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June 22, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI up 0.25 to close at $42.79

Brent up 0.43 to close at $45.25

Natural gas up 0.01 at $2.90

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CLOSING OIL & GAS STOCKS

Anadarko (APC) down 0.26 at 45.09

Apache (APA) down 0.03 at 45.63

Chevron (CVX) down 0.04 at 104.45

ConocoPhillips (COP) down 0.14 at 44.81

Devon (DVN) down 0.14 at 30.01

Energy Transfer Partners (ETP) up 0.35 at 18.81

EOG Resources (EOG) up 0.57 at 87.69

ExxonMobil (XOM) down 0.36 at 81.08

Halcon (HK) down 0.06 at 3.79

Marathon Oil Corp. (MRO) down 0.02 at 11.59

Noble Energy (NBL) down 0.36 at 27.76

Occidental Petroleum (OXY) up 0.33 at 60.21

Parsley Energy (PE) up 0.20 at 26.31

Phillips 66 (PSX) up 0.02 at 78.91

Pioneer Natural Resources (PXD) down 0.28 at 154.75

Valero (VLO) up 0.14 at 64.82

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CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) down 0.61 at 71.79

CenterPoint (CNP) up 0.11 at 28.09

Entergy (ETR) down 0.18 to close at 79.19

Exelon Generation (EXC) down 0.01 at 36.66

NextEra Energy (NEE) up 0.53 at 141.59

NRG (NRG) up 0.45 at 17.23

Vistra Energy (VST) down 0.05 at 16.65

By Mike Shiloh

June 21, 2017

Irving Pioneer Groundbreaking Next Week: DMN

Developer KDC will break ground next week for its more than $100 million Irving campus for Pioneer Natural Resources.

The 10-story office project will be the first phase of the $1 billion Hidden Ridge development in Las Colinas, the Dallas Morning News reports.

The Pioneer complex is part of the more than 150-acre mixed-use development located west of State Highway 114 and will open in 2019.

By Mike Shiloh

June 21, 2017

Perry Grid Reliability Study Postponed to July: The Hill

"The Energy Department's contentious study on electric grid reliability won't be available until July," The Hill reports Wednesday.

Nearing completion, the draft -- at first expected late in June -- will go to Secretary Rick Perry in early July, and it will be released publicly shortly after that, assuming it complies with his order.

"While it hasn't been released, the study is already highly controversial. Perry asked his staff to examine whether renewable power sources like wind and solar are harming baseload power like coal and nuclear by pushing them off the grid, and whether government support like tax credits is contributing," the newspaper says.

By The Hill

June 21, 2017

New Gas Pump Inspection Practices Signed Into Law

A bill separating some gas pumps from other commercial measuring devices under state law has been signed by Texas Governor Greg Abbott.

The new law essentially removes the state Department of Agriculure from daily participation in regular inspection of certain motor fuel metering devices and turns inspections over to "TDA licenses third-party" inspectors -- if "the metering device is not used to calculate the amount of fuel sold in a commercial transaction or to compute the charge for service."

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 21, 2017

Oil Terminal Fee Elimination Signed By Governor Abbott

A bill has been signed by Governor Greg Abbott to abolish the fee administered by the Texas General Land Office for processing of applications for oil terminal facilities.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 21, 2017

Governor Signs Electric Utility-Subdivision Liability Bill

Governor Greg Abbott has signed 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.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 21, 2017

DOJ Blocks Texas Radioactive Waste Company's Merger

A federal judge has blocked the proposed merger between Texas-based Waste Control Specialists and Salt Lake City-based EnergySolutions.

Waste Control says it's considering an appeal of Wednesday's court decision.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 21, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI down 0.98 to close at $42.53

Brent down 1.26 to close at $44.66

Natural gas down 0.01 at $2.89

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CLOSING OIL & GAS STOCKS

Anadarko (APC) down 0.94 at 45.35

Apache (APA) down 2.06 at 45.66

Chevron (CVX) down 1.99 at 104.49

ConocoPhillips (COP) down 0.87 at 44.95

Devon (DVN) down 1.01 at 30.15

Energy Transfer Partners (ETP) down 0.30 at 18.46

EOG Resources (EOG) down 0.79 at 87.12

ExxonMobil (XOM) down 0.87 at 81.44

Halcon (HK) down 0.42 at 3.85

Marathon Oil Corp. (MRO) down 0.45 at 11.61

Noble Energy (NBL) down 0.38 at 28.12

Occidental Petroleum (OXY) down 0.89 at 59.88

Parsley Energy (PE) down 0.42 at 26.11

Phillips 66 (PSX) down 0.66 at 78.89

Pioneer Natural Resources (PXD) down 2.85 at 155.03

Valero (VLO) down 0.97 at 64.68

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CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) down 0.16 at 72.40

CenterPoint (CNP) down 0.43 at 27.98

Entergy (ETR) down 0.37 to close at 79.37

Exelon Generation (EXC) down 0.22 at 36.67

NextEra Energy (NEE) down 0.90 at 141.06

NRG (NRG) up 0.02 at 16.78

Vistra Energy (VST) down 0.02 at 16.70

By Mike Shiloh

June 21, 2017

RRC: Smart IT Solution Reaps Benefits for Agency, Industry: News Release

A new well log electronic filing system has reduced the burden on operators and saved both the industry and Railroad Commission thousands of dollars and man-hours in its first six months of use. The system was created as a solution to the cumbersome and outdated print system previously used, which required operators to print hundreds of pages - that they already had in electronic format - and mail them to the Railroad Commission for imaging and processing. Prior to development of this system, the Commission did not have a way to accept the information electronically.
 
