.The Texas Energy Report

December 16, 2022 — The Senate Committee on State Affairs held a hearing in Marshall, Texas, on Thursday investigating the expansion of the Environmental, Social, and Governance (ESG) movement. Texas is leading the fight to halt ESG practices, a woke investment strategy that places a priority on subjective environmental and social metrics instead of financial metrics that ensure quality returns for investors. It is estimated that ESG has decreased investments for reliable energy (thermal) by 90% over the last five years.

“Your retirement account is collateral damage to radical environmentalists, who are leveraging Wall Street through ‘woke’ ESG investment strategies to kill the oil and gas industry,” Railroad Commissioner Wayne Christian said. “This hearing is extremely important to keep the spotlight on ESG’s fraudulent practices and the Wall Street corporations enabling it. As a 30-year financial services veteran, I’ve seen no greater threat to fiduciary ethics than ESG; and as an energy leader, I’ve also seen no greater threat to the survival of the American way of life which is powered by fossil fuels.”

This week, Chairman Bryan Hughes and members of the Texas Senate Committee on State Affairs continued their investigation of major Wall Street firms to determine whether these firms are using ESG principles that impact state retirement funds, as well as impacting oil and gas production….
 

December 16, 2022 — The White House has announced the first repurchase of oil in an attempt to begin refilling the Strategic Petroleum Reserve.….
 

December 16, 2022 — As a series of cold fronts approach Texas, ERCOT continues to closely monitor weather forecasts and models, the grid authority said on Friday.

“ERCOT expects sufficient generation to meet forecasted demand and will continue to provide updates.

In a news release, the Electric Reliability Council of Texas said, “Earlier today, ERCOT issued an Operating Condition Notice (OCN), a procedural notification to transmission and distribution owners and generation resources that temperatures will meet ERCOT’s criteria of 25 degrees or lower in the Austin/San Antonio and the Dallas Fort-Worth areas between Thursday, December 22 through Monday, December 26…..
 

By Alex Mills

Accurately predicting the price of crude oil, gasoline and other petroleum products is like wandering through a dark, strange room trying to find the light switch.

An economics professor once jokingly commented forecasters who rely heavily on the use of a crystal ball to predict the future price of oil end up eating a lot of glass.

Thousands, if not millions, of companies, individuals and governments search for the right data to reach right conclusions at the right time.

Three agencies – the Organization of Petroleum Exporting Countries (OPEC), the International Energy Agency (IEA) and the Energy Information Administration at the U.S. Department of Energy (EIA) – hire a lot of experts to crunch the numbers daily and issue a report each month.

This week each issued their most recent reports and here’s a summary….
 

December 14, 2022 — There is some concern about a possible winter storm arriving in Texas next week that could plunge temperatures to near freezing almost statewide, and ERCOT notes that it’s closely watching weather forecasts and is preparing for record electricity demand.

In a statement to The Texas Energy Report, an ERCOT spokeswoman said…
 

December 14, 2022 — Permian Resources is planning to appoint a new chairman, now that the current chairman has notified the board of his intention to retire, while the current CFO is also …

December 13, 2022 — RRC Commissioner Christi Craddick was unanimously elected Chairman of the Railroad Commission of Texas during today’s RRC open meeting.

Following her election, Chairman Craddick thanked Commissioner Wayne Christian for his leadership as Chairman for the past year. “Chairman Christian has led this agency through serious rulemakings related to Winter Storm Uri, and I am proud of the work this agency has completed to keep gas flowing in this state.”…
 

December 13, 2022 –The RRC is making the first of several changes in its earthquake response plans following a West Texas earthquake last month.

Here’s the announcement:

“Following a 5.4 magnitude earthquake on November 16 in Reeves County, the Railroad Commission of Texas is implementing several revisions to the seismicity reduction response plan in the Northern Culberson-Reeves Seismic Response Area (SRA).

“The SRA was created to address the intensity and frequency of earthquakes in the area and reduce the occurrence of high-magnitude seismicity such that recurrence of 3.5 magnitude events is decreasing by December 31^st, 2023….
 

By Alex Mills

Crude oil prices declined again this week on speculation that future demand will decrease as the global recession gains more strength into 2023.

Brent crude oil prices closed at $79 per barrel on the international exchange in London on Dec. 7 and West Texas Intermediate closed at $72, which is below the previous low of $76 recorded on Jan. 1.

