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They’re In: The TER 4th Quarter 2023 Texas Energy Companies Earnings Roundup

Compare results from nearly 100 Texas companies

This Texas Energy Report database is published each quarter and is updated as earnings are released throughout the reporting period.

Click on the name of the company for more information about the quarterly earnings report, usually from the company’s own press release

 

AEP

American Electric Power (Nasdaq: AEP) today reported fourth-quarter 2023 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $336 million or $0.64 per share, compared with GAAP earnings of $384 million or $0.75 per share in fourth-quarter 2022. Operating earnings for fourth-quarter 2023 were $647 million or $1.23 per share, compared with operating earnings of $540 million or $1.05 per share in fourth-quarter 2022. Operating earnings is a non-GAAP measure representing GAAP earnings excluding special items.

Year-end 2023 GAAP earnings were $2.2 billion or $4.26 per share, compared with GAAP earnings of $2.3 billion or $4.51 per share for year-end 2022. Year-end 2023 operating earnings were $2.7 billion or $5.25 per share, compared with operating earnings of $2.6 billion or $5.09 per share for year-end 2022.

The difference between GAAP and operating earnings for the fourth quarter and year-end 2023 was largely due to the disallowance of recovery of certain deferred fuel costs in West Virginia, the probable disallowance of certain capitalized costs associated with the Turk Plant, and the mark-to-market impact of economic hedging activities.

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Amplify Energy

  • Achieved average total production of 20.8 MBoepd
  • Generated net cash provided by operating activities of $28.4 million and net income of $43.6 million
  • Delivered Adjusted EBITDA of $25.2 million
  • Generated $14.4 million of free cash flow

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APA

During the fourth-quarter 2023, APA reported net income attributable to common stock of $1.8 billion, or $5.78 per share on a fully diluted basis. When adjusted for certain items that impact the comparability of results, APA’s fourth-quarter earnings totaled $352 million or $1.15 on a diluted share basis.

Reported fourth-quarter production was 414,000 BOE per day; adjusted production, which excludes Egypt noncontrolling interest and tax barrels, was 341,000 BOE per day. Net cash provided by operating activities in the fourth quarter was $1.0 billion, and adjusted EBITDAX was $1.4 billion.

For the full-year 2023, APA reported net income of $2.9 billion, or $9.25 per diluted common share. On an adjusted basis, APA’s 2023 earnings totaled $1.4 billion or $4.53 per diluted common share.

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Archrock Inc.

  • Revenue for the fourth quarter of 2023 was $259.6 million compared to $218.9 million in the fourth quarter of 2022. Revenue for 2023 was $990.3 million compared to $845.6 million in 2022.
  • Net income for the fourth quarter of 2023 was $33.0 million compared to $10.5 million in the fourth quarter of 2022. Net income for 2023 was $105.0 million compared to $44.3 million in 2022.
  • Adjusted EBITDA (a non-GAAP measure defined below) for the fourth quarter of 2023 was $120.3 million compared to $89.0 million in the fourth quarter of 2022. Adjusted EBITDA for 2023 was $450.4 million compared to $363.3 million in 2022.
  • Leverage ratio at the end of the fourth quarter of 2023 was 3.5x compared to 4.4x at the end of the fourth quarter of 2022.

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Atmos

Fiscal 2023:

  • Earnings per diluted share was $6.10 for the year ended September 30, 2023; $0.80 per diluted share for the fourth fiscal quarter.
  • Consolidated net income was…
     

EIA Increases Oil Price Forecast Following OPEC+ Production Cut Extension

world liquid fuels production and consumption balance

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), March 2024

March 21, 2024 — The Energy Information Administration said on Thursday, “We increased our forecast prices for crude oil and petroleum products for the remainder of 2024 in our March Short-Term Energy Outlook (STEO) following the announcement that OPEC+ will extend the existing voluntary production cuts through the second quarter of 2024. We now forecast significantly less global oil production than world oil consumption through the first half of 2024, requiring draws on world petroleum stocks (inventory). Stock draws tend to increase oil prices.

