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October 29, 2014

Texas wind power bigger deal than commonly thought

More accurate measures nearly double wind’s peak demand capacity

Wind energy in Texas is contributing far more to peak electric demand than previously assumed, a new report says, and new methods for measuring wind’s actual contribution to electric reliability are game changing.

Cyrus Reed of Sierra Club’s Lone Star Chapter reports on Wednesday that this is not a mere academic matter. The Electric Reliability Council of Texas (ERCOT) adopted a new rule Oct. 13 for more updated and accurate methods to measure wind that is turning old assumptions on their head.

In fact, if ERCOT’s last Capacity, Demand and Reserve (CDR) report had used the new method for calculating wind’s peak capacity, Reed notes, wind’s assumed peak capacity value would have nearly doubled – from 8.75 percent to 16.3 percent.  

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By Polly Ross Hughes

October 29, 2014

2010 crude oil spill prompts $1.61 million civil penalty

‘Water resources are precious, especially in Texas’

Superior Crude Gathering Inc. agreed in federal court today to pay $1.61 million for alleged violations of the Clean Water Act in a coastal community 20 miles from Corpus Christi, the Department of Justice and Environmental Protection Agency announced.

The civil penalty, agreed to in a consent decree, resolves the government’s claims regarding a 2010 crude oil spill from tanks at a Superior oil storage facility in Ingleside. The penalty is in addition to Superior’s costs in responding to the oil spill and repairing the oil tanks and containment areas. The facility, where operations have ceased, is located within the former Falcon Refinery.

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By Polly Ross Hughes

October 28, 2014

RRC addresses quakes by adopting disposal well changes

‘I think this is still a work in progress,’ says Porter

The Texas Railroad Commission unanimously adopted changes to disposal well rules Tuesday morning designed to prevent induced earthquakes when injecting saltwater and hydraulic fracturing (fracking) wastewater underground.

The changes come nearly a year after more than 25 small earthquakes rattled residents in the North Texas towns of Reno and Azle, starting in November 2013. The quakes continued for a few months before townspeople, who complained of sleep interruption and home foundation damages, stopped feeling the ground shake.

Commissioner David Porter, who has pushed the hardest at the commission for tougher disposal well rules, praised the new changes but predicted more to come as science surrounding oil and gas related earthquakes improves.

“I think it was a great example of moving with all deliberate haste. I think we did it as fast as we could do it and still do it correctly. It was roughly a year ago, when the activity in Azle started coming to my attention,” he said noting an “enjoyable evening” at an Azle townhall meeting last January where he encountered hostile residents.

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By Polly Ross Hughes

October 28, 2014

UT Energy Poll discovers big generation gap

Young, old don’t see eye-to-eye on energy

Age matters when it comes to energy preferences, according to the latest UT Energy Poll, which identified a gender gap on vital energy issues.

“Consumer perspectives on energy issues continue to track political party lines, but we’re seeing a widening gulf among older and younger Americans,” UT Energy Poll Director Sheril Kirshenbaum said Tuesday, announcing the latest poll results from the University of Texas at Austin.

 Younger Americans place a higher emphasis on environmental protection and support for renewable energy sources than their older counterparts, according to the poll, conducted Sept. 4-16.

Consider these highlights:

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By Polly Ross Hughes

October 27, 2014

Deepwater Horizon: Where did all that oil go?

Scientists trace two million barrels to ocean floor

Two million of the estimated five million barrels of oil that gushed into the Gulf of Mexico after the Deepwater Horizon blowout are resting on the ocean floor, southwest of BP’s ill-fated Macondo well, the National Science Foundation reported Monday.

The discovery of the oil’s pathway and resting place – until now a mystery – was made by scientist David Valentine of the University of California, Santa Barbara (SCSB) and researchers from the Woods Hole Oceanographic Institution and the University of California, Irvine.

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By Polly Ross Hughes

October 27, 2014

Oklahoma partnership pays $800 million for NGL pipelines

Purchase strengthens its stake in prolific Permian Basin

Tulsa-based ONEOAK Partners LP said Monday it has agreed to pay $800 million for natural gas liquids pipelines from affiliates of Chevron Corp., strengthening its stake in the prolific Permian Basin.

The deal, subject to post-closing adjustments, includes an 80 percent interest in the West Texas LPG Pipeline Limited Partnership and 100 percent interest in the Mesquite Pipeline. Together, they cover 2,600 miles of NGL gathering pipelines – from the Permian Basin in southeastern New Mexico to East Texas and the Texas town of Mont Belvieu. ONEOAK will be the operator of both pipelines.

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By Polly Ross Hughes

October 24, 2014

Lawmakers mull bill to counter urban drilling bans

If Denton blocks fracking, fight could move to Capitol

Texas lawmakers are gearing up to stop citizens in places like Denton from banning hydraulic fracturing within city limits, a state senator told members of the natural gas industry Thursday.

Sen. Craig Estes, R-Wichita Falls, said certain Texas lawmakers are focused on a ballot initiative in Denton that would throw significant roadblocks in front of oil and gas drillers eyeing shale deposits within city limits.

