to weekly data released by the Energy Information Administration on Wednesday, U.S. crude inventories dropped 1.1 million barrels in the week to Dec. 13, while gasoline and distillates stockpiles rose.

 

 

Houston Chronicle* – December 18, 2019

In a tough market to do deals, investment bankers try old and new tricks

Occidental Petroleum Corp.’s $54 billion deal for Anadarko Petroleum Corp. this year may be one of the biggest energy deals in years, but it was a rarity in an otherwise dismal environment for deal-making.

“The market woke up two years ago and decided the (energy) sector wasn’t providing returns,” said Steve Trauber, who helped advise Occidental as Citi’s vice chairman and global head of energy.

When the energy industry falls on hard times, so do the hundreds of people working in Houston, the global hub for oil and gas banking. Some of the larger, more successful investment banks in the city stay afloat by advising on restructuring. For example, Lazard has a longstanding niche helping companies manage their liquidity and debt, both in and out of bankruptcy court. Citi, one of the largest financial advisers in the energy industry right now, is helping companies raise high-yield debt.

 

 

S&P Global Platts – December 18, 2019

US SEC proposes new oil, natural gas disclosure rules with new exceptions

The US Securities and Exchange Commission agreed by a 3-2 vote to release a new proposal requiring multinational oil and gas companies to disclose payments made to foreign governments.

The rule, initially mandated by Section 1504 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, has been twice adopted by the SEC, overturned by a federal court, and rolled back by Congress and President Donald Trump.

The rule is intended to bring transparency to bribes paid to foreign governments in exchange for oil, gas and mining rights overseas, but Robert Jackson Jr. and Allison Herren Lee, the two SEC commissioners who voted against the proposal Wednesday, said it would not achieve that aim.

 

 

Houston Chronicle* – December 18, 2019

Unauthorized air emissions in Texas more than doubled in 2018, environmental group says

Texas companies last year spewed more than 135 million pounds of toxic pollutants beyond what is permitted, a doubling of emissions over 2017, according to a new analysis by an environmental nonprofit.

Much of the spike in 2018 came from a single event at the Beaumont Gas to Gasoline Plant in Jefferson County, when an equipment startup at the plant on Aug. 29, 2018 lasted for more than five days and emitted more than 53 million pounds of carbon dioxide — a primary driver of climate change.

Still, even without this event, unauthorized emissions statewide jumped by more than 30 percent, from 63 million pounds in 2017 to 82 million pounds in 2018, according to Environment Texas, a nonprofit that produces the annual report.

 

 

Dallas Morning News* – December 18, 2019

Report lists top 10 polluters in North Texas

More than 87,000 pounds of air pollution got pumped into North Texas in 2018, according to a new report by Environment Texas Research and Policy Center.

This year’s report pinpoints the 10 worst polluters in each metro area that emitted six pollutants of concern: benzene, nitrogen oxides, soot, sulfur dioxide, hydrogen sulfide and Butadiene.

In Dallas-Fort Worth, more than 3,000 pounds of the six pollutants were produced by 10 polluters, including an Owens Corning Insulating Systems plant in Waxahachie, a Garland Municipal Power plant, a Tamko Building Product facility in Dallas, a Conecsus facility in Kaufman County, a Bridgeport Gas plant in Wise, and five other facilities across Wise, Johnson, Parker and Tarrant counties.

 

 

Houston Chronicle* – December 18, 2019

Industry, enviros contrasting accounts over flaring

Environmentalists and the natural gas industry have issued contrasting accounts about flaring, the practice of burning off excess natural gas in the Permian Basin and other shale plays across the United States.

Over the past week, the Washington, D.C.-based environmental group Earthworks and the industry-funded group Texans For Natural Gas released online statements that offer contrasting viewpoints of the issue.

In a public letter, Earthworks criticized the Texas Commission on Environmental Quality, the state’s top environmental agency, as being lax on enforcement and “uncooperative” in response to citizen complaints about the issue.

Texans For Natural Gas posted a Tuesday morning report stating that methane emissions intensity, the amount of methane vented or flared for each barrel of oil equivalent produced, has fallen in the United States over the past seven years and remains at rates far below other nations such as Russia.

 

 

Beaumont Enterprise – December 18, 2019

TPC explosion, past violations now before state AG

State environmental regulators have referred a host of emissions-related violations against TPC Group, as well as their investigation of the pre-Thanksgiving blast at its Port Neches plant, to the Texas Attorney General’s Office, increasing the potential size of penalty the company could face as a result.

Jon Niermann, chairman of the Texas Commission on Environmental Quality, said the Nov. 27 explosions and fire made eight prior violations “jump out” at him. The commission had just voted unanimously to send those violations, all related to unauthorized emissions recorded in 2018, to the AG for potential civil penalties.

The vote followed a spirited presentation in Austin by activists from Port Arthur and advocacy groups about the company and the Port Neches disaster.

TCEQ executive director Toby Baker said he expect the cases will be lumped together in one investigation.

 

 

Houston Business Journal* – December 18, 2019

Houston oil field services co. to spin off U.S. business lines

Superior Energy Services Inc. has reached an agreement to spin off a number of its core U.S. business lines into a separate public company to be based in Houston.

Houston-based Superior is combining those business lines with Alice, Texas-based Forbes Energy Services Ltd. to create a new company focused on U.S. completion, production and water, according to a press release. In exchange, Superior will get a non-controlling 65 percent economic interest in the new company.

Superior plans to close the deal in the first quarter of 2020, according to a presentation on the deal.

 

 

Houston Chronicle* – December 16, 2019

Drilling Down: The 10 longest horizontal wells in Texas

The Permian Basin of West Texas dominated the list with eight of the 10 longest laterals. The Eagle Ford Shale of South Texas and Haynesville Shale of East Texas each had one.

Surge Energy, a Chinese-owned oil and natural gas company headquartered in Houston, drilled and completed the longest lateral in Texas so far this year.

A horizontal well on the Suege’s Medusa Unit C 28-09 lease in the Permian Basin’s Borden County measured nearly 17,000 feet, or about 3.2 miles. Completed in July, production figures for the lease are yet not available, but the company gets bragging rights for the longest horizontal well in Texas — at least for now.

 

 

Jakarta Post – December 18, 2019

ExxonMobil kicks off oil production at new field in Cepu Block

ExxonMobil Cepu Limited, part of Texas-based oil giant ExxonMobil, has begun production at its Kedung Keris oil field in the Cepu Block, East Java, eight years after discovering the field. Kedung Keris, which holds an estimated 20 million barrels in oil reserves, has the capacity to produce 5,000 barrels of oil per day (bopd), the company said.