“We reduced our forecast for world oil production in the second quarter of 2024 (2Q24) to 101.3 million barrels per day (b/d) in the March STEO in response to OPEC+ extending its cuts. That results in global oil production that is 0.9 million b/d less than our forecast of 102.2 million b/d for world oil consumption. Although we expected some OPEC+ countries to continue to restrict production, we expect the March 3 announcement to result in larger cuts to production than we had previously assumed. The announcement includes an additional voluntary production cut from Russia.

“The current OPEC+ agreement includes two types of production cuts. The first type is officially stated production targets, and the second type is additional voluntary cuts pledged by certain OPEC+ countries. Although our previous forecast assumed that some OPEC+ members would maintain voluntary cuts—which had been set to expire after 1Q24—through 2Q24, this new announcement pledges that cuts will be continued for all member countries through the first half of 2024. Because OPEC+ did not…
 

RRC Commissioners Assess Over $3 Million in Penalties

March 19, 2024 — The Railroad Commission of Texas assessed $3,141,077 in fines involving 775 enforcement dockets against operators and businesses at the Commissioners’ Conference on Tuesday. The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety.

Ninety-one dockets involved $1,217,351.30 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…
 

Biden Administration Seeks New Restrictions on U.S. Oil and Gas Industry

By Alex Mills

The battle over the future of America’s petroleum industry continues to rage as “President Biden has used every weapon and every tool available to him to make producing American energy more difficult,” as one Texas Congressman said.

Rep. August Pfluger (R-Tx), who chairs the House Energy Action Team, pointed to two new regulations proposed by Washington bureaucrats creating more restrictions on exports of liquefied natural gas (LNG) from the U.S. and requires the industry to begin reporting greenhouse gas emissions.

Pfluger introduced a bill to amend the Natural Gas Act repealing restriction on the import and export of natural gas, and it passed by a vote of 224-200 in the House of Representatives.

Additionally, a group of nine Democrats from Texas have joined with the Texas Republicans in signing a letter to Biden asking him to stop implementing restrictions on LNG exports.

“Your continued prioritization of LNG exports ensures a future marked by affordable, accessible, and sustainable energy resources that foster global stability and propel the energy transition,” the members of Congress wrote in a letter. “We firmly believe that LNG exports hold significant benefits for the U.S. economy, energy security, and bolstering our alliances with U.S. partners across the world. As the United States continues to lead in global stability and energy resources, the export of U.S. LNG is a linchpin for fostering strong international partnerships, diversifying energy supplies, and reducing dependence on volatile regions. The Administration’s support for U.S. LNG is not only a boon for America but a beacon for the world’s pursuit of cleaner, more sustainable energy sources.”

The decision to ban exports creates uncertainty and discourages investments that would otherwise create jobs and expand the supply of natural gas, Pfluger said.

The Securities and Exchange Commission recently issued new greenhouse reporting requirement for the oil and gas industry, and several states and industry groups sued to stop the regulations.

The suit states Congress did not authorize the SEC to demand that companies report environmental or any other controversial issues completely unrelated to finance.

Meanwhile, the price of natural gas has dropped, closing in mid-week at $1.66 per million British thermal units (MMBtu) because of large oversupply, according to the Energy Information Administration (EIA).

“We expect the Henry Hub spot price to remain below $2 per MMBtu in 2Q24 (second quarter 2024) as the winter heating season ends with natural gas inventories 37% above the five-year average,” EIA stated. “The Henry Hub spot price averaged $1.72/MMBtu in February…
 

United States produces more crude oil than any country, ever: EIA

average annual crude oil and condensate production from top three global producers

Data source: U.S. Energy Information Administration, International Energy Statistics

The United States produced more crude oil than any nation at any time, according to our International Energy Statistics, for the past six years in a row. Crude oil production in the United States, including condensate, averaged 12.9 million barrels per day (b/d) in 2023, breaking the previous U.S. and global record of 12.3 million b/d, set in 2019. Average monthly U.S. crude oil production established a monthly record high in December 2023 at more than 13.3 million b/d.

The crude oil production record in the United States in 2023 is unlikely to be broken in any other country in the near term because no other country has reached production capacity of 13.0 million b/d. Saudi Arabia’s state-owned Saudi Aramco recently scrapped plans to increase production capacity to 13.0 million b/d by 2027.

