Texas Energy Report Closing Top Texas Energy Stocks

July 17, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI down 0.52 to close at $46.02

Brent down 0.52 to close at $48.39

Natural gas up 0.04 at $3.02

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CLOSING OIL & GAS STOCKS

Anadarko (APC) up 0.49 at 45.22

Apache (APA) up 0.12 at 48.68

Chevron (CVX) down 0.23 at 104.21

ConocoPhillips (COP) down 0.26 at 43.19

Devon (DVN) down 0.30 at 31.35

Energy Transfer Partners (ETP) up 0.10 at 20.55

EOG Resources (EOG) up 0.03 at 91.90

ExxonMobil (XOM) down 0.42 at 80.86

Halcon (HK) down 0.22 at 6.56

Marathon Oil Corp. (MRO) down 0.06 at 11.59

Noble Energy (NBL) up 0.44 at 28.70

Occidental Petroleum (OXY) up 0.22 at 60.04

Parsley Energy (PE) down 0.22 at 28.49

Phillips 66 (PSX) down 0.39 at 81.81

Pioneer Natural Resources (PXD) up 1.89 at 162.83

Valero (VLO) down 0.61 at 67.43

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CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) up 0.38 at 68.55

CenterPoint (CNP) up 0.15 at 27.77

Entergy (ETR) up 0.12 to close at 75.61

Exelon Generation (EXC) up 0.97 at 37.03

NRG (NRG) down 0.32 at 22.92

Vistra Energy (VST) down 0.06 at 15.96

Texas Energy Report BUZZ

How Robo Cars Will Impact Everything Else:
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Entire professions could become obsolete. Beyond professional drivers for cars, trucks, and buses, there are salespeople, insurance workers, fuel-station owners, parking attendants, car-wash workers, and more whose livelihoods could be at risk.

• Power distribution could change. A sharp increase in electric-car usage could make decentralized power generation more cost effective, and all of those plugged-in batteries could be used to feed electricity onto the grid in the event of a shortage.

• Reduced need for parking spaces will free up large amounts of prime city space for development. Real estate investors who have bet on steady long-term cash flows from parking facilities could one day face waning demand.

• No more speeding or parking tickets, and no more meter fees. Cities will have to make up the revenue, perhaps by taxing mobility services.

• Programmers will be forced to make life-and-death decisions in advance, until regulators create guidelines. For example, if a pedestrian darts out in front of a passenger-carrying robo-car, should the computer prioritize the life of the passenger or the pedestrian.

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In the video below, Tony Seba and the ReThinkX think tank say self-driving cars will change the world, to the detriment of the geopolitical and energy world we know today. “Oil demand will peak 2021-2030 and will go down 100 million barrels, to 70 million barrels within 10 years. And what that means, the new equilibrium price is going to be $25, and if you produce oil and you can’t compete at $25, essentially you are holding stranded assets,” Seba told CNBC.

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July 17 2017

US House Action to Spur Energy Development: The Hill

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The US House of Representatives will vote on four energy or environment bills this week designed both to crack down on federal regulatory efforts and spur energy development, reports The Hill.

“The Rules Committee on Monday will begin the process of bringing to the floor Rep. Pete Olson‘s (R-Texas) bill to slow down the EPA’s regulatory schedule for ozone pollution.

“Republicans and industry groups have rallied around the bill as a way to help states and localities come into compliance with current ozone standards before new ones roll out.

“Later in the week, the House will vote on three energy bills.

“One would extend permitting for hydropower facilities; another would ease restrictions on energy imports and exports with Canada and Mexico; and the third would overhaul the permitting of interstate natural gas pipeline projects.”

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Cheniere Has Big Committment to New Texas Gulf Coast Pipeline

 

Cheniere Energy has some new funding to develop a proposed pipeline from the Oklahoma STACK and SCOOP plays in the Anadarko basin to markets along the Gulf Coast.

The Houston company also announced a plan for Federal Energy Regulatory Commission authorization of the Midship pipeline by early 2018, with the project to be in service by late 2018 or early 2019.

According to it’s FERC filing, Cheniere has secured a commitment to investment of up to $500 million in connection with investment funds handled EIG Global Energy Partners.

The investment firm also partnered in the building of Cheniere’s Corpus Christi Liquefaction terminal.

The Midship pipeline is expected to be a 200-mile 36-inch interstate natural gas line with the ability to deliver up to 1,440,000 Decatherms per day.

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June 1, 2017

Texas Energy Consultant to Help Perry: EENews

 

“Energy Secretary Rick Perry has brought on veteran Texas energy consultant Alison Silverstein to produce his first major energy policy statement, a controversial study of whether federal tax and subsidy policies favoring renewable energy have burdened “baseload” coal-fired generation, putting power grid reliability at risk,” EENews reports Wednesday.

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May 31, 2017

RRC Intellectual Property Protection Law Signed by Governor

 

A bill protecting the intellectual property belonging to the Railroad Commission of Texas has been signed into law by the governor.

There have been reports of some private organizations using logos, art or symbols associated with the RRC both in print and online.

Some advertising has also been reported using RRC-styled graphics.

Governor Greg Abbott last week signed into law District 30 state Senator Craig Estes‘s SB 1422 that prohibits the unauthorized use of the RRC logo and related materials.

It also allows the RRC to contract with organizations to lease it’s logo and related materials in exchange for “reasonable compensation,” with the proceeds to go to the oil and gas regulation and cleanup fund.

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May 31, 2017

Outside-ERCOT Smart Meter Cost Pass-Through Law Signed by Governor

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Investor-owned electric utilities outside the jurisdiction of the Electric Reliability Council of Texas that want to advanced meters in homes and businesses will be able to charge customers “reasonable and necessary” costs caused by the new meters under new legislation signed by Governor Greg Abbott.

District 3 state Senator Robert Nichols‘ SB 1145 authorized the pass-though of costs associated with installing and maintaining the “smart meters” to electricity suppliers outside ERCOT, subject to certain PUC rules and regulations.

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May 31, 2017

Land Office Oil Spill Law Signed by Governor

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The Texas General Land Office will be able to confiscate vessels or structures that are involved in an oil spill under new legislation signed by the governor on Monday.

District 24 state Representative Dr. Greg Bonnen‘s HB 1625 requires that the owners of such property be notified ahead of time and then, after being properly notified, if the owner of the vessel doesn’t take immediate action to stop the oil spill, confiscation of the property can begin.

The law will apply to vessels and structures “involved in an actual or threatened unauthorized discharge of oil.”

It becomes effective September 1st of this year.

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May 31, 2017

Energy Savings Contract Law Revamp Signed By Governor Abbott

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A bill that standardizes the definitions of often-used words in Texas energy-saving construction financing contracts has been signed into law by the governor.

A House of Representatives analysis of District 9 state Representative Chris Paddie‘s HB 1571 says energy-saving performance contracting is a…method that allows an entity to finance the completion of improvements” that save energy using savings from reduced utility expenses.

The new law, which takes effect immediately, changes the definition of the phrases “energy savings performance contract,” “energy savings” and the word “baseline” in Local Government Code, Government Code and Education Code.

The law also amends an earlier law that prohibits the use of state-borrowed money in entering into energy-savings performance contracts.

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May 31, 2017

Crude Oil Drawdown Biggest of the Year: API

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US crude oil stockpiles were down for the week ending May 26th by a huge 8.7 million barrels, according to the American Petroleum Institute.

In figures released a day late because of the Memorial Day holiday, the API figures indicate the biggest one-week drop in crude supplies so far this year.

They also showed a drop of 1.7 million barrels of gasoline.

Distillates were reported up by 124,000 barrels.

Similar data from the US Energy Information Administration are expected tomorrow.

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May 31, 2017

Craddick’s Petroleum Royalty Check Details Bill Signed by Governor

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Some oil and gas operators are going to have to spell out details of how paper royalty checks are made out to mineral rights owners under a new law that takes effect in September.

District 82 Representative Tom Craddick’s HB 129, signed by Governor Greg Abbott on Memorial Day, requires well operators to specifically note financial details related to royalty checks and should be on check stubs.

This supercedes the practice by some in the petroleum industry of sending along checks with the notice that details of royalties are available online.

Craddick said the bill is aimed to protect royalty holders who receive paper checks but don’t have access to the Internet — it doesn’t affect electronic royalty payments.

The law takes effect September 1st 2017.

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May 31, 2017

Governor Signs Oil Products Felony Theft Law

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Theft of more than $300,000 in petroleum products soon to be a first degree felony under new law

A bill making it a third degree felony to steal, receive, move or hide petroleum products with the “intent to deprive the owner” of the product has been signed by Governor Greg Abbott.

District 21 state Senator Judith Zafferini‘s SB 1871 was passed by the Texas Legislature instead of a companion House bill, both of which called for third-degree felony charges against those caught stealing crude oil, natural gas or distillates. including those who might drill or tap into pipelines — if the value of the stolen product is more than $10,000 but under $100,000.

More than $100,000 in theft (up to $300,000) and the charge could be bumped up to a second-degree felony.

In cases of theft of petroleum products worth more than $300,000 the charge could be a first-degree felony.

Theft of products under $10,000 are a state jail felony.

Despite concerns by energy committee members that the law could be abused by charging those attempting petty crimes with severe penalties, the high dollar value of the crimes generally target organized oilfield crime.

Proponents of the law noted that groups have stolen vacuum trucks used for siphoning water from the bottom of oil tanks and, at night in unguarded oil fields, used them to siphon large tanks of oil products that are then shipped for illegal sale.

The law takes effect September 1st, 2017.

May 31, 2017

Denbury Buying Into Wyoming Field, To Sell Houston Land

Denbury Resources Inc. is buying interest in a working oil and gas field in Wyoming from subsidiaries of Linn Energy, then intends to sell some Houston property.

The Denbury buy is for a 23% non-operated working interest in Wyoming’s Salt Creek field, west of the city of Casper, for a price of $71.5 million in a deal to close in June, the company said Tuesday.

The plan is to pay for the working interest using Denbury’s line of credit, but the cost will eventually be offset by the sale of property in Houston that isn’t producing and would be well suited for commercial development.

More development of the Salt Creek field is expected to raise it’s output well beyond its current output of 2,100 barrels a day based on the proved reserves of 9 million barrels.

The company said it expects to combine finding and development expenses into a total of just $7 a barrel.

Earlier this month Linn Energy, gaining strength after bankruptcy, sold other non-core Wyoming assets to Denver’s Jonah Energy for $581 millon that will significantly pay down Linn’s debt.

By Mike Shiloh

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May 31, 2017

Wind Turbine Limitation Bill Awaits Abbott’s Decision

The governor has received a controversial bill that would end tax breaks for property owners intending to build wind energy turbines within 25 miles of Texas military bases.

The bill was passed by the legislature last week and was sent to Governor Greg Abbott Tuesday.

The proposed law would discourage building such turbines in another way: it would end limitations on appraised value of properties where commercial-sized turbines are built or permitted.

SB 277 by Wichita Falls Senator Donna Campbell satisfies requests from leaders at nine Texas military bases who are concerned that the tall commercial-quality turbines interfere with aviation activities, especially radar precision.

The turbines create false interference on some radar screens.

The bill would go into effect September 1st.

Supporters say the bill will not hinder renewable energy efforts; critics say the loss of tax incentives will drive large wind energy turbine builders elsewhere.

By Mike Shiloh

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May 31, 2017

Will Governor Abbott Sign the High-Speed Rail Federal Safety Bill?

A bill that makes it a little harder for private fundraisers to build a proposed high-speed rail project between Dallas and Houston is now on Texas Governor Greg Abbott‘s desk — but proponents say the bill is essential for passenger safety if the rail is built.

SB 975 by District 22 state Senator Brian Birdwell requires the operator of any private rail service topping 110 miles per hour to adhere to all federal Transportation Security Administration security requirements.

And it requires the Texas Department of Public Safety to enforce security regulations and assessments while also applying federal safety and security requirements.

Although the bill is worded as a general legal and regulatory outline for any private high-speed rail line, it obviously is meant for a system between Dallas and Houston that’s in the planning stages.

And District 22 state Senator Brian Birdwell‘s general wording of the bill make the point that it’s aimed at creating a baseline code for safety of all future high-speed rail, not just the Houston-Dallas project.