“This production rate is expected to help sustain the average production of the Cepu Block, which is currently producing more than 25 percent of national oil production,” said ExxonMobil Cepu president Louise McKenzie during an event to mark the commercial production of the new oil field on Tuesday.

 

 

Law.com – December 17, 2019

NY Exxon Mobil Verdict Should Worry Mass. AG, Says Texas Securities Litigator

The conclusion of the big climate change securities fraud case against Irving-based Exxon Mobil in New York last week didn’t go the way the New York Attorney General’s Office hoped.

New York State Supreme Court Judge Barry Ostrager ruled the New York attorney general failed to prove energy giant Exxon Mobil misled its investors and blasted the case as “hyperbolic.” In the words of one attorney, the case was a major victory for Exxon Mobil and its attorneys, Theodore Wells and his colleagues at Paul, Weiss, Rifkind, Wharton & Garrison.

Michael Biles, a partner in the securities and litigation group at King & Spalding in Austin who was not involved in the matter, said this was the first case in which a state attorney general used the Martin Act for alleged securities fraud violations against a publicly traded oil and gas company for climate change-related disclosures.

 

 

World Oil – December 18, 2019

Milestone Environmental opens its eighth slurry injection facility in Texas

Milestone Environmental Services announced the opening of its newest slurry injection facility in the prolific Permian basin. The Big Spring facility, Milestone’s eighth slurry injection facility in Texas and fifth in the Permian basin, is now accepting drilling, completion, and production waste streams, as well as providing full-service truck washouts and frac tank washouts.

The opening of Milestone’s Big Spring facility comes on the heels of a successful opening of its first landfill facility in Orla, Texas, earlier this month.

 

 

S&P Global Platts – December 18, 2019

Qatar and Saudi Arabia eye peace, a mega gas deal could follow

Qatar and Saudi Arabia have several good reasons to finally settle their political differences. Agreeing what could be the gas deal of the century is perhaps the best.

The kingdom burned almost 900,000 b/d of valuable liquid fuels for industrial use and power generation in 2017, according to the Riyadh-based energy think tank, King Abdullah Petroleum Studies and Research Center.

Replacing this oil with natural gas could generate more than $10 billion of additional export revenue at current market prices, or add to its existing cushion of spare crude capacity that was recently tested by the attacks on Abqaiq.

 

 

New York Times* – December 16, 2019

The first satellite designed to continuously monitor the planet for methane leaks made a startling discovery last year: A little known gas-well accident at an Ohio fracking site was in fact one of the largest methane leaks ever recorded in the United States.

The findings by a Dutch-American team of scientists, published Monday in the Proceedings of the National Academy of Sciences, mark a step forward in using space technology to detect leaks of methane, a potent greenhouse gas that contributes to global warming, from oil and gas sites worldwide.

The scientists said the new findings reinforced the view that methane releases like these, which are difficult to predict, could be far more widespread than previously thought.

 

 

Oil Price – December 11, 2019

These Secretive Oil Companies Control $3 Trillion In Wealth

State-owned oil and gas companies (aka, the national oil companies, or NOCs) control at least US$3 trillion in oil and gas assets, compared to around $2.5 trillion as of 2017, and hold an estimated 90% of all known reserves–considerably more than publicly listed companies such as BP, ExxonMobil and Shell. Meanwhile, Saudi Aramco leads the pack as the world’s most profitable company.

That means that NOCs control about as much wealth as all U.S. billionaires or roughly twice the assets of global multilateral development banks.

If we go by annual revenue alone, China’s state-run Sinopec—explorer, producer, refiner, marketer and distributor—was the biggest oil and gas company in the world at the end of 2018. By net income, that title goes to Saudi Aramco, which reported net income in 2018 of $111.1 billion, compared to Sinopec’s $9.1 billion.

These numbers may seem a bit wild, but no one really ever knows where they come from or how they are derived.

 

Utilities

 

S&P Global Platts – December 18, 2019

ERCOT summer 2020 likely to have high prices earlier, lower later

Electric Reliability Council of Texas power traders expect, or at least suspect, prices will be substantially higher in June-July 2020 than in June-July 2019, though slightly weaker in August 2020 than August this year, judging from recent forward prices. Market observers are not surprised.

Those expectations may seem counterintuitive, inasmuch as ERCOT’s most recent Capacity, Demand, and Reserves Report forecast a planning reserve margin of 10.6% for the summer of 2020, 2 percentage points higher than that of the summer of 2019.

 

 

E&E News – December 18, 2019

For a place that’s synonymous with oil and gas, Texas has a lot riding on renewable energy.

No state can match its installed wind power capacity. Solar generation is about to surge. And a new report shows both wind and solar helping to push the reserve cushion for Texas’ main electricity market to 10.6% and beyond.

All of that is generating applause — but also some concern about grid reliability, considering the intermittent nature of wind and solar.

“Will they have peak supply available at the time of peak demand?” asked Ed Hirs, an energy fellow at the University of Houston.

 

 

New York Times* – December 16, 2019

Decades of climate change foot-dragging are finally giving way to public demands for action. Around the world, millions of young people are on the march. Political and business leaders are making pledges and offering plans.

Yet society delayed action for so long that the pace of change now required seems impossible. Greenhouse gases are still rising globally. Some advocacy groups are demanding that these emissions be eliminated entirely within a decade, requiring a scale of industrial and political mobilization matching or exceeding that of World War II.

In the United States, most of the Democratic presidential candidates have embraced a goal that is more limited, but still challenging: cleaning up, to a large degree, the electricity grid by 2030, just 10 years from now. Turning to cleaner energy sources to generate that electricity would not eliminate emissions from other sources like cars and buildings, but it would be a huge step in the right direction. It appears the 2020 election may feature an argument about whether such a rapid cleanup is possible.

 

Alternatives & Renewables

 

Kallanish Energy* – December 16, 2019

AEP utilities to buy three wind farms in Oklahoma

An Oklahoma-based utility has reached a settlement with state regulators and others to add 675 megawatts of wind energy in the next two years, while its sister utility will add an additional 810 MW of wind power.

The agreement will enable the Public Service Co. of Oklahoma (PSO) and Louisiana-based Southwestern Electric Power Co. to purchase three wind facilities being developed in Oklahoma, Kallanish Energy reports.

Both companies are subsidiaries of Ohio-based American Electric Power. The power will go to customers in Arkansas, Louisiana, Oklahoma and Texas.

 

Regulatory

 

Texas Tribune – December 18, 2019

No Texans cross party lines in votes to impeach President Trump

Texans serving in the U.S. House moved in a party-line vote to impeach President Donald Trump on charges of abuse of power and obstruction of Congress, the third time in the nation’s history the chamber took such action.