Together, the United States, Russia, and Saudi Arabia accounted for 40% (32.8 million b/d) of global oil production in 2023. These three countries have produced more oil than any others since 1971 (counting production in the Russian Federation of the Soviet Union prior…
 

PUCT Welcomes New Independent Market Monitor Director

March 11, 2024 – The Public Utility Commission of Texas is pleased to welcome Jeff McDonald to his new role as the Director of the Independent Market Monitor (IMM) for the Electric Reliability Council of Texas (ERCOT) market.

As IMM Director, McDonald will collaborate with the PUCT to detect and prevent market manipulation and identify potential design improvements for the ERCOT market.

“Jeff is uniquely qualified for this role, having led market monitoring efforts in major wholesale electricity markets across the country,” said PUCT Interim Executive Director Connie Corona. “His experience working with other large grid operators around the country will give us an expert perspective on the ERCOT region and how we can continue to improve reliability and affordability for Texas energy customers.”

Created by statute in 2005, the IMM plays a critical role in the operation and design of the ERCOT wholesale electricity market.

The IMM works with PUCT staff to monitor the ERCOT market, identify areas for improvement, and protect against market manipulation or other activity that could hurt Texas consumers.

Potomac Economics has served as the ERCOT IMM for nearly 20 years and was recently re-awarded the IMM contract following a required competitive bidding process.

“We are very proud to continue serving the State of Texas and the ERCOT market in this important role,” said Dr. David Patton, president of Potomac Economics.

“Jeff’s deep expertise and decades of experience make him the perfect person to lead the IMM team in Texas and ensure the market is operating efficiently, fairly, and competitively.”

McDonald has worked in the monitoring of wholesale electricity markets for more than 20 years. He has served as the Vice President and Head of Internal Market Monitoring Unit at Independent System Operator (ISO) New England and Senior Manager of the Market Monitoring Unit at the California ISO.

Prior to joining Potomac Economics, McDonald was Vice President of Concentric Energy Advisors and Principal of Libertas Market Analysis.

McDonald has a Ph.D. in Economics from the University of California, Davis, a Master of Science in Natural Resource Economics from the University of Massachusetts, Amherst, and a Bachelor of Science in Agricultural and Managerial Economics from the University of California, Davis.

 

Increased Efficiency, New Technology Result in Record Production

By Alex Mills

Increased efficiency and the development of new technology by America’s oil industry resulted in record oil production last year, according to a study by the Energy Information Administration (EIA).

“U.S. crude oil production has increased to record highs since 2010 and has risen even more quickly in recent months. These record highs have come despite declining U.S. drilling activity because the new wells are more efficient,” EIA stated in its Petroleum Supply Monthly report issued this week.

Since first surpassing the previous record in August 2023, U.S. crude oil production has increased another 2%, exceeding the pre-pandemic November 2019 peak by 0.3 million b/d. U.S. oil industry produced 13.3 million b/d in December 2023.

EIA noted the number of new wells brought on line by drilling activity has historically been the key determinant of whether crude oil production increases or decreases. However, advances in horizontal drilling and hydraulic fracturing technologies have increased well productivity, enabling U.S. producers to extract more crude oil from new wells drilled while maintaining production from legacy wells.

“Our Drilling Productivity Report (DPR) shows more production from a combination of increasing new well production and higher sustained legacy well production,” EIA stated in the report. “We define new well production as crude oil extracted during the first 12 months…
 

Oil & NatGas State Revenues Down in February

March 3, 2024 — The Texas state comptroller says tax income from oil production was down last month by 7% while natural gas income dropped 39% when compared year-over-year.

The oil production tax income was $458 million, according to Comptroller Glenn Hegar‘s latest month-end statement of revenues, while natural gas tax income was $186 million.

Motor fuel taxes dropped 1% to $302 million when compared to February 2023, while motor vehicle sales and rental taxes drew $586 million, up 8%.

Overall state sales tax revenue totaled $3.69 billion in February, half a percent more than in February 2023.

The majority of February sales tax revenue is…
 

Today’s Misguided Policies Can Lead to Tomorrow’s Energy Crisis

By Alex Mills

Twenty years ago the United States imported more than half of the oil we consumed each day. Today, primarily through innovative technology developed by the American oil and natural gas industry, the U.S. exports more oil than it imports.

In 2004, the U.S. imported 13.7 million barrels of oil per day (b/d) while producing 5.2 million b/d, resulting in a negative 8.5 million b/d.