The Energy Information Administration (EIA) at the Department of Energy released its Short-Term Energy Outlook (STEO) on Wednesday estimating that Brent price will average $92 per barrel in 2023, which is $3 less than it forecast last month.

EIA also forecast global oil inventories will fall by 200,000 barrels per day (b/d) during the first half of 2023.

Crude oil inventories in the U.S. have declined recently to 413.9 million barrels, which is 19 million barrels less than it high point of 432 million barrels in August….
 

December 7, 2022 — Recent legislation like the Bipartisan Infrastructure Law and the Inflation Reduction Act gives a huge boost to the nation’s efforts to achieve a clean energy transition.

The energy transition, a global transformation of energy systems away from fossil fuels to renewable and clean energy sources by 2050, is necessary to ward off the worst impacts of climate change. It will entail overhauling our energy resources, systems, economics, policies, and our behavior. It will require a huge expansion of renewable energy sources, the phase out of coal and oil, and increased energy efficiency across the board. It will not be easy. Below are five factors that will be crucial in order to decarbonize our society, according to Columbia University….
 

December 3, 2022 — Natural gas tax income for the State of Texas continued it’s comeback in November following the economic downturn related to Covid 19, with tax revenue reported by the comptroller up 41% year-over-year (y/y), with overall state sales tax income the largest ever.

Natural gas production tax income was $410 million….
 

December 1, 2022 — Todd Staples, president of the Texas Oil & Gas Association (TXOGA) today issued the following statement on the passing of past TXOGA president Rob Looney:

“The passing of Rob Looney is not only a loss for his family and the oil and natural gas industry where he played such a key role for many years, but to all of Texas. Having served as president of TXOGA for more than 25 years before retiring in 2014, Rob instituted many transformative initiatives….
 

December 1, 2022 — Yesterday, Texas Comptroller Glenn Hegar announced the transfer of $3.64 billion to the Economic Stabilization Fund (Rainy Day Fund) and $3.64 billion the State Highway Fund (SHF).

“The transfer $7.3 billion of oil and gas industry tax revenue is further concrete proof that the oil and gas industry is invaluable to the State of Texas. Revenue from the oil and gas industry is what’s in the Rainy Day Fund, accounts for billions to the State Highway Fund, and contributes to state funds that pay for schools, universities, and first responders,” RRC Chairman Wayne Christian said….
 

By Alex Mills It took a year, but gasoline prices in Texas dropped this week below last year’s price. Diesel, on the other hand, remains above November 2021. According to AAA, gasoline prices …

November 29, 2022 — Texas Comptroller Glenn Hegar announced today he has completed the transfer of about $7.3 billion into the State Highway Fund (SHF) and the Economic Stabilization Fund (ESF; commonly known as the “Rainy Day Fund”). Each fund received nearly $3.64 billion, or 50 percent of the total transfer.

“Texas’ strong economic recovery continues but inflation and supply chain issues coupled with ongoing geopolitical unrest point to uncertainty on the horizon,” Hegar said. “Additionally, our economic strength and business friendly environment continue to attract people and businesses to Texas….
 

November 23, 2022 — The Railroad Commission of Texas (RRC) is warning O&G and pipeline operators about expected heavy snowfall in West Texas and the Panhandle.

And while the National Weather Service (NWS) and other forecasters are calling for a possible 24″ of snow in the Amarillo area and up to 18″ in other portions of the Panhandle Thursday night into Friday, the forecast is far from certain….
 

November 18, 2022 — Freeport LNG Development, L.P. said in a press release on Friday that work necessary for reopening its plant south of Houston is about 90% complete.

The company is looking toward “utilization of all three liquefaction trains, two LNG storage tanks and one dock…with all reconstruction work anticipated to be completed by the end of November.”…
 

By Alex Mills

Even though many petroleum industry and government officials predict global demand to increase in the coming months, they fully recognize a high degree of uncertainty within the markets on the demand side and the supply side, too.

The Covid lockdown in China, one of the largest importers of oil, continues to impact demand as does high inflation, tight monetary policy by central banks, and persistent supply chain constraints in many countries around the globe.

The Organization of Petroleum Exporting Countries (OPEC) issued its monthly report this week stating October production by OPEC members averaged 29.49 million barrels per day (b/d), which is 210,000 b/d less than September. OPEC forecast global oil demand will increase 2.55 million b/d (2.6%), which is a 100,000 b/d decrease from last month’s forecast.

Russia’s invasion of Ukraine has muddied the waters, also….