The TER Buzz:

Offshore Platform Death Under Investigation

January 20, 2018

 

An oil and gas worker on a Talos Energy offshore oil and gas platform in the U.S. Gulf of Mexico was killed on Saturday while replacing piping, a federal regulator said Tuesday.

The US Dept of the Interior says there were no other injuries in the Saturday incident, which is under investigation, according to Reuters.

 

American Petroleum Institute Supports NAFTA Re-Do: Press Release

February 20, 2018

 

API President and CEO Jack Gerard released the following statement in advance of the seventh round of NAFTA negotiations, highlighting the energy and economic benefits of NAFTA, and urging the administration to retain critical protections for U.S. businesses.

“NAFTA has created a North American energy market that benefits American consumers, creates American jobs and promotes US national security interests,” said API President and CEO Jack Gerard.

“Ongoing negotiations to modernize NAFTA must advance our role as a global energy leader by retaining US access to Mexico’s newly-opened oil and natural gas market and providing strong protections, including Investor-State Dispute Settlement (ISDS), for these U.S. energy investments.”

According to API, today’s…
 

Leal TV Ad: “Kel Seliger’s Liberal History” (video)

February 20, 2018

 

Amarillo restaurant owner Victor Leal, a Republican challenging Kel Seliger in the three-way state senate District 31 primary race, has a new ad out characterizing Seliger as a “liberal.”

The district spans 37 counties across the Texas Panhandle, around Lubbock and over to Midland-Odessa and Big Spring.

Former Midland Mayor…

 

Texas Association of Manufacturers Concerned About ERCOT Balance, PUC Jurisdiction, Water Access

February 20, 2018

 

The Texas Association of Manufacturers (TAM) is out Tuesday with its “TAM Top Ten” list of policy priorities for 2018 and the 2019 session of the state legislature.

Among those on the list are two that pertain to the Electric Reliability Council of Texas (ERCOT): “Electric Reliability Council of Texas Governance and Stakeholder Process” and “Allowing Non-Texas Entities to Construct Transmission Outside of ERCOT” (with regard to PUC jurisdiction) — and one concerning the Texas Commission on Environmental Quality (TCEQ): “TCEQ funding.”

The TAM represents more than 500 large and small companies from every manufacturing sector, the association says.

President Tony Bennett said, “As early voting begins today, we urge all Texans to find out where their candidates stand on policies that can impact competitiveness and job growth in Texas.”

 

Concern About the Balance of ERCOT’s Governance

 

Regarding ERCOT Governance And Stakeholder Process, the TAM said, “As ERCOT’s role in electricity costs has increased, manufacturers are increasingly concerned with how ERCOT is governed and the dominance of entities (generators, power marketers, etc.) that benefit directly (i.e., financially) from ERCOT’s decisions.

“The current governance structure and process slants heavily in favor of these players.

“Moreover, the sheer volume of meetings and…
 

Stanford engineers develop a new method of keeping the lights on if the world turns to 100% clean, renewable energy

February 20, 2018

 

Researchers propose three separate ways to avoid blackouts if the world transitions all its energy to electricity or direct heat and provides the energy with 100 percent wind, water and sunlight. The solutions reduce energy requirements, health damage and climate damage.

 

By Taylor Kubota
Special to The Texas Energy Report

Renewable energy solutions are often hindered by the inconsistencies of power produced by wind, water and sunlight and the continuously fluctuating demand for energy.

New research by Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford University, and colleagues at the University of California, Berkeley, and Aalborg University in Denmark finds several solutions to making clean, renewable energy reliable enough to power at least 139 countries.

 

In their paper, published as a manuscript in Renewable Energy, the researchers propose three different methods of providing consistent power among all energy sectors – transportation; heating and cooling…

 

Texas Gulf Properties Integral In New Joint Venture

February 19, 2018

 

A Port Arthur ethane steam cracker and a Bayport plant are part of a newly-announced joint venture deal between affiliates of Total S.A., NOVA Chemicals Corp. and Borealis AG.

Total said Monday the JV includes a 50% share by Total, with the other two companies splitting the other 50%; otherwise financial arrangements were…

 

Noble Energy Deal With Delek To Supply Egypt Natural Gas In Political Milestone

 

In an anticipated move that still surprised those outside the oil and gas industry, Houston’s Noble Energy Inc. has completed a deal to join Israel’s Delek Drilling LP in supplying natural gas to Egypt.

The friendly arrangement between the two formerly hostile neighbors in the Middle East is seen as a political milestone in the troubled region.

Noble and Delek will supply more than 83 billion cubic…

 

Austin Solar Company Gets Ohio Project OK

February 20, 2018

 

Austin solar developer Open Road Renewables now has the green light to build a new solar farm in Ohio.

The Ohio Power Siting Board gave permit approval to the Hilcrest Solar Farm in Brown County just east of Cincinnati on Thursday, along with…

 

37% of U.S. Broadband Households are Highly Familiar With Backup Generators: Press Release

Speakers for the ninth-annual Smart Energy Summit include Austin Energy, Carrier, DTE, Mercedes-Benz, Nest, and many more

New energy researchannounced today by Parks Associates reveals 37% of U.S. broadband households are highly familiar with backup generators and 50% consider these energy products to be highly valuable.

The IoT research firm also notes that approximately one-third or more of U.S. broadband households see strong value in energy products such as solar heating panels, solar PV panels…

Railroad Commission Enforcement Actions Taken at Commissioners’ Feb. 13 Conference

February 15, 2018

The Railroad Commission of Texas assessed $384,615 in fines involving 231 enforcement dockets against operators and businesses at the Commissioners’ conference last week.

The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety.

One operator was assessed $18,100 in an oil and gas docket that went to hearing. The final order…

 

Defense Expected To Rest In Uresti, Cain Trial

February 15, 2018

The defense is expected to rest its case on Friday in the federal trial of Texas state Senator Carlos Uresti and his co-defendant Gary Cain.

Both are accused of felonies in what prosecutors say were attempts to bring investors into a failing oil field sand fracking company called FourWinds Logistics, which was formed in 2014 during the oil and gas boom but then went under in 2015.

Another defendant in…
 

Texas Leads Nation In Latest Proved Reserves

February 15, 2018

 

Texas is leading the nation in new proved reserves of crude oil and lease condensate, adding 941 million barrels between 2015 and 2016, according to new estimates from the US Energy Information Administration.

It’s annual review released Thursday said most of the Texas increase came from the Permian Basin.

Despite increases in Texas, though, proved reserves in the US overall were flat.

Looking ahead…

 

DOE Audit Slams Lax Obama-Era Oversight Of Texas Clean Energy Project: Report

February 15, 2018

 

The Texas Clean Energy Project is at the center of a new audit report from the US Department of Energy that found the company receiving federal money to build it used some of it for spas, alcohol, lobbying and other questionable expenses.

A report released Tuesday found that the Obama administration’s DOE’s Office of Fossil Energy was lax in its oversight of the $450 million grant awarded to Summit Power Group, which is now bankrupt…

 

Ferguson COO At Energy Hunter

February 15, 2018

 

H. C. Kip Ferguson III is the new president and COO at Energy Hunter Resources Inc.

The Irving-based E&P announced…

 

Equipment Maker Spawns Energy Company For the Woodlands: Report

February 15, 2018

 

Apergy Energy — a mix of the two words Apex and Energy — is coming to the Woodlands, according to the Houston Chronicle.