There was little suspense in the proceedings, as the larger chamber mostly reflected the Texas delegation’s partisan split. But U.S. Rep. Michael Cloud, a Victoria Republican, briefly voted yes on impeachment and then quickly switched his vote to no. Soon after the vote, he made his position clear in a tweet.

“Despite unfair and, even at times, secret hearings, this impeachment investigation uncovered no evidence that the president committed impeachable offenses,” he wrote. “This is a single-party effort to remove a sitting president.”

 

 

Texas Tribune – December 18, 2019

Sierra Club intervenes in open records lawsuit against Texas Attorney General

The Sierra Club on Wednesday intervened in a lawsuit that the Texas Commission on Environmental Quality filed against the Texas Attorney General’s Office in October over an open records ruling.

In July, weeks after the TCEQ proposed increasing the acceptable limit on air emissions of a toxic gas known as ethylene oxide, Earthjustice submitted an open records request to the commission on behalf of the Sierra Club for records related to how the commission went about devising the rule. Instead of releasing them, TCEQ requested a decision from the Attorney General’s office, which ruled in favor of the environmental groups in September.

 

 

San Antonio Express News* – December 16, 2019

Texas Rep. Henry Cuellar moves to stave off primary challenge from progressive Cisneros

U.S. Rep. Henry Cuellar is accustomed to winning big, averaging more than 70 percent of the vote in his last half-dozen general elections.

In eight terms, he has established himself as a distinctly moderate Democrat despite representing a south Texas district so blue that Hillary Clinton won in Webb County, his home, with 74 percent of the vote.

Now, responding to a primary challenge from the left, Cuellar has moved into full-hustle mode to protect his seat, gathering endorsements, dispatching paid canvassers and trumpeting his work in Congress.

 

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The Texas Energy Report NewsClips – December 18, 2019

Subscriber’s Edition

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Lead Stories

 

Sludge – December 16, 2019

Joe Biden’s Campaign Co-Chair is a Big Oil and Gas Booster

Former Vice President Joe Biden has surrounded himself with people tied to the natural gas industry for his 2020 presidential campaign. His climate adviser, Heather Zichal, is a former board member of natural gas company Cheniere Energy, while one of his fundraisers is a cofounder of natural gas company Western LNG. In addition, the super PAC supporting his candidacy has a former gas lobbyist on its board.

But there is another Biden campaign figure whose oil and gas industry connections have not been examined: Louisiana Democratic Rep. Cedric Richmond, whom Biden selected in May to serve as his campaign co-chairman.

Despite representing a low-lying Louisiana district that could be one of the areas in the U.S. most immediately impacted by climate change, Richmond has voted reliably in favor of expanding production and exports of natural gas and oil. His voting record is one of the most fossil fuel industry-friendly of all Democrats in Congress.

 

 

Reuters – December 17, 2019

Fed survey doubles job loss estimates for Texas oil and gas

The Federal Reserve Bank of Dallas has doubled its estimates for jobs losses this year through October in the oil and gas industry of Texas, the largest oil producing state in the United States, as companies rein in spending in the face of volatile oil prices.

In a report released on Tuesday, the Dallas Federal Bank said it expects about 8,100 job losses in Texas’ oil and gas sector, from an earlier estimate of 4,000 losses.

Employment in the U.S oil and gas sector fell for the first time in 14 months in November, according to data from the U.S. Bureau of Labor Statistics.

 

 

Reuters – December 17, 2019

CenterPoint Energy seeks to sell non-utility services units: sources

CenterPoint Energy Inc (CNP.N) is exploring the sale of two services units that could fetch more than $1 billion, people familiar with the matter said on Tuesday, as the U.S. power utility seeks to raise capital and simplify its structure.

The divestitures could compensate for a regulator’s refusal to grant CenterPoint its desired rate increase for what it charges to deliver electricity to energy providers in Houston.

Last month, the Public Utility Commission of Texas (PUCT) said CenterPoint would be allowed to earn a 9.25% return on equity, lower than the 10.5% return which the company had requested. The regulator wanted to make sure that consumer bills did not soar and that the utility continued to invest in its network.

 

 

Hellenic Shipping News – December 17, 2019

Mexico’s demand for US natural gas poised for growth, but risks remain

US gas exports to Mexico could see significant upside in 2020, thanks to recent infrastructure upgrades and growing, latent demand south of the border. Any potential growth in southbound volumes, though, will depend on the completion of key pipeline projects required to access Mexico’s new end users.

With more gas moving southbound into Mexico, US producers can hang their hopes on a more tightly supplied market in the months ahead – a balancing factor that could be enough to lift benchmark gas prices from the $2.30/MMBtu range, where they’ve largely remained over the past eight months.

South of the border, incremental pipeline supply could be expected to have the opposite effect, lowering prices – particularly in North and Northeast Mexico where US gas has its most extensive reach.

 

 

BOE Report – December 17, 2019

Canadian Energy Network: Confusing Steam For Methane, and Other Things to Know About the New York Times’ Latest Emissions Story

In Energy In Depth’s analysis, they found that Times reporters spent a few hours doing flyovers of oil and natural gas facilities in two counties in West Texas and then followed up the flight by visiting locations they claimed to have shown methane spikes to film with FLIR (Forward Looking Infrared) cameras. Based on these findings, the reporters made the jump that, “Vast amounts of methane are escaping from oil and gas sites nationwide, worsening global warming.”

Energy In Depth notes that there are some issues with their claims, starting with the heat signature recorded from the roof of a building. It doesn’t appear to give off the same signature as methane, which calls into question every other stated “fact” in the story. Given such a lapse in fact-checking by the Times, here are a few things Energy in Depth wants you to keep in mind when reading the article.

In a dramatic image, the Times shows what it says appears to be a massive hidden plume of methane shooting directly into the air. But that does not appear to be methane. In a story the Times spent months producing, the emblematic image could be a massive error. Infrared videos can indeed show methane and other hydrocarbon emissions. But the bright imagery should have been a red flag that what they were probably seeing was heat, not a leaking plume of methane. That didn’t stop them from declaring it methane and – even more embarrassing – using it as the feature image of the story.

Related: Permian industry groups challenge perceptions on methane emissions

 

Oil & Gas

 

CNBC – December 18, 2019

Oil dips after US stock build, but demand hopes support

Oil retreated on Wednesday after rising more than 1% in the previous session as U.S. industry data showed a surprise build in crude stocks, but hopes for firmer demand next year checked a deeper fall in prices.

A “phase one” U.S.China trade deal announced last week has helped ward off some pressure from the oil market, dampened by worries over the economic impact of a prolonged dispute between the world’s two biggest oil consumers.

