.The Texas Energy Report

November 5, 2022 — Natural gas and oil sales tax collected by the Texas Comptroller‘s office continued a months-long rise year-over-year during the month of October.

The natural gas production tax collected last month of $410 million was up 59% when compared to October 2021.

And the October oil production tax income was up $544 million, up 33% from October of last year.

Motor fuel taxes, however, were down 3% year-over-year, at $312 million….
 

November 5, 2022 — Phillips 66 and Valero are among the winning bidders in the US Dept. of Energy’s (DoE) awards for access to the Strategic Petroleum Reserve (SPR).

Twelve companies replied to the DoE’s notice of sale, totaling 110 bids, the agency said…..
 

By Alex Mills President Biden threatened American oil producers this week with punitive taxes if they do not decrease prices. Just seven days before the midterm election, Biden went to the podium at …

November 2, 2022 — Plains All American Pipeline LP and Enbridge Inc are now the sole owners of the Texas Cactus II Pipeline and its company Cactus II Pipeline LLC, after a buyout priced at about $265 million.

Subsidiaries of Enbridge and Plains purchased 15% interest in the pipeline from Western Midstream Partners LP, with Enbridge getting 10% and Plains 5% based on the Western Midstream holdings…..
 

November 1, 2022 — Denbury Carbon Solutions says it’s executed a CO₂ Services Agreement with Clean Hydrogen Works, certifying Denbury to transport and sequester CO₂ captured from a hydrogen-ammonia complex in Louisiana that Clean Hydrogen is planning, with a final investment decision to be made in 2024.

Denbury, a subsidiary of Plano-based Denbury Inc., says the Ascension Parish complex (to be called the Ascension Clean Energy complex, or ACE) is expected to be built less than 2 miles from Denbury’s existing CO₂ pipeline network.

The proposed facilities are to be constructed on a 1,700-acre site along the west bank of the Mississippi River in Donaldsonville, Louisiana, about 50 miles upstream from New Orleans….
 

November 1, 2022 — The University of Texas at Arlington is adding a first-of-its-kind bachelor’s degree program in resource and energy engineering to train students to apply engineering principles to the design, development, …

October 28, 2022 — A new report from the Federal Energy Regulatory Commission (FERC) — actually an update of an earlier report — says the ERCOT power grid is almost as vulnerable as it was during Winter Storm Uri in February of 2021.

The FERC said marginal improvements have been made to the grid but more changes are required..

And on Thursday Texas PUC Director of Communications Rich Parsons replied to the FERC report, saying the grid is indeed ready for winter weather: ….
 

October 29, 2022 — As Pioneer Natural Resources evaluates a number of potential renewable energy investments,  it’s now participating in a couple of projects the company says will provide low-cost, renewable power to its Permian Basin operations and to the Texas electric grid….

October 28, 2022 — Permex Petroleum Corporation has appointed a new member to its board — Melissa Folz P.E., who has an extensive background in the O&G industry.
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By Alex Mills

Politicians around the world just can’t help themselves. They can’t keep their cotton-picking hands out of trying to manipulate energy markets.

Take the political leaders in Europe. For decades western European countries have relied upon Russia to supply them with oil and natural gas that was reliable and affordable.

Now, that source of energy is no longer available to them because of sanctions on Russian oil and gas, and their primary source of energy has  evaporated and consumers (voters) face paying extremely high prices if they can get it at all.

Oil rose as high as $130 per barrel earlier this year (current price is about $90), and natural gas escalated to $80 per million British thermal units (mmBtu) but has settled in the $35 range, currently….
 

October 26, 2022 — An industry advisory group being formed by Houston’s Criterion Energy Partners to aid the expansion of geothermal energy includes a number of big players in the Texas energy industries.

The group is expected to meet regularly to consider ways to bring geothermal energy to commercial markets while driving down the length of execution timelines and the costs of projects and production — and to help the company in crafting a demonstration project.

Criterion said the initial list of companies includes a number of specialists in drilling and completions as well as subsurface experts.

The announced list of members includes:…
 

October 20, 2022 — Entergy Texas expects to increase the Southeast Texas economy with its new non-binding agreement with an affiliate of New Fortress Energy Inc. (NFE) for a collaboration on the development …

October 19, 2022 — Texas became the first state in the nation to begin plugging abandoned oil and gas wells using federal grants from the Infrastructure Investment and Jobs Act.

Plugging work began last week on an abandoned oil and gas well in Refugio County in South Texas. The RRC anticipates the initial grant will be used to plug approximately 800 abandoned wells. These would be in addition to 1,000 wells the agency anticipates will be plugged this year by the successful State Managed Plugging Program (SMP), using industry fee and fine revenue from the Oil and Gas Regulatory and Cleanup Fund.

“The RRC’s success and expertise with SMP was instrumental in quickly standing up the plugging project using federal funds,” said Clay Woodul, RRC Assistant Director of the Oil and Gas Division for Field Operations. “Our established workplans and contracting will continue to help ensure neighborhoods and the environment across Texas are kept safe through our well plugging work.”