The company is completing a separation from industrial equipment maker Dover Corp. in May.

“Chicago-based Dover is…

 

Noble Asset Sale To Fieldwood Worth $750 Million — But Wait a Minute, Fieldwood Is Filing for Bankruptcy

February 15, 2018

 

Noble Energy Inc. is selling its deepwater assets in the Gulf of Mexico to Fieldwood Energy LLC in a deal between the Houston companies worth $710 million.

Noble said Thursday it plans to use some of the cash from the sale to pay for a $750 million share buyback program it expects to undertake over the next two years.

But Fieldwood said Thursday it’s filing for Chapter 11 bankruptcy, the Wall St. Journal said.

Turns out…

 

Reported NOV Target Laying Off 150 in Texas

February 14, 2018

 

An energy tubular products maker is laying of 150 employees in Texas.

Vallourec Drilling Products, a subsidiary of Paris, France-based steel pipe maker Vallourec SA, which keeps offices in Houston and Edmond, Oklahoma, has about 19,000 employees worldwide, according to a regulatory filing.

About 600 are employed in the company’s drilling…

 

Oil, Natural Gas Proved Reserves Increased In 2016

By Alex Mills
Proved reserves of onshore crude oil and natural gas in the U.S. increased in 2016, according to a report issued this week by the Energy Information Administration (EIA).

Crude oil proved reserves increased 3 percent and natural gas rose 5 percent compared to 2015, EIA stated.

Proved reserves are estimated volumes of hydrocarbon resources that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic…

 

Crude Stockpiles Up But Overall Petroleum Inventories Down: EIA

February 14, 2018

 

US commercial crude oil stockpiles continued an upward climb last week, up by 1.84 million barrels — the most since December, according to weekly data released Wednesday by the Energy Information Administration.

But the total inventory of petroleum dropped by 2.7 million barrels because of decreasing stockpiles of propane, propylene, distillates (down by 459,000 barrels), fuel…

 

Trump Endorses 25-Cent Gas Tax: Axios

February 14, 2018

 

The political website Axios claims President Trump gave his endorsement this morning to a 25-cent gasoline tax hike to pay for new infrastructure.

Axios says two sources confirmed it after a meeting this morning between…

 

Oil and Gasoline Stockpiles Way Up: API

February 13, 2018

 

Oil inventories for the week ending February 9th jumped nearly four million barrels when compared to the week before, according to Tuesday’s estimate from the American Petroleum Institute.

The API said US crude stockpiles were up 3.947 million barrels.

Some analysts…

 

Three Texas Coal-Power Plants Shut; Effects Widely Felt

February 14, 2018

 

Big Brown is shutting down.

The two-unit coal-fired electricity generation plant in Freestone County between Palestine and Corsicana began phasing out operations on Monday.

It’s the third of three Texas coal-power plants being shut down by Luminant, dropping more than 4,600 MW of power capacity in Texas, and the effects are being felt around the nation.

Because of related pollution, the Sierra Club estimates that the closing of Big Brown alone will save “an estimated 163 lives every year, prevent nearly 6,000 asthma attacks, prevent tens of thousands of lost work and school days, and save $1.6 billion in in annual public health costs, according to analysis conducted with EPA-approved air modeling.”

The other two plants, the Monticello about 130 miles east of Dallas and the Sandow Steam Electric Station in Milam County east of Round Rock, are already phasing out and ceased operations last month.

Coal-fired plants can no longer compete…

 

NYC Law Firm Brings O&G Lawyers To New Houston Office

February 14, 2018

 

New York-based White & Case, a firm with more than 2,000 lawyers and offices in 30 countries, has boosted its oil and gas practice by opening an office in Houston with lateral partners from big Texas firms.

The new office is led by partner James “Jay” Cuclis, who joined the firm on Feb. 8 from Vinson & Elkins.

Other partners in the new office…

 

Senator Estes Vs. Former Representative Fallon: He Doesn’t Even Live In Our District (video)

February 13, 2018

 

Five-term District 30 state Senator Craig Estes, facing strong opposition from former Rep. Pat Fallon of Frisco, has a new ad on television accusing the multimillionaire of dishonesty.

The two Republicans are hashing it out, with Nacona Republican entrepreneur Craig Carter, 39, who also manages a local food bank, also on the ballot.

Kevin Lopez is unopposed in the District 30 Democratic primary election.

Fallon, 50, has charged Estes with being insufficiently conservative.

In the latest ad, Estes counters:

 

Houston Firm Advises On Eagle Energy Sale of Caldwell County O&G Assets

February 13, 2018

 

With advice from Houston experts, Canada’s Eagle Energy Inc. is selling its oil and gas interests in Caldwell County, Texas to an undisclosed US buyer.

The sale of the Salt Flat Field assets is worth more than $26 million, a good price, Calgary’s Eagle Energy says, that will go to the bottom line.

In a statement, Eagle said its board arrived at the decision to sell after “carefully considering expert advice” from Houston-based advisory firm Detring Energy Advisors, retained by Eagle for consideration of the sale.

The firm specializes in midstream oil and gas acquisitions and divestitures.

Eagle said it plans to use the cash to reduce debt and fund North Texas drilling.

“This is a rare opportunity to capture nearly all our proved plus probable reserves value booked to this field at strip pricing,” Eagle President and CEO Wayne Wisniewski said about the deal.

“And the sales price is approximately 45% higher than what would have been realized only six months ago.”

 

Shell Agrees To $10 Million Louisiana Flaring Agreement

February 13, 2018

 

Shell Chemical LP agreed on Monday to spend approximately $10 million to reduce harmful air pollution from four industrial flares at a plant in Norco, Louisiana.

The agreement resolves claims that emissions from the Shell facilities violated the Clean Air Act as well as state law.

Shell has agreed to eliminate more than 150 tons of harmful air pollutants from its Norco chemical plant as part of a consent decree with the U.S. Department of Justice, the U.S. Environmental Protection Agency and the Louisiana Department of Environmental Quality, according to Law 360.

 

Court Refuses Appeal of $225 Million ExxonMobil-New Jersey Contamination Settlement

February 13, 2018

 

An appeals court refused on Monday to revisit a $225 million settlement between ExxonMobil and the state of New Jersey over environmentally contaminated sites and gas stations that the Irving-based oil company has been working to clean up.

The three-judge New Jersey appeals court ruled that the judge who originally heard the case — who at the time called it a fair and reasonable deal– was in the best position to approve the agreement.

The appeals court on Monday affirmed a superior court judge’s denial of a motion by onetime New Jersey state Sen. Ray Lesniak and several environmental groups to revisit a 2015 settlement decision.

The original 2015 settlement ruling culminated a long legal battle in which New Jersey demanded nearly $9 billion for damage to wetlands, marshes and waters at refinery sites once owned by Exxon at the cities of Linden and Bayonne.

Exxon has already spent more than the settlement amount on cleanup of the sites under a 1991 agreement.

