Will Low Oil Prices Rattle The Texas Economy?

The lead oil and gas regulator in Texas passed new rules for fracking and drilling wells today. (Photo of a Cabot natural gas drill at a fracking site in Pennsylvania.)

Photo by MIRA OBERMAN/AFP/Getty Images

The benchmark price of oil is lower than it has been in four years.

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.

IFrame<--break->Dropping prices have already things shaken up in the business world. Mergers and acquisitions of oil companies are slowing because of the uncertainty.  Companies in the oil-rich city of Houston are expecting to take a financial hit, and Mexico’s massive oil-hedging program has been thrown into disarray.

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Global Warming And The Texas Surge Of New Chemical Plants

Along the Texas Gulf Coast, billions is being spent to build or expand petrochemical plants.

Dave Fehling

Along the Texas Gulf Coast, billions is being spent to build or expand petrochemical plants.

A big, new expansion of a petrochemical plant is under construction in Clear Lake. It’ll make methanol, a key ingredient for producing other chemicals. But will it also make pollution that will add to global warming?

The expansion of an existing complex owned by Celanese is part of trend along the Texas Gulf Coast as low prices for natural gas have made making chemicals cheaper.


“There’ve been several methanol and ammonia plants proposed for the area. And those are very natural gas intensive,” said Katie Teller, an analyst with the Federal Department of Energy.

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Rolling Blackouts Highlight Troubles With Electric Grid In Rio Grande Valley

A map of projects to increase transmission capacity in the Rio Grande Valley.

Courtesy of ERCOT

A map of projects to increase transmission capacity in the Rio Grande Valley.

It had been about three years since Texas experienced major rolling blackouts, but they happened this week in the Rio Grande Valley. The Electric Reliability Council of Texas (ERCOT), the group that manages nearly all of the Texas grid, says the blackouts are related to longstanding problems with the transmission system in the region.

Trouble started on Wednesday afternoon when two power plants suffered breakdowns. Fearing that high demand and low supply of electricity could damage the regional grid and cause an uncontrolled blackout, ERCOT called for “rotating outages” (industry speak for rolling blackouts) to keep some power on the lines.

Grid managers have known for some time the valley runs a higher risk of rolling blackouts. The reason is that the transmission system in the Valley is more isolated than other parts of Texas. It cannot easily bring in electricity from the rest of the ERCOT grid when needed.  That can cause blackouts in the Valley even when the rest of the grid is stable, according to ERCOT.

“The valley area has some significant limitations as far as how much power it can import into that region,” says Robbie Searcy, an ERCOT spokesperson. “Right now when there is a hot early fall afternoon and we have these sort of generation outages there is a risk to the transmission system in that area.”

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KRTS: Public Access to Chinati Mountains State Natural Area Secured

Chinati Mountains in Presidio County

Charlie Llewellin via Creative Commons

Chinati Mountains in Presidio County

The Chinati Mountains State Natural Area in south Presidio County finally has public access, according to Corky Kulhmann, senior project manager for land conservation for Texas Parks and Wildlife. This is news given exclusively to KRTS.

For eight years, Kulhmann and his team have been working to gain public access to 39,000 acres donated to create a new state park.

“But that’s been blocked by either no funds or landowners changing their minds or just other priorities with state parks, as far as money could go when we had money,” Kulhmann explains. “It turned out a lot of the lands here are just a bowl of spaghetti.”

The four tracts of land needed to open a public road to the park were not straight-forward deals. There was the family that wouldn’t sell to the state and instead sold to a developer, who then sold back to the state; a landowner that had to be tracked down in Florida through Facebook; and a deal negotiated with Presidio County after a default on taxes gave them the land, says Kulhmann.

The last piece of the puzzle has Kulhmann’s surveyors working with the state of Texas General Land Office to purchase land from them.

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Energy Secretary Moniz Comments On Proposed Denton Fracking Ban (Sort Of)

Ernest Moniz was the keynote speaker of this year's SXSW Eco conference in Austin.

PHOTO CREDIT: DOE PHOTOGRAPHER, KEN SHIPP

Ernest Moniz was the keynote speaker of this year's SXSW Eco conference in Austin.

It’s not every day that you get to talk to the US Secretary of Energy about how the oil and gas boom affected your hometown. So, when Alyssa Wolverton saw her chance, she took it.

