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Texas oil and natural gas industry continues to break records

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Texas’ oil and natural gas industry broke new production records in May, continuing a trend in recent months and years.

Texas’ production of oil, natural gas, and natural gas liquids (NGLs), refinery activity and exports reached new record highs last month, according to a new analysis published by the Texas Oil & Gas Association (TXOGA).

The industry produced a record-high 5.7 million barrels per day (mb/d) of crude oil in Texas, a record 32.5 billion cubic feet per day (bcf/d) of natural gas marketed production and 3.5 mb/d of NGLs, according to estimates made by TXOGA’s Chief Economist Dean Foreman, Ph.D.

This is after the Texas oil and natural gas industry established new monthly records in March, according to U.S. Energy Information Administration (EIA) and U.S. International Trade Commission data. In March, Texas reported a record-high NGL field production of 3.7 million mb/d – the highest on record in history – more than doubling in-state consumption, according to the data.

Crude oil production topped 5.6 mb/d; natural gas marketed production topped 32.3 bcf/d. Texas refinery activities also reach a record-high net production of 5.5 mb/d.

Texas’ production of oil and natural gas is unparalleled. No other state is producing the volume that Texas is.

This is after Texas’ petroleum products exports exceeded 4 million barrels per day for the first time in history last December.

Since then, the Texas oil and natural gas industry has sustained five consecutive months of exporting petroleum products of more than 4 million barrels per day. In the first quarter of 2024, Texas exported nearly $57 billion worth of petroleum products.

The majority of LNG exports went to European and Asia Pacific countries; the majority of crude oil and hydrocarbon gas liquids were exported to Asia Pacific countries, according to the data.

Foreman said that Texas’ record-setting performance has continued “on the heels of remarkable productivity gains,” with rig productivity in May increasing by more than 20% year-over-year, according to EIA estimates. “As a result, Texas has continued to gain market share amid U.S. oil and natural gas production through the first half of 2024. U.S. energy security increasingly depends on Texas, and Texas has stepped up like none other.”

Projections for June show Texas’ production remains historically strong, holding at 5.7 mb/d of crude oil, 3.6 mb/d of NGLs, and 32.4 bcf/d of natural gas marketed production, according to Foreman’s estimates.

In the first half of 2024, Texas produced an estimated nearly 43% of all domestically produced crude oil and more than 28% of all domestic natural gas marketed production, according to TXOGA estimates.

Thermal and dispatchable sources of energy, primarily natural gas, are generating the majority of electricity Texans use through Texas’ grid managed by the Electric Reliability Council of Texas (ERCOT). During Winter Storm Heather, from Jan. 13-16, thermal and dispatchable sources generated as much as 95% of ERCOT’s electricity.

During another high demand period, from March 21-22, thermal and dispatchable sources, primarily natural gas, generated over 90% of ERCOT’s electricity for nine consecutive hours, averaging 91.8% of the region’s power, according to ERCOT and EIA data.

“These new records are a testament to Texas’ role as a national and global energy leader,” TXOGA President Todd Staples said. “Amidst growing global instability and energy demand that is expected to nearly double by 2050, oil and natural gas continue to serve as the bedrock of our energy mix, providing affordable reliable energy to meet our state, nation, and the world’s needs.”

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Energy

Hydrogen is the most recent impractical green energy blind alley

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From the Frontier Centre for Public Policy

By Ian Madsen

Climate Crisis alarmists tout yet another avenue by which renewable energy could replace reliable fossil fuel-sourced energy:  hydrogen, ‘H2’.  However, typical with alternative energy proposals, there are numerous problems with the widespread integration of this option in future energy production, distribution and consumption.

The first problem is producing H2. The current, and most cost-effective way, is from natural gas’s main component, methane.  Natural gas, while not demonized like oil or coal, is still reviled by Climate activists, since the common byproduct is carbon dioxide, thus requiring expensive sequestration.  An experimental carbon-removal process – pyrolysis, produces carbon nanotubes.

With methane out, the next hydrogen source is via electrolyzing water; using electricity to separate H2O into hydrogen and oxygen. The oxygen would either be recovered for commercial use or released into the atmosphere. However, hydrolysis is costly.

The equipment is expensive, and the energy required to produce the electricity is not cheap either – even if renewable energy sources, such as wind, solar and hydro, are used. There are predictions that H2 produced this way could become cost-competitive with methane-derived H2 by 2030, but using methane is not costless.