A state expert’s report admitted that contamination of the sites began as far back as the 1870s in Bayonne and the early 1900s in Linden, where tidal marshes had been used to dispose of hazardous waste.

 

New Player In the Barnett Shale

February 13, 2018

 

Texas E&P International Western Petroleum has some new oil and gas producing properties in Palo Pinto and Jack counties.

The eleven leases, totaling 18 existing-production 4,000-5,000-ft.-depth wells, are on a combined 2,790 acres in the two counties, with International Western paying $1.6 million in cash, the company said.

There’ll be more oil and gas production on the properties in the near future, which sit in the prolific Ft. Worth Basin in the Barnett Shale play.

 

JP Morgan Chase Among Investors In Willacy County Wind Farm

February 13, 2018

 

The builder says the tax equity financing is in place for the 228-MW Bruenning’s Breeze wind farm in Willacy County, Texas.

E.ON SE said an undisclosed investor joined a subsidiary of JPMorgan Chase & Co. to provide money in exchange for a partial interest in the project, which started commercial operation in December 2017.

Bruenning’s Breeze is a 228-MW wind farm comprised of 76 Acciona AW-125 3.0-MW turbines that can create enough electricity to power approximately 75,000 homes.

Dr. Verena Volpert, Senior Vice President, Group Finance, E.ON SE said, “We are delighted to expand our constructive partnership with the investors in our Bruenning’s Breeze project.”

 

Novus Receives Go-Ahead For Controversial Green Lake Area Injection Project: Report

February 13, 2018

 

One environmental obstacle to a proposed Calhoun County injection well project near Texas’ largest freshwater lake has been cleared.

The Texas Commission on Environmental Quality gave Novus International permission last week to drill two underground injection control wells a few miles from Green Lake, according to the Victoria Advocate.

“The company’s next step will be to get the Environmental Protection Agency‘s approval to actually inject hazardous waste into them,” the newspaper reports.

“Bryan W. Shaw, chairman of the TCEQ, said during a meeting Wednesday that it was “fairly obvious” that those who had asked for a hearing hadn’t proved they would be affected by the wells – a requirement for such a hearing.

“He said they lived at least 10 miles away from it.”

 

Houston State Rep May Have Employment Conflict: KPRC

February 12, 2018

 

Houston businessman and State Representative Jim Murphy may have some explaining to do about a Houston contract job, according to KPRC-TV.

Murphy works with the Westchase District of west Houston, home to several energy companies, for which he’s paid about $312,000 a year, the Houston TV station reports.

Problem is Texas law states that no member of the Legislature “may hold any other office or position of profit, except as a notary public,” and the Westchase District is a state political subdivision.

Oasis Energy, Promethius Energy Group, Just Energy and other companies have offices in the district, which happens to be just a number of blocks southeast of Houston’s Energy Corridor.

KPRC’s investigative unit has been unable to ferret out details of the financial arrangement from Murphy, but added in its TV report:

“In 2014, Murphy’s contracts began to include bonuses called ‘special projects.’

“Some of the projects were categorized as ‘top priority’ and some as ‘secondary priority.’

“In some cases, the bonuses were awarded to Murphy for securing funding– not for his constituents, but for the district that cuts his check.

“In fact, Murphy can earn up to $6,000 if he is able to secure $1 million or more from the Texas Department of Transportation for highway projects.”

 

Governor Abbott Names 7 Among Energy Related Policy Advisors

February 12, 2018

 

Governor Greg Abbott has a new set of policy advisors and his office released the list Monday.

The advisors include:

Stacie Bennett on oil & gas as well as eminent domain and economic development issues.

Steven Schar on environmental regulation, Schar and Julie Frank on state water.

Charles Miller on cybersecurity, workforce and insurance issues.

Seth Christensen on border security, homeland security and public safety.

Sarah Hicks and Bobby Wilkinson on the general budget.

 

Here’s the complete list of the governor’s new policy advisors:

 

Agency Primary / Advisor
1st Amendment / Charles Miller
2nd Amendment / Seth Christensen
Administrative Law – General / Courtney Hjaltman
Agriculture / Julie Frank
Criminal Justice / Preston Streufert
Public Safety / Seth Christensen
Homeland Security / Seth Christensen
Border Security / Seth Christensen
Criminal Law / Preston Streufert
Corrections / Preston Streufert
Cybersecurity / Charles Miller
Workforce / Charles Miller
Economic Development / Stacie Bennett
Elections / Charles Miller
Emergency Management / Seth Christensen
Eminent Domain / Stacie Bennett
Environmental Regulation / Steven Schar
Child Protection / Erin Bennett
Family Services / Erin Bennett
Financial Institutions / Kate Huddleston
Gaming / Stacie Bennett
Alcohol / Courtney Hjaltman
Tobacco / Erin Bennett
General Budget / Sarah Hicks & Bobby Wilkinson
Human Services / Kate Hendrix and Erin Bennett
Higher Education / Matt Cope
Housing / Bobby Wilkinson and Catarina Gonzales
Insurance / Charles Miller
Judicial Branch / Courtney Hjaltman
Life Initiatives / Erin Bennett
Local Government – General / Julie Frank, Steven Schar, and Catarina Gonzalez
Jails / Seth Christensen
Local Law Enforcement / Seth Christensen
Veterans / Catarina Gonzales
Military / Seth Christensen
Oil & Gas / Stacie Bennett
Public Finance / Bobby Wilkinson
Public Education / Mary Lynn Bunkley and Bogan Pollock
Public Health / Erin Bennett and MC Lambeth
Public Pensions
– State ERS John Hryhorchuk and Bobby Wilkinson
– State TRS John Hryhorchuk and Bogan Pollock
– Local John Hryhorchuk and Steven Schar
ICE Detainers / Seth Christensen
Sanctuary Cities / Seth Christensen
Special Districts / Julie Frank, Steven Schar, and Catarina Gonzalez
Taxation / David Shoemaker
Telemedicine / Erin Bennett
Transportation / Charlie Leal
Water / Steven Schar and Julie Frank

 

Pellets Propel Coastal County Growth

February 13, 2018

 

Brazoria County south of Houston is booming, and residents can thank plastic pellets for some of it.

The Houston Chronicle says Central and South Texas ethane from natural gas is going to new LNG terminals at Freeport for conversion into plastic pellets, then being shipped to China where they’re used for building consumer electronics.

The strong economy is fueling big demand for housing in Brazoria County, where new home sales are up 88% compared to 2015.

 

Water Pipeline Extension Finished For West Texas O&G Drilling and Completion

February 12, 2018

 

More water is on the way to West Texas midstreamers with the early completion of a pipeline extension, building Layne Christensen Co. said Friday.

The six-mile extension of the 26-mile Hermosa water line started in December and is now ready for transmission.

The pipeline runs from Layne-owned land near Pecos northward in Reeves County with a capacity of 175,000 barrels of water per day to 18 delivery points along the route, for use in energy drilling and completion.

Layne Water Midstream subsidiary CFO and President J. Michael Anderson said, “We have already sold water through the extended pipeline, which expands our water midstream business further north into Reeves County where access to water is more limited for oil and gas producers.