SB 975 holds responsible the private entity that builds a rail line for investigating security threats and required managers and administrators to complete emergency management training.

The operator of the rail is instructed to work with the legislature and state officials on protocol to “ensure the safe entry, exit and passage of all passengers and employees,” as a state analysis says.

Critics of the bill say it just makes it harder for the proposed rail line to be built because it creates an unnecessary regulatory burden.

Proponents say the bill is needed to protect passengers and residents who live along the rail line, and to provide a general template for regulation of any future high-speed rail in Texas.

The governor has already signed Distict 5 state Senator Charles Schwertner‘s SB 977, which prohibits the use of state money in building, planning, operating or promoting such rail projects and requires a twice-yearly report to several state agencies and offices on state-paid expenses related to any such projects.

By Mike Shiloh

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May 31, 2017

Bill Calling for No High Speed Rail State Assistance Signed By Governor

A bill has been signed by Governor Greg Abbott prohibing the legislature from appropriating money for, and from helping build, plan. promote or operate, any private rail project that reaches 110 miles per hour, except as covered by existing legislation.

The new law amends the state transporation code.

Distict 5 state Senator Charles Schwertner‘s SB 977 requires a twice-yearly report to several state agencies and offices on state-paid expenses related to high-speed rail projects.

There is only one high-speed private rail being considered in Texas, and it is still in the formative stages.

A proposed private high-speed rail project between Dallas and Houston is still being planned.

By Mike Shiloh

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May 31, 2017

Bill Opening Up Port Property Bidding Awaits Governor’s Signature

Governor Greg Abbott is expected to sign into law a bill aimed at opening up the number of bidders for property being sold by a Texas coastal port has been passed by the House and Senate and awaits a signature or veto by the Governor.

Authored by District 4 state Senator Brandon Creighton, SB 1395 amends the state water code to eliminate the requirement that those bidding on port land — such as that offered by the growing Port of Corpus Christi — provide financial security for the entire bid price.

Current law excludes property bidders who can pay using financing; the law is considered unfair and limits considerably the number of people able to bid on port property.

The bill also allows the Port of Corpus Christi to extend the length of property franchises to some port-area landowners from 30 years to 50 years, easing a paperwork burden on the port authority.

And finally the bill clarifies that land held by a navigation board for public use is not subject to state taxation.

By Mike Shiloh

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May 30, 2017

Junex Unloads West Texas Interest

Selling Schleicher, going Galt

Canadian oil and gas explorer Junex Inc. has sold its interest in a block of West Texas licensed interests.

Why? Its President and CEO Jean-Yves Lavoie said, “After having been involved in this project for several years, we concluded that it was time to divest ourselves of this investment in which we were a minority partner.”

The property in which Junex held interest is about 2,000 acres in the Schleicher County fields about 30 miles south of San Angelo.

It’s the same Camar field property on which Junex said last December it had discovered and was to start pumping a well (the Thornburg #11) that was producing about 32 barrels a day.

Buyer has not yet been revealed; price is said to be about $743,000 cash.

Lavoie said he expects the company to put the proceeds to work in its Galt oil and gas exploration project in Quebec that’s already underway, with expectations of drilling at least one horizontal well there over the next year.

One well on the Galt property has already produced 18,000 barrels of light, sweet crude, which the company touts as “by far the most significant recovery of oil ever recorded from a single well in Quebec’s history.”

By Mike Shiloh

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May 30, 2017

Hilcorp Exploring at Existing Alaskan Units: Petroleum News

“Although it has been one of the most active operators in Alaska over the past five years, Hilcorp Alaska LLC has only drilled five wells classified as “exploratory” by the state.

“The local subsidiary of the Texas-based independent has been focused more or less entirely on reviving aging fields since it arrived in Alaska,” Petroleum News reports in latest editions.

“Through three purchases of properties from Marathon Oil Corp., Union Oil Company of California and BP Exploration (Alaska) Inc., as well as some smaller acquisitions, the company has become the dominant operator in Cook Inlet and increasingly important on the North Slope.

“The five exploration wells have all been located within or near three units that the company operates in the southern Kenai Peninsula: Ninilchik, Deep Creek and to a lesser extent Nikolaevsk.”

By Mike Shiloh

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May 30, 2017

Subdivision-Electric Utility Liability Bill Awaits Governor’s Action

A proposed Texas law establishing the liability of political subdivisions and electric utilities when they enter into a contract allowing use of utilities’ easement land for recreational use has gone to the governor.

In practical terms, the bill allows for a subdivision to contract with an electric utility to use easements for hike and bike trails, for example.

The bill passed the House and Senate last week.

It covers electric utilities in counties — or adjacent to counties — with populations of four million or more.

Counties with further adjacency but with popluations of more than 20,700 are also covered by the bill.

By Mike Shiloh

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May 30, 2017

Texas Electricity Grid Security Bill Dies In Legislature

HB 787 from District 61 Representative Tan Parker would have tasked a committee to consider security risks and recommend changes to increase electricity generation and transmission security.

The bill never left the Senate Business and Commerce committee, where it was assigned in mid-May.

It had been amended to include the committee’s close scrutiny for possible “geomagnetic disturbances” and to open communication with the federal departments of energy, homeland security and defense.

The amendment also directed the committee to search for cost effective ways to bring greater security to the grid and to consider possible monetary appropriations.

By Mike Shiloh

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May 30, 2017

Super-Majority Mineral Rights Bill Fails

A controversial bill by District 8 state Senator Van Taylor (SB 177) calling for a super-majority of adjacent Texas private landowners to allow permission for some oil and gas drilling has died in the legislature.

Taylor, incidentally, is rumored to be interested in running for the US representative seat being vacated by Plano-area Republican Sam Johnson.

The idea for the bill was to help landowners work together in giving permission for secondary and tertiary oil exploration and production; if one-third or fewer of adjacent mineral rights holders refused to allow production they could, under the proposed bill, be overruled by the two-thirds super-majority of adjacent landowners, with the Railroad Commission of Texas to officiate.

Proponents said it would bring Texas in line with most other states in allowing such super-majority mineral rights rules; critics said the proposed law is not compatible with landowner rights laws and favors big petroleum companies over independent operators.

The bill was left pending in the Senate Natural Resources and Economic Development committee in April and was never revived.

By Mike Shiloh

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May 30, 2017

Controversial Air Pollutant Public Notice Revamp Awaits Governor’s Signature

Permitting potential polluters simplified; pubic input period is not

A law passed by the Texas Legislature allowing the consolidation of public notice requirements for the construction of air polluting structures is on the governor’s desk.

District 30 state Senator Craig Estes‘ SB 1045 allows a company applying for a simple and routine permit from the Texas Commission on Environmental Quality to build a facility that could emit air contaminants to shorten the public notice period, thereby speeding up the permit process, and the bill’s intent is to make public comment on those permits more informed and efficient.

It’s not meant for complex or controversial permit applications.

The bill defines simple and routine permits as those that can be drafted in 15 days; critics of the bill pointed out that even major polluters could qualify for the “simple and routine” permit process if the permit itself were simple enough.

Proponents of the bill say any such circumstances would be rare.

The bill would reduce permit applicants’ costs for multiple publishing of notices.

It calls for draft versions of permits to be made available to the public at the beginning of the public review period, making it easier for the public to call for contested case hearings.

Those opposed to the bill, though, said the bill’s consolidation aspect actually eliminates a portion of the public comment period in some cases (such as pre-draft public notice) and allows the TCEQ to draft permits in private without public input, removing the public ability to comment on permits before they are drafted.

The bill is now ready for Governor Abbott’s signature or veto.

By Mike Shiloh

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May 30, 2017

Governor Signs Electric Utility Rate Review Law

Governor Greg Abbott has signed into law a requirement that the Texas Public Utility Commission set up a rate schedule for electric utilities (other than a river authority) that are entirely inside the Electric Reliability Council of Texas.

The rate schedule would be set up by a deadline of June 1, 2018.

The law requires those utilities to file periodically with the PUC for modification of electricity base rates.

It would allow utilities to raise rates on four occasions between base rate proceedings and releases the PUC from requiring some electricity rate analyses and reporting on them

Lawmakers and the PUC have been concerned that there have been few rate reviews for some electric utilities over several years; the law will establish a regular review calendar.

Critics have said the law will increase rate hearing costs; proponents have said the new law will increase transparency and accountability among utilities.

The governor signed the bill (SB 735) into law Saturday.

By Mike Shiloh

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May 30, 2017

Governor Gets the Tax-Free Fuel Tax Bill

Gasoline or diesel has to keep moving out of state to avoid state taxes

Governor Greg Abbott has received District 18 state Senator Lois Kolkhorst‘s bill (SB 1557) requiring a person or company to report to the state Comptroller any “tax-free” sale of gasoline or diesel fuel under sales-for-export provisions of the tax code.

Under the bill, tax will now be imposed if fuel was sold in Texas to an unlicensed supplier, exporter, importer or distributor; or if the fuel was delivered within Texas to a supplier, distributor, importer or exporter even if the receiver of the fuel is licensed.

“Tax free” in this case refers to the Texas tax code, which allows for the sale of gasoline and diesel fuel free of state tax only if the fuel is “continuously moving” from Texas to a destination outside the state, such as through a pipeline.

There are certain current industry practices, lawmakers noted, that may not meet these tax code requirements, leaving the state with fewer tax dollars than that for which the law was designed, hence the tightened regulations in SB 1557.

The bill also cites a penalty of $200 if reporting provisions of the bill are not met regarding the sale of “untaxed” fuel — or penalties of $2,000 or five times the amount of tax due, whichever is greater.

If signed by Abbott, the law would take effect January 1st 2018.

By Mike Shiloh

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May 30, 2017

House Bill on Central Reports Dies In Legislature

A bill (HB 2305) requiring state agencies to post reports on The Texas Digital Archive; agency websites (including the PUC and RRC) has died in the legislature.

It was an attempt at more transparent government reporting; the public would have had access to the majority of state reports online in a central place.

It was also intended to save the state agencies and the public money in paper, printing and postage fees.

There were amendments added to the bill including one to abolish some little-known state agencies, but then the bill was killed by District 34 Representative Abel Herrero in the state House on a point of order precisely because those amendments were unrelated to the original bill.

By Mike Shiloh

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May 30, 2017

Oil and Gas Private Land Open-Space Tax Bill Hits Gov’s Desk

Texas landowners who add oil and/or gas leases will still be eligible for exemption from ad valorum appraisal procedures in all cases if Governor Greg Abbott signs HB 3198, a bill passed by the state legislature last week.

In the past, property used for timber, farm, ranch or wildlife are considered open-space land and in the past oil and gas exploration and production land was treated the same.

The state notes that some Texas counties now claim that oil and gas activity exempts property from open-space tax privileges; HB 3198 clarifies that even oil and gas land, in practically all cases, qualifies as open-space land with accompanying tax breaks.

By Mike Shiloh

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May 30, 2017

Governor Gets Revised Texas Earthquake Monitoring Committee Bill

TexNet oil and gas representation expands

The re-authorization and revamping of the TexNet Technical Advisory Committee is awaiting Governor Greg Abbott’s signature.

TNAC is an advisory group made up of nine members to prepare reports on the state’s seismic activity, especially with respect to the activity’s possible relationship with oil and gas operations.

TexNet is a statewide network for the monitoring of earthquakes.

The legislature passed House Bill 2819 last week, establishing that the committee will now have at least one representative expert from the Railroad Commission of Texas — with that appointee’s qualifications expanded — and three representatives from the oil and gas industry rather than the previous two.

At least two of the appointees must represent higher education institutions and have seismic or reservoir modeling experience, according to the originial authorization.

The committee is tasked with preparing a bi-yearly report and administering TexNet’s budget.

It will remain a part of the University of Texas Bureau of Economic Geology as it has since the committee was authorized last session.

The Governor will continue to appoint all nine members and will designate a committee chair, according to the legislation.

By Mike Shiloh

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May 30, 2017

Texas “Ike Dike” Legislation Goes to Governor

State-appointed group would look into building hurricane barriers along Gulf Coast

The governor of Texas is expected to sign a bill authorizing a committee to study the “feasability and desirability” of a barrier system along the Texas coast that would protect coastal residents and businesses such as oil refineries.