The effort to streamline the burdensome well log filing system came as part of Railroad Commissioner Ryan Sitton's initiative to implement smart IT solutions. As an oil and gas engineer, and founder of a company that focused on IT solutions for asset evaluation and reliability, Commissioner Sitton understands what taxpayers and the agency's customers should expect from an IT solution perspective.
 
"Information Technology solutions aren't always easy to develop. An entity's desire for customization and control often leads to poor IT development decisions that don't solve problems at affordable rates," Sitton said. "Since joining the Commission I've encouraged our IT department to develop affordable, off-the-shelf systems and simple fixes to important problems like the well log issue. As we utilize budget resources this next biennium, I will continue to push for smart IT solutions to increase transparency and efficiency, and to make our IT systems more user friendly for all Texans."
 
Nearly 30 percent of all well logs filed since the system launched have been submitted online. That number will grow as more operators learn of the time and money they will save as a result of this system.
 
"BP welcomes the changes to the state's well log submission system, which will significantly reduce costs and streamline the process," said Tim Seidel, a geoscience technologist with BP America, "and we appreciate the Railroad Commission's efforts to push for these necessary reforms and its continued support of our industry."

 

Well Log Hard Copies
Pictured above are boxes of hard copies of well logs the RRC has received. One well log could stretch several feet in length, such as the one pictured above. Electronic submission of well logs will eliminate the need to print, process and store all hard copies of well logs.

By Railroad Commission of Texas

June 21, 2017

EIA: Crude Supply Down About 2.5 Million Barrels

US inventories of crude oil were down by 2.45 million barrels last week, slightly more than the 2.1 million barrels analysts had expected according to the Energy Information Administration's weekly report.

The current stockpile nationwide is 509.1 million barrels.

Gasoline declined by 600,000 barrels last week, with distillates recording an increase of 1.1 million barrels.

Overall, US commercial petroleum inventories fell by 1.9 million barrels.

Tuesday the American Petroleum Institute reported a drop of 2.72 million barrels in US crude oil inventories, just about wiping out last week's reported increase of 2.75 million.

By Mike Shiloh

June 20, 2017

PEC Elects Directors

Voters in Pedernales Electric Cooperative’s districts 2 and 3 elected directors in the 2017 annual election.

District 2 re-elected Emily Pataki to serve as its board director and District 3 elected Randy R. Klaus to serve as its new board director.

Klaus replaces former director Kathy Scanlon, who served District 3 for nine years, the San Marcos Corridor News reports.

Election results were announced during the PEC Annual Meeting Saturday in Leander.

Board officers will be elected during the cooperative’s regular July 17 board meeting.

By Mike Shiloh

June 20, 2017

DOE Program to Help Integrate Conventional and Renewable Power

The US Department of Energy’s Office of Electricity Delivery and Energy Reliability is distributing nationally an investment of nearly $10 million for new research to enhance control and monitoring of distributed energy resources by grid operators.

"The investment is part of DOE’s Grid Modernization Initiative to integrate conventional and renewable energy sources while maintaining grid reliability and protecting against cybersecurity threats," according to National Law Review.

By Mike Shiloh

June 20, 2017

Mewbourne to Open New Permian Plant

Tyler-based Mewbourne Oil Co. Inc. has scheduled the grand opening of its newly-built regional headquarters in Hobbs, on the New Mexico side of the Permian Basin for Wednesday. 

The New Mexico Oil and Gas Association said Monday that the new facility cost more than $6 million, details of which are exected at the opening.

By Mike Shiloh

June 20, 2017

Sanchez Eagle Ford Production Land to Lonestar

Sanchez Energy is selling about 21,000 net acres in the eastern Eagle Ford to Lonestar Resources US for about $50 million, the company said Monday.

The land comprises non-core assets Sanchez held in Fayette and Lavaca Counties, with net reserves of 2.7 million barrels of oil equivalent.

Net production is about 1,750 barrels per day.

The deal reportedly includes Lonestar preferred stock convertable to 1.5 million shares of common stock.

Sanchez says it now plans to focus on it's other 340,000 net acres in the Eagle Ford play.

By Mike Shiloh

June 20, 2017

US Public Land Fracking Rule Withdrawal Goes to White House

The US Bureau of Land Management sent the proposed withdrawal of its rule regulating hydraulic fracturing on public and tribal lands to the White House's Office of Management and Budget for review, as states, industry and environmental groups continue to fight over the rule's legality, acording to Law360.

The proposal was put into the hands of OMB's Office of Information and Regulatory Affairs on Saturday.

By Mike Shiloh

June 19, 2017

FERC Report Considers ERCOT Reserves Tight But Adequate

Reserve energy supplies for Texas are expected to be adequate but somewhat tight when compared to other regional electricity supplies, according to a new assessment from the US Federal Energy Regulatory Commission (FERC).

The FERC's report released late last week forecasts reserve margins in the Electric Reliability Council of Texas (which handles more than three-quarters of the state's electricity system) to continue to be tight in relation to reserves kept in the Southeastern and Western United States.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 19, 2017

New Texas Comptroller Program Allows State, Local Entities Power Price Consultation

Waco-based Texas Energy Aggregation LLC has been awarded an electricity contract from the Texas Comptroller of Public Accounts Statewide Procurement Division, with local and state entities said to be welcome to take part in the program.

The four-year contract includes electricity purchasing and consulting services for the largest Texas state agencies and is available for use by cities, towns, school districts and universities in need of electicity consulting services.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 19, 2017

Texas Wind Project Goes From Tri-Global to NextEra Subsidiary

Utility-scale wind power developer Tri-Global Energy is selling Texas assets to a NextEra Energy Resources LLC subsidiary.