“We expect to see continuing demand growth for water in the energy sector, especially in the Delaware Basin, due to attractive producer economics, longer horizontal drilling lengths, and more use of water per foot of lateral length.”

 

Rover Pipeline Nearing Completion As ETP Works With Regulators Over Concerns

February 12, 2018

 

Dallas’ Energy Transfer Partners will resume drilling under a river where there had been concerns over the possibility of a spill.

The $4.2 billion Rover Pipeline was stopped by US regulators in January because of claims that drilling fluid had been lost underground.

The company said recently that one of the two Rover pipelines is finished and already in use, and completion of the second line is nearing.

Under an agreement with the Federal Energy Regulatory Commission, the twin natural gas pipelines can continue construction across Ohio and into Michigan and West Virginia, but Energy Transfer will be required to test groundwater near its construction sites, including the northeast Ohio Tuscarawas River, to confirm there is no contamination.

 

Houston’s Buckeye Ups Q4 Earnings Year Over Year

September 13, 2018

 

Buckeye Partners LP reported a net income for the fourth quarter of 2017 of $126 million, an increase from the previous year’s $107 million.

Adjusted earnings before taxes, depreciation and other factors (“EBITDA”) amounted to $289.9 million compared to $255.1 million for the fourth quarter of 2016.

Houston-based Buckeye is a primary Eastern and Midwest US petroleum distributor, with a network of more than 135 liquid petroleum products terminals with aggregate tank capacity of over 176 million barrels across pipelines, inland terminals and marine terminals located primarily in the East Coast, Midwest and Gulf Coast regions of the United States as well as in the Caribbean, Northwest Europe, the Middle East and Southeast Asia.

 

ETP/Sunoco LNG Project Resumes After Pennsylvania Regulator Agreement

September 12, 2018

 

Sunoco‘s Mariner East 2 project is continuing after a new agreement between the company and the Pennsylvania Department of Environmental Protection.

Sunoco merged with Texas’ Energy Transfer Partners last April.

The company has agreed to pay a more than $12 million fine and will make some changes as part of the arrangement that avoid litigation.

The Pennsylvania regulator, in a statement last Thursday, said the major liquid natural gas pipeline project can resume construction right away.

The $2.5 billion 20-inch line, when completed, will transport LNG products from the Marcellus Shale play to a terminal in Philadelphia, with completion still expected by this summer.

It was stopped January 3rd because the regulator said the company had “willfully” used improper construction methods and said there had been leaks of drilling fluid.

Sunoco said it vehemently disagrees with the regulator that problems had been willful or egregious.

 

U.S. Oil Production Exceeds 10 Million Barrels Per Day

By Alex Mills

 

Just two days after President Trump proclaimed the end of thefederal government’s war on energy produced in the U.S., the Department of Energy’s Energy Information Administration announced domestic crude oil production has reached record levels.

He also boasted about his aggressive deregulation agenda during his State of the Union address to a joint session of Congress Tuesday.

“We have ended the war on American energy, and we have ended the war on beautiful, clean coal,” Trump proclaimed.

The EIA reported Thursday U.S. crude oil production reached 10.038 million barrels per day (b/d) in November 2017.. November’s production is the first time since 1970 that monthly U.S. production levels surpassed 10 million b/d and the second-highest U.S. monthly oil production value ever, just below the November 1970 production of 10.044 million b/d.

Texas led the way with a record high 3.89 million b/d, followed by North Dakota at 1.18 million b/d. Production in the Federal Gulf of Mexico reached 1.67 million b/d, up 14% from the October 2017 level as the region recovered from Hurricane Nate.

“U.S. crude oil production has increased significantly over the past 10 years, driven mainly by production from tight rock formations including shale and other fine-grained rock using horizontal drilling and hydraulic fracturing to improve efficiency,” EIA stated in its monthly report.

EIA estimates of crude oil production from tight formations in November 2017 reached 5.09 million b/d, surpassing a previous high of 4.70 million b/d in March 2015. These formations also produce considerable volumes of natural gas associated with the crude oil.

Liquid production—both crude oil and condensate—from tight rock currently accounts for about 51% of total production. A decade ago, in November 2008, production from tight formations accounted for only 7% of total U.S. production. Non-tight oil production has been mostly constant over the previous decade. EIA stated.

Trump’s Environmental Protection Agency (EPA), Interior Department and other agencies have aggressively worked to roll back or change Obama-era rules, in the name of increasing use and production of domestic energy.

“We are now, very proudly, an exporter of energy to the world,” Trump said and was interrupted by applause.

The U.S. oil and natural gas industry has accomplished a complete reversal, which enhances the U.S. economy and national energy security as it competes with other markets worldwide.

 

Alex Mills is the former President of the Texas Alliance of Energy Producers. The opinions expressed are solely those of the author.

 

Dynegy Seeking Pollution Standards Relief In Illinois; Environmental Groups Oppose

February 12, 2018

 

Environmentalists in Illinois object to a plan put forth by Dynegy Inc. over state pollution standards.

Five environmental groups on Friday filed a motion to end hearings on Dynegy’s proposal before the Illinois Environmental Protection Agency (EPAI) for a temporary rule allowing the Houston-based energy provider’s fleet to increase sulfer dioxide and nitrogen oxide emissions from coal plants until Dynegy’s merger with Vistra Energy Corp. is complete.

Dynegy has been asking regulators for relief in meeting increasing expenses to keep aging coal plants generating power, and wants to go from rate-based emissions limits to an overall annual maximum for coal plants in Illinois.

The Environmental Defense Fund, the Environmental Law & Policy Center, the Natural Resources Defense Council, The Sierra Club and The Respiratory Health Association are asking the EPAI to withhold a special ruling on Dynegy’s request until the merger is complete.

The groups point out that once the merger is completed, the company will have more than “four billion dollars in equity” — an entirely different economic climate for the coal plants.

Irving-based Vistra is not part of the emissions request, and the environmental groups argue that the ability of Dynegy’s coal-fired electricity generation plants to keep running under current pollution standards should be considered after the merger.

Vistra would not be bound to any temporary new standards, should they be granted to Dynegy, but the groups are concerned that Vistra might push to continue the lowered standards.

TXU and Luminant parent Vistra signed a $1.7 billion common stock merger agreement with Dynegy last October which is undergoing regulatory approval and could be taken up by the Public Utility Commission of Texas very soon.

PUC staff on February 5th recommended that Vistra and Dynegy be required to divest some 1,280 MW of generation (the combined companies appear to exceed ERCOT‘s statutory cap of 20% of overall installed capacity) in order to secure merger approval.

Vistra has said it knows of a way for merger approval without divestitures.

The merged companies would be largest independent power producing company in the nation with expected market value of $10 billion.
 

Lubbock Growth Leads To New Power Lines

February 12, 2018

 

Growth in the area west of Lubbock calls for growth in electrical infrastructure, and Xcel Energy says it has a new 13-mile line to meet the need.

The 230 kV high-voltage transmission power line — part of an overall $32 million upgrade project — is now finished, linking two substations, in an effort to alleviate overloads that have been a problem in the area.