Brent crude futures dropped 21 cents, or 0.32%, to $65.89 a barrel by 0110 GMT on Wednesday. The international benchmark rose 1.2% to $66.10 a barrel on Tuesday.

West Texas Intermediate (WTI) crude futures fell 31 cents, or 0.51%, to $60.63 per barrel.

U.S. crude inventories climbed 4.7 million barrels in the week to Dec. 13 to 452 million, compared with analysts’ expectations for a draw of 1.3 million barrels, data from industry group the American Petroleum Institute showed.

 

 

Transportation Today – December 17, 2019

First crude oil shipment unloaded at Corpus Christi’s new dock

The new dock, located in the port’s Inner Harbor, received the delivery from EPIC Midstream.

“With the safe loading of its first vessel from the Port of Corpus Christi, we extend a hearty congratulations to Phil Mezey, EPIC Midstream CEO, and his team,” Sean Strawbridge, Port of Corpus Christi CEO, said. “As increasingly more Texas crude oil production finds its way to the most competitive gateway on the entire U.S. Gulf Coast, the Port of Corpus Christi continues its record-breaking economic evolution as the true Energy Port of the Americas.”

 

 

Reuters – December 17, 2019

Trader Mercuria to compete for South Texas oil-trading hub: executive

Commodities trader Mercuria Energy Group expects to open a new U.S. Gulf Coast crude oil storage facility next year that could compete to become a trading hub for shale oil, the Swiss company’s investment chief said on Tuesday.

Pin Oak Terminals LLC, a joint venture owned by Mercuria and Dauphine Midstream LLC, is building 2 million barrels of crude storage outside of Corpus Christi, Texas, near where several pipelines connect and other firms have oil storage, said Brian Falik, Mercuria’s chief investment officer for the Americas.

The new Pin Oak hub, which is expected to open mid-2020, could potentially become the main location for crude price assessments for oil shipments through Corpus Christi, Falik said in a phone interview.

 

 

Port Neches News – December 17, 2019

TPC equipment restart ready; plan to rebuild Port Neches site

TPC Group Port Neches Operations is moving forward with plans to restart some equipment this week to further enable response efforts.

The news comes days after the U.S. Environmental Protection Agency transitioned response and cleanup to the Texas Commission on Environmental Quality.

Last week, TPC Group began introducing diethylhydroxylamine, or DEHA, to storage tanks containing butadiene to stabilize materials for longer-term storage, transportation and safe removal from the site.

Sara Cronin, media relations with TPC, said this is a phased process and all tanks containing materials are being evaluated and identified for inhibitor introduction so the number of tanks receiving DEHA may change.

 

 

Beaumont Enterprise – December 17, 2019

Chevron Phillips vote postponed but deal seems done

A public vote on whether to offer tax abatements to Chevron Phillips for a potential $5.6 billion investment in Orange County may have been delayed, but conversation Tuesday was a matter of “when,” not “if.”

The scheduled vote was postponed because certain language in the agreement, which those involved thought would be ready at the end of the required 30-day notice period, still needed to be finessed and reviewed by attorneys.

However, Orange County Economic Development Corp. executive director Jessica Hill stressed that the county and others involved are negotiating with residents in mind.

 

 

S&P Global Platts – December 17, 2019

Enterprise to ship 1st cargo from new US ethylene export terminal this week

Enterprise Products Partners this week aims to ship out the first cargo from its new US ethylene export terminal, freeing up producers to run crackers at high rates and export surplus output when domestic downstream derivative demand is limited.

The new terminal, a joint venture with global chemical shipper Navigator Gas, will initially have 60% to 70% of its eventual 1 million mt/year capacity, depending on marketing opportunities, company executives said.

For the first phase, Enterprise has converted an ethane cavern at its natural gas liquids and petrochemical hub in Mont Belvieu east of Houston to hold up to 275,000 mt of ethylene. The company also has started up a new bidirectional pipeline connecting that cavern to the new terminal at Morgan’s Point along the Houston Ship Channel, where Enterprise already operates an ethane export facility, to move ethylene from the cavern to ships.

 

 

Houston Chronicle* – December 17, 2019

More layoffs in the troubled oilfield service sector

A pair of Houston oilfield service companies are laying off dozens of employees at their operations in Texas.

In separate filings with the Texas Workforce Commission, hydraulic fracturing company Pumpco Energy Services and oilfield equipment maker Stewart and Stevenson announced that they were laying off a combined 60 employees.

Pumpco is closing its office in the Dallas suburb of Cleburne and laying off five people while Stewart and Stevenson is laying off 55 people at its Telge Road facility in Houston.

 

 

Wall Street Journal* – December 17, 2019

A Decade in Which Fracking Rocked the Oil World

Before the surge in shale drilling, U.S. crude production had been steadily declining since the 1970s, leaving the country vulnerable to price shocks such as after the 1973 Arab oil embargo. Now, the country is more insulated, thanks in large part to the shale boom. After Saudi Arabia shut down more than half of its oil production following a September attack on its oil facilities, U.S. benchmark oil prices briefly shot up but declined to pre-attack levels in about two weeks. Fracking also has limited the domestic effects of sanctions on countries such as Venezuela, which had long been one of the top suppliers of crude to the U.S.

“At the beginning of the decade, energy independence was still a joke for late-night television comedians,” says author Daniel Yergin, who is vice chairman at IHS Markit. “Turn around a decade later, and we’re here.” ….

But while the boom has had dramatic ramifications for markets and the economy, it has not in recent years delivered good returns for investors in shale companies, which have spent far more than they have made as they pursued rapid growth. Clear signs have been emerging of a slowdown, as shale companies pull back on spending in response to fed-up investors and tightening access to capital.

 

 

Wall Street Journal* – December 17, 2019

For Business, Climate Change Has Become Real

The debate over climate change intensified over the decade, amid several of the hottest years on record, several extreme weather events and the publication of a wave of reports on warming. That—along with attention to the issue by policy makers in many countries and increasingly heated rhetoric—brought the issue to the doorstep of business, in the form of environmental disclosures, carbon pledges and green investment.

Big companies, like Amazon. com and Nestlé, set out ambitious—if long-term—plans to become carbon-neutral over decades. A few companies shifted their focus, such as Equinor AS, a European integrated oil company that turned toward renewable energy.

The turning point for business came in 2015, with the United Nations Climate Change Conference in Paris. More than 190 nations met to agree on a plan to tackle the problem of greenhouse-gas emissions, crystallizing the anxieties of governments and environmental activists the world over.

