.The Texas Energy Report

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.The Texas Energy Report

RRC Commissioners Assess Over $2 Million in Penalties

August 16, 2024 — The Railroad Commission of Texas assessed $2,173,382.40 in fines involving 715 enforcement dockets against operators and businesses at the Commissioners’ Conference on Thursday.  The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety.

Master default orders for operators that failed to appear at Commission enforcement proceedings can be found on the RRC Hearings Division web page.

Master Agreed Orders in which operators…
 

Demand for Oil and Natural Gas Continues to Set Records

By Alex Mills

The demand for crude oil and natural gas in the U.S. and around the globe continued at a record pace through the first half of 2024 and producers in Texas and throughout the nation struggled to keep pace with consumer demand.

On the international scene, the Organization of Petroleum Countries (OPEC) believes that demand will rise by 2 million barrels per day to 106 million barrels per day.

The Energy Information Administration forecast global consumption will increase by 1.1 million barrels per day this year.

EIA expects crude oil prices to increase during the second half of the year.

“The Brent crude oil spot price ended July at…
 

Southeast Texas Groups File PUC Opposition to CenterPoint Rate Increase Withdrawal

August 7, 2024 — Four groups representing Southeast Texas cities and consumers on Wednesday filed a protest with the Public Utility Commission of Texas (PUC) against CenterPoint’s withdrawal of a rate increase request, while accusing the company of significantly overcharging customers.

The Gulf Coast Coalition of Cities, the Gulf Coast Utilities Coalition, the Houston Coalition of Cities, and the Texas Consumer Coalition filed the request for intervention with the PUC, offering a Joint Response Opposing CenterPoint Energy Houston Electric LLC‘s notice of withdrawal.

The filing contends that CenterPoint doesn’t have the authority to “unilaterally withdraw this case.”…
 

RRC Texas Drilling Permit and Completion Statistics for July 2024

August 5, 2024 — The Railroad Commission of Texas issued a total of 771 original drilling permits in July 2024. The total includes 685 to drill new oil or gas wells, 12 to re-enter plugged wellbores and 68 for re-completions of existing wellbores.

The breakdown of well types for total original drilling permits in July 2024 is: 137 oil, 48 gas, 544 oil and gas, 28 injection, and 14 other permits.

In July 2024, Commission staff processed 805 oil, 222 gas, and 355 injection completions for new drills, re-entries and re-completions.

Detailed data on drilling permits and well completions for the…
 

Chevron Says It’s Moving to Houston

August 2, 2024 — Chevron is moving its headquarters from California to Houston over the next several years, the company said in a statement Friday.

Plans are to move Chairman and CEO Mike Wirth and Vice Chairman Mark Nelson to Houston before the end of this year, joining the company’s 7,000 local employees and other senior managers for “better collaboration and engagement with executives, employees, and business partners.”

Chevron’s 2,000…
 

Comptroller Says Texas Tax Income Up Considerably In July Y/Y

August 1, 2024 — State tax income from Texas natural gas production was up 152% in July when compared to the same month a year, with a notable increase in oil taxes as well.

Natural gas production tax last month totaled $164 million, a 152% jump from July 2023, according to the state comptroller’s office.

Oil production taxes totaled $557 million…
 

CenterPoint Withdraws Controversial Rate Increase Request

August 1, 2024 — CenterPoint has filed papers to withdraw its request to the PUC for a rate increase “without prejudice,” just after the money is needed to “make significant investments in our infrastructure.”**

The rate hike was intended to help recover costs from recent storms, estimated to be about $1.8 billion.

Hurricane Beryl in Southeast Texas last month is estimated to have cost the power delivery system $1.3 billion.

CenterPoint and its CEO Jason P. Wells have come under scrutiny from the state legislature this week, with some lawmakers critical of the utility’s communications and recovery efforts following Beryl.

See the PUC filing receipt here.

 …

 

What Are Kamala Harris’s Positions on Energy Issues?

