.The Texas Energy Report

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.The Texas Energy Report

Texas O&G Severance Tax Income Healthy for Fiscal 2019 But Down for August Y/Y

September 9, 2019

In November the Texas Comptroller will deposit a healthy $167 billion into each of the state Economic Stabilization Fund (ESF) and State Highway Fund for the year 2019 after counting up the receipts from oil and natural gas severance taxes, but the O&G tax income numbers for August continue a downward trend.
 

NuStar Completes Pipeline Projects In 24 Hour Period

September 9, 2019

In what the CEO calls an “amazing coincidence,” NuStar Energy LP says it’s completed three pipeline projects that greatly expand capacity for Permian Basin crude takeaway to Corpus Christi and to move refined products to Mexico.

And the company said crude loadings at its Corpus export terminal will double to about half-a-million barrels per day by the end of September — an increase expected to come from crude arriving on EPIC Midstream and Plains All American Pipeline LP pipelines from the Permian and New Mexico…
 

Spot Power Prices Hit Record, TCEQ Eases Plant Emissions Limits As Heat Wave Hits Texas

September 5, 2019

As the Public Utility Commission joined the Electric Reliability Council of Texas in urging consumers and businesses to cut back on power usage Thursday and Friday afternoons, spot prices on the power markets soared to a record high on Thursday and the TCEQ said it will allow some power generators to exceed emissions limits during the current heat wave….
 

Some Investors Have Lost Confidence In Oil

By Alex Mills

 

September 5, 2019

The oil industry has been through some tough times during the last four decades, but recent allegations that fossil fuels are linked to environmental catastrophes, and the lack of fiscal performance have oil companies facing a new storm the size of Hurricane Dorian.

Politicians expressed outrage in the 1970s when prices rose alleging oil companies were making “obscene profits.” Washington imposed the crude oil “windfall profits tax.” Later President Clinton proposed and Congress almost passed a tax on the energy content of oil known as the Btu tax, and President Obama proposed a cap-and-trade law on oil production, which passed the House but narrowly failed in the Senate. All of these issues were designed to increase the cost of oil.

Most of the 20-some Democratic candidates for President have proposed some form of restrictions, reductions, or total ban on oil in the future. Senator Bernie Sanders, who is within the top three contenders in many polls, has the most outrageous ideas. …
 

RRC Receives National Energy Education Award For RRC OIL; Online Oil & Gas Inspection Query

August 29, 2019

MEDORA, N.D. – The Railroad Commission of Texas is the winner of the 2019 Chairman’s Stewardship Award for Energy Education from the Interstate Oil & Gas Compact Commission. The award is in recognition of the Commission’s RRC Online Inspection Lookup (RRC OIL) tool. For the first time in the Commission’s history anyone, anywhere can look up the inspection and enforcement history of oil and gas wells and operators online. The searchable database provides 24-hour, 7-day a week access to this important information.

North Dakota Governor Doug Burgum presented the award to RRC’s Executive Director Wei Wang and Clay Woodul, Assistant Director for Oil and Gas Field Operations, today at the IOGCC’s Annual Conference in Medora, N.D.

“We are proud and honored to receive this prestigious award,” RRC Chairman Wayne Christian said. “It is recognition of our continuing efforts to educate the public about how we regulate the state’s oil and gas industry to ensure safe, responsible energy production…..
 

TIPRO Applauds EPA on Latest Proposal to Update Air Regulations for Oil and Natural Gas: Press Release

August 29, 2019

Austin, Texas – Under a new regulatory proposal announced Thursday, August 28, the U.S. Environmental Protection Agency (EPA) plans to roll-back burdensome air standards for the U.S. oil and natural gas industry, in a move expected to save the oil and natural gas industry $17-$19 million a year in compliance costs, for a total of $97-$123 million from 2019 through 2025. The EPA’s rule-making seeks to update the 2016 New Source Performance Standards (NSPS) for the oil and gas industry by rescinding emissions limits for methane from the production and processing segments of the industry, but would keep emissions limits for ozone-forming volatile organic compounds (VOCs). The following statement can be attributed to Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO):

The Trump Administration continues to scale back unnecessary, burdensome regulations hindering growth of the U.S. oil and gas industry, while at the same time strengthening environmental protections in the United States. TIPRO commends the administration and EPA for recognizing that the addition of these sources to the 2016 NSPS rule was not appropriate because the agency did not make a separate finding at that time to determine that the emissions from the transmission and storage segment of the industry causes or significantly contributes to air pollution that may endanger public health or welfare.

The 2016 NSPS were among the most overreaching regulations targeting the U.S. oil and natural gas industry promulgated under the previous administration. Since the EPA updated its NSPS and permitting rules in 2016 for new, reconstructed and modified oil and gas sources, TIPRO has lobbied aggressively against the onerous regulations.

The U.S. oil and gas industry is making significant progress in reducing energy emissions as domestic production continues to set new records. Methane emissions from onshore U.S. oil and natural gas production fell 24 percent, while oil and natural gas production rose 65 percent and 19 percent, respectively, from 2011 to 2017, according to data from the U.S. Environmental Protection Agency and the Energy Information Administration. These positive energy emission trends are primarily attributable to voluntary actions from operators, including investment of approximately $300 billion in greenhouse gas mitigating technologies by U.S. oil and natural gas companies over the past 20 years.