The link between substations in the city of Wolfforth southwest of Lubbock to the substation in Shallowater, to the city’s northwest, will boost carrying capacity to rural areas to the west of Lubbock and into Hockley County directly to Lubbock’s west, the company said.

The new addition is part of Xcel’s “Power to the Plains” project to upgrade the grid across its Texas and New Mexico service area, with the company working on more than 500 miles of additional lines to be completed by 2021.

“Those of us living in the Lubbock area know that communities west of the city have experienced strong residential and commercial growth over the past few years,” said Steve Deaton, Xcel’s regional manager for Community and Economic Development in Lubbock.

“Growth like this is only sustainable when the basic infrastructure can keep up, and this new line will position these communities for decades of additional expansion.”

The company says more related substation upgrades should be completed in March.

 

Australian Company Takes Modest East Texas Approach To Double Base Reserves

February 10, 2018

 

Australia’s American Patriot Oil & Gas Co. is buying up individual East Texas assets in four counties.

The company said this week it has a purchase and sale agreement for conventional oil and gas wells in Harrison, Rusk, Upshur and Gregg counties that were included in a letter of intent signed in November.

The $2.5 million deal is expected to close by mid-March, with American Patriot estimating a potential for generation of more than $22 million in revenue based on $50 a barrel oil, which the company calls a conservative estimate considering the higher oil market price.

The properties include 38 wells producing 36 barrels of oil per day, the company said, and 440,000 cubic feet of natural gas per day.

The wells will require minimal workover costs and operation costs will be about $23 a barrel, with good access to refineries.

The company said the purchase doubles its reserves base.

 

Abraxas Gets Delaware Acreage

February 10, 2018

 

San Antonio-based oil and gas E&P company Abraxas Petroleum has agreed to acquire oil and gas acreage located in Winkler County in the Delaware Basin for $14.2 million.

The acreage includes more than 900 acres and two operated and non-operated fields.

 

Open Season: Waha-To-Agua Dulce Pipeline

February 10, 2018

 

Binding open season is underway for Gulf Coast Express Pipeline LLC (GCX), to which 60,000 Dth/d is being added to, when built, move natural gas from the Waha, Texas, production area to the market hub near Agua Dulce.

The open season is a result of strong market demand, the pipeline company said; it’s underway now and will continue until March 5th.

Gulf Coast is a joint venture with Kinder Morgan Inc., DCP Midstream LP and Targa Resources Corp.

With the added capacity, the pipeline is expected to have 220,000 Dth/d deliver ability.

The GCX Project will have a total design capacity of 1.98 billion cubic feet per day at an estimated cost of $1.75 billion.

Construction is expected to begin this quarter, with service to begin in October 2019.

The company said this week that Occidental Energy Marketing Inc. and Kaiser-Francis Oil Co. have signed on.

See more about the project here.

 

West Texas State Senate Race Racking Up Endorsements

February 9, 2018

 

The West Texas state senate race for District 31 is growing heated as endorsements come in.

State Senator Kel Seliger has the approval of the Texas and Southwestern Cattle Raisers Association PAC as the longtime incumbent goes up against former Midland Mayor Mike Canon and businessman Victor Leal in the March 6th primary.

Seliger said he’s “honored to have the support of such a strong advocate for hard-working families in the cattle industry like the TSCRA PAC

Leal gained the endorsement of the Hispanic Republicans of Texas PAC recently.

“Victor will fight to lower property taxes, improve education by empowering parents and teachers, and defend the life of the unborn. His family’s story and entrepreneurial spirit are a great reflection of these values,” Hispanic Republicans of Texas Board Chairman Mano DeAyala said in announcing his support.

Last month, Canon’s candidacy was endorsed by Young Conservatives of Texas which Canon called “an honor.”

“With so much at stake in this election, it is encouraging to have the support of one of Texas’ most reputable conservative organizations,” Canon said.

 

Southwestern Energy Preparing For Growth, Possible Sale of Arkansas Assets

February 9, 2018

 

Southwestern Energy says it may sell assets in Arkansas as part of a new focus on Appalachian shale.

The company is based in the Houston area but started out in Arkansas and has long maintained its Fayetteville Shale play land, pipeline and processing projects.

The company has admittedly been struggling lately, and CEO Bill Way said this week that Southwestern is looking to cut its debt.

The Spring-based company said profits from a possible sale would allow a reduction in costs and a stronger bottom line, allowing for increased E&P in Pennsylvania and West Virginia.

 

New Study Maps Earthquake Potential in the Permian Basin

February 9, 2018

 

Now that the Permian Basin is the hottest site for well drilling in the world, scientists at Stanford University have developed a new map of the ground stresses found in the 75,000 square mile Permian Basin and have been calculating the likelihood of potential oil and gas developments that could trigger an earthquake by use of fluid injection.

A color-coded map was produced as part of the research published in the journal The Leading Edge from the Society of Exploration Geophysicists.

“We want to get out ahead of the problem in Texas,” said study co-author Mark Zoback told Science Daily in describing the reason for the study.

The Benjamin M. Page Professor of Geophysics in Stanford’s School of Earth, Energy & Environmental Sciences said, “We want to stop fluid injection from triggering even small earthquakes in Texas so that the probability of larger earthquakes is significantly reduced.”

The geophysicists built on previous maps of faultlines and stress potential in the Permian and added extensive new data, which paint a complex picture of the ground stresses in the basin, which one geophysicist said has the potential for “a lot of earthquakes” because of the dramatic variations in rock and soil in the Permian region.

The Stanford School of Earth has also been working on extensive maps of Oklahoma to chart earthquake potential.

 

New US Budget Includes Alternative, Turbine and Carbon Capture Tax Credits

February 9, 2018

 

President Donald Trump has signed the new House and Senate budget that includes an extension of tax credits for buyers of fuel cell vehicles of up to $40,000 (depending on the weight of the vehicle, the tax credit could be as low as $4,000).

It also includes extension of a 10% credit (up to $2,500) for the purchase of two-wheeled electric vehicles.

Perhaps most important among the energy-related provisions of the budget are the extensions of tax credits for every ton of carbon dioxide that is captured and then used for enhanced oil recovery (as is being done at NRG‘s and JX Nippon‘s Petro Nova plant near Houston), or is sequestered (such as in long-term storage) or used to create another end product.

The credit extends for a dozen years and can be used by any facility that began carbon capture construction within the past seven years.

New carbon capture projects have until the end of 2023 to begin building to take advantage of the credit.

Among those who shepherded the credits through the bill-writing process were by West Virginia Republican Senator Shelley Moore Capito, Rhode Island Democrat Senator Sheldon Whitehouse, North Dakota Democrat Senator Heidi Heitkamp, and Wyoming Republican Senator John Barrasso.

There are also tax credit extensions for the installation of micro turbines, which could play a part in the development of microgrids, and for the installation of Combined Heat and Power turbines.

 

Updates To RRC’s “Call Before You Dig” Requirements Take Effect Monday: Press Release

February 9, 2018

 

Effective next Monday, Feb. 12, Railroad Commission pipeline damage prevention rules require excavators who strike a pipeline while digging to notify the pipeline operator by calling the 811- notification center as soon as possible, but no later than one hour after an incident.