By Alex Mills

Vice President Kamala Harris, who presumably will be the Democrat nominee for President following the withdrawal of Joe Biden last week, apparently is not a fan of America’s oil and gas industry.

Even though Harris has not officially won the Democratic nomination yet (the convention will be held in August), her previous statements and positions indicate she will push for more regulations and laws to make finding and producing more hydrocarbons in the U.S. more difficult.

She served only four years in the Senate (2017-2021) as the junior Senator from California. She ran for President against Biden and a host of other candidates, but dropped out of the race before the primaries began. Now, she is getting a chance to run as the Democratic candidate for President without obtaining any delegates or facing other potential candidates in a debate on the issues.

During her term in the Senate and as a candidate for President she made numerous statements opposing hydraulic fracturing, which has been a critical…
 

Trump’s Energy Record Encourages U.S. Production

By Alex Mills

July 20, 2024 — It’s official: Donald J. Trump is the Republican Party’s candidate for President of the United States of America for the third time.

All indications point to Trump taking many of the same positions on energy issues that he took in 2016 and in 2020, which included reducing taxes and regulations, encouraging drilling and production, and approval of new infrastructure projects.

Trump overturned many of the restrictions and regulations implemented by President Obama, and he has said he will reverse many of the programs adopted by President Biden.

Trump has said many times this year he will encourage the domestic oil and gas industry to “drill, baby, drill.” He believes that a healthy oil and gas industry contributes to a healthy economy and decreases U.S. reliance on foreign energy.

The Biden administration has reduced leasing of federal public lands (onshore and offshore). Trump most likely will seek to change the Biden leasing practice and offer more lands for exploration.

Additionally, the Biden administration has issued a temporary…
 

Machine Learning May Be Key to the Future of Nuclear Energy: Texas A&M

July 15, 2024 — As in many areas of modern life, big data has become a big deal in nuclear engineering. A Texas A&M nuclear engineering professor will investigate artificial intelligence’s ability to harness data to improve the next generation of nuclear reactors.

Yang Liu, an assistant professor in the Texas A&M Department of Nuclear Engineering, is one of four researchers chosen for this year’s Distinguished Early Career Award from the U.S. Department of Energy’s Nuclear Energy University Program. This annual award provides funding for outstanding university faculty early in their careers who will help advance nuclear energy research.

Liu’s research focuses on the role of artificial intelligence (AI) and machine learning (ML) in designing and controlling nuclear reactors. At Texas A&M, he established the Scientific Machine Learning for Advanced Reactor Technologies (SMART) laboratory, where he and his students focus on using ML to enhance simulations, engineering decisions, and the operation of nuclear systems.

During his doctoral studies at North Carolina…
 

Air Emissions Decline in Texas

By Alex Mills

July 13, 2024 — The debate over climate change and the possible causes and solutions have included many topics including methane emissions from crude oil and natural gas. The discussion has been ongoing for quite some time.

Recently an official from the oil and gas regulatory agency in Texas pointed out that the industry in Texas, along with the oversight of the agency, has been able to significantly decrease emissions.

The official is Wayne Christian, who was first elected to the Texas Railroad Commission in 2016, pointed out the success achieved.

“We all want clean air and water,” Christian began. “We all want to be good stewards of our land and natural resources. And over the last 50…
 

June State Sales Tax Revenue Flat But Oil Production Taxes Up 8%: Comptroller

July 1, 2024 — The Texas comptroller’s office says oil production tax income during June was up eight percent when compared to a year ago.

The state took in $493 million last month, similar to estimates made by the US Energy Information Administration, which three weeks ago called for an 8% increase in Permian Basin oil production in 2024.

Natural gas production tax income at $171 million was down 7 percent in June 2024 compared to June 2023, according to Texas Comptroller Glenn Hegar.

Motor fuel taxes took in $340 million, up…
 

Judge Blocks Federal Ban On New LNG Export App Approvals

July 1, 2024 — A federal judge on Monday blocked the Biden administration’s ban on approving LNG export applications, a win for a coalition of 16 states, including Texas.