The Denton fracking ban proposal is the result of urban drilling disputes in the North Texas university town between residents and industry, disputes that a city task force was unable to resolve otherwise. Denton is located in the Barnett Shale where natural gas deposits beneath the surface don’t stop along political boundary lines.

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By Polly Ross Hughes

October 24, 2014

Quote du jour: Estes’ dream bumper sticker

“I’m tired of seeing these bumper stickers that say, ‘Keep Austin Weird.’ I want a bumper sticker to go around town to say, ‘Have You Hugged Your Oil and Gas Producer Today?’”

--- State Sen. Craig Estes, R-Weatherford, speaking to oil and gas officials attending the Texas Natural Gas Summit in Austin on Thursday.

By Polly Ross Hughes

October 22, 2014

UT leads scientists exploring Gulf of Mexico’s frozen methane

‘This stuff is cool,’ professor says of vast potential energy source

A scientific drilling expedition led by the University of Texas at Austin has received $58 million, one of the largest grants ever awarded to a university, to explore the enormous world-wide energy potential of frozen methane.

The research team plans to analyze frozen methane – sometimes referred to as fire and ice for the brilliant flame it produces when lit – in the Gulf of Mexico. The Department of Energy has supplied more than $41.2 million, with the rest of the funding coming from research and industry partners, UT said.

Vast quantities of methane hydrate, found beneath the ocean floor and below Arctic permafrost, hold enormous energy potential, the university notes. The Gulf of Mexico, where the expedition will take place, contains an estimated 7,000 trillion cubic feet of methane. That’s 250 times the amount of natural gas used in the United States in 2013.

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By Polly Ross Hughes

October 21, 2014

Skyonic launches first plant to transform CO2 for profit

First-of-its-kind technology debuts in San Antonio

Skyonic Corp. of Austin and the Department of Energy unveiled a first-of-its-kind carbon capture plant Tuesday next to the Capitol Aggregates cement plant in San Antonio.

The $125 million, commercial-scale Capitol SkyMine project will use a new process to capture 75,000 tons of carbon dioxide (CO2) from the cement plant for conversion into products such as baking soda, bleach and hydrochloric acid, according to Skyonic.

The company said the plant, using its patented SkyMine technology, is expected to generate $48 million in revenue and $28 million in annual earnings by converting greenhouse gas emissions that would have been released into the atmosphere into useful products with a market value.

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By Polly Ross Hughes

October 21, 2014

Convicted Florida man told to stop touting oil, gas interests for sale

Texas Securities Commissioner issues emergency cease and desist order

A Florida man convicted of securities fraud and other crimes was ordered by Texas securities officials Tuesday to cease and desist from selling oil and gas investments in Texas via a Houston company called Quixote Xploration LLC.

James Patrick Bona of Pampano Beach, Florida is the president, CEO and managing member of Quixote and also lists an address at 777 S. Post Oak Lane, Ste. 1700, in Houston.

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By Polly Ross Hughes

October 20, 2014

Denton to “polka the vote” on proposed fracking ban

Conservatives in Austin say city’s ballot initiative ill advised

Denton fracking foes invited voters to “polka your way to the polls” on Monday, the first day of early voting, just as a politically conservative group in Austin issued a report saying Denton and other Texas cities shouldn’t ban fracking.

Grammy-award winning Brave Combo, the famous band from Denton, joins supporters of a ballot initiative to ban fracking this evening with a “polka the vote” concert in Denton’s Quakertown Park. And a trio of young women calling themselves the Frackettes has satirized industry opponents, singing, “Fracking is a Town’s Best Friend.”  Rodger Mallison of the Fort Worth Star-Telegram captured their bit – including the lines, “Talk to me, Barry Smitherman! Tell me all about it!” – in this video.  

The proposed ban has drawn fierce opposition from the energy industry in a colorful campaign that has labeled some ban proponents as Russian sympathizers for airing their anti-fracking stands on RT, the Russian television network. The “Frack Free Denton” website, meanwhile, has published two e-mails it has characterized as death threats. While it didn’t release the names of its opponents, it said it did share the names with authorities.

Should the ban pass, and some who oppose it think that’s possible, it remains to be seen whether it would effectively stop all future fracking or all current and future fracking.  

The ballot initiative reads:

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By Polly Ross Hughes

October 17, 2014

PUC’s Anderson surprised to find Oncor cut distribution spending

Regulator says tree trimming could have prevented long outages

Texas Public Utility Commissioner Ken Anderson, curious about why recent storms in North Texas resulted in long and widespread electrical outages, said this week he was surprised to discover Oncor had “continuously and systematically” cut spending on maintaining its distribution system.

Specifically, he was alarmed to discover a “problematic” 24 percent reduction in distribution maintenance (such as tree and bush trimming around power lines) and a 4.6 percent reduction in distribution system capital expenditures over a nine-year period – from 2005 to 2013.

“Much to my surprise, it appears as though Oncor has continuously and systematically reduced its investment in, and operational maintenance spending on, its distribution system infrastructure,” Anderson noted in a memo filed before Friday’s PUC meeting.  