Excavators must also call 911 if any natural gas or other product is released when an underground pipeline is struck.

These rule updates extend the deadline for pipeline operators and excavators to file a damage report with the Railroad Commission from the current 10 days to 30 days.

RRC rules already require anyone planning to dig deeper than 16 inches to call 811 before they dig to prevent damage to underground pipelines.

The required 811 call prompts pipeline operators to mark their underground natural gas or hazardous liquid pipelines to avoid being struck during the digging process.

Failure to obey the “Call Before You Dig” rules can result in penalties and fines.

More information on these new rule requirements can be found under “Chapter 18. Underground Pipeline Damage Prevention” at the RRC website.

Railroad Commission of Texas

 

Texas Drilling Permits and Completion Stats For January 2018: RRC

February 9, 2018

 

The Railroad Commission of Texas issued a total of 1,166 original drilling permits in January 2018 compared to 956 in January 2017.

The January total included 1,036 permits to drill new oil or gas wells, 18 to re-enter plugged well bores and 112 for re-completions of existing well bores.

The breakdown of well types for those permits issued January 2018 included 243 oil, 78 gas, 784 oil or gas, 55 injection, two service and four other permits.

Click here for statistics and tables.

 

Rig Count Soars: Baker Hughes GE

February 9, 2018

 

The US commercial oil and gas rig count shot up by 29 this past week, according to weekly figures released Friday by Baker Hughes GE, the highest weekly rise in more than a year.

Oil rigs increased by 26, now totaling 791, the highest since April 2015 and the third straight week of rig increases.

Gas rigs were up by three, now at 184, an increase from 149 a year ago.

More than half the oil rigs are in the Permian Basin, where the rig count was up this week by ten to reach a total of 437.

The proliferation of oil and gas production is expected to increase Permian output to near a record 2.9 million barrels per day this month or about 30% of all US oil output.

Texas added 14 rigs in total, with three of them in the Eagle Ford.

North Dakota and Wyoming each were up four; Louisiana and New Mexico each were up by three and Kansas and Oklahoma each gained one.

The overall rig count is 975, considerably higher than the 591 total of a year ago.

Weekly U.S. production is rising much faster than many expected: it jumped to a record 10.25 million barrels a day in the most recent report.

Projected production will rise to a record 10.6 million barrels per day this year, the US Energy Information Administration said earlier this month, up from 9.3 MMbbl/d last year and topping the all time annual output record of 9.6 MMbbl/day set in 1970.

 

Haynes and Boone Adds Oil & Energy Attorney

February 8, 2018

 

Former Andrews Kurth corporate lawyer Bill McDonald joined Haynes and Boone’s Houston office on February 1st as a partner in the capital markets and securities practice.

McDonald’s clients are in the energy and oil field services industries.

“He’s very experienced in energy and oil and gas, which is one of the strengths of our firm,” said Jeff Nichols, co-chair of the firm’s energy practice group.

Haynes and Boone has been adding energy practice lawyers to its fold over the past year, notably partners Chad Mills, Craig Stahl and Jeffrey Kuehnle, who also came from Andrews Kurth.

 

Oil, gas, stock markets rally hits a bump

By Alex Mills

 

Crude oil, natural gas and the stock market all had a down week last week after more than a year of steady increases.

Crude oil prices on the New York Mercantile Exchange (NYMEX) declined 4.5 percent for the week ending Feb. 8 from $64.73 to $61.79.

Natural gas dropped about 10 percent from $3.01 to $2.702 during the week.

The Dow, NASDAQ and the S&P 500 all declined about 4 percent in one-day trading on Monday. The Dow declined 1,175 points from 26,616. It bounced back later in the week to the 25,500 range, which is still a 25 percent increase over its 52-week low of 20,015.

Crude oil fell four consecutive days as the U.S. dollar rose to its highest in more than a week. Crude oil is sold in dollars. As the dollar increases, it is more expensive for traders to buy crude oil because of the increased value of the dollar.

Analysts also pointed to rising U.S. oil production, and increasing stockpiles of oil and refined products (gasoline and distillates). The Energy Information Administration reported oil inventories rose 1.9 million barrels this week, gasoline stocks were up 3.4 million barrels, and distillates were up 3.9 million barrels.

EIA also noted that domestic oil production increased 332,000 barrels last week, setting another record at 10.251 million barrels per day.

The Wall Street Journal reported it polled 15 investment banks near the end of January and the banks expect West Texas Intermediate (WTI) to average $57 a barrel in 2018, up $3 from the previous survey.

“Investor sentiment toward oil has become more positive on a range of factors, including strong global growth, supply limits by big producers, a weaker dollar and output disruptions in Venezuela,” the story stated.

The story noted that rising prices could encourage U.S. producers to continue to increase production, which is seen as a factor for prices to drop.

OPEC members have reduced their production by 1.8 million barrels per day, and Venezuela (a member of OPEC) has lost 29 percent of its production because of economic problems.

 

Alex Mills is the former President of the Texas Alliance of Energy Producers. The opinions expressed are solely those of the author.

 

DMN Endorses Estes for District 30 Republican Primary

February 8, 2018

 

The Dallas Morning News has endorsed Wichita Falls state Senator Craig Estes for the Republican primary for District 30.

The newspaper lauded Estes’ “long record of bills passed speaks to his leadership and experience.

“He’s unafraid to break with his party, and its increasingly one-way momentum, when his conscience compels. For example, Estes was the lone Republican who did not support the 2015 change to the Senate’s ‘two-thirds rule,’ which has for more than 70 years required at least 21 senators to agree before a bill could be debated.”

The paper registers disappointment in Estes’ failure “to seek significant reforms at the Texas Railroad Commission during last session’s sunset review process, and that was a mistake.”

“Estes, seeking his fifth full term, faces a strong challenge from former Rep. Pat Fallon of Frisco.

“Fallon is a strong candidate and, like Estes, a very conservative one.”

 

Also see: The Dallas Morning News: State senator faces two GOP challengers for seat that includes Collin, Denton counties

 

Open Grant Application Underway for TCEQ Alternative Fueling Facilities Program

February 7, 2018

 

A new round of grants for the development of alternative fuel stations will be handed out by the TCEQ.

The total funding will be $6 million for the first round of grants announced earlier and this second series of grants, a program called the Alternative Fueling Facilities Program.

The first round of grant applications are already under review.

They will be available to businesses, individuals and government entities with plans to continue the development of natural gas and alternative fueling station networks, the Texas Commission on Environmental Quality said this past week.

The state agency said the purpose is to create a foundation for a “self-sustaining market” for alternative fuel vehicles in Texas.

 

Crude Stockpiles Up Nearly 2 Million Barrels Last Week: EIA

February 7, 2018

 

Domestic crude supplies were up 1.9 million barrels for the week ended February 2 — the most since early September, according to Wednesday’s weekly report from the US Energy Information Administration, after the American Petroleum Institute reported Tuesday a decline of 1.1 million barrels.

Analysts surveyed by S&P Global Platts had forecast a climb of 2.8 million barrels.

The EIA report said U.S. output climbed 332,000 barrels to total 10.251 million barrels a day, the biggest jump since the EIA started keeping records in 1983.