Governor Greg Abbott has received the bill.

The idea of the so-called “Ike Dike” is to create barriers that could protect sensitive areas along the coast, especially Galveston Bay, from storm surges caused by hurricanes.

The notion was adopted after studies made following Hurricane Ike in 2008 determined that despite the heavy damage caused by the storm, damage could have been much worse and a plan is needed to prevent further devastation.

House Bill 2252 calls for a committee made up of members of the House and Senate land resource committees along with appointees from the governor and lieutenant governor.

The committee’s final report is due to be delivered to the governor and the legislature by December 1, 2018.

By Mike Shiloh

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May 30, 2017

RRC Funding Up for Inspections, Reporting, Staffing

Agency that oversees oil and gas will soon keep closer online track of inspections, violations

Funding for the Railroad Commission of Texas is about $256 million for the next two years.

The Texas Legislature passed it’s biennium budget Saturday; including federal money, the two-year spending plan totals nearly $217 billion just a fraction of a percent more than the current budget.

The RRC. though, got a nearly $6 million budget raise to increase oil and gas pipeline safety inspections and nearly $41 million to increase the number of oil and gas well remediation and plugging.

The agency is also getting nearly $40 million to help stabilize its operations, which have been compromised because of budget cutbacks over the past year or two.

And there will be an operational information services upgrade upon the insistence of several state representatives and senators, with $3 million budgeted for upgrading IT to increase inspection reporting on the RRC website and the hiring of IT personnel.

Lawmakers also pushed for a searchable database for violations, inspections and enforcement actions and reporting.

Governor Greg Abbott has already signed the Sunset bill re-authorizing the Railroad Commission for another 12 years; he’s expected to sign the budget bill into law soon.

By Mike Shiloh

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May 30, 2017

Camber to San Antonio: Cost Cutting

Camber Energy Inc. — formerly Lucas Energy — has a new Chairman of the Board in Fred S. Zeidman, replacing Richard N. Azar II, who will remain on the board as the company undergoes cost cutting.

Part of that budget-slashing includes a move of company headquarters from Houston to San Antonio and outsourcing some back office functions.

Zeidman has a reputation for company turnarounds, having guided Houston-based onshore and offshore seismic data provider Seitel Inc. through a $300 million reorganization; he joined Camber’s board in 2013.

He’s also chairman of the Gordian Group, an investment and advisory bank.

Anthony N. Schnur is president, CEO and director.

Camber bought assets in Oklahoma from Segundo Resources of San Antonio last year and bought more than 3600 acres in the San Andes formation in the Permian Basin earlier this year, which the company says it intends to develop.

Camber has taken on professional fees and added staff because of the Segundo purchase and is considering the renegotation of loan agreements.

By Mike Shiloh

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May 26, 2017

Sitton: American Energy Disrupts OPEC’s Influence

By Railroad Commission of Texas Commissioner Ryan Sitton

The OPEC cartel’s plan to continue its production cuts for nine more months means that two worlds — energy and politics — are once again colliding. Energy observers today are feverishly trying to anticipate what will happen with the basic cost of energy, which has the ability to upset manufacturing capabilities, trade practices, and even entire economic markets. With all the uncertainty, one thing is clear. American energy production is disrupting OPEC plans and influencing energy prices more than it has in a generation.

As a Texas energy regulator, I am often asked about the impact of Texas oil and gas on the rest of the world’s oil activities. Throughout my 20 years as an engineer working in the energy industry, I’ve had the opportunity to travel all over the world and witness Texas’ influence firsthand.  Today, one quarter of all U.S. oil output comes from the Permian Basin, and projections show that number will continue to rise.. On May 25 we watched as the advances of the shale producers in Texas and the U.S. forced the hand of the OPEC nations – and they extended cuts to support prices.

So what can we glean from the cartel’s action? First, OPEC nations are indicating that they believe the market can come into supply and demand balance based on existing production levels. Second, it appears that OPEC countries are accepting the current price environment. Last and most notably, OPEC nations are beginning to bump up against their limits in controlling prices.

What that means for Texas oil and gas producers is that there’s more global demand that they can fill at current pricing levels. Energy exports of oil, liquefied natural gas, chemicals and refined products hold enormous opportunities for our country.

America’s energy exports have increased 334 percent in just the last 10 years, and our energy is being used to lessen the influence of Russia in Europe and provide cleaner burning energy for countries like China, South Korea, Mexico, Jordan, Pakistan, Turkey, Dominican Republic, Thailand, Kuwait and Chile. For all of the political posturing around energy, the market forces in the United States are competing head to head with the conglomerate forces in the rest of the world. The days of OPEC using oil supplies and prices as a political weapon are dwindling. More specifically, while they still have the ability to push prices down, they are losing the ability to push them up. Now those countries, along with non-OPEC participating countries like Russia, are going to have to decide how to fund their lavish governments on the basis of a commodity whose price they no longer control.

Less OPEC oil on the market enhances the opportunity for American energy to fill needs around the world, and will help us achieve energy dominance, which means producing more energy than anyone else and using that energy to enhance our economic and national security.

By TRRC Commissioner Ryan Sitton

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May 26, 2017

PEC Launches Quick-Response Network System

California digital logistics company Trimble Inc. says the Pedernales Electric Cooperative is now using Trimble’s latest electricity network operational system.

Trimble says its Distribution Management System ties together the central electricity distribution network with a quick response system for outages and service restoration with enhanced communications among engineers and repair crews.

Pedernales’ wide system of more than a quarter million customers — the largest electric co-op in the nation — has its share of outages in Central Texas storms, and PEC’s VP of Engineering and Energy Innovations Brad Hicks said the new system “enables PEC to more proactively respond to outages and engage with our members, giving them the critical information they need.”

By Mike Shiloh

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May 25, 2017

The Texas Energy Report Begins Public Testing of New Web Home

The Texas Energy Report has begun beta-testing our latest website design.

Cell phone and tablet friendly, it also works well with your laptop and home computer.

The new version of The Texas Energy Report allows for quicker dissemination of Texas energy news.

As a subscriber to or associate of The Texas Energy Report, we welcome you to test out our new design by going here.

It may be a while before our new home is up to speed, but daily updates will continue to be available here, at our traditional website, and at our new home.

I hope you like it and will feel free to let me know how we can improve our websites and how we can better deliver to you the latest Texas energy information.

Thank you for subscribing and for sharing our passion for the energy business,

Mike Shiloh
Publisher, The Texas Energy Report
TexasEnergyReport@Gmail.com
713-785-4234

By Mike Shiloh

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May 25, 2017

Senate Resolution for Ports Considered

An appeal is underway from the state to the federal government for more funding for the safety, maintenance and improvement of Texas ports.

The legislative initiative emphasizes that less than half of federal funds that could be used to dredge and improve US ports are being used, calling for increased funding of port maintenance.

District 20 state Senator Juan Hinojosa‘s Senate Concurrent Resolution 37 has been passed by the Senate.

The Text:

“Resolved:

“That the 85th Legislature of the State of Texas hereby respectfully urge the United States Congress to increase appropriations from the Harbor Maintenance Trust Fund to ensure that the nation’s ship channels are appropriately maintained and safe.

“That the Texas secretary of state forward official copies of this resolution to the president of the United States, to the president of the Senate and the speaker of the House of Representatives of the United States Congress, and to all the members of the Texas delegation to Congress with the request that this resolution be entered in the Congressional Record as a memorial to the Congress of the United States of America.”

By Mike Shiloh

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May 24, 2017

RRC Commissioner: Innovative Disruption in Energy: News Release

Railroad Commissioner Ryan Sitton
Discusses Innovative Disruption in Energy
AUSTIN – Railroad Commissioner Ryan Sitton met with 100 senior level oil and gas executives in Houston yesterday for An Energy Evening hosted by KCA, a business consultancy serving energy, technology and legal clients.
New technology and drilling techniques in Texas shale plays have led to a dramatic increase in Texas production, forcing OPEC to cut production and disrupting the global supply and demand balance. In light of these developments, Sitton discussed “Innovative Disruption in Energy,” and its impact on the market, investments and infrastructure.
“After 25 years of viewing oil and gas as just another commodity, we need to begin thinking differently about the role energy plays in the world,” Sitton said. “Texas energy production, and the innovation of our drillers, has the ability to disrupt the global market, secure our economic growth and national security, and place the U.S. in a position of energy dominance.”

By Railroad Commission of Texas

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May 24, 2017

RRC: February Oil and Gas Stats

Texas Oil and Gas Production Statistics for February 2017
AUSTIN — Production for March 2017 as reported to the Railroad Commission of Texas (Commission) is 77,262,815 barrels of crude oil and 608,006,175 mcf (thousand cubic feet) of total gas from oil and gas wells. These preliminary figures are based on production volumes reported by operators and will be updated as late and corrected production reports are received. Production reported to the Commission for March 2016, was: 77,702,710 barrels of crude oil preliminarily, updated to a current figure of 87,212,078 barrels; and 638,377,189 mcf of total gas preliminarily, updated to a current figure of 710,704,805 mcf.

By Railroad Commission of Texas

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May 24, 2017

US Crude Supplies Drop More Than 4 Million BBLs

Crude oil stockpiles dropped by 4.43 million barrels last week, beating analysts expectations by a large margin.

Analysts in more than one survey expected about a 2 million barrel decrease in oil supplies.

Energy Information Agency stats show a total 516.3 million barrels of oil in stock as of late last week.

The EIA says that number is still 100 million barrels more than the five-year average of oil stockpiles for this time of year.

By Mike Shiloh

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May 24, 2017

Oil & Gas Excessive Regulation Resolution Passes Texas House

A plea for a close review by the US Congress and the White House of federal regulations instituted during the past eight years that are considered harmful by the oil and gas industry passed the Texas House Wednesday.

Senate Concurrent Resolution 26 calls on the federal government to scrutinize and then, where possible, revise or repeal laws that have a negative impact on the industry and return oversights of oil and gas to the states.

Text of the resolution:

“Resolved:

“That the 85th Legislature of the State of Texas hereby respectfully urge the executive branch and the Congress of the United States to work in conjunction with the State of Texas to identify federal regulations promulgated during the last eight years, especially those promulgated under the authority of the United States Environmental Protection Agency, the United States Department of the Interior, and the United States Department of Energy, and determine whether they should be revised, delegated to state agencies, or eliminated in order to ease the overly burdensome regulatory patchwork on the oil and gas industry in Texas.

“That the Texas secretary of state forward official copies of this resolution to the president of the United States, to the president of the Senate and the speaker of the House of Representatives of the United States Congress, and to all the members of the Texas delegation to Congress with the request that this resolution be entered in the Congressional Record as a memorial to the Congress of the United States of America.”

By Mike Shiloh

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May 24, 2017

Oil and Gas Private Land Open-Space Tax Bill Passes Lege

Texas landowners who add oil and/or gas leases will still be eligible for exemption from ad valorum appraisal procedures in all cases under HB 3198, a bill passed by the state legislature Wednesday afternoon.

In the past, property used for timber, farm, ranch or wildlife are considered open-space land and in the past oil and gas exploration and production land was treated the same.

The state notes that some Texas counties now claim that oil and gas activity exempts property from open-space tax privileges; HB 3198 clarifies that even oil and gas land, in practically all cases, qualifies as open-space land with accompanying tax breaks.

By Mike Shiloh

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May 24, 2017

Tax-Free Fuel Tax Bill Passes Texas House on 2nd Reading

The gasoline or diesel must keep moving out of state to avoid state taxes

In late night last-minute bill passing the Texas House of Representatives on Tuesday okayed District 18 state Senator Lois Kolkhorst‘s SB 1557, which requires a person or company to report to the state Comptroller any “tax-free” sale of gasoline or diesel fuel under sales-for-export provisions of the tax code.

It was the last day for the House to consider second-reading Senate bills on the daily or supplemental calendar.

Under the bill, tax will now be imposed if the fuel was sold in Texas to an unlicensed supplier, exporter, importer or distributor; or if the fuel was delivered within Texas to a supplier, distributor, importer or exporter even if the receiver of the fuel is licensed.

“Tax free” in this case refers to the Texas tax code, which allows for tax-free sale of gasoline and diesel fuel if the fuel is “continuously moving” from Texas to a destination outside the state, such as through a pipeline.