That subsidiary, Lorenzo Wind, is buying the Fiber Winds wind energy project in Crosby County capable of producing 80 MW of power, according to Tri-Global.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 19, 2017

Houston-area Companies Seismic Testing Near Marcellus

New natural gas exploration is underway in an area just east of Pittsburgh, Pennsylvania, under the direction of Huntley & Huntley, a Monroeville, PA oil and gas engineering company, with seismic testing from Geokinetics of Houston and Cougar Land Services of Sugar Land, both Texas companies.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 19, 2017

Abbott’s Veto Pen Targets Low-Income Texans, Clean Air, Groundwater Research: News Release

AUSTIN, Texas - Last week, Texas Governor Greg Abbott cut funds from important low-income and clean air planning programs, as well as brackish groundwater research, using his line item veto power. Abbott also signed SB 1731 into law, which keeps the Texas Emissions Reduction Program (TERP) alive but at much lower funding levels.

Abbott cut $87 million for the state’s Low-Income Vehicle Repair Assistance Program (LIRAP), a program designed to assist low-income Texans repair or replace vehicles that do not pass state inspection. In addition, Abbott vetoed $6 million for air quality planning at the Texas Commission on Environmental Quality, claiming it could be funded by local governments.

LIRAP is a voluntary 10-year old program that is self funded from Dallas, Houston, and Austin area counties through a $2-$6 charge on annual automobile emission inspections. Vehicles repaired through the program pollute less, thus improving the air quality of these urban areas. This money can be used for no other purpose.

SB 1731 extends and expands the highly-successful TERP program to help Texas meets its clean air obligations under federal law. Unfortunately, the Legislature cut the overall TERP budget from $236 million to $155 million over two years.

In response, Cyrus Reed, Conservation Director of the Sierra Club’s Lone Star Chapter, and Ken Kramer, Water Resources Chair of the Sierra Club’s Lone Star Chapter, issued the following statements:

Cyrus Reed:

“This is Abbott dictating local affairs again. He’s supposed to be the Governor, not City Council Member and County Commissioner. Essentially, Mr. Abbott has decided that he alone knows what is best for everyone, and that includes how much pollution you breathe in. While Mr. Abbott and the Legislature chop effective programs that serve the public well, we hope the Legislative Budget Board can meet during the interim and make an adjustment to the budget to at least fund the new TERP programs appropriately.”

Ken Kramer:

“The Governor’s veto of funds for brackish groundwater studies is unfortunate. Texas needs more information about our groundwater resources, fresh and brackish, if we are to use those resources wisely to meet our water needs. The Governor is correct in saying that the Texas Water Development Board has already completed several studies on brackish groundwater in some regions, but there are many other regions in need of study.”

By Sierra Club's Lone Star Chapter

June 19, 2017

Texas Will Lose Half Its Solar Jobs Next Year If Federal Government Rules Against Industry in Trade Case: SEIA

SEIA says adverse decision would cost U.S. 88,000 jobs, reverse years of solar growth

The Solar Energy Industries Association (SEIA), the national trade association for the solar industry, said that Texas will lose 46 percent of its solar jobs next year if Suniva gets trade protections as proposed in its petition with the U.S. International Trade Commission (ITC).

This spring, the Georgia-based company asked the ITC to place a tariff on imported solar cells and set a price floor for virtually all imported panels,arguing that it cannot compete with foreign rivals. Suniva, which is majority-owned by a Chinese firm, filed the petition after declaring bankruptcy in April.

Overall, SEIA said, the U.S. will lose some 88,000 jobs next year, or about one-third of the American solar workforce today, if Suniva prevails.

“These new estimates show the potential damage to the solar industry as a result of this petition,” said SEIA President and CEO Abigail Ross Hopper. “Rather than help the industry, the action would kill many thousands of American jobs and put a stop to billions of dollars in private investment.”

“Our estimates show that even in the states where Suniva and its lone supporter, SolarWorld, have operations, if the petition succeeds there would be many more jobs lost than expected gains for two struggling companies,” Hopper said.

SEIA said that if Suniva gets the relief it is seeking, prices will rise substantially, slashing demand for solar and sending the industry in reverse.

Among the states standing to lose the most jobs include California with an expected job loss of 15,800, another 7,000 jobs would be lost in South Carolina, and 6,300 in Texas, which is nearly half of the state’s solar workforce, according to preliminary estimates by SEIA.

“We believe Suniva’s Section 201 trade petition has a strong potential to negatively affect thousands of current and future jobs across the renewable energy industry,” said Trent Mostaert, vice president and general manager for Solar and Emerging Renewables, at Mortenson, which operates in Texas. “Solar energy has achieved tremendous adoption in the U.S. and costs continue to decrease as the industry grows and this proposal could bring that progress to a halt and hurt the economy.” 

The trade case comes after a record-breaking year of solar energy growth in 2016, when nationwide installed capacity doubled and industry jobs grew by 51,000 jobs, a 25 percent increase. Texas’ solar capacity doubled and its solar jobs climbed 34 percent.

SEIA forecasts that solar jobs would be lost in all segments of the market. The utility-scale market, which has paced the industry’s growth for years, would see jobs shrink by 60 percent, while residential and commercial employment would fall by 44 percent and 46 percent, respectively, SEIA said.

By SEIA

June 19, 2017

ERCOT Board approves transmission project in West Texas: News Release

AUSTIN, TX, June 14, 2017 – The ERCOT Board of Directors has endorsed a transmission project that includes two new 345-kV lines to help address future reliability concerns in the growing region of Far West Texas.

 “We continue to see a tremendous amount of load growth in West Texas,” said ERCOT Senior Manager of Transmission Planning Jeff Billo. “Based on projected load growth in this area, these new lines will be needed to support system reliability in the coming years.”

 Increased oil and natural gas exploration in the Permian Basin area in Far West Texas has contributed to high load growth in the region. Between 2010 and 2016, the average load growth in Far West Texas was about eight percent. An increase in the number of generation projects, mostly solar, being developed in this region is also a factor.

