Oil

Jerod Foster for the Texas Tribune

When the oil and gas fields of Texas are booming, it’s busy times for the state agency that regulates the industry. And when there’s a downturn, it can be even busier. One reason: abandoned oil and gas wells.

That was a big takeaway from a meeting this week of the Texas House Energy Resources Committee.  The topic came up when Chairman Drew Darby (R-San Angelo) said people around his hometown are seeing oil and gas companies get into financial trouble and walk away from their wells. 

Spencer Selvidge/Texas Tribune

Aubrey McClendon was a pioneer in the world of fracking who ushered in an American energy boom.  So it was big news when the former head of Chesapeake Energy was indicted on anti-trust charges last week.

When McClendon died in a fiery car wreck a day later, it sent shockwaves through the business world. Investigators are looking into the crash. But what of the charges that preceded it? 


Texas Archive of the Moving Image

The Organization of Petroleum Exporting Countries is not getting a lot of love in Texas these days. David Porter, top oil and gas regulator at the Railroad Commission of Texas, has accused OPEC of declaring an "oil war" against the state. Porter is leaving the Commission this year, and some of those running to replace him have used similar rhetoric.  

Mose Buchele / KUT

Deep in South Texas oil country, there’s a place known as the “Hotel Capital of the Eagle Ford Shale.” More than 20 hotels were built in the small town of Cotulla during the oil boom, but that boom came to a standstill in 2015. 

KUT reported on the town a year ago and recently returned to see how Cotulla and other oil towns are faring. 


Wikimedia Commons

If there’s one bit of conventional wisdom when to comes to oil prices it’s this: What goes down, must go up. The boom-bust cycle of the oil markets means that the cheap gas you’re enjoying now will cost you more sometime in the future. But what if low oil prices are actually the new normal? Some people are saying just that.

Image courtesy Angelos Angelou

From Texas Standard:

Every January for the past three decades, state and local officials have gathered in Austin to hear economist Angelos Angelou give his annual economic forecast. Some say he's conservative in his forecasts, yet lawmakers follow his words carefully because he's been proven to be on the money in the past.

flickr/smreilly

The low gas prices a lot of us are enjoying when we fill up our cars are thanks, in part, to a glut in the global supply of oil.  In fact there’s so much crude oil being pumped right now that it's created a traffic jam in an unlikely place.


KUT News

There’s an old rancher’s saying that the cattle always look good around an oil well.  It means if the ranch is making money leasing to oil companies, the ranch's finances are probably in pretty good shape. So, is the decline in oil hurting Texas ranchers? That’s something state lawmakers are trying to figure out.


Bob Daemmrich via Texas Tribune

A stalled oil drilling boom is forcing the state to revise its income predictions — but not enough to force any cuts in the state budget, Texas Comptroller Glenn Hegar said Tuesday.

Wikimedia Commons

It might sound surprising that the U.S. does not allow the export of one of its most valuable and plentiful natural resources — but in the case of crude oil, it's true.

A lot of Texas politicians would like to see the ban overturned, and soon lawmakers in the U.S. House of Representatives may vote on just that.  But why is there a ban in the first place?

Miguel Gutierrez Jr./KUT News

Texas Governor Greg Abbott is back from his first official trip to Mexico. While he was there, the governor met Mexican President Enrique Peña Nieto and talked border security, trade and energy. As KUT’s Mose Buchele reports, cross-border energy issues are of growing importance on both sides of the border.


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.

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