There are certain current industry practices, lawmakers note, that may not meet these tax code requirements, leaving the state with fewer tax dollars than that for which the law was designed, hence the tightened regulations in SB 1557.

The bill also cites a penalty of $200 if reporting provisions of the bill are not met regarding the sale of “untaxed” fuel — or penalties of $2,000 or five times the amount of tax due, whichever is greater.

The bill has already been voted out of the Senate.

SB 1557 would take effect January 1st 2018.

By Mike Shiloh

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May 23, 2017

Lege Passes Subdivision-Electric Utility Liability Bill

The Texas Legislature has passed a bill establishing the liability of political subdivisions and electric utilities when they contract in connection with using utilities’ easement land for recreational use.

In practical terms, the bill allows for a subdivision to contract with an electric utility to use easements for hike and bike trails, for example.

It passed the Senate with a liability cap amendment Tuesday evening; it passed the House May 11th.

The bill covers electric utilities in counties — or adjacent to counties — with populations of four million or more.

Counties with further adjacency but with popluations of more than 20,700 are also covered by the bill.

By Mike Shiloh

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May 23, 2017

Controversial Air Pollutant Public Notice Revamp Passes Lege

Permitting potential polluters simplified; pubic input period is not

A bill allowing the consolidation of public notice requirements for the construction of air polluting structures has been passed by the Texas House and Senate.

District 30 state Senator Craig Estes‘ SB 1045 allows a company applying for a simple and routine permit from the Texas Commission on Environmental Quality to build a facility that could emit air contaminants to shorten the public notice period, thereby speeding up the permit process, and the bill’s intent is to make public comment on those permits more informed and efficient.

It’s not meant for complex or controversial permit applications.

The bill defines simple and routine permits as those that can be drafted in 15 days; critics of the bill pointed out that even major polluters could qualify for the “simple and routine” permit process if the permit itself were simple enough.

Proponents of the bill say any such circumstances would be rare.

The bill would reduce permit applicants’ costs for multiple publishing of notices.

It calls for draft versions of permits to be made available to the public at the beginning of the public review period, making it easier for the public to call for contested case hearings.

Those opposed to the bill, though, said the bill’s consolidation aspect actually eliminates a portion of the public comment period in some cases (such as pre-draft public notice) and allows the TCEQ to draft permits in private without public input, removing the public ability to comment on permits before they are drafted.

The bill is now ready for Governor Abbott’s signature or veto.

By Mike Shiloh

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May 23, 2017

High-Speed Rail Regulations Bills Go to Governor

Is it encumbering proposed Houston to Dallas project with extra regulatory burden, or creating needed regulatory baseline for high-speed rail concept?

A proposed private high-speed rail project between Dallas and Houston is the subject of two bills now on the Governors desk.

SB 975 by District 22 state Senator Brian Birdwell requires the operator of any private rail service topping 110 miles per hour to adhere to all federal Transporation Security Administration security requirements.

SB 975 requires the Texas Department of Public Safety to enforce security regulations and assessments while also bringing federal safety and security  requirements.

And SB 977 — also on the Governor’s desk — amends the state transporation code, prohibing the legislature from appropriating money for,and from helping build, plan. promote or operate, any such private project, except as covered by existing legislation.

There is only one high-speed private rail being considered in Texas, and it is still in the formative stages.

Senator Birdwell’s SB 975 holds responsible the private entity that builds the rail line — if it is built — for investigating security threats, also requiring managers and administrators to complete emergency management training.

The operator of the rail is instructed to work with the legislature and state officials on protocol to “ensure the safe entry, exit and passage of all passengers and employees,” as a state analysis says.

Critics of the bill say it just makes it harder for the proposed rail line to be built because it creates an unneccesary regulatory burden.

Proponents say the bill is needed to protect passengers and residents who live along the rail line, and to provide a general template for regulation of any future high-speed rail in Texas.

Distict 5 state Senator Charles Schwertner‘s SB 977 requires a twice-yearly report to several state agencies and offices on state-paid expenses related to high-speed rail projects.

By Mike Shiloh

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May 23, 2017

Bill Clarifying Unique Agency Goes for Governor’s Signature

Texas part of interstate agreement to handle low-level nuclear waste clarified in bill

A unique bill clarifying duties of an independent agency created by the federal government for the disposal of low-level radioactive waste is waiting for Governor Greg Abbott’s signature.

The Texas House passed SB 1667 authored by District 31 state Senator Kel Seliger on Sunday after an April passage by the Senate.

The bill’s language makes it clear that the Texas Low Level Radioactive Waste Disposal Compact Commission is not a state agency, though it is organized through the state in conjunction with other states who signed onto the compact and it is subject to Texas laws.

The bill administers the state portion of The Texas Compact, a multi-state agreement that ensures the disposal of low-level radioactive waste from nuclear plants such as the now inactive Vermont Yankee plant that is being decommissioned.

Entergy shut down the plant more than two years ago.

High-level waste such as spent fuel rods are not included in the Texas Compact.

Texas is aleady the site of several low-level waste storage compounds including one near Andrews in West Texas.

The bill doesn’t create a new agency but clarifies the duties and limitations of the Texas Compact commission in Texas, allowing to draw limited state funds and register with state agencies.

The company administering that site, Waste Control Specialists, had been lobbying for a high-level waste disposal site in Texas but has recently stopped, citing financial concerns.

The disposal of high-level waste — as opposed to the Texas Compact’s low-level waste — is now under consideration by the Trump administration, with the possibility of a much-discussed site at Yucca Mountain in Nevada.

Tuesday the US Department of Energy said it’s abandoning tests aimed at finding whether nuclear waste can be stored in holes bored three miles deep.

The DoE said budget constraints caused the agency to abandon the Deep Borehole Field Test project.

By Mike Shiloh

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May 23, 2017

Governor Signs RRC Sunset Bill; TIPRO Praises

Critics disappointed in too few changes at RRC

The Texas Railroad Commission is good to go for another 12 years now that Governor Greg Abbott has signed HB 1818 following exhaustive scrutiny of the agency that oversees the oil and gas industry.

It took three legislative sessions to finally decide the direction of the Railroad Commission of Texas, and in the end it keeps the name its had for more than 100 years but moves well into the 21st Century with online registrations, reports and databases.

While wrangling over the state budget continues, the RRC is expected to receive an increased budget; the question for the short-handed agency is how much.

Critics of the way the Sunset Review was handled this session say almost all of the recommendations made were discarded by the Legislature, including changing the name to something more appropriate and transferring oversight of the natural gas industry to the state Public Utility Commission.

Critics have also been disappointed by the failure of legislation to limit political income by RRC commissioners and added bond requirements.

The Texas Independent Producers and Royalty Owners Association, however, applauded Gov. Abbott’s signing, saying in a Tuesday statement, “By signing House Bill 1818, Governor Abbott has ensured regulatory certainty for the Texas oil and gas industry and strengthened oversight of energy development in the Lone Star State. 

“The E&P sector is the key economic driver in the state of Texas, providing employment for hundreds of thousands of Texans and generating tax revenue that supports all aspects of the economy, including education, public safety, water conservation, and infrastructure development.”

By Mike Shiloh

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May 22, 2017

Lege Passes Wind Turbine Limitation Bill

A long-discussed bill that would end tax breaks for property owners intending to build wind energy turbines within 25 miles of military bases has passed the Texas Legislature.

The proposed law would discourage building such turbines in another way: it would end limitations on appraised value of properties where commercial-sized turbines are built or permitted.

The effect of SB 277 by Wichita Falls Senator Donna Campbell is to satisfy requests from leaders at nine Texas military bases, who are concerned that the tall commercial-quality turbines interfere with aviation activities, especially radar precision.

The turbines create false interference on radar screens.

The bill would go into effect September 1st.

Supporters say the bill will not hinder renewable energy efforts.

The bill will be subject of one more House vote, then will go to the governor for his signature.

By Mike Shiloh

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May 22, 2017

Land Office Oil Spill Bill Passes

The Texas House and Senate have signed off, with amendment, on HB 1625, which would allow the General Land Office to confiscate vessels or structures that are involved in an oil spill if, after being properly notified, the owner of the vessel doesn’t take immediate action to stop the oil spill.

The law would apply to vessels and structures “involved in an actual or threatened unauthorized discharge of oil.”

By Mike Shiloh

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June 1, 2017

Texas Energy Consultant to Help Perry: EENews

“Energy Secretary Rick Perry has brought on veteran Texas energy consultant Alison Silverstein to produce his first major energy policy statement, a controversial study of whether federal tax and subsidy policies favoring renewable energy have burdened “baseload” coal-fired generation, putting power grid reliability at risk,” EENews reports Wednesday.

By Mike Shiloh

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May 31, 2017

RRC Intellectual Property Protection Law Signed by Governor

A bill protecting the intellectual property belonging to the Railroad Commission of Texas has been signed into law by the governor.

There have been reports of some private organizations using logos, art or symbols associated with the RRC both in print and online.

Some advertising has also been reported using RRC-styled graphics.

Governor Greg Abbott last week signed into law District 30 state Senator Craig Estes‘s SB 1422 that prohibits the unauthorized use of the RRC logo and related materials.

It also allows the RRC to contract with organizations to lease it’s logo and related materials in exchange for “reasonable compensation,” with the proceeds to go to the oil and gas regulation and cleanup fund.

By Mike Shiloh

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May 31, 2017

Outside-ERCOT Smart Meter Cost Pass-Through Law Signed by Governor

Investor-owned electric utilities outside the jurisdiction of the Electric Reliability Council of Texas that want to advanced meters in homes and businesses will be able to charge customers “reasonable and necessary” costs caused by the new meters under new legislation signed by Governor Greg Abbott.

District 3 state Senator Robert Nichols‘ SB 1145 authorized the pass-though of costs associated with installing and maintaining the “smart meters” to electricity suppliers outside ERCOT, subject to certain PUC rules and regulations.

By Mike Shiloh

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May 31, 2017

Land Office Oil Spill Law Signed by Governor

The Texas General Land Office will be able to confiscate vessels or structures that are involved in an oil spill under new legislation signed by the governor on Monday.

District 24 state Representative Dr. Greg Bonnen‘s HB 1625 requires that the owners of such property be notified ahead of time and then, after being properly notified, if the owner of the vessel doesn’t take immediate action to stop the oil spill, confiscation of the property can begin.

The law will apply to vessels and structures “involved in an actual or threatened unauthorized discharge of oil.”

It becomes effective September 1st of this year.

By Mike Shiloh

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May 31, 2017

Energy Savings Contract Law Revamp Signed By Governor Abbott

A bill that standardizes the definitions of often-used words in Texas energy-saving construction financing contracts has been signed into law by the governor.

A House of Representatives analysis of District 9 state Representative Chris Paddie‘s HB 1571 says energy-saving performance contracting is a…method that allows an entity to finance the completion of improvements” that save energy using savings from reduced utility expenses.

The new law, which takes effect immediately, changes the definition of the phrases “energy savings performance contract,” “energy savings” and the word “baseline” in Local Government Code, Government Code and Education Code.

The law also amends an earlier law that prohibits the use of state-borrowed money in entering into energy-savings performance contracts.

By Mike Shiloh

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May 31, 2017

Crude Oil Drawdown Biggest of the Year: API

US crude oil stockpiles were down for the week ending May 26th by a huge 8.7 million barrels, according to the American Petroleum Institute.

In figures released a day late because of the Memorial Day holiday, the API figures indicate the biggest one-week drop in crude supplies so far this year.

They also showed a drop of 1.7 million barrels of gasoline.

Distillates were reported up by 124,000 barrels.

Similar data from the US Energy Information Administration are expected tomorrow.

By Mike Shiloh

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May 31, 2017

Craddick’s Petroleum Royalty Check Details Bill Signed by Governor

Some oil and gas operators are going to have to spell out details of how paper royalty checks are made out to mineral rights owners under a new law that takes effect in September.

District 82 Representative Tom Craddick’s HB 129, signed by Governor Greg Abbott on Memorial Day, requires well operators to specifically note financial details related to royalty checks and should be on check stubs.

This supercedes the practice by some in the petroleum industry of sending along checks with the notice that details of royalties are available online.