 The new high voltage power lines will be built by transmission service providers Oncor, American Electric Power Service Corporation (AEPSC) and the Lower Colorado River Authority Transmission Services Corporation. Oncor and AEPSC initially proposed the project to the ERCOT Regional Planning Group in April 2016.

 An independent analysis performed by ERCOT confirmed the project’s necessity. ERCOT analyzed more than 40 options and proposed the most cost-effective option to meet reliability needs in the area.

 The project will include a new, 345-kV transmission line that will connect the Odessa and Riverton substations. It will span approximately 101 miles across Ector, Winkler, Loving and Reeves counties. In this area alone, peak electricity demand has jumped from 22 MW in 2010 to more than 200 MW in 2016. It is projected to exceed 500 MW by 2021.

 The second new, 345-kW transmission line will be located further south in Pecos County, spanning about 68 miles and connecting the Bakersfield and Solstice substations.

 The estimated capital cost for these improvements is $336 million. ERCOT estimates the project will be completed in the next four to five years, pending approval from the Public Utility Commission of Texas.

By ERCOT

June 19, 2017

Governor Abbott Signs Resolution Supporting Delegation Of Federal Energy Regulations To State: TAEP

AUSTIN – Texas Governor Greg Abbott signed a resolution urging the federal government to work with Texas in unraveling overreaching regulations, which were largely aimed at negatively impacting the oil and gas industry. 

Senate Concurrent Resolution 26, authored by Senate Natural Resources Chairman Craig Estes and sponsored by House Energy Resources Chairman Drew Darby, cleared both chambers by large margins of 29-2 in the Senate and 123-19 in the House.

The Texas Alliance of Energy Producers applauds the passage of Senate Concurrent Resolution 26, which sends a strong message to the federal government and the new presidential administration. Now is the time to work together to reverse some of the harmful regulations that have stunted the growth of our industry for far too long,” said Alliance Chairman Bob Osborne. “We would like to express our sincerest gratitude and appreciation to the authors of this resolution, Chairman Estes and Darby, for their stanch leadership on this important issue.” 

Specifically, SCR 26:

- recognizes the opportunity to “transcend partisan politics and correct misuses of federal regulatory power that have threatened the Texas oil and gas industry, the jobs it creates, and the economy of Texas”;

- strongly urges Congress and the new administration to closely review onerous regulations in order to determine whether these rules should be revised, repealed or alternatively, delegated back to the states to implement and enforce;

- acknowledges the incredible economic security and prosperity that Texas oilfields have afforded the state and the country as a whole, as well as the safe and reliable manner in which industry operates and produces this crucial resource;

          -  references the more than 20 lawsuits that Texas has filed in     conjunction with many other oil and gas producing states against federal overregulation that prioritizes minor environmental gains over major productive losses.

SCR 26 is a critical component in a larger overall effort to seek delegation over energy regulations from the federal government and return power to the hands of the state. 

This resolution complements the Alliance and oil and gas industry Federal Regulatory Energy Delegation (FRED) initiative designed to identify federal programs best handled by the State of Texas 

By Texas Alliance of Energy Producers

June 16, 2017

Record Increase Continues New Oil and Gas Well Count

The number of active drilling rigs in the US climbed by 6 this week to reach a total of 933, according to Baker Hughes in its weekly report.

It''s the 22nd consecutive week that oil and gas rigs increased, making for the longest rig count growth period of at least the past 30 years.

Crude oil accounted for 6 of the rigs noted by Baker Hughes; there was one new gas rig while "miscellaneous" rigs declined by one.

While the number of drillings continues to climb, Reuters notes a gradually slowing rate of increase.

Stratus Advisors also notes that the number of drilled but uncompleted wells is growing.

For a change, the red-hot Permian Basin saw no new rigs drilled this week, though Midland County reported one new well.

Canada registered a remarkable increase in rigs, up 33 for the week.

Friday's report appeared to have little effect on crude oil and gas prices.

By Mike Shiloh

June 16, 2017

Senate Resolution Appealing for Federal Port Funds Signed

An appeal from the State of Texas to the federal government for more funding for the safety, maintenance and improvement of Texas ports was signed by Governor Greg Abbott.

The 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 was signed by Abbott this week.

By Mike Shiloh

June 16, 2017

Governor Signs Law Creating Ship Channel Improvement Fund

Fund aimed at improving ports for future growth

Governor Greg Abbott has signed District 4 Senator Charles Creighton's Senate Bill 28, which creates within the state general fund an account called the Ship Channel Improvement Revolving Fund.

The state doesn't apply special funding to the fund at first but the fund does allow for a special place for later funding and for private contributions.

By Mike Shiloh

June 16, 2017

Texas Used Oil Recycling Money Now Going to Water Management

The bank account for the Texas Commission on Environmental Quality's water resource management has been dwindling, but state income from the used oil recycling program is doing well, so the state is swapping accounts.

Governor Greg Abbott has signed District 20 state Senator Juan Hinojosa and District 30 Senator Craig Estes' SB 1105, abolishing the separate used oil recycling account and transferring the money and future income to the water resource management account to, well, keep it afloat.

By Mike Shiloh

June 16, 2017

Texas Trailer Inspection Adjustment Signed Into Law

Governor Greg Abbott has signed into law a bill from the Texas Legislature increasing the weight at which pole trailers, mobile homes and other trailing vehicles are exempt from state-mandated inspection.

The weight limit increases from 4,500 pounds to 7,500 pounds but a vehicle weighing more than 4,500 pounds will be subject to a $7.50 fee due on registration.

That money goes into the state mobility fund and the clean air account.

Among those testifying in committee for the bill was a representative of a major Texas electricity distributor.