“Equally surprising is that these reductions in distribution investment and maintenance spending occurred while Oncor’s account base was increasing from 2,996,718 customers to 3,266126 customers, a nine percent increase,” he added.  

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By Polly Ross Hughes

October 17, 2014

Ted Cruz endorses Ryan Sitton for RRC

Texas Republicans say they’ll work together on energy

Tea Party darling and Republican firebrand U.S. Sen. Ted Cruz of Texas has endorsed Republican Ryan Sitton for Texas Railroad Commissioner, Sitton announced Friday.

“I’m proud to endorse Ryan Sitton who will be the first engineer to serve on the commission in over 50 years. Ryan has the right background and experience to ensure that the responsible production of oil and gas in Texas continues unimpeded by unnecessary government interference and regulation,” Cruz said. “I look forward to working with Ryan to develop comprehensive energy policies that will secure Texas and America’s energy future.”

Sitton said he is “incredibly grateful” for Cruz’s support. He called Cruz “a great conservative leader” whose work on energy issues has been “remarkable.”

By Polly Ross Hughes

October 16, 2014

Libertarian RRC candidate: ‘Texas can do better than Prop 1’

Use energy taxes in general revenue, not Rainy Day Fund, for roads

In 1988, the Texas Constitution was amended to establish the Economic Stabilization (Rainy Day) Fund. This fund currently receives 75 percent of oil and gas production taxes in excess of those collected in 1987. The Rainy Day Fund is capped at 10 percent of the State’s general revenue budget. The cap was $12 billion for the 2012-2013 biennium. The current balance is around $8 billion.

Oil and gas production severance taxes are collected from both producers and mineral owners:

--- Natural gas: 7.5 percent of market value (with exemptions for high-cost gas and low-producing wells)

--- Crude oil and condensate: 4.6 percent of market value (with an exemption for enhanced oil recovery projects)

Proposition 1, if enacted, would direct half of the money currently earmarked for the Rainy Day Fund to be transferred to the State Highway Fund, but only to be used for constructing, maintaining, and acquiring rights of way for public roadways other than toll roads. Texas’ critical highway needs are a consequence of both population growth as well as increased deterioration of roadways from oil and gas development. Proposition 1 is estimated to generate $1.4 billion for FY2015, falling to $1.2 billion in subsequent years. Budgeted state highway funding was around $10 billion for FY2013.

Mark A. Miller, PhD, PE, is the Libertarian candidate for Texas Railroad Commissioner. The rest of his column is available in our Opinions section.

By Mark Miller

October 16, 2014

Deb Mamula of TXOGA: Why Texas needs Proposition 1

‘Critical first step to address dramatic transportation needs’

Texas is one of the fastest growing states in the nation.  We lead the country in job creation and our economy is soaring, driven largely by unprecedented growth in the oil and natural gas sector.  

While we top the charts for a number of economic measures, several aspects of our state’s critical infrastructure lag behind.  As the Texas population balloons and our economy grows, Texas needs expanded infrastructure across the board including transportation, water and pipeline infrastructure.  

Proposition 1, a constitutional amendment voters will consider on Election Day, is a critical first step to address dramatic transportation needs in Texas.  For example, the number of vehicles on the road has increased by triple-digit percentages, while additional highway space languishes far behind the growth curve. Proposition 1 addresses some of these transportation needs and does so in a way that doesn’t raise taxes or increase debt.  

The author, Debbra Mamula, is executive vice president of the Texas Oil & Gas Association. Her complete column can be found in the Opinions section.

By Debbra Mamula

October 16, 2014

Border Energy Forum draws standing-room only crowd

‘There’s a lot of excitement about Mexican energy reform’

Texas Land Commissioner Jerry Patterson reported an excited and sold-out crowd at the General Land Office’s 21st Border Energy Forum that opened in Monterrey Thursday.

“There’s a lot of excitement about Mexican energy reform right now,” Patterson said. “Texas oil and gas companies will benefit from new opportunities in Mexico and Mexico will earn billions from increased production in the Eagle Ford Shale formation that extends into Mexico.”

The annual forum is a collaborative effort among 10 border states along the U.S.-Mexican border, and originally it consisted of 50 representatives from both sides of the border.

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By Polly Ross Hughes

October 16, 2014

Democrat for RRC: Create shale public health, safety zones

Brown envisions citizens advising regulators on risk reduction

Democratic candidate for Texas Railroad Commission Steve Brown said Thursday that citizen advisory teams should be created to help the oil and gas regulators reduce health and safety risks for Texans living in shale communities.

“The voices of these communities need to be an institutional part of the Railroad Commission’s decision making process,” Brown said in a statement. “Establishing and empowering these community-based councils is the first step to ensure that their voices are heard, and that we aren’t compromising the health and safety of communities that are in close proximity to drilling and waste disposal activities.”

Brown’s suggested Public Health and Safety Empowerment (PHASE) Councils would gauge quality of life impacts on communities, schools and hospitals within 1,500 feet of drilling or waste disposal activities. They’d work with operators to monitor ongoing activities and advise oil and gas regulators at the RRC on strategies to reduce health and safety risks.

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By Polly Ross Hughes