Craddick said the bill is aimed to protect royalty holders who receive paper checks but don’t have access to the Internet — it doesn’t affect electronic royalty payments.

The law takes effect September 1st 2017.

By Mike Shiloh

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May 31, 2017

Governor Signs Oil Products Felony Theft Law

Theft of more than $300,000 in petroleum products soon to be a first degree felony under new law

A bill making it a third degree felony to steal, receive, move or hide petroleum products with the “intent to deprive the owner” of the product has been signed by Governor Greg Abbott.

District 21 state Senator Judith Zafferini‘s SB 1871 was passed by the Texas Legislature instead of a companion House bill, both of which called for third-degree felony charges against those caught stealing crude oil, natural gas or distillates. including those who might drill or tap into pipelines — if the value of the stolen product is more than $10,000 but under $100,000.

More than $100,000 in theft (up to $300,000) and the charge could be bumped up to a second-degree felony.

In cases of theft of petroleum products worth more than $300,000 the charge could be a first-degree felony.

Theft of products under $10,000 are a state jail felony.

Despite concerns by energy committee members that the law could be abused by charging those attempting petty crimes with severe penalties, the high dollar value of the crimes generally target organized oilfield crime.

Proponents of the law noted that groups have stolen vacuum trucks used for siphoning water from the bottom of oil tanks and, at night in unguarded oil fields, used them to siphon large tanks of oil products that are then shipped for illegal sale.

The law takes effect September 1st, 2017.

By Mike Shiloh

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May 31, 2017

Open Records Bills Fail In Legislature

A dozen bills aimed at adding transparency to Texas government failed in the legislative session that ended Monday, including some that intended to close legal loopholes that were part of a legal strategy Chesapeake Energy used last year.

The Texas Public Information Act (then known as the Texas Open Records Act) was passed by the legislature in 1973 and has since been considered one of the most powerful open-records laws in America, but state supreme court decisions in the years that followed have allowed some of the intended open government benefits to wither.

An often-cited example is a 2015 Texas Supreme Court decision for the Greater Houston Partnership that reversed the legal precedent requiring non-profit organizations that accept government money to disclose all their financial activities.

Another decision that year involving the Boeing aerospace company ruled that companies can stop the release of information in lawsuits if it might reveal trade secrets.

Chesapeake Energy last year tried to block public disclosure of a million-dollar settlement with the Ft. Worth ISD, claiming that such information could be used against the company in future lawsuits, as the Ft. Worth Star Telegram revealed in 2016.

The settlement details were released by order of the state attorney general.

District 98 Representative Giovanni Capriglione told the Dallas Morning News early this year that he intended to close the loopholes, saying “To me this is so against the entire principle of accountability and transparency. This is taxpayer dollars that must be disclosed.”

Capriglione joined District 14 state Senator Kirk Watson and others in filing bills such as HB 793 and SB 408, both of which were terminally stuck in the House Government Transparency and Operation committee in April, the latter after a 28-3 Senate vote for passage.

Some powerful lobby groups were against the bills, proponents said, but some of the lawmakers who signed onto the numerous transparency bills say they”ll try again next session.

News organizations and open-records advocates will undoubtedly continue to apply pressure for new legislation next time around, and so will opponents.

By Mike Shiloh

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May 31, 2017

South Texas Pipe Plant Prepares for Business

Bay City Jobs Booming Again

A large pipe tubing and casing production mill at Bay City, Texas is preparing to open within weeks, according to the plant’s investor, Tenaris S.A.

The mill is expected to produce up to 600,000 tons of line pipe and related products used in the transporation and production of oil and gas.

The facility has been a boon to the Matagorda County city southwest of Houston, bringing more than 600 jobs, the company said.

The coastal county is only about an hour’s drive from the southern edge of the Eagle Ford shale play.

Bay City experienced a boom in the 1970s and ’80s during the building and early days of the “South Texas Nuclear Project,” as it was called,

By Mike Shiloh

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May 31, 2017

Denbury Buying Into Wyoming Field, To Sell Houston Land

Denbury Resources Inc. is buying interest in a working oil and gas field in Wyoming from subsidiaries of Linn Energy, then intends to sell some Houston property.

The Denbury buy is for a 23% non-operated working interest in Wyoming’s Salt Creek field, west of the city of Casper, for a price of $71.5 million in a deal to close in June, the company said Tuesday.

The plan is to pay for the working interest using Denbury’s line of credit, but the cost will eventually be offset by the sale of property in Houston that isn’t producing and would be well suited for commercial development.

More development of the Salt Creek field is expected to raise it’s output well beyond its current output of 2,100 barrels a day based on the proved reserves of 9 million barrels.

The company said it expects to combine finding and development expenses into a total of just $7 a barrel.

Earlier this month Linn Energy, gaining strength after bankruptcy, sold other non-core Wyoming assets to Denver’s Jonah Energy for $581 millon that will significantly pay down Linn’s debt.

By Mike Shiloh

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May 31, 2017

Wind Turbine Limitation Bill Awaits Abbott’s Decision

The governor has received a controversial bill that would end tax breaks for property owners intending to build wind energy turbines within 25 miles of Texas military bases.

The bill was passed by the legislature last week and was sent to Governor Greg Abbott Tuesday.

The proposed law would discourage building such turbines in another way: it would end limitations on appraised value of properties where commercial-sized turbines are built or permitted.

SB 277 by Wichita Falls Senator Donna Campbell satisfies requests from leaders at nine Texas military bases who are concerned that the tall commercial-quality turbines interfere with aviation activities, especially radar precision.

The turbines create false interference on some radar screens.

The bill would go into effect September 1st.

Supporters say the bill will not hinder renewable energy efforts; critics say the loss of tax incentives will drive large wind energy turbine builders elsewhere.

By Mike Shiloh

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May 31, 2017

Will Governor Abbott Sign the High-Speed Rail Federal Safety Bill?

A bill that makes it a little harder for private fundraisers to build a proposed high-speed rail project between Dallas and Houston is now on Texas Governor Greg Abbott‘s desk — but proponents say the bill is essential for passenger safety if the rail is built.

SB 975 by District 22 state Senator Brian Birdwell requires the operator of any private rail service topping 110 miles per hour to adhere to all federal Transportation Security Administration security requirements.

And it requires the Texas Department of Public Safety to enforce security regulations and assessments while also applying federal safety and security requirements.

Although the bill is worded as a general legal and regulatory outline for any private high-speed rail line, it obviously is meant for a system between Dallas and Houston that’s in the planning stages.

And District 22 state Senator Brian Birdwell‘s general wording of the bill make the point that it’s aimed at creating a baseline code for safety of all future high-speed rail, not just the Houston-Dallas project.

SB 975 holds responsible the private entity that builds a rail line for investigating security threats and required managers and administrators to complete emergency management training.

The operator of the rail is instructed to work with the legislature and state officials on protocol to “ensure the safe entry, exit and passage of all passengers and employees,” as a state analysis says.

Critics of the bill say it just makes it harder for the proposed rail line to be built because it creates an unnecessary regulatory burden.

Proponents say the bill is needed to protect passengers and residents who live along the rail line, and to provide a general template for regulation of any future high-speed rail in Texas.

The governor has already signed Distict 5 state Senator Charles Schwertner‘s SB 977, which prohibits the use of state money in building, planning, operating or promoting such rail projects and requires a twice-yearly report to several state agencies and offices on state-paid expenses related to any such projects.

By Mike Shiloh

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May 31, 2017

Bill Calling for No High Speed Rail State Assistance Signed By Governor

A bill has been signed by Governor Greg Abbott prohibing the legislature from appropriating money for, and from helping build, plan. promote or operate, any private rail project that reaches 110 miles per hour, except as covered by existing legislation.

The new law amends the state transporation code.

Distict 5 state Senator Charles Schwertner‘s SB 977 requires a twice-yearly report to several state agencies and offices on state-paid expenses related to high-speed rail projects.

There is only one high-speed private rail being considered in Texas, and it is still in the formative stages.

A proposed private high-speed rail project between Dallas and Houston is still being planned.

By Mike Shiloh

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May 31, 2017

Bill Opening Up Port Property Bidding Awaits Governor’s Signature

Governor Greg Abbott is expected to sign into law a bill aimed at opening up the number of bidders for property being sold by a Texas coastal port has been passed by the House and Senate and awaits a signature or veto by the Governor.

Authored by District 4 state Senator Brandon Creighton, SB 1395 amends the state water code to eliminate the requirement that those bidding on port land — such as that offered by the growing Port of Corpus Christi — provide financial security for the entire bid price.

Current law excludes property bidders who can pay using financing; the law is considered unfair and limits considerably the number of people able to bid on port property.

The bill also allows the Port of Corpus Christi to extend the length of property franchises to some port-area landowners from 30 years to 50 years, easing a paperwork burden on the port authority.

And finally the bill clarifies that land held by a navigation board for public use is not subject to state taxation.

By Mike Shiloh

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May 30, 2017

Junex Unloads West Texas Interest

Selling Schleicher, going Galt

Canadian oil and gas explorer Junex Inc. has sold its interest in a block of West Texas licensed interests.

Why? Its President and CEO Jean-Yves Lavoie said, “After having been involved in this project for several years, we concluded that it was time to divest ourselves of this investment in which we were a minority partner.”

The property in which Junex held interest is about 2,000 acres in the Schleicher County fields about 30 miles south of San Angelo.

It’s the same Camar field property on which Junex said last December it had discovered and was to start pumping a well (the Thornburg #11) that was producing about 32 barrels a day.

Buyer has not yet been revealed; price is said to be about $743,000 cash.

Lavoie said he expects the company to put the proceeds to work in its Galt oil and gas exploration project in Quebec that’s already underway, with expectations of drilling at least one horizontal well there over the next year.

One well on the Galt property has already produced 18,000 barrels of light, sweet crude, which the company touts as “by far the most significant recovery of oil ever recorded from a single well in Quebec’s history.”

By Mike Shiloh

May 30, 2017

RRC Funding Up for Inspections, Reporting, Staffing

Agency that oversees oil and gas will soon keep closer online track of inspections, violations

Funding for the Railroad Commission of Texas is about $256 million for the next two years.

The Texas Legislature passed it’s biennium budget Saturday; including federal money, the two-year spending plan totals nearly $217 billion just a fraction of a percent more than the current budget.

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By Mike Shiloh

May 30, 2017

Hilcorp Exploring at Existing Alaskan Units: Petroleum News

“Although it has been one of the most active operators in Alaska over the past five years, Hilcorp Alaska LLC has only drilled five wells classified as “exploratory” by the state.

“The local subsidiary of the Texas-based independent has been focused more or less entirely on reviving aging fields since it arrived in Alaska,” Petroleum News reports in latest editions.

“Through three purchases of properties from Marathon Oil Corp., Union Oil Company of California and BP Exploration (Alaska) Inc., as well as some smaller acquisitions, the company has become the dominant operator in Cook Inlet and increasingly important on the North Slope.

“The five exploration wells have all been located within or near three units that the company operates in the southern Kenai Peninsula: Ninilchik, Deep Creek and to a lesser extent Nikolaevsk.”

By Mike Shiloh

May 30, 2017

Subdivision-Electric Utility Liability Bill Awaits Governor’s Action

A proposed Texas law establishing the liability of political subdivisions and electric utilities when they enter into a contract allowing use of utilities’ easement land for recreational use has gone to the governor.

In practical terms, the bill allows for a subdivision to contract with an electric utility to use easements for hike and bike trails, for example.

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By Mike Shiloh

May 30, 2017

Texas Electricity Grid Security Bill Dies In Legislature

 

HB 787 from District 61 Representative Tan Parker would have tasked a committee to consider security risks and recommend changes to increase electricity generation and transmission security.

The bill never left the Senate Business and Commerce committee, where it was assigned in mid-May.

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By Mike Shiloh

May 30, 2017

Super-Majority Mineral Rights Bill Fails

 

A controversial bill by District 8 state Senator Van Taylor (SB 177) calling for a super-majority of adjacent Texas private landowners to allow permission for some oil and gas drilling has died in the legislature.

Taylor, incidentally, is rumored to be interested in running for the US representative seat being vacated by Plano-area Republican Sam Johnson.