District 11 state Senator Larry Taylor's bill also allows a mandated safety inspection of fleet vehicles "to be conducted by an inspector qualified under federal law and employed or acting as an agent of a commercial fleet."

The law takes effect September 1st 2017.

By Mike Shiloh

June 16, 2017

Texas Oil and Gas Severance Tax Penalty Removal Signed by Governor

A bill removing penalities on some amended oil and gas tax reports has been signed into law by the Texas governor.

Some oil and gas companies said they were finding that even though they filed on time with their required reports to the state on 5% severance taxes, when they filed amended reports they were penalized.

Penalties were designed for those companies that filed their reports late, so District 72 state Representative Drew Darby's HB 3232 clarified the state tax code so that those who filed and paid ontime were not penalized for filing amended reports within two weeks of the original as long as they amounted to less than 25% of the original report's tax paid -- and as long as the taxpayer cleared up all errors pointed out by the state comptroller within 60 days.

Governor Greg Abbott signed the bill June 12th; it becomes effective January 1st, 2018.

By Mike Shiloh

June 16, 2017

Governor Signs the Tax-Free Fuel Tax Bill

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

Governor Greg Abbott has signed 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 law, 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 -- such as drawing oil or gas from pipelines within the state and selling it -- that may not meet these tax code requirements.

Lawmakers said these practices are leaving the state with fewer tax dollars than that for which the law was designed, hence the tightened regulations in SB 1557.

The law 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 law takes effect January 1st 2018.

By Mike Shiloh

June 16, 2017

Texas Land Office Electricity Study Endorsed by Governor Abbott

A bill in the Texas Legislature aimed at opening up electricity markets to some schools, cities and institutions didn't make it through the legislative process, but there will be a study made of the plan under a bill signed this week by Governor Greg Abbott.

North Texas state Senator Kelly Hancock's SB 736 and its companion bill HB 1685 authored by East Texas Representative Travis Clardy and co-authored by North Texas representatives Matt Krause and Lynn Stucky were intended to sublimate an electicity discount to schools, veterans' services and others through the General Land Office of Texas in favor of a strictly competitive bid process by electricity retailers.

Back in 1999, when deregulation of electricity in the state was being implemented, the legislature protected institutions from concerns about whether electricity rates might skyrocket, at least temporarily, so the Land Office offered special untaxed electricity rates to some schools and others.

Many of those same institutions have continued using the program even though there might be cheaper electricity available, and some power retailers have complained that they can't beat Land Office rates that are untaxed.

There was concern from a former Land Office commissioner and others that the bills would end up causing some institutions to lose money because of increased electricity costs, so a substitute bill was fashioned calling for a study to determine whether they would actually lose money.

SB 736 as passed and signed by the governor requires the Land Office to file a legislative report by September 2018 listing how many contracts are using the cheaper electricity program and the terms of the contracts, the costs of the aggregate rates and the fiscal impacts of the rates.

Representatives of Clardy's office and others tell The Texas Energy Report they hope to revive the bill in the next legislative session.

By Mike Shiloh

June 16, 2017

Texas Energy Report Closing Top Texas Energy Stocks

WTI up 0.22 to close at $44.68

Brent up 0.35 to close at $47.04

Natural gas down 0.03 at $3.09

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CLOSING OIL & GAS STOCKS

Anadarko (APC) up 0.93 at 47.04

Apache (APA) up 1.74 at 49.54

Chevron (CVX) up 2.02 at 108.35

ConocoPhillips (COP) up 1.14 at 46.53

Devon (DVN) up 0.27 at 31.76

Energy Transfer Partners (ETP) down 0.02 at 19.19

EOG Resources (EOG) up 1.48 at 88.52

ExxonMobil (XOM) up 1.23 at 83.49

Halcon (HK) down 0.17 at 4.43

Marathon Oil Corp. (MRO) up 0.15 at 12.52

Noble Energy (NBL) down 0.22 at 29.50

Occidental Petroleum (OXY) up 2.43 at 61.83

Parsley Energy (PE) down 0.35 at 25.86

Phillips 66 (PSX) up 1.86 at 80.94

Pioneer Natural Resources (PXD) up 0.35 at 159.14

Valero (VLO) up 1.11 at 65.80

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CLOSING TOP UTILITY STOCKS

American Electric Power (AEP) up 0.28 at 72.42

CenterPoint (CNP) up 0.27 at 28.88

Entergy (ETR) down 0.02 to close at 80.01

Exelon Generation (EXC) up 0.26 at 37.08

NextEra Energy (NEE) up 0.97 at 142.84

NRG (NRG) up 0.30  at 16.91

Vistra Energy (VST) up 0.10 at 16.70

By Mike Shiloh

June 14, 2017

Two Energy Supreme Court Patent Lawsuits to Be Followed Closely

The United States Federal Courts for the Eastern District of Texas has been for years considered a friendly place to try lawsuits over federal patents -- so friendly that 40 percent of nationwide patent lawsuits are filed there, with a single judge in Marshall overseeing about a quarter of patent cases nationwide, according to The New York Times.

That's one reason the case of Oil States Energy Services v. Greene's Energy Group is of so much importance in the energy legal landscape.

Energy-related patents are tried in East Texas courts often because the owner of the intellectual properties is Texas-based, but a lot of such suits end up in East Texas because juries and judges there have ordered billions of dollars in awards in favor of and against patent holders.

Federal law has been lax over such lawsuits; they can be filed pretty much anywhere and East Texas has traditionally had a much lower criminal case load than most other federal courts, leaving room for faster patent decisions.

