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February 4, 2016

Folksy fireside chat: What lies ahead for ailing Texas oil industry?

‘End is not over in terms of contractions, mergers,’ says TXOGA’s Staples

The Texas oil and gas industry’s largest lobbying group has been busy this week – warning lawmakers and the public of rough times ahead, including in a slickly produced video released today by Texas Comptroller Glenn Hegar.

Hegar, of course, collects tax revenues for Texas, including from the oil industry. In good, booming times (recently enough), oil revenues swelled the state’s Rainy Day Fund by the billions, prevented budget shortfalls, funded schools and created needed pots of money for highways and an ambitious state water plan.

Now, as the industry copes with a 70 percent slide in oil prices since summer 2014, the state is bracing for the crunch to state coffers. Last year, Hegar embarked on a Good for Texas Tour. Today he launched his new Good for Texas Talks via a folksy fireside chat with Todd Staples, president of the Texas Oil and Gas Association (TXOGA).

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By Polly Ross Hughes

February 4, 2016

Texas Advanced Energy Business Alliance names ED

Suzanne Bertin leads group fostering emerging $16 billion market

Suzanne Bertin, an electric industry policy and government affairs specialist, has been named executive director of the Texas Advanced Energy Business Alliance, a group formed to foster an estimated $16 billion advanced energy market in Texas.

TAEBA, formed nearly a year ago, is made up of local and national companies engaged in advanced energy technologies and products that span seven segments. The top three include energy efficiency ($5.4 billion), advanced electric generation technologies ($3.6 billion in natural gas, wind, solar, geothermal, biomass) and fuel production ($2.7 billion in advanced fuels such as CNG and LNG for vehicles).

“We are thrilled to have Suzanne Bertin leading our efforts to build a strong industry presence in Texas,” said Todd Horsman, vice president of regulatory and delivery for Landis + Gyr, specializing in energy management solutions such as smart grid services.

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By Polly Ross Hughes

February 3, 2016

RRC needs a business leader, declares wealthy Gary Gates

(Plus) he warns how not to turn public into ‘ferocious animal’

The oil-and-gas regulating Texas Railroad Commission could be facing a 25-40 percent slash in its income as it enters the next legislative session, a cut so large that up to one in four staffers might face job cuts, predicts Gary Gates, a self-funded Republican RRC candidate.

Low oil and gas prices are depressing oil field activities regulated by the agency, which receives its funding from permitting fees and various penalties, Gates told Texas Energy Report in an interview exploring why he seeks election to the three-panel commission.

“I think the Railroad Commission needs someone who has a good business background. This agency is going to be facing some of the biggest challenges that it’s ever faced. Eighty-five percent of its funding comes from the industry itself. Because of the drop in commodity prices, this agency – unlike any other agency – is probably going to be facing anywhere from a 25-40 percent reduction in its income,” the candidate said.

Gates, a rancher who made his personal fortune in Houston-area real estate, told TER he plans to spend $2.1 million (his own money) on the March 1 primary race in which seven Republicans are vying for their party’s nomination. Already he’s begun a series of radio advertising spots that will touch on different topics and play statewide.

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By Polly Ross Hughes

February 2, 2016

TXOGA: Oil industry pays second-highest state revenues in history

Even so, industry also seeking billions in tax breaks, exemptions

The Texas oil and gas industry touted its second-highest payment of taxes and public royalties in state history Tuesday -- $13.8 billion in FY 2015 versus $15.7 billion the previous year– even as the financially ailing industry continues to search for tax breaks and exemptions during the bust.

The industry, reeling from a 70 percent plunge in oil prices since summer 2014, “knows that 2016 is off to a rough start” and that economists predict no immediate relief in sight, Todd Staples, president of the Texas Oil & Gas Association (TXOGA) said during his annual update of the industry’s contributions to the Texas economy.

“Make no mistake. Texas is an oil and natural gas state,” Staples told reporters during a conference call. “The oil and gas industry anchors our economy.”

Yet, even as oil and gas industry contributions to the state coffers remained high in 2015, they could possibly have been even high still, according to estimates supplied by the Texas Comptroller.