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By Mike Shiloh

May 30, 2017

Controversial Air Pollutant Public Notice Revamp Awaits Governor’s Signature

Permitting potential polluters simplified; pubic input period is not

 

A law passed by the Texas Legislature allowing the consolidation of public notice requirements for the construction of air polluting structures is on the governor’s desk.

District 30 state Senator Craig Estes‘ SB 1045 allows a company applying for a simple and routine permit from the Texas Commission on Environmental Quality to build a facility that could emit air contaminants to shorten the public notice period, thereby speeding up the permit process, and the bill’s intent is to make public comment on those permits more informed and efficient.

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By Mike Shiloh

May 30, 2017

Governor Signs Electric Utility Rate Review Law

 

Governor Greg Abbott has signed into law a requirement that the Texas Public Utility Commission set up a rate schedule for electric utilities (other than a river authority) that are entirely inside the Electric Reliability Council of Texas.

The rate schedule would be set up by a deadline of June 1, 2018.

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By Mike Shiloh

May 30, 2017

Governor Gets the Tax-Free Fuel Tax Bill

Gasoline or diesel has to keep moving out of state to avoid state taxes

 

Governor Greg Abbott has received District 18 state Senator Lois Kolkhorst‘s bill (SB 1557) requiring a person or company to report to the state Comptroller any “tax-free” sale of gasoline or diesel fuel under sales-for-export provisions of the tax code.

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By Mike Shiloh

May 30, 2017

House Bill on Central Reports Dies In Legislature

 

A bill (HB 2305) requiring state agencies to post reports on The Texas Digital Archive; agency websites (including the PUC and RRC) has died in the legislature.

It was an attempt at more transparent government reporting; the public would have had access to the majority of state reports online in a central place.

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By Mike Shiloh

May 30, 2017

Oil and Gas Private Land Open-Space Tax Bill Hits Gov’s Desk

 

Texas landowners who add oil and/or gas leases will still be eligible for exemption from ad valorum appraisal procedures in all cases if Governor Greg Abbott signs HB 3198, a bill passed by the state legislature last week.

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By Mike Shiloh

May 30, 2017

Governor Gets Revised Texas Earthquake Monitoring Committee Bill

TexNet oil and gas representation expands

 

The re-authorization and revamping of the TexNet Technical Advisory Committee is awaiting Governor Greg Abbott’s signature.

TNAC is an advisory group made up of nine members to prepare reports on the state’s seismic activity, especially with respect to the activity’s possible relationship with oil and gas operations.

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By Mike Shiloh

May 30, 2017

Texas “Ike Dike” Legislation Goes to Governor

State-appointed group would look into building hurricane barriers along Gulf Coast

 

The governor of Texas is expected to sign a bill authorizing a committee to study the “feasability and desirability” of a barrier system along the Texas coast that would protect coastal residents and businesses such as oil refineries.

Governor Greg Abbott has received the bill.

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By Mike Shiloh

Earlier stories from The Texas Energy Report:

May 30, 2017

Camber to San Antonio: Cost Cutting

Camber Energy Inc. — formerly Lucas Energy — has a new Chairman of the Board in Fred S. Zeidman, replacing Richard N. Azar II, who will remain on the board as the company undergoes cost cutting.

Part of that budget-slashing includes a move of company headquarters from Houston to San Antonio and outsourcing some back office functions.

Zeidman has a reputation for company turnarounds, having guided Houston-based onshore and offshore seismic data provider Seitel Inc. through a $300 million reorganization; he joined Camber’s board in 2013.

He’s also chairman of the Gordian Group, an investment and advisory bank.

Anthony N. Schnur is president, CEO and director.

Camber bought assets in Oklahoma from Segundo Resources of San Antonio last year and bought more than 3600 acres in the San Andes formation in the Permian Basin earlier this year, which the company says it intends to develop.

Camber has taken on professional fees and added staff because of the Segundo purchase and is considering the renegotation of loan agreements.

By Mike Shiloh

May 26, 2017

Sitton: American Energy Disrupts OPEC’s Influence

By Railroad Commission of Texas Commissioner Ryan Sitton

The OPEC cartel’s plan to continue its production cuts for nine more months means that two worlds — energy and politics — are once again colliding. Energy observers today are feverishly trying to anticipate what will happen with the basic cost of energy, which has the ability to upset manufacturing capabilities, trade practices, and even entire economic markets. With all the uncertainty, one thing is clear. American energy production is disrupting OPEC plans and influencing energy prices more than it has in a generation.

As a Texas energy regulator, I am often asked about the impact of Texas oil and gas on the rest of the world’s oil activities. Throughout my 20 years as an engineer working in the energy industry, I’ve had the opportunity to travel all over the world and witness Texas’ influence firsthand.  Today, one quarter of all U.S. oil output comes from the Permian Basin, and projections show that number will continue to rise.. On May 25 we watched as the advances of the shale producers in Texas and the U.S. forced the hand of the OPEC nations – and they extended cuts to support prices.

So what can we glean from the cartel’s action? First, OPEC nations are indicating that they believe the market can come into supply and demand balance based on existing production levels. Second, it appears that OPEC countries are accepting the current price environment. Last and most notably, OPEC nations are beginning to bump up against their limits in controlling prices.

What that means for Texas oil and gas producers is that there’s more global demand that they can fill at current pricing levels. Energy exports of oil, liquefied natural gas, chemicals and refined products hold enormous opportunities for our country.

America’s energy exports have increased 334 percent in just the last 10 years, and our energy is being used to lessen the influence of Russia in Europe and provide cleaner burning energy for countries like China, South Korea, Mexico, Jordan, Pakistan, Turkey, Dominican Republic, Thailand, Kuwait and Chile. For all of the political posturing around energy, the market forces in the United States are competing head to head with the conglomerate forces in the rest of the world. The days of OPEC using oil supplies and prices as a political weapon are dwindling. More specifically, while they still have the ability to push prices down, they are losing the ability to push them up. Now those countries, along with non-OPEC participating countries like Russia, are going to have to decide how to fund their lavish governments on the basis of a commodity whose price they no longer control.

Less OPEC oil on the market enhances the opportunity for American energy to fill needs around the world, and will help us achieve energy dominance, which means producing more energy than anyone else and using that energy to enhance our economic and national security.

By TRRC Commissioner Ryan Sitton

May 26, 2017

PEC Launches Quick-Response Network System

California digital logistics company Trimble Inc. says the Pedernales Electric Cooperative is now using Trimble’s latest electricity network operational system.

 

Trimble says its Distribution Management System ties together the central electricity distribution network with a quick response system for outages and service restoration with enhanced communications among engineers and repair crews.

Pedernales’ wide system of more than a quarter million customers — the largest electric co-op in the nation — has its share of outages in Central Texas storms, and PEC’s VP of Engineering and Energy Innovations Brad Hicks said the new system “enables PEC to more proactively respond to outages and engage with our members, giving them the critical information they need.”

By Mike Shiloh

Texas Energy Report NewsClips

July 17, 2017

Lead Stories

Wall St. Journal

July 16, 2017

From $2 Billion to Zero: A Private-Equity Fund Goes Bust in the Oil Patch

A $2 billion private-equity fund that borrowed heavily to buy oil and gas wells before energy prices plunged is now worth essentially nothing, an unusual debacle that is wiping out investments by major pensions, endowments and charitable foundations. EnerVest Ltd., a Houston private-equity firm that focuses on energy investments, manages the fund.

The firm raised and started investing money in 2013, when oil was trading at more than double the current price of about $45 a barrel.

But the fund added $1.3 billion of borrowed money to boost its buying power.

That later caused it trouble when oil prices tumbled. Now the fund’s lenders, led by Wells Fargo WFC -1.10% & Co., are negotiating to take control of the fund’s assets to satisfy its debt, according to people familiar with the matter. … The outcome will leave investors in the 2013 fund with, at most, pennies for every dollar they invested, the people said. At least one investor, the Orange County Employees Retirement System, already has marked its investment down to zero, according to a pension document.

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Weatherford Democrat

July 14, 2017

State emissions oversight questioned by new report

The state’s environmental watchdog disputes the findings, but a new report says the agency let industries foul Texas air for five years, with penalties so low that it may have paid to pollute. The Texas Commission on Environmental Quality levied penalties on less than 3 percent of illegal air pollution releases during industrial malfunctions — events that emitted more than 500 million pounds of pollutants, including benzene, which can cause cancer below the odor threshold — between 2011 and 2016, according to “Breakdowns in Enforcement.” “We had the general idea that TCEQ did not have a very strong enforcement record,” said Luke Metzger, director of Environment Texas and co-author of the report. “A lot of this has been anecdotal. Now we know.” Because the report, based on analysis of state records by the Environmental Integrity Project and Environment Texas, covers a five-year period, Metzger said it doesn’t simply reflect occasional lapses.

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Associated Press

July 13, 2017

Gasoline thieves out of control, and deadly, in Mexico

TEPEACA, Mexico — The police officers gripped their assault rifles tightly as they stared at the men filling plastic tanks and loading them onto a dozen pickup trucks in a cornfield in central Mexico. Even though a crime was being committed in front of them, the officers said it was too dangerous to move in. They had to wait until the army arrived to advance because the suspects were better-armed than they were and an earlier attempt to arrest them had been repelled by gunfire, officials said. “In the morning there were 40 trucks loading,” said Francisco, a security employee with the state oil company Petroleos Mexicanos, or Pemex, who asked that his last name not be used for safety reasons. “We saw them loading, we went in, and they started shooting at us. The criminals had an armored car.” The suspects weren’t cartel traffickers loading a drug shipment, but gasoline thieves tapping a state-owned pipeline — a form of organized crime that is growing in Mexico and has led to a series of deadly encounters. Fuel theft in Mexico used to be a few villagers drilling holes in pipelines and carrying away the gasoline in jugs. But the heavy arms and violence seen in Tuesday’s confrontation in Puebla state reflect its growth into a billion-dollar business that supplies not just the people selling gas on the sides of highways — called “huachicoleros” — but factories and gasoline station chains.

This article appeared in The Clark County Columbian (WA)

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Bloomberg

July 14, 2017

Renewable Energy Not a Threat to Grid, Draft of U.S. Study Finds

Wind and solar power don’t pose a significant threat to the reliability of the U.S. power grid, Energy Department staff members said in a draft report, contradicting statements by their leader Rick Perry. “The power system is more reliable today due to better planning, market discipline, and better operating rules and standards,” according to a July draft of the study obtained by Bloomberg. The findings — which are still under review by the department’s leadership — contrast with Perry’s arguments that “baseload” sources such as coal and nuclear power that provide constant power are jeopardized by Obama-era incentives for renewable energy, making the grid unreliable. “I’ve asked the staff of the Department of Energy to undertake a critical review of regulatory burdens placed by the previous administration on baseload generators,” Perry said last month. “Over the last several years, grid experts have expressed concern about the erosion of critical baseload resources.” Play Video Perry: Regret Calling for Elimination of Energy Dept.

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Houston Chronicle

July 14, 2017

Pipeline projects caught up in Washington “dysfunction”

Billions of dollars in gas pipeline projects face the prospect of substantial delays, as attempts to fill critical positions on the Federal Energy Regulatory Commission fall prey to a political inertia that has overtaken Washington in recent months. With health care and the investigation into the Trump campaign’s contact with Russia sucking up the capital’s oxygen – and Republicans and Democrats increasingly at odds – nominations to federal posts have slowed to a virtual crawl. The situation is particularly dire at FERC, which must give approval before construction can begin on any natural gas pipeline that crosses state lines. For the past five months, the five-member commission has not had the minimum three commissioners required for a vote – a first in its more than 40-year history. That has resulted in a dozen pipeline projects, including those of Houston’s Spectra Energy and Tulsa’s Williams Co., getting put on hold while executives await final approval from FERC before beginning construction. “We’ve never had a situation like this before, with such an acute backlog,” said David Holt, president of the Consumer Energy Alliance, a trade group representing energy consumers and producers.