Currently, the U.S. imports just 6 million b/d while producing 13.3 million b/d, resulting in the U.S. becoming a net exporter of oil.

Natural gas also has become a net exporter with liquefied natural gas (LNG) traveling to Japan to the west and Europe to the east and many other countries.

The industry began experimenting with new technology in the 1990s that involved drilling vertically into shale formations and then drilling horizontally and then hydraulic fracturing the shale to free the oil and gas to flow to the surface. Around 2008 the rush to drill using this new technology took off.

However, some of the politicians in Washington, D.C. are using the regulatory weapon against the oil and gas industry.

President Joe Biden has used his power in an attempt to make it more difficult and expensive for the oil industry. The Biden administration recently implemented a complicated new methane tax, proposed new emission standards for vehicles, limited exploration on public lands, and proposed limiting LNG exports.

The American Petroleum Institute (API) this week released a new national poll demonstrating widespread concern over Washington’s approach on energy policy.

The poll, conducted Feb. 9-13 of 1,132 registered voters, found 86% believe producing oil and natural gas here in America helps make our country more secure against action by countries such as China and Russia.

Also, the survey found 84% believe producing more oil and natural gas in the U.S. could help lower energy costs for American consumers and …
 

Electric Vehicle Sales Grow But Problems Exist

By Alex Mills

Even though electric vehicle and hybrids sales grew in 2023, a variety of issues have emerged to cause some automakers to modify future manufacturing targets.

The Energy Information Administration (EIA) reported recently sales of hybrid, plug-in hybrids, and battery-electric vehicles in the U.S. rose to 17.7% of new light-duty vehicle sales in the third-quarter 2023.

Additionally, sales accounted for 16% of all new light-duty vehicle sales in the U.S. in 2023 compared to 12.6% in 2022.

EIA attributed the increase in battery-electric vehicles (BEV) to a 5% reduction in the average transaction price in the third quarter to $50,283, bringing the price 24% lower than at the price peak in the second quarter of 2022. “BEV prices are now within $3,000 of the overall industry average transaction price for light-duty vehicles,” EIA stated.

However, recent news indicates the BEV industry hit a few speed bumps that include a decline in consumer buying interest, investors taking a second look at charging companies, resale value, and reliability.

“As a result, electric cars and trucks are piling up on dealer lots, causing auto companies to reassess their investment plans,” the Wall Street Journal reported. “It takes a dealership around three weeks longer to sell a BEV than a gasoline vehicle, according to data from car-shopping website Edmunds. A year ago…
 

Natural Gas Prices Plunge as Inventories Rise

By Alex Mills

The decline in natural gas prices surprised industry officials this week – dropping more than 30% – as news surfaced about the oversupply of natural gas becoming more severe.

Natural gas traded at Henry Hub on the New York Mercantile Exchange closed at $2.52 on Feb. 9 and by Feb. 14 the price had dropped to $1.629. One year ago, natural gas traded $3.68 for 30-day deliveries on NYMEX. This is the lowest price in 40 months.

Natural gas demand, which historically has been driven by colder weather in the winter months, declined last week because of mild weather. Natural gas production, which continues to set records, also is a major contributor to the oversupply. The decline in demand and increase in supply has created an increase in inventories, the Energy Information Administration stated in its recent Short-Term Energy Forecast.

“We forecast inventories will end this winter heating season (November–March) at about 1,910 Bcf, which would be 15% more than the five-year average,” EIA stated.

EIA also forecast soft prices, but not below $2.  “We forecast that mild weather for the remainder of first quarter of 2024 will keep the average Henry Hub spot price near $2.40 per million British thermal units (MMBtu) during February and March. But volatility could return if severely cold weather emerges, even for a short period” EIA stated.

EIA forecasts U.S. natural gas production will increase in February and reach 105 Bcf/d by March as the weather-related disruptions subside and will stay close to that level for the rest of the year. EIA expects production will increase in 2025 to average more than 106 Bcf/d, which will set another production record if achieved.