 

 

KTUU (Anchorage) – December 17, 2019

Alaska state commission to decide if Hilcorp can keep finances confidential

If the Regulatory Commission of Alaska decides it’s in the public’s interest, Alaskans may soon get a closer look at Hilcorp’s finances.

On Monday, a joint resource committee held its first public hearing on the $5.6 billion BP-Hilcorp deal and the state’s processes to scrutinize it.

Department of Natural Resources Commissioner Corri Feige said it will ultimately be her decision whether or not the sale moves ahead. “We take this transaction very, very seriously,” she said.

 

 

Guardian (UK) – December 15, 2019

Goldman Sachs to stop financing new drilling for oil in the Arctic

Goldman Sachs has ruled out future financing of oil drilling or exploration in the Arctic and said it would not invest in new thermal coal mines anywhere in the world.

The new environmental policy, which was released by the US bank on Sunday, was praised by environmentalists, though many warned that it was only a first step.

In its statement, Goldman Sachs also “acknowledged” the scientific consensus on the climate crisis, which it said was one of the “most significant environmental challenges of the 21st century” and said it planned to more effectively help its client manage climate impacts, including through the sale of weather-related catastrophe bonds.

 

 

E&E News – December 10, 2019

A voter-led initiative to roll back tax breaks for Alaska’s oil industry could become a proxy fight over the future of crude production in one of the most energy-dependent states in the U.S.

Alaska’s oil output has been in a slump even as the rest of the country went through an oil boom, forcing the state to slash spending on education and other services.

The budget crunch has led a group of Anchorage-based activists to launch a petition drive targeting tax cuts for Alaska’s legacy oil fields, which at their peak produced more crude than Texas.

Proponents say their targeted tax increases will stabilize the state budget without hurting the industry. Oil companies say the changes will drive operators out of Alaska just as the industry is poised to start pumping oil from promising new fields.

 

 

Reuters – December 17, 2019

How Mexico’s leftist president quietly made peace with big business

Barely a day goes by without Mexican President Andres Manuel Lopez Obrador berating business and political elites, whom he blames for fueling the country’s poverty and corruption.

But behind the scenes, the leftist is proving more accommodating to Mexico’s top tycoons during his first year in office than his language often suggests.

Meeting regularly with Lopez Obrador, corporate bosses have steered him toward more business-friendly policies, according to more than two dozen senior executives and government officials who spoke to Reuters. Quietly, they have also urged the president to soften some of his rhetoric.

 

 

Wall Street Journal* – December 13, 2019

Holman W. Jenkins: On Aramco and MBS, I’m Not Buying

The sale this week of a small stake in Saudi Aramco, the Dhahran-based oil company, bears a sickly resemblance to a similar deal three years ago involving Russia’s Rosneft. When no foreign buyer could be found at a price acceptable to Vladimir Putin, a sham sale was ginned up that subsequently was subsumed in controversy. The deal did little to advance Mr. Putin’s aim of showing that Russia had weathered sanctions and was alluring to Western investors again.

No, Crown Prince Mohammed bin Salman, popularly known as MBS, didn’t follow quite the same skeevy tack, but the market represents the reality principle, and the prince isn’t big on the reality principle. That’s been my qualm all along not only about this week’s Aramco offering but about his larger scheme to transform Saudi society via swashbuckling princely diktat.

 

 

E&E News* – December 5, 2019

Oil companies increasingly tout emissions reduction targets. But it’s often unclear how they plan to actually cut greenhouse gases.

The Spanish oil giant Repsol SA offered some clues earlier this week when it unveiled its goal to achieve net-zero emissions by 2050. The announcement itself was notable. While a growing number of companies have pledged to reduce greenhouse gases from their operations, none has committed to eliminating them, until now.

The Madrid-based major said it planned to increase spending on renewables, tie 40% of executive compensation to emissions reductions and revamp industrial processes like refining so they release less carbon dioxide. It also set interim carbon intensity targets to achieve a 10% reduction from 2016 levels by 2025, 20% by 2030 and 40% by 2040.

 

Utilities

 

Bloomberg News* – December 13, 2019

CenterPoint, Pipeline Owner Must Defend Suit in State Court

Enterprise Products Partner LP and CenterPoint Energy Inc. will have to defend in state court a proposed class action by 12,000 property owners alleging the construction of a pipeline near Houston caused flooding and property damage, after the Southern District of Texas found a significant number of the proposed class members are Texas citizens.

The plaintiffs showed that over half of the potential class members are Texas citizens, which is enough to warrant discretionary remand of the case, the U.S. District Court for the Southern District of Texas said Dec. 12.

The court rejected the companies’ argument that the case.

 

Alternatives & Renewables

 

Windpower Engineering – December 17, 2019

UT Dallas researchers developing floating turbine for deep-sea offshore wind

 

Regulatory

 

September 12, 2019

Beaumont Enterprise: Air quality budget cuts can’t continue in Texas

With legislative campaigns ramping up soon for the Texas primaries in March, one issue should stand out for both parties: The need for more funding of and more action from the Texas Commission on Environmental Quality, the state’s main agency that tries to ensure clean air and water.

If that sounds like the routine goal that most state bureaucracies have, it shouldn’t. A study by the Environmental Integrity Project shows that Texas is one of five states that has cut funding for pollution control the most between 2008 and 2018. Texas (and Louisiana) reduced their funding by 35%, adjusted for inflation, exceeded only by Wisconsin’s 36%. Yet no one in Texas can claim that air pollution has been reduced by 35% from 2008 to 2018. …

In Southeast Texas and statewide, TCEQ can do its job only if it has the resources and staff to cope with an increasingly larger workload of more plants that usually produce more pollution. This is a goal that both political parties should support, for the health of all Texans and the benefit of companies that play by the rules. The only way it will happen is with more oversight, not less.

 

 

Forbes – December 10, 2019

Jude Clemente: Elizabeth Warren’s Massachusetts Loves Natural Gas

Elizabeth Warren has pledged to ban fracking when she becomes president of the United States. This would cause real problems for her home state. The Massachusetts economy depends on imported natural gas. In a single year, methane supplies around 465 trillion Btu of energy, or some 50% more than second place gasoline. Massachusetts, however, produces no natural gas itself, making energy imports as integral to the state’s functioning as anywhere.

Since the 1970s, Massachusetts has seen a steady shift to heating with natural gas in households, from a greater reliance on heating oil. Especially in the shale revolution era since 2008, natural gas is cheaper, less volatile, and has lower greenhouse gas emissions. Over 1.5 million homes in Massachusetts use gas as the primary source of heating.