Indeed, advocates argue that intermittent wind and solar output would become reliable – ‘smoothed’ – by using hydrogen, as a storage and supply-levelling medium.  The stored H2 would then generate electricity during dark or non-windy conditions. H2 has other uses, in smelting, or aluminumsteelcementglass and other high temperature industries.

Hydrogen seems feasible: it burns cleanly at a high temperature. However, that brings more issues.

The first problem is handling and transporting hydrogen.  H2 dangerously weakens most standard high strength steel alloys in existing natural gas gathering and distribution systems, pipelines, storage and tank farms, in a process called hydrogen embrittlement.  Hence, special alloys are needed.  These cannot cost-effectively be retroactively deployed in existing natural gas distribution systems and pipelines.  They would have to be entirely replaced, although these alloys are cheaper than legacy ones.

Hhas another problem.  To be stored, must either be expensively cooled and pressurized to liquify it; or, if still gaseous, use expensive high pressure vessels. If H2 is not highly pressurized, then the vessels could be much larger, but that would increase materials costs and require more costly land area.

A reminder: natural gas goes from wellhead to customers with minimal storage.  The goal of using renewables is to produce H2 for storage – and use during dark or calm periods – which could last days, as Texas and Germany discovered, disastrously.

Using Hin transportation is impractical.  H2 has low energy density, requiring, as noted, either highly-pressurized storage or expensive cooling, liquefaction and storage: unfeasible for motor vehicles.  There is presently no H2 fuel distribution system.  This would also have to be built, along with the aforesaid new pipelines.

Hundreds of billions of dollars are now invested in legacy natural gas pipelines, gathering and distribution systems.  Replacing them, or building a parallel system, would be profoundly expensive, for no real gain.

Hydrogen makes no sense now; it may never do so, as it is an expensive redundancy.  There are more details in a new Frontier Centre backgrounder “Why We Should be Skeptical of the Hydrogen Economy”.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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Economy

Feds spending $1.7 million pushing carbon tax on other countries

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From the Canadian Taxpayers Federation

Author: Ryan Thorpe

The Trudeau government is dumping $1.7 million into a failed bid to get countries around the world to impose carbon taxes, according to access-to-information records obtained by the Canadian Taxpayers Federation.

“All Canadians need to do to know Prime Minister Justin Trudeau’s carbon tax push is an utter failure is look south of the border and see the United States’ refusal to impose their own tax,” said Franco Terrazzano, CTF Federal Director. “If Trudeau can’t even get our biggest trading partner and ally to impose a carbon tax, then why is he wasting money trying to push this unpopular tax around the world?”

The Trudeau government launched the Global Carbon Pricing Challenge at COP26 in 2021.

The program “aims to see 60 per cent of global GHG emissions covered by carbon pricing policies by 2030.” The program website notes “carbon pricing is most effective when more countries adopt it.”

But the results so far are dismal for the government.

Only 24 per cent of global emissions are currently covered by a carbon tax. About 70 per cent of countries do not have a national carbon tax, according to the World Bank.

Three of the four largest emitting countries – the U.S., Russia and India – currently do not have a national carbon tax, according to the World Bank.

“The [climate] community has largely moved into a different framework,” said John Podesta, a long-time Democratic strategist, when asked about whether the Biden administration would impose a carbon tax in the U.S.

Only 12 countries, including Kazakhstan and Chile, have signed onto the Global Carbon Pricing Challenge as “partners,” alongside the European Union. Côte d’Ivoire is listed as the lone “friend” of the program.

There are 195 countries in the world, according to the United Nations.

“This program is a complete failure that’s wasting taxpayers’ money,” Terrazzano said. “The carbon tax makes life in Canada more expensive, forces taxpayers to pay for more bureaucrats to administer it and now we learn we’re also paying for the government to push this failed policy on other countries.”

Records obtained by the CTF show the Trudeau government has spent $811,598 on salaries for bureaucrats, operations and maintenance, and guidance and control for the program since the 2021-22 fiscal year.

The government committed an additional $974,900 towards the creation of an independent secretariat to “support the GCPC.”

The federal government has also spent about $200 million administering the carbon tax in Canada since it was first imposed, according to separate records obtained by the CTF.

Canada’s “GDP is expected to be about $25 billion lower in 2030 due to carbon pricing than it would be otherwise,” according to the Globe and Mail.

“Trudeau should stop wasting money, stop punishing Canadians and scrap the carbon tax,” Terrazzano said.

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