Increasing use of natural gas for electricity generation has also resulted in reductions in the emissions of carbon dioxide (CO2) and criteria air pollutants. In fact, in 2017, the U.S. led the world in carbon emission reductions for the third consecutive year and for the ninth time this century. Since 2000, our nation’s energy-related carbon emissions have declined more than any other country on earth.

Federal regulations should support, not stifle this progress. Only through a fair, stable regulatory environment has the country been able to accomplish such major achievements, resulting in cleaner air and water resources, while leading the world in oil and natural gas production.

 

About TIPRO

The Texas Independent Producers & Royalty Owners Association (TIPRO) is a trade association representing the interests of nearly 3,000 independent oil and natural gas producers and royalty owners throughout Texas. As one of the nation’s largest statewide associations representing both independent producers and royalty owners, members include small businesses, the largest, publicly-traded independent producers, and mineral owners, estates, and trusts.

 

The Texas Oil and Natural Gas Industry is Fueling The Future Through Investments in Education: TXOGA

August 29, 2019
All across Texas, students, their parents, teachers and school administrators are getting back into the swing of things as this new school year has started. While curriculum, classroom materials and technology have changed over the decades, one thing has remained constant – the meaningful impact the Texas oil and natural gas industry has had in the success of our state’s education system.

Billions of dollars from Texas oil and natural gas activity is paid each year into our state’s Permanent School Fund and Permanent University Fund. The Permanent School Fund recently became the largest educational endowment in America and is valued at over $44 billion – money that will be available for our state’s public schools in perpetuity. And because of the money generated by West Texas oil and natural gas, UT Austin is using millions from the Permanent University Fund to offer free tuition to students with family income less than $65,000 starting next year.

The Texas oil and natural gas industry also pays property taxes to independent school districts, accounting for millions of dollars each year for public schools in the state. In some communities, the oil and gas share of the school district’s tax base tops 70, 80 and even 90 percent – money that is used to enhance learning, upgrade technology and safety equipment, and hire and retain the best teachers.

Beyond tax dollars and royalty payments, the Texas oil and natural gas industry is investing untold time, talent and treasure in Texas schools and their students and teachers through innovative education programs and productive partnerships aimed at providing a state-of-the-art education for the next generation of Texans.

In 2015, Midland ISD, Midland College and West Texas oil and natural gas operators such as Pioneer Natural Resources joined together to launch the Petroleum Academy, a program that allows local high schoolers interested in a career in oil and natural gas to receive hands-on, real-world experience in the industry by learning directly from energy employees in their classrooms. The program also includes field trips to training facilities and site tours and internships for seniors looking to join the workforce straight out of high school.

The Texas A&M-Chevron Engineering Academies, available at four two-year colleges in Texas, allow students to remain close to home for the first two years of their studies while putting them on a path toward a four-year engineering degree from Texas A&M University. The program, which was seeded by a $5 million gift from Chevron, has been lauded not only for its potential impact on underserved communities and the number of STEM degrees awarded in our state, but also for the affordability it offers many first-generation college students. The program has also expanded to include several more two-year colleges and brought on additional industry partners such as Concho Resources.

The Texas City ISD Industrial Trades Center is the result of a forward-looking collaborative effort to prepare local high school students in Galveston County with the education needed to learn skilled trades and pursue careers with local companies. The program has a strong partner in the area’s oil and natural gas operators including Marathon Petroleum and Valero. Both companies were prominent in driving the development and funding of the Center, creating curriculum that prepares students for the industry’s needs, and donating equipment and supplies. Marathon Petroleum also established a STEM LAB at Texas City High School.

The CITGO Innovation Academy for Engineering, Environmental & Marine Science at Moody High School in Corpus Christi creates a rigorous four-year college preparatory program that includes upper-level engineering, mathematics and science courses, with the goal of graduating students who are college or career ready.

Exxon has been a consistent advocate of STEM education. Worldwide, the company has contributed $1.25 billion to education programs since 2000. Here in Texas, Exxon champions numerous programs that aim to inspire and prepare students for a career in the energy industry, including STEM camps, professional development camps for STEM teachers and “Introduce a Girl to Engineering” events featuring company employees demonstrating their experiences within the energy industry.

The Energy Institute in Houston was the first high school in the U.S. created for the sole purpose of preparing students for careers in the energy sector and is backed by strong partnerships from multiple Texas oil and natural gas companies including BP, Phillips 66, Noble Energy and Schlumberger. These partners host field trips, provide guest speakers, and fund student activities.

Shell has been a long-time sponsor of the National Science Teachers Association, and, for the past 23 years, has sponsored the Shell Science Teaching Award, which recognizes outstanding science teachers and provides makeovers for science laboratories.

The Oilfield Energy Center in Houston offers schools across Texas the opportunity to experience their Mobile Oilfield Learning Unit – otherwise known as a MOLU. This traveling exhibit features curriculum-based, hands-on activities about energy and technologies and sciences involved with the oil and natural gas industry.

