.The Texas Energy Report

May 29, 2023 –Governor Greg Abbott about 9 Monday night officially called a special session of the Texas Legislature to take up only border security and property taxes — but he called it “special session #1,” indicating the first in a series of special summer sessions.

Gov. Abbott said the session begins immediately — at 9 pm Monday; like, now. (See the full proclamation below.)

Earlier in the evening, three energy-related suggestions were made by the Texas Lieutenant Governor for legislative action in a likely special session of the state legislature….

May 29, 2023 — The 88th Texas Legislature ended Monday evening on an uncertain note, without the “must-pass” property tax cuts and with a special session certain and imminent; details are expected as soon as tonight, with Aug. 28th set as the deadline.

Texas Energy Report is preparing a session wrap-up report to appear Tuesday morning.

— In case you missed it, the lead story in this morning’s TER NewsClips is ConocoPhillips‘ 50% stake buy-in (for about $3 billion) in the Surmont oil facility held by TotalEnergies’ Canadian subsidiary

— The Texas Senate‘s impeachment trial of Attorney General Ken Paxton is expected sometime this summer.

Lt. Gov. Dan Patrick will set trial date and all the Senate must convene, must accept charges made by the House, and a two-thirds vote is required to remove Mr. Paxton from office.

The impeachment committee that will prosecute Attorney General Paxton was named on Monday, with the prosecution committee from the House made up of Rep. Andrew Murr (R) as chairman, Rep. Ann Johnson (D) as vice chair; and “managers” will be Reps. Charlie Geren (R); Joe Moody (D); Jeff Leach (R); Terry Canales (D); Briscoe Cain (R); Oscar Longoria (D); Morgan Meyer (R); Cody Vasut (R); Erin Gámez (D); and David Spiller (R)

A Senate panel of seven people will suggest procedure for the trial, with Sen. Brian Birdwell (R) as chairman, Sen. Juan “Chuy” Hinojosa (D) as vice chair; Sens. Brandon Creighton (R); Royce West (D); Pete Flores (R); Joan Huffman (R) and Phil King (R) filling out that panel.

May 29, 2023 — The Texas Legislature finally agreed on several energy-related bills on the eve of Memorial Day, the final official day of the 2023 session.

As it started to get dark, a compromise was reached on Senate Bill 2627 (Conference committee report) regarding low interest (or even no-interest) state funding for new or enhanced power plants and an agreement released from the conference committee, backdated.

The latest version of the bill, which is headed to Governor Greg Abbott‘s desk, still includes budgeting $5 billion to pay for bonuses to those entities getting plants ready and connected to the grid by June 1st, 2026 ($120,000 per megawatt of capacity) or June 1st, 2029 ($80,000 per megawatt capacity).

The enabling legislation, SJR 93 (amended), for a constitutional amendment and public vote for the creation of the Texas energy fund, has passed conference and is headed to the Governor.

The bill agreement was reached more than 18 hours after the legislative deadline of midnight Saturday night, but is considered okay to move forward.

Also better late than never was…
 

May 27, 2023 — The Texas House on Saturday afternoon voted to impeach Republican Attorney General Ken Paxton, removing him from office at least temporarily while he awaits a trial in the state …

By Alex Mills

Retail gasoline prices are more than $1 per gallon lower this Memorial Day weekend than last year, and AAA expects more traffic on the highways.

AAA expects 6% more Memorial Day weekend road trips in 2023 than in 2022.

Even though U.S. retail gasoline prices are lower than 2022, prices are relatively high compared to previous years according to a report from the Energy Information Administration (EIA).

“Heading into Memorial Day weekend 2023, the U.S. retail gasoline price averaged $3.53 per gallon, or $1.24 (26%) lower than the inflation-adjusted price one year ago,” EIA stated in its report issued on Wednesday.

“Despite this price decrease, retail gasoline prices remain relatively high. This year’s price is higher than the inflation-adjusted prices of $3.38 in 2019, $2.22 in 2020 (when responses to the COVID-19 pandemic decreased demand for petroleum products), and $3.41 in 2021,” EIA stated.

Gasoline prices follow crude oil prices closely. When market conditions for both commodities are tight prices tend to follow. In recent years, a global pandemic and Russia’s invasion of Ukraine have played key roles in energy prices….
 

May 25, 2023 — The Supreme Court on Thursday ruled against the Environmental Protection Agency in a dispute over its authority to regulate certain wetlands under the Clean Water Act, long seen as a key tool to protect waterways from pollution…
 

May 25, 2023 — A bill passed by the Texas Legislature to continue the Texas Produced Water Consortium has been signed by Governor Greg Abbott, to go into effect immediately. The Texas Senate …

May 25, 2023 — The Railroad Commission of Texas will have the authority to designate the operators of orphaned oil or natural gas wells under a bill signed into law by Governor Greg Abbott over the weekend.

SB 1210, from District 29 Sen. César Blanco, would allow a geothermal operator to adopt such wells in order to convert the well into geothermal electricity production….
 

May 25, 2023 — The Texas Legislature has passed the PUC Sunset Bill in modified form and is preparing to send the bill to the Governor. There were a number of amendments to …

May 25, 2023 — The Texas Legislature has passed and sent to the Governor a bill to put off new federal regulations on state O&G production.

HB 33, which author Rep. Brooks Landgraf calls the “Texas Energy Independence Act,” was passed by the House May 5th and by the Senate May 22nd, and would take effect September 1st.

The bill keeps Texas state agencies and officials from contracting with or even offering assistance to federal agencies or officials on the enforcement of federal statutes, rules, regulations or orders regulating O&G operations if the regulation does not already exist.

…
 

In the EIA’s Issues in Focus: Effects of Liquefied Natural Gas Exports on the U.S. Natural Gas Market supplement to their Annual Energy Outlook 2023 (AEO2023), they find that the volumes of liquefied natural gas exports (LNG) do affect average U.S. natural gas prices. However, the resulting range in natural gas prices in our new cases was narrower than the price range in recent history and the AEO2023 side cases despite a wide variety of U.S. LNG export volumes.

In the EIA’s AEO2023, they explore long-term energy trends in the United States and present an outlook for energy markets through 2050. The Issues in Focus articles based on the AEO provide in-depth discussions on topics of special significance, such as LNG exports. This Issues in Focus presents three additional side cases to the AEO2023 that explore how LNG exports volumes affect domestic natural gas prices….
 

May 24, 2023 — A new bill ready to be signed by Governor Greg Abbott would eliminate the need for yearly non-commercial vehicle inspections of the horn, brakes, lights and all the rest …

May 24, 2023 — The Texas Legislature has passed a modified version of District 5 Sen. Charles Schwertner‘s and District 10 Sen. Phil King‘s SB 7, aimed at strengthening the ERCOT grid by instituting a procedure for incentivizing more gas-fueled power plants — and has also passed SB 2627 (see below)

The bill was passed by the Senate on April 5th and by the House on May 23rd and is now undergoing reconciliation as the Senate decides whether to meet with House representatives over changes the House made to the Senate’s version of the bill — or the Senate could simply accept without question those House changes….
 

May 24, 2023 — Gasoline and diesel fueled engines may not be outlawed in local jurisdictions under a new law signed by Governor Greg Abbott.

The Texas Senate passed SB 1017  by District 22 Sen. Brian Birdwell on April 5th and the House passed a modified measure on April 25th, after which the Governor signed the bill May 13th, outlawing any ban of gas stations along with any other similar or related wholesale or energy producer….
 

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

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

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

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

And the House has passed …
 

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

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

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

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

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

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

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