Oil

Mose Buchele/KUT

Oil closed at its lowest price in more than six years yesterday and, while it’s risen slightly since then, some project the price to drop even further

In some parts of Texas that's bad news for almost everyone. The economic ripple effect of low prices has led to layoffs and slammed the brakes on local economies.  But there’s one business that’s going through a boom in the oil patch right now: the repo man.

Mose Buchele/KUT News

Even before oil prices plummeted last year, the town of Alice, Texas was feeling the pain caused by a restless oil industry. Some oilfield service companies had moved operations from Alice, located near Corpus Christi, to places deeper in the Eagle Ford Shale. That cost the town jobs and tax revenue. Then, starting around Thanksgiving, the value of Texas crude dropped by more than half. More layoffs came, and the real trouble started.

"A lot of people are in depression right now. And in denial," says Bonnie Whitley, volunteer coordinator at the Alice Food Pantry. "They just can’t come to grips with what’s happened. So there’s depression and we really need some good counselors down here. Which we don’t have…”

Flickr/Beth Cortez-Neavel (CC BY-NC 4.0)

From Texas Standard:

The Obama administration announced what it calls the Clean Power Plan — an ambitious plan to dramatically reduce carbon emissions. From an international perspective, the plan could give the United States more weight in future discussions on curbing so-called greenhouse gases. But there’s some politics here as well: The move is seen by many analysts as legacy-building, and there’s no doubt Texas is in the crosshairs.

Travis Bubenik of Marfa Public Radio has been following this for Inside Energy. Bubenik sat down with The Texas Standard to discuss President Obama's new Clean Power Plan.

Todd Wiseman/Texas Tribune

This week, oil prices dropped below $50 for the first time since February, a development that could upend the state's predictions of oil revenue for this year.

Estimates from the Comptroller of Public Accounts put oil prices at an average of just over $64 per barrel in 2015 and 2016. And, as of now, those predictions are rosier than the reality of the market, meaning the state's loss in oil and gas tax revenue could impact the Texas budget going forward.

In January, when Texas Comptroller Glenn Hegar released his estimate of how much tax revenue the state would bring in for the Texas budget, he did so with a caveat.

Eddie Seal/Texas Tribune

For the first time this year, the number of oil rigs operating in the U.S. went up, according to oil field services company Baker Hughes. But what does that mean for the largest oil producing state in the country?

For Texas, and the U.S., the increase is more of a bellwether, but after months of declines it could signal a stabilizing of the U.S. oil markets. According to Baker Hughes, there was a net gain of only three rigs – a loss of nine gas rigs was offset by the addition of 12 oil rigs.

Star Spencer is a senior editor for Platts Energy Information Service. She says it looks like the industry is betting that U.S. crude has settled around $60 a barrel.

Lawmakers will find out this morning how much money they’ll have to work with as they craft the state’s next two-year budget. They’re expected to have plenty of wiggle room, but rapidly dropping oil prices have raised some concerns. Oil and gas prices could affect those numbers.

At the end of 2013, former Texas Comptroller Susan Combs said the state could have about $2.6 billion dollars in unspent revenue from the current budget. Some believe that surplus will be even larger when current Comptroller Glenn Hegar delivers his revenue estimate this morning. And that money could be a big help, considering the state's economic future might not be as rosy thanks to falling oil prices.

Residents of Denton, Texas, voted Tuesday to ban hydraulic fracturing in the city.

According to unofficial results posted on the city's website, 58.64 percent of voters supported banning the controversial drilling method that is also called fracking; 41.36 percent voted against the proposition. It's the first time a city in the energy-friendly state has voted to ban fracking.

The vote is expected to be challenged, but Mayor Chris Watts said he would defend the ban.

GRAPHIC COURTESY OF THE TEXAS TRIBUNE

Update: Ryan Sitton defeated Steve Brown in the race for Railroad Commissioner 58.31 percent to 36.49 percent.

Original Story (Nov. 4, 4:14 p.m.): An empty seat on a strangely-named state regulatory agency usually flies under the radar of voters. But the race to serve on the Railroad Commission of Texas has gained additional attention and importance this election. That’s because whoever wins will not oversee railroads, as the name suggests, but will regulate the Texas oil and gas industry. It’s an industry in the midst of a boom that’s transforming global energy markets and pumping billions into the Texas economy.

The two major party candidates competing for the seat offer starkly different visions for what the job entails.

Photo by MIRA OBERMAN/AFP/Getty Images

From StateImpact Texas:

The benchmark price of U.S. crude hovers around $85 a barrel. That’s lower than it's been in four years and $15 below where it was a year ago. Here are a few reasons why:

  • Economic growth has stalled internationally – This has slowing the demand for oil, but oil supplies are increasing thanks to the shale boom in the U.S. and the fact that OPEC – the cartel that sets prices internationally – has not cut production.
  •  The dollar is strong – The higher valuation of U.S. currency means that oil prices are down but –because the dollar’s also at a four-year high – the oil is still pricey, driving down demand.
  • Speculators are betting on prices to drop – Weekly production of oil is expected to reach a 45-year high next year, the market’s going bearish, driving the prices down.

Eddie Seal, Texas Tribune

  Today, members of the state House Energy Resources Committee met in the Rio Grande Valley town of Edinburg to discuss how a partial privatization of Mexico’s oil and gas sector could impact the Texas economy. 