Well plugging work in Refugio County utilizing federal grants.

The RRC has a web page on the federal grant funds for abandoned oil and gas well plugging. That page is at the following link: https://www.rrc.texas.gov/oil-and-gas/environmental-cleanup-programs/federally-funded-well-plugging/

By Alex Mills

As winter approaches, energy forecasters expect colder than average temperatures and higher energy prices.

The Energy Information Administration at the U.S. Department of Energy releases is Short-Term Energy Outlook stating it will be 2% colder this winter than the average temperature during the last 10 years. Colder weather will increase demand for energy and rising prices.

“Compared with last winter, in nominal terms, we forecast expenditures for homes that heat with natural gas will rise by 28%, heating oil by 27%, electricity by 10%, and propane 5% from October–March,” EIA stated.

EIA expects U.S. sales of electricity to ultimate customers to rise by 2.7% in 2022, mostly because of more economic activity but also because of slightly hotter summer weather than last year….
 

October 18, 2022 — Houston- and Flower Mound-based Sage Creek Energy Partners has applications in to the Railroad Commission of Texas for the first new gas storage facility to be developed in Texas in more than a decade.

Sage Creek said on Tuesday that its planned Trinity Gas Storage facility in East Texas would have an initial capacity of about 24 Bcf and will be instrumental in “balancing the ever-growing renewable energy supply in Texas and in providing safe and reliable gas service for the benefit of the residents, businesses, and industry in Texas.”

Trinity commercial operations are expected to begin in the second quarter of 2024, and the company said the facility can ultimately be expanded to over 50 Bcf of working gas capacity with firm, uninterrupted delivery of natural gas in excess of 1.75 Bcf/d……
 

October 17, 2022 — Diamondback Energy announced on Monday that it’s priced an offering of $1.1 billion in aggregate principal amount of 6.250% senior notes, to mature on March 15, 2033 (price to the public is 99.572% of the principal amount).

The company says it intends to use the net proceeds to fully fund the redemption of all of Rattler Midstream LP’s outstanding 5.625% Senior Notes due 2025 and will also use proceeds for “general corporate purposes, including, without limitation, paying a portion of the cash consideration for the pending acquisition of certain oil and natural gas assets from FireBird Energy LLC upon closing (if it occurs)”….
 

By Alex Mills

Crude oil and natural gas production in the U.S. are headed for new records in 2022 and 2023 as the industry continues to show strength following the crash during the pandemic two years ago.

“U.S. production surges,” World Oil magazine stated in its recently released annual analysis. “Despite a sizeable drop in recoverable resources, U.S. oil production remains on track for a record in 2023, even as output grows more slowly than anticipated amid increased costs and labor shortages in America’s shale fields.”

The report projects an increase of 840,000 barrels of oil per day (bopd) in 2023 reaching an all-time high of 12.7 million bodpd, which exceeds the previous record of 12.3 million bopd in 2019.

Dry natural gas production has been rising since the first quarter of 2022, when it averaged 94.6 billion cubic feet per day (Bcfd). The Energy Information Administration (EIA) forecasts U.S. natural gas production to average 99.0 Bcfd during fourth-quarter 2022 and then rise to 100.4 Bcfd in 2023….
 

October 3, 2022 — “The Permian Basin in western Texas and eastern New Mexico is one of the world’s most prolific unconventional oil- and natural gas-producing regions. The Permian Basin has become more productive because of the technological advancements in drilling and completion techniques, which allow operators to economically extract hydrocarbons from the low permeability reservoirs,” the US Energy Information Administration said on Friday.

“The stacked reservoirs of the Permian Basin, and the Delaware and Midland subbasins within it, vary in thickness and depth. Improved geological understanding, known as subsurface delineation, helps operators place wells to optimize well spacing in the most productive areas…..
 

October 3, 2022 — Natural gas tax income for the State of Texas was up 91% year-over-year during the month of September, according to the latest figures from Comptroller Glenn Hegar‘s office.

Overall state sales tax revenue totaled $3.69 billion in September, 17.2% more than in the same month of 2021, with the majority of that sales tax revenue based on sales made in August and remitted to the agency in September.

Natural gas production tax totaled $480 million, up 91% from a year ago.

And the state’s oil production tax income was $552 million, up 41% from September 2021.

Motor fuel taxes were up 2% year-over-year at $328 million, up 2 percent from September 2021.

Meanwhile motor vehicle sales and rental taxes were up 13% year-over-year at $616 million.
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October 1, 2022 — Texas Attorney General Paxton’s office is joining several other states in sending a letter to the Federal Energy Regulatory Commission (FERC) in protest of a proposed rule to advance what Mr. Paxton’s office called “the Biden Administration’s radical climate agenda.”

“By granting increased electrical grid oversight to FERC, the proposed rule would compromise individual states’ ability to determine on their own the most efficient mix of energy sources for their electrical grids. The new rule also forces states to cover the costs of expensive regional transmission lines to support so-called “green” energy generation, even when such expenditures contradict the state’s needs and decrease grid efficiency and reliability,” the AG’s office said on Friday….