The Rest of the Story, Subscribers Only

By Mike Shiloh

June 14, 2017

Reporter's Notebook: New Seismic Model Program, AEP Award

Global risk analytics firm RMS has released a new version of its North America Earthquake Modes program, covering Canada and Mexico as well as Texas and all of the United States. The computer models will be especially useful to insurance companies and underwriters who need to factor risk into their businesses using the US Geological Survey 2014 national seismic hazard modeil as a basis. RMS said this week that "a key insight of the updated RMS model is that it captures what is now understood to be the potential for larger and more correlated seismic events in California, as well as new views of risk across all the regions of the U.S. The model now includes induced seismicity, making it the first available tool on the market for analyzing property risks from man-made earthquakes across Oklahoma, Kansas, Ohio, Arkansas, Texas, Colorado, New Mexico and Alabama. This functionality will allow clients of RMS to consider risks from earthquakes linked to oil and gas extraction."

American Electric Power won the 2017 Edison Award, the Edison Electric Institute's top award. It's the first U.S. company to receive the Edison Award in consecutive years, earning the award three of the last five years. AEP has won more Edison Awards than any other company, a total of seven since the 1950s. The institute says it recognizes "distinguished leadership, innovation and contribution to the advancement of the electric industry for the benefit of all."

Parker Driling executive Chris Weber has been hired by Halliburton to become its new CFO, the Houston-based drilling rig contractor said Tuesday. Parker's Chief Administrative Officer Jon-Al Duplantier is set to take over as interim CFO at Parker while Weber prepares for his new position to begin June 22nd.

By Mike Shiloh

June 14, 2017

Staffer for Texan on US House Transportation Subcommittee Shot Along with Louisiana Representative

Without Capitol Police presence, Senator Rand Paul said, "it would have been a massacre"

A member of Texas congressman Roger Williams' staff was shot at a community baseball practice Wednesday morning in Alexandria Virginia, according to police, as was New Orleans-area US representative Steve Scalise.

The staffer has been identified as congressional assistant Zack Barth.

It was at first thought that Williams was wounded in the shooting and he was taken by emergency personnel to be examined.

Williams serves on the House Transportation Subcommittee on Railroads, Pipelines and Hazardous Materials.

Rep. Scalise is undergoing treatment for what ABC News said is non-life threatening wounds, as is Williams' unnamed staffer.

NBC News reported that there will be no US House votes today; the House has gone into recess because of the shooting.

The shooter has been identified as James T. Hodgkinson, 66, of Belleville, Illinois, who died at a hospital after being wounded in a shootout with Capitol Police.

Hodgkinson is characterized by the Belleville, IL News-Democrat as a "member of anti-Republican groups" who, North Carolina Representative Mark Walker told NBC News, specifically targeted Republican House and Senate members during an early morning baseball practice session.

CBS News said Democratic congressmembers were practicing at a different location.

Michigan Representative Mike Bishop told Detriot's WWJ Radio that a man just walked up to the fence of the practice field and opened fire; 50 or so shots were fired, he said.

Other witnesses said there were up to 100 shots fired; one said the shooter had multiple rounds and just kept reloading.

Two US Capitol police officers were shot, according to Alexandria police, with five people injured in all.

One report says the shooter was deliberately targeting Republicans; Senator Rand Paul told CNN that Capitol Police were there at the game because Scalise is House Majority Whip, a ranking Republican leader, otherwise those at practice would have been unprotected.

"It would have been a massacre," he said.

By Mike Shiloh

June 13, 2017

Environment Texas: Watson, Howard Lead Legislature in Environmental Voting

AUSTIN – Austin state Sen. Kirk Watson and Rep. Donna Howard were the only two legislators to get perfect marks on Environment Texas’ biennial scorecard of environmental votes in the Texas Legislature, the group reported today. Meanwhile a record 27 legislators failed to cast a single vote for the environment.  

"The legislature did not do right by the environment this session” said Luke Metzger, Director of Environment Texas. “Lawmakers weakened the rights of Texans and local governments to fight pollution and took away support for wind energy.”

“I’m very grateful to Sen. Watson and Rep. Howard, who both proved themselves champions for the environment this session – working tirelessly in committee and on the floor and voting time and time again to put public health ahead of polluters’ interests," continued Metzger.

Environment Texas tracked eight votes each in the House and Senate, including votes on clean air, wind energy, bee protection, tire dumping and more.  

Environment Texas noted a steady decline in voting for the environment in the Texas Legislature over the last three legislative sessions. In 2013, House members voted for the environment 63% of the time on average and Senators 64%. In 2015, House members voted for the environment 59% of the time and Senators 56%. In 2017, the average score of Senators was 43% and the House 34%.

Bringing down the average were 27 legislators voting for the environment 0% of the time. By comparison, the 2015 session only had 2 legislators earn zeros.  

Senate: Konni Burton, Bob Hall, Van Taylor

House: DeWayne Burns, Briscoe Cain, Pat Fallon, Craig Goldman, Cole Hefner, Mark Keogh, Stephanie Klick, Matt Krause, Mike Lang, Jeff Leach, Will Metcalf, Andrew Murr, Tom Oliverson, Dennis Paul, Matt Rinaldi, Scott Sanford, Matt Schaefer, Leighton Schubert, Matt Shaheen, Hugh Shine, Jonathan Stickland, Valoree Swanson, Tony Tinderholt, and Terry Wilson

"Our scorecards help Texans know which legislators are standing up for clean air and water and which are siding with big polluters against our health," concluded Metzger. “It’s clear that elections matter and we urge voters to consider this information in the voting booths next year.”

Environment Texas's scorecards for 2017 and previous years are available online at http://environmenttexas.org/page/txe/legislative-scorecards

By Environment Texas

June 12, 2017

GE-Baker Hughes Merger Wins Justice Department Approval, Now Goes to Shareholders

The merger between Houston's Baker Hughes and General Electric is nearly official with Monday's antitrust approval announced by the US Department of Justice, subject to terms.