Until this year, drilling in Mexico was run by Pemex, a state-owned company.  A change in Mexican law has now partially opened the county to foreign business. That could be a big opportunity for Texas companies familiar with the oil and gas rich Eagle Ford shale that straddles the border.

Some estimates have already said a shale boom in Mexico could grow the Texas economy by tens of billions of dollars. Others say it's too early to tell. 

Oliver Berg DPA/LANDOV

From StateImpact Texas: 

After a surge in earthquakes across Texas over the last several years, state regulators are considering their options. On Monday, the House Subcommittee on Seismic Activity heard some of those options.

Many of the quakes are likely caused by wastewater disposal wells, where the liquid waste from oil and gas drilling is pumped back into the ground. The Railroad Commission of Texas is the agency that regulates the state’s oil and gas industry, and it is proposing new rules for those wells.

The U.S. is in the middle of an oil drilling boom that few people saw coming. After decades of decline, crude oil production is rising again. Technologies such as hydraulic fracturing in places such as North Dakota are getting a lot of attention. But the Gulf of Mexico still accounts for more than one-fifth of domestic oil production.

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From StateImpact Texas:

  Texas is getting more oil out of the ground than is has since the great boom of the 1970s. The oil fields of North Dakota are, for the first time ever, producing over one million barrels a day. Across the country, the boom has lead to predictions that the US will overtake even Saudi Arabia in oil production by the end of the year.  But is all that drilling helping US consumers at the pump?

A quick look at the numbers before the long weekend would indicate not. Prices were about 20 cents per gallon higher than this time last year, according to the US Energy Information Administration.

Dave Fehling/StateImpact Texas

From StateImpact Texas:

In states with the most oil and gas drilling, including Texas, Oklahoma and North Dakota, the U.S. Department of Labor has won back pay for over 4,000 energy industry workers in just the past year.

It totaled $6.7 million dollars, accounting for a third of all such settlements by all types of industries nationwide.

“We were hearing that workers were being misclassified as independent contractors, that they were being paid straight-time for their hours over 40 in a workweek. And we were hearing this consistently throughout the Southwest Region,” said Cynthia Watson, the U.S. Department of Labor’s Regional Administrator in Dallas.

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While the crisis in Iraq is half a world away, it’s impact can be felt here in the U.S.  The rapidly destabilizing region is a base for major Texas oil companies, some of whom have had to evacuate the increasingly hostile environment.  

The Sunni militant group that has stormed across Iraq invaded the country's largest oil refinery today, hitting it with mortars. The government is using limited air attacks to strike back at ISIS, which now controls large areas of Iraq's north.

"The oil refinery in Beiji has been under siege since the militant fighters of ISIS seized the town of Beiji in their sweep through northern Iraq," NPR's Deborah Amos reports from Irbil, Iraq. "In an offensive at dawn, ISIS fighters attacked the refinery with machine-gun fire and mortars, according to Iraqi security forces."

U.S. Customs and Border Protection

While fracking for oil along the Texas border has become a big business for petrol companies, a new entity seeks to tap into the lucrative market – drug smugglers.  

As infrastructure and activity increases to meet the demand of the booming industry, drug smugglers are starting to take advantage of the new roads and increased traffic, much of which is located on private ranch lands.  

“Because there are so many different companies, and so many different trucks going through that area, it provides a sort of way to blend in if you will,” National Journal writer Ben Geman tells The Texas Standard's David Brown. “Essentially what’s happening is you’ve got smugglers who are stashing marijuana, or other drugs, in trucks that are either 'cloned' to look like one of the industry trucks, or some type of truck that seems to fit right in driving around on these ranch lands.”

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The global boom in energy production driven by fracking and horizontal drilling is leading to a shortage of skilled workers. A new report by the human resources firm Mercer says two-thirds of oil and gas companies are now poaching employees from their competitors.

"The industry seems inclined when an individual is trained and developed by a competitor to, especially in the first five years of employment, go after that key talent, as opposed to training and developing their own,"  says Philip Tenenbaum, a senior partner at Mercer. 

He says in some cases, the practice has become quite overt.  

There's an old joke that if Moses had turned right when he led Jewish tribes out of Egypt, Israel might be where Saudi Arabia is today — and be rich from oil. Consultant Amit Mor of Eco Energy says that joke is out of date.

"Israel has more oil than Saudi Arabia," he claims. "And it's not a joke."

But that oil will be difficult to reach, if it can be recovered at all. The oil he's talking about is not yet liquid but is trapped in rocks underground.

facebook.com/WorldWarZMovie

Let’s talk zombies. Can’t kill them. Can’t eat them. What are we to the living dead? 

No longer merely the province of Halloween season, nowadays zombies proliferate in American pop culture, from books to TV to film.

Dr. Michael Webber, deputy director of UT’s Energy Institute, says there’s good reason for the persistence of zombies – and it has a lot to do with how we think about power. 

Energy – or the lack thereof – is always a sign of post-apocalyptic and zombie culture. Loss of energy inevitably leads to resource wars among the apocalypse’s survivors. From “The Walking Dead” to “World War Z,” the main drive is often for fuel, water, or power.

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