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By Polly Ross Hughes

February 1, 2016

Oil downturn takes toll on Texas jobs, with nearly 540 cuts reported

Plant closures, bankruptcy liquidations, offshore rig operations stalled

Nearly 540 oil-and-gas related jobs in Texas are disappearing, companies report, led by the Luxembourg-based steel pipe company, Tenaris SA, which said 166 jobs will be cut at Maverick Tube Corp. in Houston when operations cease next month.

The job losses at the company’s Texas ARAI facility at 8204 Fairbanks N. Houston Road are expected by March 31, Tenaris told the Texas Workforce Commission.  Employees at that location will get termination slips unless they have agreed to transfer to another company location.

The affected workers are not unionized and do not have bumping rights, Tenaris added. Last year, the company announced it was cutting 133 jobs at the same location and 230 at another Houston location, according to the Houston Business Journal.

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By Polly Ross Hughes

January 29, 2016

Texas Supreme Court reverses $7 million verdict against RRC

Sends mistaken well plugging case back for new trail

The Texas Supreme Court reversed a $7-million verdict against the Texas Railroad Commission Friday in a rare mistaken well-plugging case, saying a lower court failed to let a jury decide whether the commission was acting in “good faith,” an affirmative defense under state law.

The high court sent the case back for a new trial, noting that a resolution passed by the Texas Legislature removing the agency’s immunity from liability (and allowing the lawsuit) did not concurrently waive the commission’s “good faith” defense, Gulf Energy Exploration Corp. had argued.

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By Polly Ross Hughes

January 29, 2016

Dallas renewable firm building nearly half of Texas wind projects

‘Wind has become a pillar of economic development’

Dallas-based Tri Global Energy leads in wind energy projects under construction in Texas, developing nearly half of current projects, according to a fourth quarter 2015 market report from the American Wind Energy Association (AWEA).

Tri Global Energy projects make up 2,100 megawatts (MW) out of a total 4,600 megawatts (MW) of wind power projects under construction statewide, the report shows. And Texas wind projects make up nearly half of the 9,400 MW of wind under construction nationwide.

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By Polly Ross Hughes

January 28, 2016

Op-ed: Miller urges proactive earthquake stance by RRC

‘Human-induced earthquakes have potential to cause property damage,’ warns Libertarian candidate

The 84th Texas Legislature passed, and the Governor signed, a bill allocating $4.47 million for the TexNet Seismic Monitoring Program.

The program will be conducted by the Texas Bureau of Economic Geology, the State Geological Survey of Texas housed at the University of Texas at Austin.

TexNet has two goals: 1) monitor and catalog seismic activity with magnitudes 2.0 or greater, and 2) improve the ability to rapidly investigate earthquake activity across the state. Of particular importance will be earthquakes larger than magnitude 3.0 in or near urban areas or where they are more likely to be induced by human activity such as underground wastewater injection. The TexNet Program was instigated because of seismic activity believed to be caused by wastewater injection from oil and gas activities.

The complete op-ed from Mark Miller can be found in our Opinions section.

By Mark Miller

January 27, 2016

RRC hopeful Gary Gates defends help from Rep. Jim Keffer

Gates responds to incessant attacks from Michael Quinn Sullivan

The GOP’s Texas Railroad Commission candidate with the deepest pockets (by far) released a press release this afternoon to defend his adviser, former Texas Energy Resources Committee Chairman Jim Keffer.

Empower Texans President Michael Quinn Sullivan (MQS for short), writing in the online Texas Scorecard magazine yesterday, attacked the wealthy Gates on several fronts, including that he’s lost six political races already – twice for the Texas House, twice for the Texas Senate, and along the way, twice for a local school board seat.

Whether seven proves a lucky number for Gates remains to be seen, but he’s certainly outspending the other six Republicans in his primary race for the oil-and-gas regulating Railroad Commission. Gates told Texas Energy Report that he is planning to spend $2.1 million – and that’s just on the March 1 primary race alone.

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By Polly Ross Hughes

January 26, 2016

Texas oil outlook goes from bad to worse to . . . oh, no!