The announcement comes just hours after GE announced the retirement of its CEO Jeff Immelt, who will step down later this year and will retire from the board at the end of December, to be replaced as CEO by John Flannery (see story below).

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By Mike Shiloh

June 12, 2017

Gov. Abbott Signs 2018-19 Budget Bill with TCEQ Pollution Awareness Program Veto

Vetoed program would draw money from state Clean Air account that governor says should be dedicated to "non-attainment" pollution areas

The state budget for 2018-19 has been signed by Governor Greg Abbott, with $120 million in vetoes, including a proposed TCEQ program.

The $218 billion dollar budget was finalized after weeks of compromise talks between the Texas House and Senate thanks to budget constraints because revenues were down during the oil and gas downturn.

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By Mike Shiloh

June 12, 2017

Houston Selling Streets to Valero: HC

The city of Houston is selling off streets intersecting property owned by San Antonio's Valero Energy Corp. to the oil company for $1.4 million, according to the Houston Chronicle.

It's part of a plan to raise money for the cash-strapped city, which is running $100 milliion in deficits over the next five years, city projections say.

Valero will take possession of the streets near Buffalo Bayou and incorporate them into the private property as part of a plan to build new structures and parking areas on the southeast Houston property adjacent to Valero's refinery.

By Mike Shiloh

June 12, 2017

TXDot Reauthorized, Including "Statewide Passenger Rail System" Rule

A bill re-authorizing the Texas Department of Transportation, including directives to monitor the use of state funds by the department and of statewide passenger rail systems, was signed by Governor Greg Abbott on Friday, according to the governor's office.

District 3 state Senator Robert Nichols' SB 312 requires the department to analyze and publish on a state website it's spending and transportaiton priorities and to measure its performance in each of the TXDot districts.

And the law requires any plan for a statewide passenger rail system "to be updated at least once every five years, instead of every year as under current law, and include an analysis of any potential impact on local road connectivity and statewide transportation planning," according to state analysis.

The new law also gives TXDot until September 1st 2018 to adopt rules coordinating project with local Metropolitan Planning Organizations.

The bill also establishes some restrictions on the use of state aircraft; requires law enforcement to submit car accident data electronically; and requires TXDot to hold hearings if road projects would substantially change existing transportation infrastructure.

The bill SB 312 also said, "the department shall establish a state airport in Central Texas that is open to the general public."

The law takes effect September 1st of this year

TXDot would have been discontinued September 1st if this legislation had not gone through.

By Mike Shiloh

June 12, 2017

RRC Gains Criminal History Access Under New Law

The Railroad Commission of Texas will now have access to information about criminal histories that can be checked before the commission lets contracts or hires employees.

Governor Greg Abbott has signed into law District 11 Representative Travis Clardy's HB 2588 doesn't prohibit the RRC from associating with those who might have criminal histories, it's intended to allow the commission to have a broader picture of potential contractors and employees.

The bill amends Chapter 411 of the state government code allowing the commission to have the information just like "at least 30 other state agencies and entities," the bill says.

And unless there's an official call for retaining criminal investigation reports -- such as a court order -- the RRC is required to destroy the reports within six months of receiving them, unless there is permission from the subjects of the reports to retain them.

The law is effective immediately.

By Mike Shiloh

June 12, 2017

Law Ending Wind Power Tax Breaks Near Military Bases Signed By Texas Governor

Governor Greg Abbott has signed into law a controversial bill that would end tax breaks for property owners intending to build wind energy turbines within 25 miles of Texas military bases.

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.

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By Mike Shiloh

June 12, 2017

Patent Law Challenge: US Supreme Court to Take Up Houston Oil Services Company Lawsuit: Law360

America's high court says a legal action by a Houston oil services company challenging the ability of the US Patent Trial and Appeal Board to rule on patent cases can go forward.

The plaintiff challenging the board contends that the board is unconstitutional under federal separation of powers because it's an extension of the executive branch yet it has sweeping powers to declare patents invalid.

The U.S. Supreme Court agreed on Monday to decide whether reviews under the America Invents Act violate the U.S. Constitution, "throwing the future of the popular system for challenging patents into doubt," according to Law360.

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By Mike Shiloh

June 12, 2017

GE's Immelt Stepping Down

General Electric says Jeff Immelt is leaving his post as CEO, while the president and CEO of the company's health care unit, John Flannery, will take over the top job in August.

Immelt, 61, will remain chairman of the board until his retirement at the end of this year; Flannery, 55, has been with GE since 1987

The company has been under pressure to increase profits, especially since investor Norman Peltz's Trian Fund Management's large investment in the company beginning two years ago.

Immelt has held the job for 16 years, having replaced legendary CEO Jack Welch in September 2001, and his company decisions have often been controversial.

Last October GE agreed to buy Houston's Baker Hughes and merge it with GE's oil and gas division in an attempt to profit during the oil and gas downturn.

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By Mike Shiloh

June 11, 2017

Reporter's Notebook: Cabot's Billion, Slow Down E&P

Houston-based Cabot Oil & Gas says its natural gas production in Pennsylvania over the past 10 years has been so successful it's now paid out more that $1 billion in royalties in that state's Susquehanna County alone.  Cabot drilled its first vertical well in 2006, and has since drilled more than 500 wells and pumped almost three billion cubic feet of natural gas since then. And don't forget the company payouts of more than $60 million in impact fees, $500 million in signing bonues and $48 million in road maintenance since 2009, the Sayre PA Morning Times reports.

Lower prices could put a dent in U.S. shale. "If the market's telling you anything, it's saying, 'E&P guys, slow down,'" said David Pursell, an analyst at investment bank Tudor, Pickering, Holt & Co. "Investors are more worried about whether the market can absorb this slug of growth from U.S. shale." The investment bank says that shale is probably on its way to strong growth this year, but if prices stay between $40 and $45 then it could derail the production growth in 2018. "That $10 makes a big difference," Pursell said. -- Oil Price

Southwest Energy Co.'s CFO and Senior Vice President R. Craig Owen is leaving the company for an undisclosed opportunity, the Houston Chronicle reports. Owen has been CFO since 2012.