 

 

Houston Chronicle* – December 11, 2019

Activist Diane Wilson: If ‘serial offender’ Formosa can stop plastic pollution in Texas, all U.S. plastic plants can

I’m so happy to have such a successful ending to this long saga and for Formosa to finally be held accountable after decades of dumping plastic into our water. But I’m also more concerned than ever about a petrochemical industry that is increasing U.S. plastic production using the country’s oversupply of fracked natural gas.

If Formosa Plastics can really achieve zero plastic discharges from this aging plastic plant in Texas, then every plastic-making factory in the country should be able to meet that same zero-plastic discharge standard. A new federal “zero discharge” rule would be a crucial step toward addressing the crisis of plastic pollution in our oceans, rivers and bays. …

It’s time for the federal government to finally regulate plastic pollution. Federal environmental regulators need to step up to protect our health, our environment and the industries that rely on clean oceans.

 

______________________________

 

The Texas Energy Report NewsClips – December 17, 2019

Subscriber’s Edition

Asterisk * indicates news content may be limited or unavailable at website because it’s password protected

 

Lead Stories

 

Houston Chronicle* – December 16, 2019

Bondholders take control of Weatherford as company emerges from bankruptcy

Bondholders are now calling the shots at Weatherford International, a company once considered the fourth-largest oil field service company in the world, now that it has emerged from Chapter 11 bankruptcy.

Weatherford completed its reorganization Friday, shedding about $6 billion in debt and moving forward with roughly $10 billion of financial support from a consortium of bondholders. Under a bankruptcy plan supported by 80 percent of the company’s creditors, those bondholders will hold more than 94 percent control of the company. An additional 5 percent of the company’s stock will be reserved as incentives for executives, while the remaining 1 percent will be used for current shareholders, who will be issued warrants for new shares.

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Mineral Wells Index – December 16, 2019

‘Outsider’ with Wilks ties files for Texas House District 60 seat

There is one more Republican candidate in the running for the Texas House District 60 seat – one who will be very well-funded with close ties to political powerhouse Empower Texans.

Jon Francis on Monday filed with the Texas GOP as a candidate for the seat being vacated by current State Rep. Mike Lang, of Granbury. Lang on Dec. 9 made a last-minute decision to withdraw from the race and not seek a third term. That extended the filing the deadline one more week.

Lang had initially filed for re-election, then backed out to run for a Hood County commissioner seat. However, Lang once again changed his mind – the day after Palo Pinto County fifth-generation rancher and veterinarian Dr. Glenn Rogers filed – and declared he would run to keep his seat.

 

 

Texas Tribune – December 16, 2019

Watchdog report finds air pollution monitoring fell short during Hurricane Harvey

[A report issued Monday by the EPA’s internal watchdog agency] which noted that many of the Houston area’s stationary air monitors were turned off and secured ahead of Harvey’s landfall, found that the mobile air monitoring the EPA and TCEQ conducted “didn’t coincide” with a majority of the air pollution events that companies reported to the state.

Among the unmonitored pollution events were two major ones: the collapse of a storage tank at a Valero Energy refinery in southeast Houston and a fire and explosion at the Arkema chemical plant in Crosby. The latter event happened on Aug. 31, days after Harvey arrived in Houston as a monster tropical storm.

And when agencies finally began monitoring, the report found, the data generated in the storm’s wake weren’t sufficient to gauge the true impact of the emissions on human health. That was in part because there were no rules governing how to monitor air quality in the wake of an emergency, according to the report, which recommended developing such guidance in heavily industrialized areas.

 

 

Time – December 16, 2019

Lawsuit Raises Questions About Rick Perry’s Role in Ukraine’s Energy Sector

This summer, the Ukrainian government awarded the rights to develop a huge complex of oil and gas fields in the country to an American company that is co-owned by a former campaign donor to then-Energy Secretary Rick Perry. The decision annoyed the heads of the state-owned Naftogaz conglomerate, which had competed and lost the bidding for the contract. Now, Naftogaz has filed a lawsuit seeking to overturn the deal, two sources familiar with the matter tell TIME, casting a spotlight on Perry’s role in Ukraine’s oil and gas industry.

The suit was filed on Friday afternoon in the District Administrative Court of Kyiv, the sources tell TIME, and has not been previously reported. In a draft of the complaint obtained by TIME on Monday, Naftogaz alleges that the government of Ukraine acted illegally and with bias in July when it granted the oil and gas fields to an American company that is co-owned by Michael Bleyzer, one of Perry’s longtime allies and financial backers.

 

 

Houston Chronicle* – December 16, 2019

Energy tax credits fall into doubt

The future of federal support for several burgeoning energy technologies fell into doubt Monday as Democrats and Republicans in Congress failed to reach agreement on maintaining and expanding subsidies for biofuels, electric vehicles and renewables.

In recent days, Republicans and Democrats were working on a compromise that could have expanded tax credits for electric cars and other clean energy technologies, while extending the credit for biodiesel, which farmers and oil refineries want reinstated following its lapse at the end of 2017. But on Monday evening, House Democrats released a bill without any such provisions, leaving energy companies little time to sway congressional leaders. …

Rep. Kevin Brady, R-Woodlands, has long opposed so-called tax extenders, which are used to offer short-term tax relief to certain favored industries, as irresponsible fiscal policy that increases the federal budget deficit for the sake of political deal making. …

Expectations leading into the weekend were that Sen. Chuck Grassley, R-Iowa, chairman of the Senate Finance Committee, would support clean energy tax credits in exchange for Democratic support of extending the $1 a gallon tax credit for biodiesel, a renewable fuel supply which converts oils made from corn and soybeans into diesel.

 

Oil & Gas

 

CNBC – December 17, 2019

Oil poised near three-month highs on US-China trade hopes, supply cuts

Oil prices trickled a fraction lower on Tuesday but remained near a three-month high as investors kept the faith with hopes that a fully fledged U.S.China trade deal is in the pipeline, set to stoke oil demand in the world’s biggest economies.

Brent crude oil futures had slipped by two cents to $65.32 a barrel by 0422 GMT, while West Texas Intermediate crude was down four cents to $60.17 a barrel.

Under a partial trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $200 billion over the next two years.

 

 

Reuters – December 16, 2019

U.S. shale oil output to rise 29,000 bpd to record 9.14 million bpd in January: EIA

U.S. oil output from seven major shale formations is expected to rise about 29,000 barrels per day (bpd) in January to a record 9.14 million bpd, the U.S. Energy Information Administration said in a monthly forecast on Monday.

Output at the largest formation, the Permian Basin of Texas and New Mexico, is expected to rise 48,000 bpd to a new record 4.74 million bpd, the smallest increase since July.

Production from North Dakota and Montana’s Bakken region is expected to rise by about 3,000 bpd to a fresh peak of about 1.53 million bpd. That would be the smallest increase since production from the region declined in September, the data showed.