Experts including Bloomberg‘s Julian Lee and WTRG EconomicsJames Williams agree that the increase in output reported for last week was “influenced by the much higher-than-expected November production.”

It’s a correction, Lee said, based on the much-bigger-than-anticipated production in November finally catching up to the market.

Williams added, “both the 10 million [barrels a day] for November and the continuing rise on a pace that will result in U.S. output over 11 million…by September or October of this year should be make OPEC nervous and second guess any plans of eliminating their production cuts too early.”

That, he said, should awaken “the remaining bears out of hibernation.”

TAB FedPac Releases Congressional Campaign Endorsements: News Release

February 7, 2018

 

Wednesday, TXBIZ FEDPAC, the political action committee representing the Texas Association of Business, released its list of endorsements for Texas’ congressional seat holders.

The TXBIZ FEDPAC stands behind officeholders who will represent Texas’ best interests in Washington, D.C. and fuel the state’s economic growth.

“The Texas Association of Business FEDPAC Board chose to support the candidates in our delegation who have remained committed to the growth and success of the state and represented the cornerstone issues that have sparked Texas’ excellence in business, entrepreneurship, and innovation,” said TXBIZ FEDPAC Chairman Gary Gibson.

Below, the complete list of TXBIZ FEDPAC congressional endorsements:

• Senator Ted Cruz
• Congressman John Ratcliffe, TX-04
• Congressman John Culberson, TX-07
• Congressman Kevin Brady, TX-08
• Congressman Michael McCaul, TX-10
• Congressman Mike Conaway, TX-11
• Congressman Kay Granger, TX-12
• Congressman Mac Thornberry, TX-13
• Congressman Randy Weber, TX-14
• Congressman Bill Flores, TX-17
• Congressman Jodey Arrington, TX-19
• Congressman Joaquin Castro, TX-20
• Congressman Pete Olson, TX-22
• Congressman Will Hurd, TX-23
• Congressman Kenny Marchant, TX-24
• Congressman Roger Williams, TX-25
• Congressman Michael Burgess, TX-26
• Congressman Henry Cuellar, TX-28
• Congressman John Carter, TX-31
• Congressman Pete Sessions, TX-32
• Congressman Marc Veasey, TX-33
• Congressman Filemon Vela, TX-34
• Congressman Brian Babin, TX-36

FedPac says more endorsements may be forthcoming.

 

Sen. Seliger Has $1.3 Million On Hand: QR

February 7, 2018

Sen. Kel Seliger’s campaign has raised $138K, spent $531K and has $1.3 million on hand, Quorum Report says Wednesday.

“As for his GOP challengers: Victor Leal’s Houston-based PAC raised $88K, spent $78K and has $49K on hand; Mike Canon raised $37K, has $130K on hand after a $170K loan.”

West Texas Family Helps Empower Empower Texans And Texas Right to Life

February 6, 2018

 

Two West Texas brothers are again plowing some of their oil millions into the upcoming political races.

Billionaire Farris Wilks and his family contributed $625,000 to each of two conservative groups heavily involved in Texas politics, Texas Right to Life and Empower Texans.

The former is a Houston-based pro-life Political Action Committee, the latter is Michael Quinn Sullivan‘s conservative free-market non-profit based in Austin.

The Wilks family of Cisco, Texas, has been active in recent years in Texas politics, giving the Empower Texans PAC $500,000 in 2015.

In 2016, the PAC helped fund campaigns by District 92 Rep. Jonathan Stickland of Bedford, District 94 Rep. Tony Tinderholt of Arlington and District 115 Rep. Matt Rinaldi of Irving, all conservative Republicans.

Wilks, along with his brother Dan, made millions in the fracking boom over the past 12 years or so.

 

Commissioner Ryan Sitton to Reveal 2018 Energy Market Outlook at NAPE Summit: Press Release

February 5 2018
AUSTIN – Texas Railroad Commissioner Ryan Sitton will discuss worldwide supply and demand, the impact of OPEC‘s production cuts on America’s energy opportunities, and reveal predictions from his 2018 energy market report at the 2018 NAPE Summit on Feb. 9 at 11:15 a.m. in Houston.
At the beginning of 2017, Sitton predicted that the price of West Texas Intermediate crude oil would reach $60 per barrel before the end of the year, and it did. At the 2018 NAPE Summit, attendees will find out exactly where oil prices are heading, what trends will impact the market, what the Railroad Commission is doing to work with the energy industry in this time of record growth, and how Texas and the United States are poised to meet energy demand around the world.
WHO: Ryan Sitton, Texas Railroad Commissioner
WHAT: 2018 Energy Market Outlook – NAPE
WHEN: Friday, Feb. 9, 2018
11:15 – 11:45 a.m.
WHERE: Domestic Theater, Hall C, 1st Floor
George R. Brown Convention Center

 

Texas Tells Trump: No More Offshore Drilling Off Our Coasts: Press Release

February 5, 2018

 

Austin, Texas — Local environmental advocates, business leaders, and elected officials will rally on Tuesday, February 6 at 3:30 PM to send a clear message to the Trump administration that more offshore drilling is not welcome off Texas’ coast.

 

In early January, Donald Trump and Interior Secretary Ryan Zinke released a draft offshore drilling plan that proposed an unprecedented expansion of offshore drilling into nearly all of America’s waters, from Alaska to the Gulf of Mexico.

 

For Texas, the five-year leasing plan proposes no buffer or exclusion for any part of the Western Gulf, even as the Trump administration looks to rollback important safety provisions put in place in the wake of the BP Deepwater Horizon spill.

 

The crowd, many dressed in beach wear, will gather outside the administration’s public hearing on the draft plan — the only hearing scheduled in Texas — to highlight the threats offshore drilling poses to our coastline, climate, marine ecosystems, and the health and economic well-being of our communities. After rally, members will enter Embassy Suites and reject Trump’s Drill-friendly plan.

 

 

WHAT: Texas Tells Trump: No More Offshore Drilling Off Our Coasts

 

WHEN: 3:30 PM, Tuesday, February 6th

 

WHERE: Parking Lot at corner of Clayton Lane and I-35 Access Road near 5901 N. I-35, Embassy Suites by Hilton.

WHO:

  • Rebekah Hinojosa, No LNG in Rio Grande Valley Coalition
  • Bryan Parras, Long-Time Organizer for TEJAS (Texas Environmental Justice Advocacy Services) and Sierra Club
  • Luke Metzger, Environment Texas
  • Adrian Shelley, Director, Public Citizen’s Texas Office
  • Diane Wilson

Oncor-Sempra Energy Settlement Garners Unanimous Support From Texas Stakeholders

Oncor Electric Delivery Company, LLC and Sempra Energy have announced that all of the intervenors in the Public Utility Commission of Texas regulatory proceeding now support the settlement related to Sempra Energy’s pending acquisition of Energy Future Holdings Corp., including EFH’s indirect, approximate 80-percent ownership of Oncor.

Texas Legal Services Center joined the nine other Texas stakeholders who previously had signed on to the settlement agreement favoring the acquisition.

 

Natural Gas Consumption Sets Record

By Alex Mills

 

The natural gas industry received a gold star for performance during the recent cold weather across a large portion of the United States.