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Salon

July 16, 2017

Is Putin funding anti-fracking groups? Republicans think so — and so did Hillary Clinton

One person who appears to believe that the Russians are interested in stopping oil and gas extraction via fracking, in fact, is Hillary Clinton herself. In a private, paid speech delivered in Canada on June 18, 2014, the former secretary of state denounced “phony environmental groups” she claimed had been created by Russia to oppose fracking. “We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, oh that pipeline, that fracking, that whatever will be a problem for you, and a lot of the money supporting that message was coming from Russia,” Clinton said, according to an excerpt from the speech created by her presidential campaign staffers. It is unclear what region of the world Clinton was discussing, since the full text of her speech has never been made available by Clinton or by tinePublic, the Canadian marketing firm that paid her to deliver it.

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Oil & Gas Stories

Reuters

July 13, 2017

Trump administration reduces royalty rates in first U.S. oil, gas lease sale

The Trump administration on Thursday announced its first offshore oil and gas lease sale, offering 76 million acres (30 million hectares) in the Gulf of Mexico and reduced royalty rates for shallow-water leases to encourage drilling at a time of low oil prices. U.S. Interior Secretary Ryan Zinke said the sale on Aug. 16 would offer leases offshore Texas, Louisiana, Mississippi, Alabama and Florida for exploration and development. The sale will be the first of the administration’s 2017-22 National Outer Continental Shelf Oil and Gas Leasing Program. Zinke signed an order last week to hold more lease sales and speed up approvals of permits to explore for oil and gas, a process he said got bogged down under former President Barack Obama.

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CNBC

July 17, 2017

Oil prices firm on signs of US production slowdown

Brent crude futures, the international benchmark for oil prices, were at $49.08 per barrel at 0126 GMT, up 17 cents, or 0.35 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $46.70 per barrel, up 16 cents, or 0.34 percent. Both crudes extended gains from a strong previous week. Traders and analysts said the rising prices were a result of strong demand as well as signs that a relentless climb in U.S. oil production was slowing down. “Last week’s strong draw on U.S. oil inventories was supported by comments from the IEA that demand is growing stronger than they had initially estimated … The relentless climb in drill rigs operating in the U.S. also subsided,” ANZ bank said on Monday.

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Houston Chronicle

July 16, 2017

Apache’s Alpine High won’t use more water than a typical farm, researcher says

Apache Corp. might not use much more water in its oil and gas operations than a mid-sized farm. The Houston oil production company announced last year that it had discovered a vast new oil and gas field in southern Reeves County, surrounding the small town of Balmorhea and its famous spring-fed pool. It named the find Alpine High. Soon after the announcement, some residents and conservationists there began protesting the development, worried about the impact of oil and gas drilling on their water and land. But a new white paper from Rice University suggests Apache’s operations will use the same amount of water as some of the farms in the area. And not necessarily even very big ones.

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Austin American-Statesman

July 16, 2017

Pipeline resumes normal operations after Bastrop County oil spill

The Longhorn pipeline resumed normal operations on Sunday after a contractor last week struck a fitting, releasing 50,000 gallons of crude oil into a residential and commercial area in southwestern Bastrop County. According to Magellan Midstream Partners, which owns the pipeline that carries crude oil from West Texas to Houston, the section that was damaged on Thursday has been repaired. Normal operations resumed on Sunday at 11 a.m. Cleanup efforts are ongoing in Bastrop County. On Friday, Magellan reported it had safely recaptured all the spilled oil and was working to replace the affected soil.

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Houston Chronicle

July 14, 2017

Ensco leads way as offshore drilling bottoms out

The struggling offshore energy sector may have finally bottomed out, analysts said, with Ensco leading the rebound by winning several new West African drilling contracts. Lond0n-based Ensco, which has its operational headquarters in Houston, said it won deepwater drilling contracts with “Big Oil” giants like Chevron, Royal Dutch Shell and Paris-based Total offshore of Nigeria and the Ivory Coast. “We believe that this new work positions us well for follow-on opportunities, benefiting future utilization for our rig fleet,” said Ensco CEO Carl Trowell. Ensco also is leading in industry consolidation with its pending acquisition of Houston’s Atwood Oceanics, another deepwater drilling player.

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San Antonio Express News

July 14, 2017

Abraxas Petroleum deal adds to its Permian acreage

San Antonio-based oil and gas driller Abraxas Petroleum Corp. said Friday it will add to its acreage in the Delaware Basin, part of the Permian Basin oil field in West Texas. The deal, worth $4.3 million in cash and 2 million shares of Abraxas stock, is for 853 acres net to the company after partners are paid, and is producing 130 barrels of oil equivalent per day, a measure that includes oil, natural gas liquids and natural gas. The deal is expected to close in August, and adds to the1,894 net acres the company purchased in May for $20.9 million.

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KUOW

July 14, 2017

Lamar Smith Says Russians Are Plotting To Hack U.S. Fracking Industry

U.S. Rep. Lamar Smith is on a mission to uncover what he calls “Russia’s propaganda war against fossil fuels.” The Republican congressman whose district includes parts of San Antonio, the Hill Country and Austin, said as much in a recent letter to Treasury Secretary Steven Mnuchin. Smith tells the Texas Standard that the House Committee on Science, Space and Technology, which he chairs, is calling for an investigation into the possibility that Russia secretly funneled money to environmental groups in the U.S. in order to fund their opposition to fracking, and to destabilize the domestic oil and gas industry. … Smith alleges that tens of millions of dollars went to U.S. environmental groups through a shell company in Bermuda, naming the Sierra Club as one of the beneficiaries. But Smith’s claims have not been substantiated and his letter to Secretary Mnuchin merely tries to make the case for possible ties between Russia and those groups. “We’ve asked the Treasury department to investigate because we cannot get access to the mail transfers — that’s out of our jurisdiction,” he says.

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Huffington Post (HuffPost)

July 15, 2017

Dakota Access Company Cozied Up To Ohio Officials. Then A Pollution Nightmare Began.

For Energy Transfer Partners, the Texas-based company behind the Dakota Access Pipeline, Feb. 23 was a good day. After months of waging a public and at times bloody battle with protesters bivouacked outside its construction site in North Dakota, law enforcement officers razed the encampment and arrested the holdouts. Meanwhile, roughly 1,700 miles east, the company completed the final edits requested by regulators to its application to start building the Rover natural gas pipeline, a $4.2 billion project through Ohio. That project had sailed through the permitting process, and these markups would be its last. Project manager Buffy Thomason wanted to extend thanks to the Ohio Environmental Protection Agency, so she emailed the firm’s lobbyist in the state, Art Arnold, that evening. “It’s awesome,” she wrote in an email, which was obtained by HuffPost. “It’s such a beautiful thing. Please tell your contact how much we appreciate their help.” The emails, released this week to Greenpeace through a Freedom of Information Act request, depict a $22 billion firm which until recently boasted President Donald Trump as a shareholder and Energy Secretary Rick Perry as a board member comfortably exerting influence over a state agency charged with policing its activities. But just a few months after those emails were sent, Energy Transfer Partners and the state officials became embroiled in a vicious public fight over a massive drilling fluid spill and construction pollution.

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Oil Price

July 13, 2017

Cunningham: ‘’Oil Market Rebalancing Hasn’t Even Started Yet’’

Global oil production surged in June “as producers opened the taps,” according to a new report from the International Energy Agency (IEA). OPEC was a major culprit, with Libya and Nigeria doing their best to scuttle the production cuts made by other members. But it wasn’t just those two countries, who are exempted from the agreed upon reductions. OPEC’s de facto leader, Saudi Arabia, also boosted output by an estimated 120,000 bpd in June, from a month earlier. That put Saudi production above 10 million barrels per day (mb/d) for the first time in 2017. Those gains, combined with the 80,000 bpd increase from Libya and a 60,000 bpd jump from Nigeria, plus some smaller contributions from Equatorial Guinea, put OPEC’s June production 340,000 bpd higher than in May. It also took the cartel’s compliance rate down to just 78 percent from 95 percent in May, the worst monthly figure for the group since its deal came into force at the start of the year. Even worse, the production figures from Libya and Nigeria are much higher at this point than their June average.

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Bloomberg

July 16, 2017

Oil Skeptics Let a Little Sunshine In

After the worst June for oil in six years, hedge fund bets on declining West Texas Intermediate retreated. That made room for futures to rebound more than 5 percent last week on optimism that the summer will finally boost demand for crude and gasoline. “The market is starting to recognize that demand is a little better than what has been the consensus view so far this year,” Matt Sallee, who helps manage $16 billion in oil-related assets at Tortoise Capital Advisors in Leawood, Kansas, said by telephone. While doubts persist that the Organization of Petroleum Exporting Countries and its allies will manage to bring the oil market back to balance anytime soon, the mood improved as the International Energy Agency said world demand is climbing faster than initially estimated. Meanwhile, Libya and Nigeria may be asked to join the other members of OPEC in capping output, according to Kuwait’s oil minister. In the U.S., data from the Energy Information Administration showed crude and gasoline stockpiles shrinking.

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Houston Chronicle

July 14, 2017

Linn Energy forms Blue Mountain Midstream

Houston’s Linn Energy is changing the name of its pipeline subsidiary from Linn Midstream to Blue Mountain Midstream and starting to build up its Oklahoma asset base. Linn said Blue Mountain is working with BCCK Engineering to construct the Chisholm Trail Cryogenic Gas Plant to help with the extraction, treatment and processing of gas hydrocarbons in the growing Oklahoma oil and gas shale plays. The project will build on Linn’s existing Chisholm Trail gathering and treatment network. Linn was the largest company to file for bankruptcy during the oil bust, emerging from Ch. 11 in February and changing the business from a growth-oriented master limited partnership structure to a traditional corporation. Linn came out of bankruptcy after clearing away $5 billion in debt and parting ways with Berry Petroleum, the Denver-based oil company it had bought for $4.3 billion.

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Seeking Alpha

July 14, 2017

Small Cap Detective: Billionaire T. Boone Pickens Quietly Buying Enterprise Products Partners

T. Boone Pickens is one of the best energy investors on Earth, and right now he’s quietly accumulating a position in one little-known pipeline company – Enterprise Products Partners LP (NYSE:EPD). The oilman made a fortune in the energy patch; first as a wildcatter through the 1960s, then as a corporate raider in the 1980s, and most recently as a trader through his hedge fund BP Capital. For this reason, I always watch where he’s putting new cash to work. And right now, he’s making some big bets on pipelines. In recent quarters, the billionaire has increased his positions in names like Kinder Morgan, Inc. (NYSE:KMI), Williams Partners L.P. (NYSE:WPZ) and Energy Transfer Partners, L.P. (NYSE:ETP). He’s also backing up the truck on a new position: a 331,000 share stake in midstream giant Enterprise Products Partners.

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The Cable

July 15, 2017

US to seize $144m assets acquired through Diezani’s ‘shady contracts’

The US government has filed a suit to recover $144 million in assets which were purportedly acquired with proceeds from a shady scheme in Nigeria’s oil industry. The suit was filed by the US justice department’s kleptocracy asset recovery initiative. Kola Aluko and Jide Omokore were said to have paid bribes between 2011 and 2015 to Diezani Alison-Madueke, Nigeria’s former minister of petroleum, in exchange for contracts. Diezani reportedly used her position to secure contracts for Aluko and Omokri’s shell companies through a subsidiary of the Nigerian National Petroleum Corporation (NNPC). Although failing to abide by the terms of the contracts, the companies were reportedly allowed to sell $1.5 billion worth of Nigerian crude oil. According to the suit filed on Friday in Houston, Texas, proceeds of the contracts were laundered through the US.

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Utilities Stories

KFOX

July 14, 2017

High electric bills this month shock customers

El Paso — You may be in for a shock when you open up your electric bill this month. After last month’s triple-digit temperatures and the long-lasting heat wave, residents this month are finding their electric bills to be higher than they ever could have imagined. “I have noticed,” said Daniela Lizarraga. As a resident of the Sunset Heights district, she lives in an apartment with very limited amount of stuff. “I don’t have a TV or computer,” she said, “so it wasn’t too bad of a shock. Usually my bill is about $20 a month, and I think this month it increased to about $32.” But some residents are noticing their bills reflect the current temperatures. Bills are ranging from $90 to as high as $150. We even found one resident whose bill showed $211 worth of electricity used last month alone.