The agency forecast production declines in the Eagle Ford and Anadarko basins.

 

 

Nasdaq – December 16, 2019

Exxon, Chevron face new round of shareholder climate resolutions

An activist group is increasing the pressure on five big U.S. and European oil companies with shareholder resolutions urging them to meet the Paris climate goals and cut carbon emissions.

Dutch group Follow This is targeting U.S. giants ExxonMobil XOM.N, Chevron CVX.N and their European rivals Royal Dutch Shell RDSa.L, BP BP.L and Equinor EQNR.OL with climate resolutions ahead of next year’s annual general meetings (AGMs) scheduled for the first half of 2020.

Follow This owns minor stakes in the companies which enables it to file shareholder resolutions.

The Exxon and Chevron resolutions are vaguer than the European text, underscoring an Atlantic divide over companies’ approach to climate change.

 

 

Houston Chronicle* – December 16, 2019

Kinder Morgan closes $2.5 billion deal to exit Canada

Houston pipeline operator Kinder Morgan has exited the Canadian market after closing a deal worth estimated to be more than $2.5 billion in cash and stock.

In a Monday afternoon statement, Kinder Morgan reported closing a deal to sell its subsidiary Kinder Morgan Canada and cross-border Cochin Pipeline to the Calgary pipeline and storage terminal operator Pembina Corp.

Pembina paid Kinder Morgan more than $1.5 billion in cash for the Alberta-to-Michigan tar sands crude oil pipeline and stock currently valued at $935 million to buy Kinder Morgan Canada. The deal will be added to Kinder Morgan’s fourth quarter results.

 

 

Oil Price – December 16, 2019

Alex Kimani: The Worst Performing Oil Stocks Of 2019

Worst Performing oil stocks with Market Caps Above $500M: Antero Resources, Tullow Oil Plc, Oasis Petroleum Inc and Occidental Pretroleum Corp.

Worst performing oil Stocks with Market Caps Below $500M: McDermott International inc., Seadrill Ltd., Pacific Drillin SA

On the other hand: Here are Wall Street’s favorite stocks for an oil-sector recovery in 2020

 

 

San Antonio Business Journal* – December 16, 2019

Local midstream company investing millions in liquid gas production

A subsidiary of San Antonio-based EPIC Midstream Holdings LP announced Thursday that it is investing in a second natural gas liquids processing plant to join a sister plant it owns near Corpus Christi.

EPIC Y-Grade LP is increasing the company’s credit line by $150 million to finance a second NGL fractionation facility in Robstown, 18 miles west of Corpus. Natural gas liquids, or NGLs, are present in natural gas and need to be separated through a process called fractionation. NGLs include hydrocarbons like ethane, propane and butane that are often mixed with gasoline, used as a petrochemical feedstock or used to heat homes.

EPIC has built a pipeline to deliver NGLs from the West Texas city of Crane to its Robstown facility, which currently is able to process 170,000 barrels of NGLs per day. The new investment will add another 100,000 barrel per day processing unit to the facility. The San Antonio company said commitments from operators in the Permian Basin to use the company’s facilities helped secure the investment.

 

 

Reuters – December 16, 2019

Superior Energy Services latest casualty of ‘fracking’ market downturn

Oilfield service company Superior Energy Services Inc. on Monday said it will shutter its hydraulic fracturing unit, the second supplier this month to exit a business hammered by slower shale activity.

Last week, Basic Energy Services said it would sell most of its hydraulic fracturing equipment for between $30 million to $45 million, citing weaker activity and pricing that inhibited “the potential for positive free cash flow in the near- to medium-term.”

Oilfield service companies have been hard hit this year by weak oil and gas prices and spending cuts by producers shifting to focus on shareholder returns via cost-savings over production growth.

 

 

Bloomberg News/Yahoo News! – December 16, 2019

One of Hottest Energy Trades This Year Is Becoming the Trickiest to Profit From

One of the hottest trades this year across energy markets is proving one of the trickiest to profit from.

Starting Jan. 1, oceangoing ships will need to burn fuel that contains some 86% less sulfur. The change means that some of the so-called bunker fuel will contain more gasoil — a lighter oil that goes into more-expensive diesel — and less of the gunky “resid,” which is the stuff left over after squeezing all the valuable bits out of crude oil.

On paper, the trade seemed an easy one: buy the lighter, cleaner fuel and, at the same time, sell the heavier, dirtier stuff. But supply of the lower-quality fuel proved less robust and demand far higher than forecast. As a result, the trade has become this year’s “widowmaker,” making and breaking some of the biggest commodities firms around the world.

 

 

Wall Street Journal* – December 14, 2019

Mary Anastasia O’Grady: Mexico’s Energy Hari-Kari

Mexican President Andrés Manuel López Obrador makes no secret of his longing for the days when the state-owned oil monopoly, Petróleos Mexicanos, was a symbol of Mexican sovereignty. He seems to believe that with the right central planning, Pemex can return to the heady 1970s. To that end, he’s doing what he can to close the Mexican energy market.

Witness a side letter on energy signed by Washington and Ottawa as part of the new U.S.-Mexico-Canada Agreement. In it the two parties recognize the importance of “the integration of North American energy markets based on market principles, including open trade and investment among the Parties to support North American energy.”

Mexico didn’t sign that letter. While the U.S. and Canada are developing a continental energy market—using private capital—to serve growing demand, Mexico is moving backward toward energy nationalism. It’s one reason the outlook for Mexican growth is dismal.

 

 

Associated Press/Las Cruces Sun News – December 10, 2019

A ‘tremendous opportunity’: Oil bonanza sustains state budget surplus in New Mexico

State government income is expected to outpace spending obligations by nearly $800 million for the coming fiscal year as New Mexico lawmakers contemplate bigger budgets for public schools, health care and anti-crime initiatives.

Economists from three state agencies and the Legislature’s budget office delivered a twice-annual forecast of state revenues to a panel of lawmakers Monday. Revenues are on track to exceed the current annual general fund spending of $7 billion by 11% — a $797 million surplus.

That’s a slight reduction from an earlier estimate in August, but still a major windfall for state finances after a downturn as recently as 2016 prompted the Legislature to slash funding to state universities and increase entrance fees at public museums.

 

 

S&P Global Platts – December 16, 2019

Xcel starts building 522-MW wind facility; new line to serve oil and gas area

Xcel Energy has started construction on a 522-MW, $900 million wind farm project in New Mexico a week after announcing the construction startup of 200-mile transmission and distribution lines in its Texas-New Mexico service area.

One of the new transmission lines will serve New Mexico’s bustling oil and gas exploration area in the southern portion of the state.