The Energy Information Administration (EIA) reported recently consumption of natural gas in the residential and commercial sectors set a record for the week ending on Jan. 5.

EIA said consumption reached 452 billion cubic feet (Bcf) compared with 348 Bcf during the previous week, according to estimates from PointLogic Energy. Total weekly natural gas consumption in the Lower 48 states increased by 150 Bcf, reaching 961 Bcf for the week ending Jan. 5. Another 50 Bcf was exported by pipeline.

EIA also noted natural gas spot prices at the national benchmark Henry Hub in Louisiana averaged $3.01 per million British thermal units (MMBtu) in 2017 about 50 cents per MMBtu higher than in 2016.

Overall, natural gas prices at key regional trading hubs were less volatile in 2017 than in previous years, as pipelines that came online throughout the year eased some infrastructure constraints that affect regional prices.

The Appalachian region, which includes West Virginia and Pennsylvania, continued to narrow price differences between Henry Hub and nearby trading hubs in the North East because of the significant increase in production in the area.

EIA predicts the United States will become a net exporter of natural gas on an annual basis in 2017 for the first time since 1957. The United States is exporting more natural gas to Mexico and more LNG to at least 20 countries while importing less natural gas by pipeline from Canada. Although EIA’s monthly natural gas data for December 2017 will not be available until the end of February 2018, EIA expects the United States to have exported 0.4 billion cubic feet per day (Bcf/d) more natural gas than it imported in 2017.

U.S. net pipeline imports from Canada continued to decline in 2017, in part because of the commissioning of the first phase of the Rover pipeline, which transports natural gas from the Northeast’s Appalachian supply basin to the Midwest and other markets, reducing Canadian net exports into the Midwest.

U.S. LNG exports averaged 1.9 Bcf/d in 2017, 1.4 Bcf/d higher than in 2016, as liquefaction capacity continued to expand, according to EIA. The Sabine Pass LNG terminal in Louisiana is operating at near-full capacity with additional liquefaction capacity to be added in the near future. The Cove Point LNG terminal in Maryland is scheduled to begin commercial operations soon, and four additional LNG projects are under construction in Georgia, Texas, and Louisiana. By the end of 2019, assuming all liquefaction facilities currently under development are completed, EIA expects U.S. liquefaction capacity to reach 9.6 Bcf/d, the third largest in the world behind Qatar and Australia.

Also, natural gas exports to Mexico could double soon if connecting pipelines in Mexico are finished by 2019.

U.S. marketed natural gas production increased by 1 Bcf/d (1 percent) in 2017, according to EIA’s preliminary estimates for the year.

 

Alex Mills is the former President of the Texas Alliance of Energy Producers. The opinions expressed are solely those of the author.

 

Oil & Gas Rig Count Down By One; Oil Rigs Up By 6; Baker Hughes GE

February 2, 2018

 

The number of active commercial US rigs dropped by just one last week, Friday’s weekly report from Baker Hughes GE said.

Oil drilling rigs climbed by six to reach 765, adding rigs for the second straight week.

There are 946 oil and natural gas rigs active today.

Simmons & Co. analysts at investment bank Piper Jaffray slightly increased their forecast this week for the total oil and natural gas rig count in 2018 to an average of 1,006, and 1,131 in 2019.

 

Renewed Oil Patch Raises Texas Sales Tax Revenue Over 60%: Hegar

February 2, 2018

 

Oil and natural gas production tax revenue jumped more than 60% in January, sales tax figures released Friday by the state comptroller reveal.

While some tax income across many sectors jumped by single digits, the renewed vigor of the oil and gas sector stood out.

Production tax income jumped to $407 million during January, a 63.9% rise from January 2017, according to Texas Comptroller Glenn Hegar.

Sales tax revenue is the largest source of state funding for the budget, accounting for 58% of all tax collections.

Total sales tax revenue, at $2.67 billion, was up 9.1% over the previous January, and revenue for the three months ending in January 2018 was up 10.8% year-over-year.

Motor fuel taxes brought in $304.6 million, up 3% from January 2017; motor vehicle sales and rental taxes yielded $427.7 million, up 5.15 from January 2017.

“Growth in sales tax revenue occurred across all major economic sectors,” Hegar said.

“The strong growth in revenue was led by collections from the mining, construction and wholesale trade sectors. The manufacturing, retail trade and restaurant sectors also saw strong gains.”

 

Cornyn Joins In Suggesting NAFTA Improvements; TAEP Thumbs Down On Tariff Raises

February 1, 2018

 

US senator from Texas John Cornyn is joining 35 other senators in calling for improvements in NAFTA.

Cornyn joined the others in writing a letter to President Donald Trump outlining the benefits of the North American Free Trade Agreement, but adding suggestions for improving it.

“NAFTA supports 14 million jobs, representing thousands of jobs in each of the 50 states,” the senators wrote.

“Despite all of its benefits, however, we can do better and there are opportunities to improve the agreement.

This week, the Texas Alliance of Energy Producers (TAEP) took an official position against raising any NAFTA tariffs; Chairman Bob Osborne said if the agreement is changed, its “impact on our markets for oil and gas needs to remain positive and profitable.”

TAEP said the agreement is important to Texas, especially considering the opening and development of freer markets in Mexico, including a five-fold increase in natural gas exports to our neighbors to the south during the past seven years.

 

Texas Representative Calls For Port Infrastructure Improvements

February 1, 2018

 

Texas Representative Ted Poe joined in the call for ports to be included in any federal infrastructure program.

Poe joined his co-chair of the Congressional Ports Opportunity, Renewal, Trade, and Security (PORTS) Caucus, California Republican Alan Lowenthal in leading a bipartisan coalition of 36 Congressional members in placing investment in ports at the top of the list of infrastructure improvements.

“Any infrastructure package presented by the Administration should include necessary funding to maintain and improve our national freight network. Our nation’s ports are critical to the growth of our economy and our national supply chain.”

Poe and Lowenthal were joined by other Texas members of Congress in writing a letter to President Trump emphasizing the need for port improvements, including John Culberson, Randy Weber, Blake Farenthold and Filemon Vela.

President Donald Trump, in his Tuesday night State of the Union speech, called for infrastructure improvements that were also among his campaign promises.

The port of Corpus Christi is one of the fastest-growing ports in the nation, with significant growth expected at the Port of Brownsville over the coming years.

 

New Midland E&P Ready For Acquisitions With New Line of Credit

February 1, 2018

 

A new West Texas oil and gas exploration and production company says it now has the cash ready for acquisitions.

Stronghold Energy II Holdings said it has a line of credit through Warburg Pincus, the private equity firm, of up to $150 million.

The Midland company was formed in December under the leadership of geologist Steve Weatherl, a 35-year veteran of the Permian Basin who worked for Exxon, the company said.

He was also a GM and VP at EOG Resources in the Midland division and has worked for Pioneer and EnerQuest Oil and Gas along the way.

The senior team includes strong Permian experience among Chief Operating Officer Travis Lain, onetime operations manager for the Midland Division at EOG and President and CEO Caleb Weatherl, a former Chief Financial Officer for Desert Royalty Company.