EIA believes natural gas consumption will increase…
 

Renewable Energy Goals Are Unattainable by 2050: Baylor University Study

New study by Baylor researchers finds infrastructure, leadership and understanding in the way of fully sustainable energy sources

By Kayla Garrett

February 13, 2024 — More than 250 U.S. cities have made pledges to transition to 100% renewable energy sources by the year 2050. However, in a new study published in the journal Environmental Research: Infrastructure and Sustainability, Baylor University researchers Kayla P. Garrett, Ph.D., and Ryan A. McManamay, Ph.D., found that, despite efforts, the target date to move to fully sustainable energy sources is unrealistic because of economic barriers, leadership and government breakdowns and a misunderstanding of energy limitations.

“The United Nations Panel on Climate Change emphasizes the need for sustainable energy sources and states that these changes have to happen in the next 20 to 30 years to meet these really critical timelines that we’re looking at for irreconcilable climate change,” said, Garrett, a postdoctoral teaching fellow in environmental science at Baylor. “But when we look at like what is being done and how we’re trying to get it done in those timelines, there’s a misalignment.”

The researchers used an “energyshed framework” to analyze energy consumption on a city level, investigating a subset of 31 out of the 250 cities (including Washington, D.C., Chicago and Los Angeles) to evaluate their existing electricity production and estimate how much further they have to go to meet their goals.

“It is likely most cities will meet 10% of their energy demand with renewable energy, with best case scenarios reaching between 35% and 65% renewable penetration, within the next 20 to 30 years,” the researchers wrote. “This highlights the need for infrastructural development in the energy sector, as well as intentional planning efforts in order to make these energy goals a reality.”

An energyshed is similar in concept to a watershed — an area where energy is produced and can be collected and stored until needed. By looking at the energy needs through the context of an energyshed, researchers were able to determine if moving to fully sustainable energy is possible within the time goals.

“The term energyshed is still relatively new but has gained national attention for the benefit it offers in understanding the urban energy transitions that…
 

New Rice University Report Offers Options to Improve ERCOT Reliability

By Avery Ruxer Franklin

February 9, 2024 — The reliability of electricity service in ERCOT, the Electric Reliability Council of Texas, has come under increased scrutiny since Winter Storm Uri in February 2021. Increasing demand will create issues, but there are several available “insurance” actions that will likely need to be called upon to ensure long-term reliability, according to a new report from Rice University’s Baker Institute for Public Policy.

Currently, ERCOT is like a new, high-performance sports car being driven 100 mph without insurance, said Ken Medlock, senior director of the Baker Institute’s Center for Energy Studies.

“Over the last five years, ERCOT has seen a steady year-on-year increase in calls for conservation as demand growth outstrips dispatchable, or controllable, generation capacity,” Medlock said. “Dispatchable resources such as natural gas, hydro, batteries and geothermal provide generation services that can be called upon to meet minute-by-minute variations in demand. Non-dispatchable resources such as wind and solar are only available when the wind is blowing or the sun is shining, so their variation is not controllable.”

Reliability on an electric grid requires sufficient redundancy and dispatchability to meet peak demands, effectively acting as insurance when load increases or some generation sources are unexpectedly not operational, Medlock said.

Electricity

Electricity and resource reliability in ERCOT have been a top legislative, regulatory and commercial priority for the past few years in Austin. Demand (load) in Texas has grown substantially over the last 20 years and is expected to see continued growth in the future, driven by strong population growth, robust economic expansion and shifts to electrification of various energy services. This includes a significant push toward electrification of oil and gas operations that has manifested in very strong regional load growth in high oil- and gas-producing regions across the state.

Complicating matters is the fact that load is growing in the Texas Triangle — the region between Houston, Dallas-Fort Worth, and Austin-San Antonio — while most new generation capacity has been added in West and South Texas. This mismatch between load and generation is stressing transmission capacity across the state, Medlock said.

Additionally, projected growth in carbon capture and storage and the “green” hydrogen industry as well as greater adoption of electric vehicles will further increase the demand for electricity in the Texas Triangle, potentially exacerbating an emergent problem.

“Texas has also seen tremendous growth in wind and solar generation capacity over the last 20 years, and it is now No. 1 in the nation in terms of existing wind capacity and No. 1 in terms of planned capacity additions for wind and solar,” according to the report. “Such aggressive growth of intermittent resources, while motivated by environmental goals, will compromise reliability if there is little to no concomitant addition of dispatchable forms of generation. Continued growth in system load, and changes in its geographic distribution, only exacerbates matters.”