By Mike Shiloh

June 11, 2017

Worth Noting: US Rig Count Growth Is Far Greater Than In Previous Cycles

By Mike Shiloh

June 9, 2017

Oil and Gas Rig Count Up for 21st Consecutive Week

Another 11 US oil and natural gas drilling rigs were added in the past week according to the latest stats from Baker Hughes.

The count is up eight oil rigs (for a total of 741, more than twice the number working last year at this time) and up three gas rigs nationwide, with the offshore count down one (now standing at 22 total).

The rig count is now up 21 weeks in a row.

Four of those oil units were in the Permian Basin where the total, now at 368, has risen three-fold over the past year.

Reuters quotes analysts at Simmons & Co. energy specialists at investment bank Piper Jaffray forecasting this week that the total oil and gas rig count would average 878 for this year, 1,092 in 2018 and 1,203 in 2019.

For a more detailed list of Permian rigs see today's Midland Reporter Telegram report.

 

By Mike Shiloh

June 9, 2017

Texas Greatly Increasing It's Solar Capacity This Year: Report

Solar is still a remarkable growth industry, despite growing pains

Texas is moving up among states installing new solar power, according to a new report.

In adding nearly 22 megawatts of photovoltaic power in just the first quarter of this year, Texas increased its ranking among states from 13th to 9th in the latest US Solar Market Insight Report.

In fact, America's overall solar market made big strides in the first quarter of this year, adding just over two gigawatts of new capacity.

The GTM Research and Solar Energy Industries Association report also says the added 2,044 megawatts of photovoltaic power brings total installed US capacity to more than 44 gigawatts, which could power eight million homes.

In Texas alone, the first-quarter increased electrical generation is enough to power 138,000 homes, according to the report, which cites statistics showing more than a full gigawatt of solar power has been installed here in the past five years.

This, while utility-scale prices fell below $1 per watt for the first time.

And the report presents a forecast of more than five gigawatts to be installed over the next five years, with Texas just behind number-one California in increased capacity.

The report tallies 9,400 people employed at 467 solar companies in the state.

It was the sixth straight quarter in which more than two gigawatts of solar PV was added nationwide.

And while there has been a 2% decline year-over-year in PV installation nationwide, the association's CEO Abigail Ross Hopper remains optimistic, noting that "solar is delivering more clean energy, adding jobs 17 times faster than the US economy and creating tens of billions of dollars in investment."

Nationwide, the total installed US solar PV capacity is expected to increase three-fold over the coming five years, the report adds.

And growing capacity is not limited to the usual solar leaders such as Texas; Minnesota, Idaho and Indiana are increasingly bringing new solar power online.

One caveat: The report finds a recent petition by solar panel maker Suniva to be troubling, with its call for a minimum silicon PV module price of 78 cents per watt "which could raise system costs between 13 and 35 percent."

The Georgia-based company earlier this year called for tarriffs on solar cells and duties of 40 cents per watt on imported cells, shortly after declaring bankruptcy because, it said, it was being undercut by Asian cell manufacturers selling below-cost modules.

International acceptance of the Suniva petition would likely result in higher solar cell costs and less-optimistic power capacity forecasts over the coming years, the report says.

By Mike Shiloh

June 8, 2017

Chairman Craddick Highlights Successful RRC Technology Overhaul: Press Release

SAN ANTONIO - Railroad Commission Chairman Christi Craddick today noted key advancements and on-going efforts by the Railroad Commission to improve the agency's technological infrastructure at the 6th Annual Eagle Ford Shale Consortium Conference in San Antonio.
 
"Technology plays a critical role in allowing us to do our job in a more efficient and effective manner, facilitating better service at less cost for the public and industry," Craddick said. "The Commission collects and houses massive amounts of data. We recognized it was time to bring the agency into the 21st century, and we are making great strides improving outdated systems and antiquated processes."
The Information Technology Modernization Program (ITMP), a multi-biennia effort, was launched in January 2013. The legislature appropriated $24.7 million to the Railroad Commission in the 83rd Legislative Session and work began on ITMP in September 2013.
"With the ITMP effort, we have spent the last four and half years implementing extensive upgrades across the agency," Craddick said. "The changes we have made reducing paper filings, automating processes and bringing more data online for public use are saving countless hours of staff time for the state and substantial dollars for industry that can instead be used to hire workers, invest in technology and produce more energy in Texas.
"Our technological capabilities have improved but there is still plenty to do," Craddick said. "This past session, the Legislature appropriated $3 million to the agency to establish an Inspection and Enforcement Tracking and Reporting System. In addition to that project, this year, we plan to implement the online filing of well plugging forms. We will continue to look for ways to advance technology and become more efficient across the board."
Completed ITMP items include:
  • Performance improvements to queries for drilling permits, production reports and statewide field rules;
  • Establishment of online filing processes for well status reports, groundwater letters, Rule 13 exceptions, pipeline permits, well logs and identifying gatherers and purchasers;
  • Improvements to efficiencies in processes for issuing drilling permits, submitting completion information and utilizing the RRC Payment Portal;
  • Launch of new internal applications, including Surface Mining permitting and Oil and Gas inspection management;
  • Launch of a new public GIS viewer;
  • Improved usability and accessibility of all agency IT applications;
  • Redesign of the Railroad Commission public website and RRC Online home page;
  • Migration of RRC Online and other critical systems to the state data center, and;
  • Deployment of Windows 7, Office 2016 and MS Cloud email services to staff.

By Railroad Commission of Texas