Alliance economist: 60,000 jobs cut in 2015 and it’s not over yet

As if 60,000 job cuts in Texas oil and gas fields last year weren’t bad enough, even deeper oil price slides in early 2016 clearly show that an industry once intoxicated with its soaring wealth hasn’t likely hit rock bottom yet.

It’s ugly out there. Just ask Karr Ingham, economist for the Texas Alliance of Energy Producers, who points out that West Texas Intermediate (WTI) crude dropped to $23.25 per barrel on Jan. 20 before inching back up again. That was a $10 per barrel drop from year-end, a warning that it’s still too soon to know how low prices can go.

“A year ago I was predicting we would lose 40,000 to 50,000 jobs. It’s already worse than that,” Ingham, creator of an oil-and-gas scorecard called the Texas Petro Index, told Texas Energy Report Tuesday. “The disturbing part is we’re not done with the 60,000. It’s going to get worse than that.”

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By Polly Ross Hughes

January 25, 2016

Almost 1,200 oil/gas jobs in Texas on March cutting block

Southwestern says 376 of its 1,100 cuts target Spring corporate staff

Southwestern Energy plans to permanently cut 376 workers on March 22 at its corporate office located at 10000 Energy Drive in Spring, near Houston, the company informed the Texas Workforce Commission.

The independent oil and gas company last week disclosed that it would cut 1,100 employees total, about 40 percent of its workforce, in the face of lower drilling activity. and told Reuters it planned to take a pre-tax charge in the first quarter of $60 million to $70 million.

The independent oil and gas company joins Noble Drilling LLC and U.S. Steel Tubular Products in making sizable workforce reductions targeting workers in Texas before the end of the first quarter.

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By Polly Ross Hughes

January 22, 2016

High court to hear bombshell oil and gas tax exemption case

Billions of state revenue at stake if mineral extraction deemed ‘manufacturing’

The Texas Supreme Court said Friday it will hear a case that could cost the state billions in lost revenue if the powerful oil industry convinces the court that services and equipment used in oil and gas extraction qualify for sales tax exemptions.

The Texas Oil & Gas Association (TXOGA) have filed “friend of the court” briefs, court documents show, supporting arguments brought by Southwest Royalties Inc. The company, associated with former gubernatorial candidate Clayton Williams, stands to reap a huge sales tax refund if it prevails.

Tax experts have noted that a win for Southwest could have widespread application and result in a huge revenue hit for Texas, which is already reeling from lower tax collections associated with a 70-percent plunge in oil prices.

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By Polly Ross Hughes

January 22, 2016

Feds roll out proposed methane-pollution rules for public, tribal lands

Industry objects to similar EPA proposals as costly and burdensome

The federal government proposed rules Friday to cut methane emissions on federal lands from leaking, venting and flaring during oil and gas operations, a move similar to the EPA’s proposals to curb the climate-changing emissions that are fiercely opposed by the Texas oil industry.

The U.S. Department of the Interior said the rules for public and American Indian lands are needed to prevent harmful greenhouse gas emissions from methane – 25 times more powerful than carbon dioxide emissions – as part of an Obama Administration goal to cut oil and gas methane emissions by 40-45 percent from 2012 levels by 2025.

“I think most people would agree that we should be using our nation’s natural gas to power our economy – not wasting it by venting and flaring it into the atmosphere,” U.S. Secretary of the Interior Sally Jewell said.

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By Polly Ross Hughes

January 21, 2016

Hegar: Texas economy still on track for new road funds

Despite the drop in oil prices, Hegar says “Take a deep breath. Look at the trend line over the course of the last 20 years.

Texas is still expected to meet the baseline revenue projections to trigger added money for transportation over the next four years, Comptroller Glenn Hegar told the House Select Committee on Transportation Planning this morning.

The price of oil has had highs and lows since Hegar began revenue projections. With the current dip below $30 per barrel, the first-term comptroller has begun to think he needs to carry paper bags with him to offer to hyperventilating lawmakers.

“I have continued to point out, this is not the Texas of the 1980s,” Hegar told the committee this morning. “We’re a much more diverse economy. Oil and gas is 14 percent of the economy, but it’s not the 20-plus percent it was during the ‘80s.”

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By Kimberly Reeves