The effects of Monday afternoon’s injunction are likely to be minimal in the short term, with the Department of Energy (DOE) continuing to study whether new export permit applications are in the public interest. The pause has no effect on current imports.

The preliminary injunction issued by US District Judge James D. Cain Jr. in Louisiana was in response to a suit (Louisiana v. Biden, 24-cv-406, US District Court, Western District of Louisiana (Lake Charles)) filed by the states in March claiming the DOE, under direction from the Biden administration, doesn’t have the authority to broadly cancel future permits.

See more at Politico by clicking here

 

Texas and Virginia: Commercial Electricity Demand Grew Fastest in States with Rapid Computing Facility Growth, EIA Says

U.S. states change in commercial sector electricity consumption (2019-2023)

Data source: U.S. Energy Information Administration, Electricity Data Browser

Consumption of electricity in the U.S. commercial sector has recovered from pandemic levels, with annual U.S. sales of electricity to commercial customers in 2023 totaling 14 billion kilowatthours (BkWh), or 1%, more than in 2019.

However, the growth in commercial demand for electricity is concentrated in a handful of states experiencing rapid development of large-scale computing facilities such as data centers.

Electricity demand has grown the most in Virginia, which added 14 BkWh, and Texas, which added 13 BkWh.

Based on expectation that regional electricity demand will grow, forecasts have been revised upward for commercial electricity demand through 2025, according to the US Energy Information Administration’s (EIA) June Short-Term Energy Outlook (STEO).

About this EIA report:

“Commercial electricity demand in the 10 states with the…
 

Survey Reveals Modest Growth in Oil Industry

By Alex Mills

Crude oil and natural gas prices edged upward during the second quarter of 2024, which added to a modest increase in activity.

Oil prices hovered around $80 per barrel on the New York Mercantile Exchange, and natural gas was $2.70.

The Federal Reserve Bank of Dallas released its survey of oil and gas executives this week that indicated growth in industry activity.

“The business activity index, the survey’s broadest measure of the conditions energy firms in the Eleventh District face (which includes Texas), increased from 2.0 in the first quarter to 12.5 in the second quarter,” the Dallas Fed said.

The oil production index advanced from -4.1in the first quarter to 1.1 in the second quarter. The near-zero reading suggests production was essentially unchanged. Meanwhile, the…
 

7-5-24

Texas Energy Report NewsClips Friday July 5, 2024 Asterisk (*) denotes news stories that may be inaccessible because portions are behind a paywall   Top Stories   CNBC – July 5, 2024 Energy …

Researchers Working On AI That Could Help Prevent Power Outages: University of Buffalo

June 27, 2024 — University at Buffalo researchers have developed an artificial intelligence model designed to help electrical grids prevent power outages by automatically rerouting electricity in milliseconds.

The UB researchers, who collaborated with engineers at the University of Texas at Dallas, demonstrated the automated system in a research article published online June 4 in Nature Communications.

The approach is an early example of “self-healing grid” technology, which uses AI to detect and repair problems such as outages autonomously and without human intervention when issues occur, such as storm-damaged power lines.

While further research is needed before the system can be implemented and scaled to real-world power grids, it is nonetheless an exciting development for the nation’s beleaguered power grid, researchers say.

“Power grids across the world are being challenged by the growing number of extreme weather events, the likelihood of cyberattacks, and projected increases in demand,” says…
 

Deepwater Horizon Spill Resulted in More Biodiversity Loss Than Previously Thought: UTA Study

June 25, 2024 — A new peer-reviewed study from researchers at The University of Texas at Arlington; the University of Nevada, Reno; Mokwon University in Daejeon, Korea; and Texas A&M University at Corpus Christi shows the Deepwater Horizon (DWH) oil spill of 2010 affected wildlife and their habitat much more than previously understood.

“Overall, we found the area of deep-sea floor affected by the DWH spill was significantly larger than previously thought,” said Masoud Rostami, an author of the study and assistant professor of instruction in UTA’s Division of Data Science.

UTA said the work was supported by BP, the National Oceanic and Atmospheric Administration, and the U.S. Department of Interior’s Deepwater Horizon National Resource Damage Assessment.