The “insurance” options include more aggressive use of demand management programs, investing in storage capacity in load centers or alongside wind and solar generation to support more efficient use of existing transmission capacity, locating future generation capacity closer to major load centers and expanding dispatchable generation capacity. But policy will ultimately influence which options can be profitably exercised, the authors argue.

“Allowing risks to reliability that can be avoided at reasonable cost is unacceptable,” the authors write. “Appropriate market design and sufficient regulatory oversight is critical, which ranges into topics from market structures that ensure sufficient backup capacity to adequate penalties for underperformance by generators under specific obligations.

“In the end, resource adequacy and reliability are in the best interests of all market participants — producers and consumers alike — as (ERCOT) establishes a platform for long-term growth.  Identifying investment opportunities to provide reliability is paramount, and the portfolio of options in ERCOT is substantial.”

Learn more about the data, analysis, and recommendations here.

 

Texas Petroleum Industry Had Unusual Year

By Alex Mills

The petroleum industry in Texas had an unusual year in 2023: it produced more crude oil and natural gas in the state’s history, but declining exploration and production indicators could be sending a different message about the future.

The Texas Petro Index, a monthly measure of growth rates an cycles in the Texas upstream economy, fell for 11 consecutive months in 2023 from 178.3 in December 2022 to 154.4 in December 2023, which is a decline of 13.4%.

“Rising crude oil and natural gas production and still-growing industry employment were unable to offset lower prices, fewer rigs at work, and lower values of statewide production, pushing the TPI downward in 2023 after the January peak,” said Karr Ingham, Petroleum Economist for the Texas Alliance of Energy Producers, and the creator of the TPI analysis.  “But Texas oil and gas producers, with extraordinary efficiency and productivity gains on full display, still managed to grow production significantly, setting new records for statewide output along the way.”

Statewide crude oil production in Texas surpassed two billion barrels for the first time ever in 2023, and reached a record 5.62 million barrels per day in December 2023, Ingham said. Daily production, which peaked pre-COVID at 5.45 million barrels in March 2020, finally reached and exceeded that level fully three years later in March 2023. Texas annual crude oil production in 2023 outpaced the 2022 annual total by a stout 8.5%, and comprised 42.6% of U.S. annual production.

Texas natural gas production exceeded 12 trillion cubic feet (TCF) for the first time at an estimated 12.5 TCF in 2023, an increase of 7.4% over the 2022 annual total, Ingham said.

“Surprisingly, however, these milestones were accomplished with a significant and sustained decline in the statewide rig count and fewer drilling permits issued over the course of the year,” Ingham said.  “The Texas rig count climbed to its post-COVID high of 379 in January 2023, and then fell by 76 rigs to 303 in November, before adding four rigs in December. At year-end…
 

2-16-24

Texas Energy Report NewsClips Friday February 16, 2024 Asterisk (*) denotes news stories that may be inaccessible because portions are behind a paywall   Top Stories   The Hill – February 15, 2024 …

U.S. Natural Gas Consumption Established a New Daily Record in January: EIA

daily natural gas consumption in the U.S. lower 48 states

Data source: S&P Global Commodity Insights

February 6, 2024 — On January 16, 2024, a record high of 141.5 billion cubic feet (Bcf) of natural gas was consumed in the U.S. Lower 48 states (L48), exceeding the previous record set on December 23, 2022, according to estimates from S&P Global Commodity Insights. Well-below-normal temperatures caused by a large mass of arctic air that covered most of the continental United States increased demand of natural gas used for residential and commercial space heating and for electric power generation. Both consumption of natural gas and withdrawals from underground storage increased to record volumes because of the higher demand.

Natural gas consumption in the L48 averaged above 130.0 billion cubic feet per day (Bcf/d) from January 14 through January 21, 2024, as arctic air pushed south into the United States, causing temperatures to fall. Extreme wind chills, freezing rain, and snowy conditions persisted from the Pacific Northwest into Texas and across the Northeast and mid-Atlantic. Residential and commercial natural gas consumption accounted for almost 49% of L48 consumption during that period, up from 42% during the start of January, as homes and commercial buildings used more natural gas for heating. Electricity generation also increased during that time, with natural gas-fired and coal-fired electricity generation increasing to meet increased demand.