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Dallas Morning News

July 16, 2017

Schnurman: If Warren Buffett’s billions meet Oncor’s wish list, here’s how Texas stands to gain

It must be nice to imagine the future when Warren Buffett wants to be your benefactor. The energy unit of Buffett’s Berkshire Hathaway Inc. recently agreed to buy Oncor Electric Delivery Co. for $18 billion, including debt. Buffett may be best known for investments in Geico Insurance, BNSF Railway, Coca-Cola and American Express. But his energy unit is also a major player in utilities, serving over 11 million electric and gas customers.

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Townhall

July 13, 2017

Avery: Is Warren Buffet Buying Our Fossil-Fueled Future?

Warren Buffett is offering $9 billion to buy Texas-based Oncor, the largest power company in Texas (Wall Street Journal, July 12, 2017). Why does Buffett want it? Because he sees fossil fuels as radically underpriced assets around the world. Remember that his Burlington Northern railroad, purchased mostly in 2010, has since doubled in value, hauling cargoes of Wyoming coal for export and Dakota shale oil and gas west for refining. Famous for taking the long view, he sees fossil fuels as a far bigger part of his Berkshire-Hathaway empire’s future. Three years ago, Energy Future bought Oncor, betting natural gas prices would rise; instead, gas prices fell. Energy Future filed for bankruptcy and Oncor came back on the market. Buffett first and foremost sees the horrendous costs and erratic nature of wind and solar. That makes them non-competitive in the long-term, despite their current (but fading) subsidies. With Trump in the White House for the next four years, Buffett won’t have to worry about the state of Texas forcing him to buy subsidized wind or solar.

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San Antonio Express News

July 14, 2017

New Braunfels Utilities testing drones to inspect power towers

A new era in infrastructure inspection took flight Friday for the local electricity retailer. New Braunfels Utilities has hired Surveying and Mapping to inspect about 250 power poles along roughly 5 miles of distribution lines using a drone that’s equipped with both regular and infrared cameras. It’s a job normally done by workers in elevated buckets. The $35,000 trial run is expected to wrap up in about a week. “Their general plan is to fly along, around, and above NBU’s distribution poles and lines which are roughly 40-50 feet tall,” NBU spokeswoman Gretchen Reuwer said in a release alerting local residents to the drone flights. She added that the flights would comply with FAA rules. Video taken by the Austin firm’s $60,000 “unmanned aerial system” will be analyzed to yield a report that identifies issues such as loose connections, leaking oil, rust and deterioration, as well as pinpointing any hot spots through thermal imaging.

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Utility Dive

July 11, 2017

‘Steel for fuel’: Xcel CEO Ben Fowke on his utility’s move to a renewable-centric grid

Even for veterans of the power sector, the pace of the energy transformation can astound. “If I were talking to you 10 years ago, I don’t think I’d be telling you that I think solar is competing with fossil,” said Ben Fowke, CEO of Xcel Energy. “I wouldn’t tell you that wind is beating fossil. I am telling you that now.” Fowke’s utility company serves more than 3 million electricity customers across eight states from Michigan to New Mexico. Last week, Minnesota regulators approved a portion of Xcel’s wind energy expansion in the upper Midwest — a total investment of 1.55 GW of wind that also includes Iowa and the Dakotas. That plan is part of a larger Xcel initiative to add more than 3 GW of wind across its service areas in the coming years.

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Alternatives & Renewables Stories

Quartz

July 14, 2017

Long before the combustion engine, the hybrid car is facing obsolescence

Hybrid cars are becoming the VCR/DVD-combo players of the automotive world. Just 2% of US auto sales last year were of cars with both electric motors and internal combustion engines, according to a report published this month by New York-based consulting firm AlixPartners. That’s down from a peak of 3.1% in 2013. So what’s behind the drop in demand? Technology. Hydraulic fracturing (aka fracking), a drilling method that led to a boom in US oil- and natural-gas production, has driven down the cost of gasoline. Prices at the pump are currently just $2.40 a gallon, according to the US Energy Information Administration, a government statistics agency, a decline of nearly 35% since 2013. Cheap gas has also rekindled Americans’ love of trucks and SUVs.

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Inside Sources

July 13, 2017

Department of Energy Invests Additional $46M in Struggling Solar Energy Sector

When it comes to solar power, the forecast seems only partially sunny. The industry has long benefitted from federal subsidies, but the future of these programs is uncertain. On Wednesday, the Department of Energy announced that it was investing $46.2 million in 48 solar energy projects as part of its SunShot Initiative. The timing of the investment is somewhat unusual, though, since the industry has struggled in recent years. Investor interest in solar energy companies has been declining for several years, the result of a slew of major bankruptcies and overall difficulty bringing the technology successfully to market. “The SunShot Initiative is a proven driver of solar energy innovation,” SunShot Initiative Director Charlie Gay said. “These projects ensure there’s a pipeline of knowledge, human resources, transformative technology solutions, and research to support the industry.” The SunShot program began in 2011 and has a goal of making solar energy cost-competitive with traditional energy by 2020.

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WTVJ

July 16, 2017

South Miami Set to Become First City in Florida to Require Solar Panels on New Homes

South Miami is set to become the first city in Florida to mandate solar panels on new homes. On Wednesday, the City Commission approved the ordinance on a second reading, in a 4-1 vote. The new law would require owners of new homes — including single-family homes, townhouses and multi-story residential buildings — to install solar panels. It also applies to owners who expand their homes by 75% or greater. Once the measure is passed, South Miami would become the fourth U.S. city that requires new homes to be installed with solar panels. San Francisco and two small cities in California have similar renewable energy building laws. Source: South Miami Set to Become First City in Florida to Require Solar Panels on New Homes | NBC 6 South Florida http://www.nbcmiami.com/news/local/South-Miami-Set-to-Become-First-City-in-Florida-to-Require-Solar-Panels-on-New-Homes-434557443.html#ixzz4n3r7ObSr Follow us: @nbcmiami on Twitter | NBCMiami on Facebook

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Regulatory Stories

Law 360

July 13, 2017

Texas Sen. Taps New Attys For Securities Fraud Defense

State Sen. Carolos Uresti, D-San Antonio, who is also an attorney, has retained additional counsel to defend him against securities fraud charges tied to a fracking sand company after a federal magistrate judge ordered his original counsel disqualified because of a conflict of interest. After a hearing Monday, U.S. Magistrate Judge Henry J. Bemporad disqualified Mikal Watts of Watts Guerra PLLC from representing Uresti, but stayed the order until Aug. 7, giving Watts time to appeal the decision. That same day, Tab Turner of Turner & Associates PA filed notice that he was joining Uresti’s defense team, and then on Tuesday Darrell Barger of Hartline Dacus Barger Dreyer LLP joined as well. Uresti is accused of convincing a former client, Denise Cantu, to invest settlement proceeds from a lawsuit against Ford Motor Co. into FourWinds Logistics LLC, a now-bankrupt company formed at the peak of the oil boom to buy and sell sand used in fracking operations. Prosecutors say Uresti had referred Cantu to Watts for representation in the Ford case with a fee-sharing agreement that provided Uresti would receive 40 percent of any attorneys’ fees paid by Cantu in that case.

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Buzzfeed

July 14, 2017

This Congressman Doesn’t Think Climate Science Is Real. He Just Went On A Secret Tour Of The Melting Arctic.

Lamar Smith, one of the most vocal critics of climate science in Congress, led a secret trip to the Arctic in May, BuzzFeed News has learned. He and at least eight other US representatives, mostly members of the House Committee on Science, Space, and Technology, met with scientists working on the front lines of climate change. It had the potential to be an awkward or even hostile visit. As chair of the science committee for the past four years, Rep. Smith of Texas has waged a public war with federal climate scientists, or “so-called self-professed climate scientists,” as he called them in March. He’s challenged their research and integrity, repeatedly subpoenaed their emails, and voted to gut their funding.

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San Antonio Express News

July 16, 2017

SAEN: Regional funding needed to monitor air quality

With a stroke of his veto pen, Gov. Greg Abbott wiped out a bunch of air quality monitors here and in other cities across Texas. Places where the air is hard to breathe and good monitoring is crucial to good policy. It was a regrettable and shortsighted decision, as unsurprising as it was unfortunate. After all, Texas politicians have a long track record of making poor decisions when it comes to the health and well-being of their constituents. Just by way of example, consider how it took years for lawmakers in Austin to pass a law to ban texting while driving even though the combination kills hundreds of Texans each year. Abbott signed that bill into law, and then promptly announced a desire to get rid of tougher local bans.

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Natural Gas Intelligence

July 13, 2017

Perry, in Mexico, Calls For Smoother Nat Gas Permitting

Department of Energy (DOE) Secretary Rick Perry told his Mexican counterpart on Thursday that he wants to streamline the permitting process for cross-border energy infrastructure, including natural gas pipelines, calling them “absolutely vital facilitators of energy trade.” Speaking alongside Mexico Secretary of Energy Pedro Joaquin Coldwell at a bilateral meeting in Mexico City, Perry said the two countries have started discussions to create a North American energy strategy that would include Canada. The former Texas governor also lauded Mexico, which is the United States’ second-largest energy trading partner after Canada.

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Utility Dive

July 13, 2017

Senators introduce bipartisan bill to support carbon capture and utilization

A bipartisan bill to boost the troubled carbon capture and storage industry already has the support of more than two dozen U.S. senators. Introduced Wednesday, the Carbon Capture and Utilization Act of 2016 would extend and increase tax credits for power generators and industrial facilities that capture and sequester their carbon, as well as for carbon utilization — the conversion of carbon dioxide into useable products and fuels. The bill would provide a $50 tax credit for every metric ton of carbon stored underground and $35 per ton for carbon utilized for purposes such as enhanced oil recovery. Currently, credits of $20 and $10 per ton are offered for capture and utilization, respectively.

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The Hill

July 13, 2017

Trump taps industry lawyer to lead energy commission

President Trump is planning to name an energy industry attorney to lead the Federal Energy Regulatory Commission (FERC). Trump announced the pick of Kevin McIntyre for FERC late Thursday. McIntyre is the co-head of the energy practice at Jones Day, a global law firm that has sent numerous attorneys to the Trump administration, including White House counsel Don McGahn. McIntyre, a Republican, has represented energy industry clients on a number of matters ranging from compliance and enforcement to trading, exports, marketing and more. If confirmed by the Senate, McIntyre would lead an agency responsible for overseeing the nation’s power grid, approving interstate projects like pipelines and transmission lines and regulating bulk power distribution, among other tasks.

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Austin American-Statesman

July 14, 2017

Warren Buffett’s battle over Texas auto law could hinge on technicality

Is it possible to own a company without controlling it, or even being “affiliated” with it? That’s the fine point of corporate governance state officials and Warren Buffett’s Berkshire Hathaway Inc. are debating and weighing. The issue stems from Berkshire Hathaway’s efforts to maneuver around a state law that has jeopardized the conglomerate’s ongoing operation of nearly three dozen Texas car dealerships because it also owns a company that manufactures recreational vehicles, Indiana-based Forest River Inc. State law prohibits a motor vehicle manufacturer from also owning dealerships, even if the vehicles aren’t of the same type. However, the law defines a “manufacturer” as someone “affiliated with” a manufacturer or “controlled by” a manufacturer. That has constituted enough potential wiggle room for Raymond Palacios Jr., board chairman of the Texas Department of Motor Vehicles, to request an opinion from Texas Attorney General Ken Paxton as to whether it’s possible for a company that wholly owns a motor vehicle manufacturer — in this case, Berkshire Hathaway’s ownership of Forest River — to “cease to be ‘affiliated with’ the motor vehicle manufacturer by relinquishing control of the manufacturer while maintaining ownership of it.”

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Dallas Morning News

July 14, 2017

Secretary of State Rex Tillerson: It was ‘easier’ being ‘ultimate decision-maker’ as Exxon chief

In the years that Secretary of State Rex Tillerson ran Exxon Mobil, the Texan sat at the top of a famously well-oiled corporate machine that relied upon what he describes as “very long-standing, disciplined processes and decision-making.” These days, though, he’s operating in a bit different environment. His boss, President Donald Trump, has sometimes contradicted his foreign policy pushes. Tillerson’s advice on key issues such as the Paris climate accord has sometimes been overruled. And he is still grappling with a bureaucracy he called “largely not a highly disciplined organization.”

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