In recent decades, deep-water ecosystems in lakes, oceans, and seas around the world have faced pressures from offshore oil and gas production, including frequent contamination from oil and other pollutants. The DWH oil spill in the Gulf of Mexico that started on April 20, 2010, was the largest marine oil spill in U.S. history, releasing nearly 5 million barrels of crude oil and hydrocarbon gases over 87 days, with 3.2 million barrels of oil remaining in the water after cleanup efforts.

This spill greatly exceeded the amount of natural discharge of oil that seeps in the Gulf each year, and up to 35% of the pollutants were trapped below…
 

Worldwide LNG Market to Go Into Oversupply In 2 Years: Institute for Energy Economics and Financial Analysis

June 24, 2024 — Lackluster demand growth and a massive wave of new export capacity are poised to send global liquefied natural gas (LNG) markets into oversupply within two years. These two trends are developing even faster than anticipated.

Declining Russian gas supplies to Europe, driven by Russia’s full-scale invasion of Ukraine, caused a spike in European LNG imports that sent global prices to record highs. But despite modest new LNG export capacity additions in the last two years, prices have retreated from 2022 levels, largely due to falling demand from developed economies. (All prices in this report are in U.S. dollars [USD] unless otherwise specified.)

In Japan, South Korea and Europe—which account for more than half of the world’s LNG demand—combined imports fell in 2023 and will likely continue falling.

  • In Japan, formerly the world’s largest LNG importer, demand fell 8% in 2023. Since 2018, Japan’s annual LNG imports have fallen 20%. A planned increase in nuclear and renewables  generation—spurred by climate and energy policies, along with years of high LNG prices—will likely send demand even lower.
  • In South Korea, historically the largest buyer of U.S. LNG, imports fell almost 5% last year. Long-term climate and energy plans in South Korea envision LNG imports falling 20% through the mid-2030s, as solar, wind and nuclear plants come online.
  • Europe’s LNG imports stagnated in 2023, defying expectations of rising imports to replace lost Russian gas supplies. Europe’s overall gas consumption fell 20% in the past two years due to high prices, energy security mandates and climate policies. IEEFA expects Europe’s LNG demand to peak by 2025 and decline through 2030.

In emerging Asian markets, structural LNG demand growth faces a complex web of economic, political, fiscal, financial and logistical challenges. The global LNG crisis of the last several years heightened those challenges, spurring some Asian nations to reduce the role of LNG in their development plans and accelerate the development of alternative energy sources.

  • In Southeast Asia, protracted timelines for new LNG infrastructure projects, plus the  favorable economics of alternative energy sources, are likely to constrain LNG demand  growth, particularly in Vietnam and the Philippines.
  • In South Asia, LNG imports fell by 16% in 2022 but rebounded in 2023 as global spot prices fell. But two years of high prices and unreliable supplies triggered fiscal challenges and fuel switching. Pakistan, for example, announced last year that it would stop building new LNG fired power plants. Price declines will likely boost the region’s imports, but fiscal issues and competition from other power sources point to uneven growth in demand.
  • In China, imports will likely increase as prices fall, but domestic gas production, pipeline gas imports, and policies favoring domestic energy industries could constrain structural demand growth and leave Chinese LNG buyers with a surplus of contracted volumes.

Even as the LNG crisis undermined global demand growth, high prices spurred an unprecedented flood of new supply, with LNG developers more than doubling the previously planned buildout of export capacity. IEEFA anticipates that nameplate LNG liquefaction capacity from projects that have already begun construction, or that are approved by financially capable backers, could add 193 million metric tons per year (MTPA) of new supply capacity from 2024 through 2028—a 40% increase in five years. (Note: One million metric tons of LNG is the equivalent of 1.36 billion cubic meters of gas.)

By the end of 2028, the world’s total nameplate liquefaction capacity could reach 666.5 MTPA. For perspective, the International Energy Agency (IEA) projects total LNG trade in 2050 to reach 482 MTPA under its stated…