From the Panhandle to the Gulf Coast, in communities rural, suburban and urban, Texas oil and natural gas companies are steadfast partners in efforts to expand and improve STEM programs. These efforts are critical because data shows that not enough students are pursuing STEM careers to meet the oil and natural gas industry’s workforce needs. The industry will need to hire nearly 1.9 million oil and natural gas workers between 2015 and 2035 so expanding STEM education opportunities is will be critical to keep Texas competitive in an ever-changing world.

Luckily for Texas students, jobs in the oil and natural gas industry are among the highest paying in the state. And while we know there is a projected shortage of STEM-educated workers, the industry isn’t just made up of the engineers and scientists. Job opportunities vary widely and require diverse backgrounds, including attorneys, architects, accountants, truck drivers, carpenters, welders, human relations, business and public relations.

As the Texas oil and natural gas industry grows to meet the energy demands of our state and nation, so does the need for future generations of Texans to fill the various roles required to see this growth continue. Through high-quality, innovative, hands-on educational opportunities, Texas oil and natural gas companies are ensuring that even more Texans will have the opportunity to work in an industry that is growing our economy, securing our future, and making life better for people here in Texas and across the world.


 

TIPRO Mid-year Energy Report Highlights Record Oil and Gas Production, Continued Industry Employment Growth: News Release

August 29, 2019

Austin, Texas – A new report released today by the Texas Independent Producers & Royalty Owners Association (TIPRO) shares insight into oil and gas production and employment trends over the first half of 2019. TIPRO’s 2019 Midyear Texas Energy Report, part of the association’s “State of Energy” report series, projects the oil and gas industry supported 365,511 direct jobs in the state of Texas during the first half of the year, representing an increase of nearly 10,000 jobs over the previous year. On average, oil and gas jobs in Texas paid 134 percent higher wages than the private sector, with annual industry wages averaging $130,000 and a total state payroll of $47 billion, cites new findings from the TIPRO report.

“The Texas oil and gas industry remains a powerful employer in the Lone Star State, as evidenced by findings of the new mid-year TIPRO report,” said Eugene Garcia, chairman of TIPRO. “In the first half of the year, the Texas oil and gas industry accounted for 40 percent of all oil and gas jobs nationwide.”

Overall job growth in the industry has aligned with historic levels of oil and natural gas production in the Lone Star State, although TIPRO forewarns of a potential slowdown in hiring in the second half of 2019. As the nation’s top producing state, in the first half of 2019, oil production increased by 131 million barrels compared to the first half of 2018, for a total of 882 million barrels produced in Texas. Natural gas production in Texas also rose by 580 million cubic feet of gas in the first six months of the year compared to the first half of 2018, notes TIPRO, for a total of 4.9 trillion cubic feet of gas. Oil and natural gas production in Texas is on track to break all previous production records in the state for the full year of 2019, with estimated production expected to surpass 1.7 billion barrels of oil and natural gas production potentially exceeding 10 trillion cubic feet.

Strong production gains in Texas this year have primarily been driven by soaring production from the Permian Basin, the nation’s most prolific oil producing area located in West Texas and eastern New Mexico. Crude oil production from the formation today accounts for nearly two-thirds of Texas oil production, says TIPRO.

As of mid-August, the Texas rig count hovered near 450, representing approximately half of all active rigs in the United States. According to Enverus (formerly DrillingInfo), over the last year, the Anadarko Basin has accounted for 33 percent of the decline, or 55 rigs. The Permian Basin experienced the second-largest rig count decline among U.S. basins during this period, dropping 42 rigs, which accounts for 25 percent of the total U.S. rig count decline. The Gulf Coast has seen the third-largest decline, dropping 37 rigs over the last year. Together, these three basins make up 79 percent of the decline in active rigs over the last year.

Although oil and gas production keeps climbing in Texas, the number of drilling permits issued from the Railroad Commission of Texas through the first half of 2019 has also gone down, TIPRO observes. State data shows that in July the commission issued a total of 912 well permits, down from 1,001 issued in June, and from 1,153 approved last July. The number of oil, gas and injection well completions also dipped in July to 699, compared to 940 over the same time last year. Total well completions processed for 2019 year to date are 5,749, according to the Railroad Commission, a drop from 6,514 recorded during the same time period in 2018….
 

Federal energy report indicates more secure supplies

By Alex Mills

 

August 29, 2019

The Energy Information Administration at the US Department of Energy announced last week that petroleum and natural gas production in the US set a record in 2018. This week EIA released energy consumption figures revealing it set a record last year, too.

“Energy consumption in the United States reached a record high of more than 101 quadrillion British thermal units (quads) in 2018, barely surpassing the previous high recorded in 2007 by less than 0.3 percent,” EIA stated.

Energy consumption data is divided into two sectors: transportation and electricity, with petroleum products yielding the largest source followed by natural gas.

Fossil fuels (coal in addition to oil and gas) generated 80 percent of energy consumed in 2018 in the U.S. Renewables (hydroelectric, wind, solar, wood and biomass) generated 12 percent, and nuclear provided 8 percent, according to EIA…..