Natural gas was also withdrawn from underground…
 

PUCT Closes ‘Phase One’ of Blueprint for Grid Reliability Improvement Projects, Continues Focus on Second Phase of Market Reforms

February 3, 2024 — The Public Utility Commission of Texas (PUC) says it has closed two projects it opened in 2021 aimed at implementing reliability improvements for the Texas electric grid.

“The project closures mark the end of Phase One of the PUC’s blueprint for reliability reforms, which focused on improving the operational reliability of the Electric Reliability Council of Texas (ERCOT) grid through weatherization and back-up fuel programs for generation plants, and other market adjustments,” the PUC said in a statement.

“The ERCOT grid is more reliable than it’s ever been and getting to this point has been a total team effort, working side-by-side with ERCOT, members of industry and using the tools and guidance given us by Governor Greg Abbott and the Texas Legislature,” according to PUC Chairman Thomas Gleeson.

“This doesn’t mean…
 

Oil Industry Analysts Expect Volatility During 2024

By Alex Mills

The oil and gas industry experienced unusual volatility in 2023 as production in the U.S. exceeded all expectations while facing many challenges.

Oil production reached a record high of 13.2 million barrels per day (b/d) in December, which is the most production by any country ever.

Even though oil prices remained fairly constant (beginning the year at $74 per barrel, rising to a high of $93 in September, and dropping again to $71 in December), the industry fought through many negatives.

On the international scene, war and military conflicts in Europe and the Middle East created uncertain situations, inflation in the U.S. and in Europe hampered demand, implementation of more anti-oil programs globally, and lack of capital to invest in future development.

Most U.S. oil companies experienced declines in their stock prices last year.

The two largest…
 

OPEC Expects Oil Demand to Increase

By Alex Mills

The Organization of Petroleum Exporting Countries – better known as OPEC – has become the major source of crude oil exports worldwide. During the pandemic, it took in several additional countries, including Russia and it became known as OPEC+.

The 22 countries of OPEC+ provided 27% of the world’s crude oil with Saudi Arabia and Russia leading the other nations with production totals of roughly 10 million barrels per day (b/d) each.

As time passed and worldwide demand changed, OPEC+ reduced its production quotas in an effort reduce the amount of oil on the market. Saudi Arabia’s currently produces 9 million b/d. Russia’s current production is more difficult to determine because of sanctions placed on it by the U.S. and other countries after Russia invaded Ukraine two years ago, but it is estimated to be about 8 million b/d.

Global inflation and slow economic growth resulted in less demand for oil from these countries in recent years.

At the same time, oil production in the U.S. increased to a high of 13 million b/d by the end of 2023.

An oversupply of oil caused a weakening of price. Brent crude, which is traded on the international market, dropped as did West Texas Intermediate, which is traded on the New York Mercantile Exchange, below $60 per barrel.

OPEC+ has reduced production quotas five times since October 2022 in an effort to stop the decline.

Brent crude oil closed at…
 

US Electricity Customers Averaged Five and One-Half Hours of Power Interruptions in 2022: EIA

average annual total of electric power interruptions

Data source: U.S. Energy Information Administration, Annual Electric Power Industry Report

On average, U.S. electricity customers experienced approximately five and one-half hours of electricity interruptions in 2022, almost two hours less than in 2021, according to our recently released Annual Electric Power Industry Report. The annual decline was driven by fewer major events in 2022 compared with 2021.

Since 2013, the average duration of electricity interruptions each year has remained consistently around two hours after excluding major events. Major events that cause power interruptions include weather, interference from vegetation near power lines, and utility practices. We measure U.S. electric utility reliability using two indexes:

  • The System Average Interruption Duration Index (SAIDI) measures the total duration (in hours) an average customer experiences non-momentary power interruptions in a one-year period.
  • The System Average Interruption Frequency Index (SAIFI) measures the frequency of interruptions in number of occurrences.

average annual total electric power interruptions by U.S. state

Data source: U.S. Energy Information Administration, Annual Electric Power Industry Report

We measure the impact these major events have on electricity reliability by comparing the SAIDI and SAIFI values of the affected states with the U.S. average (5.6 hours of outages and 1.4 outages per customer). In 2022, the United States had 18 weather-related disasters…