The new Sagamore Wind facility is being built near Dora, in Roosevelt County, which is south of Portales, New Mexico, and west of Lubbock, Texas. The facility is expected to become operational in “the latter part of 2020,” Excel said. The facility is to supply electricity customers in New Mexico and Texas.

 

Utilities

 

San Antonio Express News* – December 12, 2019

Harry Anthony, Matt Welch: America, we are losing the 2nd nuclear race

We may have won the original nuclear race in the late 20th century, but we are now in danger of failing to even qualify for the rematch against Russia and China. Nuclear power plants across the U.S. are rapidly closing and we are in danger of losing an industry that provides the cleanest source of energy, creates good-paying jobs, and is vital to our national security.

The average age of a nuclear plant in this country is pushing well beyond 40 and there has not been a nuclear plant completed in the U.S. in over 30 years. Most nuclear power plants were built by regulated monopolies decades ago by forcing consumers to guarantee a single company’s profits while also restricting any meaningful competition.

 

 

MSN – December 15, 2019

Bloomberg calls for closing all coal-fired power plants to combat climate change

Democratic presidential candidate Mike Bloomberg is calling for a 50 percent reduction in carbon emissions over the next 10 years to battle climate change.

To achieve that goal, the former New York City mayor and multi-billionaire business and media mogul on Friday unveiled a plan that would shutter all 251 remaining coal plants across the country by 2030 and replace them all with clean energy. He would also phase out gas-fired power plants.

Standing at a podium with an ‘END COAL 2030’ campaign banner, he highlighted his goals – ensuring 80 percent clean electricity by the end of his second term in the White House, and moving the country toward 100 percent clean energy by 2045 or 2050.

 

Alternatives & Renewables

 

Solar installation companies are reporting difficulty finding enough qualified installation technicians in Texas, according to a report by the research firm Wood Mackenzie and the trade group the Solar Energy Industries Association. One of the complicating factors is that Texas regulations require electricians to be on site when solar systems are installed.

The report found that installation companies need to either hire workers and train them or pay more to hire workers away from competitors.

Solar installers earned an average wage of $20.52 an hour last year which worked out to $42,680 for the year, according to the Department of Labor. The job typically requires a high school diploma.

 

Regulatory

 

New York Times* – December 10, 2019

A top Interior Department official broke a federal ethics rule by improperly meeting with his former employer, a conservative research organization, to discuss the rollback of endangered species protections that the group had been pushing, the department’s internal watchdog said in a report published Tuesday.

The watchdog, the Interior Department’s inspector general, concluded that the official, Douglas W. Domenech, an assistant Interior secretary for the office with stewardship of the nation’s oceans and coasts, violated federal rules in April 2017 when he met with representatives of the Texas Public Policy Foundation, where he was working before he joined the Trump administration, creating the appearance of a conflict of interest. …

Federal ethics laws prohibit government officials from meeting with their former employers for at least a year after they take public office to prevent those employers from improperly influencing the outcomes of public policy. At the Texas Public Policy Foundation, which is based in Austin, Mr. Domenech led the group’s Fueling Freedom Project, which aims to “explain the forgotten moral case for fossil fuels” by making the case that preserving oil, natural gas and coal shields the poor from higher energy costs.

 

 

Reform Austin – December 16, 2019

The 2020 Texas Primary Filings Are In: Here’s What to Expect in the Railroad Commissioner Race

This year’s incumbent, Ryan Sitton (R-Irving) is up for re-election following the end of his term. Prior to his government position, Sitton, a mechanical engineer, worked at the engineering and technology company Pinnacle Advanced Reliability Technologies, which he founded with his wife Jennifer.

According to Texas Ethics Commission filings, one Republican challenger, James “Jim” Wright, has filed to run. No campaign website was available at the time of this writing.

Three Democrats will compete to win in a competitive primary race:

Roberto Alonzo is a former Democratic member of the Texas House of Representatives. He served the 104th District from 1993-2019, leaving after his Democratic primary defeat in 2018 to Jessica Gonzalez.

Chrysta Castañeda, a Dallas attorney and engineer, announced her candidacy in October. In her first campaign video, she highlighted 35 years of experience in the oil and gas industry and her opposition to the state’s natural gas waste, also known as flaring.

Kelly Stone is a self-described “sex educator, comedian, single mother, river enthusiast, lecturer, and environmental activist,” according to her campaign website. She states she is running “to help educate Texans about what the Railroad Commission does, advocating for an agency name change to reflect it’s true function in oil and gas regulations.”

 

 

Houston Chronicle* – December 13, 2019

Feds sue Harris County over documents related to recent chemical fires

A federal investigative agency has asked a judge to order Harris County to hand over documents related to two recent chemical fires, saying the delay in responding is hindering two of its investigations.

Federal prosecutors in Houston filed a petition Wednesday to order Harris County Fire Marshal Laurie L. Christensen to produce documents and other relevant materials related to the investigations. The Chemical Safety Board alleges the county has failed to comply with requests even after it issued administrative subpoenas.

“The CSB’s attempts to conduct an efficient and effective set of investigations have been harmed by hostility and entrenchment of the county’s asserted legal positions,” Dan Tillema, investigator-in-charge, wrote in a court affidavit. …

Board officials said six of its seven investigators were sent to Harris County after the March 17 fire and explosion at the Intercontinental Terminals Co. complex in Deer Park, which engulfed 11 chemical storage tanks and sent a plume of hazardous smoke into the air that was visible for miles.

 

 

Dallas Morning News* – December 13, 2019

Super PAC supporting Rick Perry’s presidential campaign received $90,000 in illegal contributions

A super PAC that supported former Texas Gov. Rick Perry’s bid for president in 2016 is ensnared in the conviction of a former University of Texas regent who funneled campaign donations through his engineering company’s employees.

James Dannenbaum pleaded guilty last week to making illegal contributions in the name of others to support candidates for president, U.S. House and Senate.

The pro-Perry PAC received $90,000. Court records don’t name the Opportunity and Freedom PAC. But the plea deal refers to donations to “Committee A” by nine employees of Houston-based Dannenbaum Engineering Corp. and their family members that align with the PAC’s federal campaign filings.

 

 

Houston Chronicle* – December 16, 2019

George P. Bush omitted nearly a dozen company ties from financial disclosure forms

Texas Land Commissioner George P. Bush omitted in state disclosure forms that he had held a seat on the board of a company that later did business with the state fund he oversees.

Now serving his second term, Bush also recently admitted to having left off his connections to at least 10 other firms on previous filings.

State politicians are required to disclose their personal financial interests to the Texas Ethics Commission on an annual basis to allow for transparency and avoid conflicts of interest.