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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


October 15, 2014

Austin students to tap sun power for home water disinfection

Design removes toxins from gray water to reuse on lawns

Students at Austin Community College have landed a federal grant to develop a solar-powered system to remove toxins from used household water so it can be reused for lawns and landscaping.

The U.S. Environmental Protection Agency said Wednesday that it is awarding $13,742 for the solar water disinfection project under its People, Prosperity and the Planet (P3) program, aimed at small projects with everyday applications for sustainability.

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By Polly Ross Hughes


October 15, 2014

Quote du jour: Are Saudis, U.S. pumping foes to death?

Friedman speculates, ‘Is there a global oil war underway?’

“Neither Moscow nor Tehran will collapse tomorrow. And if oil prices fall below $70 you will see a drop in U.S. production, as some exploration won’t be cost effective, and prices could firm up. But have no doubt, this price falloff serves U.S. and Saudi strategic interests and it harms Russian and Iran. Oil export revenues account for about 60 percent of Iran’s government revenues and more than half of Russia’s.”

--- Thomas L. Friedman, “A Pump War?” in today’s New York Times, on how falling oil prices (sliding recently from more than $100 per barrel to roughly $88) could advance the foreign policy objectives of the United States.

By Polly Ross Hughes


October 14, 2014

Christi Craddick: Mexico’s energy reform a game changer

‘If we can move from a mindset of fear toward one of cooperation . . .’

During the summer of 2014, it was impossible to turn on the TV or look at social media without seeing mention of the border crisis related to an influx of immigrants from Central America. Passions ran high as one side focused on unaccompanied children, calling border-security advocates inhumane, while the other side portrayed the influx as an invasion that would cause disease epidemics and tear at the fabric of our society. As the debate raged on and solutions ranging from amnesty to walls were discussed, I found myself asking, "How can we reshape this conversation and move in a positive direction?"

As chairman of the Railroad Commission of Texas, I have an up-close view of the Texas energy industry and a strong sense of the potential strength of that same industry on the other side of our southern border. Mexico not only shares a cultural past and a strong trading relationship with Texas, that country of some 122 million people also has access to many of the same geological formations that are driving the resurgence of our energy industry.  

Mexico's energy industry has been implementing a set of sweeping reforms aimed at increasing transparency, competition and growth that will better enable it to capitalize on its access to these major energy reserves. These energy reforms are part of a larger push by President Enrique Peña Nieto to reform Mexico's banking, taxation, education and infrastructure situation. As these changes begin to increase production capacity, Texas is a ready source of the expertise that has made places like the Permian Basin, the Eagle Ford Shale and others so successful. This opens the possibility of even greater cross-border cooperation, investment and success.

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By Christi Craddick


October 14, 2014

Apache Corp.’s CFO leaves for ‘other opportunities’

Independent oil, gas firm searching for replacement

Apache Corp. said Tuesday it’s conducting a search for a new chief financial officer now that Alfonso Leon is leaving to pursue ‘other opportunities.’

Leon’s departure is not related to issues connected to financial disclosures, accounting or legal matters, according to the independent oil and gas company. Apache named P. Anthony Lannie, executive vice president, as interim chief financial officer. Lannie served as president of Kinder Morgan Power Co. and president of Coral Energy Canada, a Shell Oil Co. subsidiary, before joining Apache as general counsel in 2003.

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By Polly Ross Hughes