After delivering the keynote speech at this year’s SXSW Eco conference, Department of Energy Secretary Ernest Moniz took some questions from the audience. That’s when Wolverton, a student at the University of North Texas in Denton, asked him about a proposal to ban hydraulic fracturing (or “fracking”) within city limits. The town will be voting on the ban this November.

“I was curious to know if you think that your really good idea of diversifying our energy (…) can mesh up with the integrity of our cities that don’t want more advances,” asked Wolverton, who supports the proposed ban.

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Rising US Crude Oil Production Buffers Prices From Mideast Violence

An oil rig south of Pyote, Texas, December 11, 2013.

Courtesy of Alice Quinlan

An oil rig south of Pyote, Texas, December 11, 2013.

Crude oil is now trading at roughly $13 a barrel less than it did a year ago. That’s in spite of the seizure of Iraqi and Syrian oil facilities by ISIS and a U.S.-led bombing campaign against those facilities.

“The beginning of the bombing campaign in Syria and Iraq recently was met with a big yawn by the energy markets and really had no upward effect at all on crude oil prices,” says economist Karr Ingham, creator of the Texas Petro Index on behalf of the Texas Alliance of Energy Producers.

According to the latest index, the state’s crude oil production approached 96 million barrels in August, up more than 23 percent from August of last year. Ingham suspects the rise in U.S. production is helping to hold down prices and stabilize energy markets. “Don’t you wonder if we are not seeing the benefits of expanded crude oil production in North America playing out before our very eyes?” he says. “I wonder if that’s not exactly what we’re seeing. I certainly hope that’s the case. This may in part be what energy independence looks like.”

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Texas Lost Over 1 Million Acres Of Private Farm and Ranch Land In 15 Years

Juan Rico culls cotton plants growing between rows in an irrigated cotton field July 27, 2011 near Hermleigh, Texas. A new bill would require most farmers to report their water usage to the state.

Photo by Scott Olson/Getty Images

Juan Rico culls cotton plants growing between rows in an irrigated cotton field July 27, 2011 near Hermleigh, Texas.

Talk of Texas often conjures images of wide open ranch land and farmers at work their fields. But that iconic territory is being lost, according to a new analysis.

Dr. Roel Lopez, director for Texas A&M Institute of Renewable Natural Resources, says the state lost over 1 million acres of privately-owned farm land and forest land between 1997-2012. He presented the information this week at a conference of the Texas Agricultural Land Trust, a nonprofit conservation group.

The conference, called “No Land No Water,” focused on what Lopez believes are inefficient and unsustainable landowning trends in Texas’ flourishing economy.

“In the past 15 years, we’ve seen a little over a million acres of working lands converted to other uses,” he says.

Land conversion can mean more than a loss of grazing space and pretty views. Lopez worries it will further impede water recharge by replacing soft, absorptive ground cover with impenetrable material, like road cement.

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When Can A Big Storm Or Drought Be Blamed On Climate Change?

This photo taken 16 November, 2006 shows a warning sign for boats sitting on the bottom of the empty Green Hill Lake outside the small rural town of Ararat, some 170 kms west of Melbourne.

Photo by WILLIAM WEST/AFP/Getty Images

This photo taken 16 November, 2006 shows a warning sign for boats sitting on the bottom of the empty Green Hill Lake outside the small rural town of Ararat, some 170 kms west of Melbourne.

Nowadays, when there’s a killer heat wave or serious drought somewhere, people wonder: Is this climate change at work? It’s a question scientists have struggled with for years. And now there’s a new field of research that’s providing some answers. It’s called “attribution science” — a set of principles that allow scientists to determine when it’s a change in climate that’s altering weather events … and when it isn’t.

The principles start with the premise that, as almost all climate scientists expect, there will be more “extreme” weather events if the planet warms up much more: heat waves, droughts, huge storms.

But then, there have always been periodic bouts of extreme weather on Earth, long before climate change. How do you tell the difference between normal variation in weather — including these rare extremes — and what climate change is doing?

That sort of discernment is difficult, so scientists have had a rule, a kind of mantra: You can’t attribute any single weather event to climate change. It could just be weird weather.

Then they took a close at last year’s heat wave in Australia. Continue Reading

Will Texas Even Bother Trying to Comply With EPA’s Clean Power Plan?

New rules proposed by the Obama administration seek to reduce greenhouse gas emissions from power plants

Photo by SAUL LOEB/AFP/Getty Images

New rules proposed by the Obama administration seek to reduce greenhouse gas emissions from power plants

As greenhouse gases reach their highest concentrations in human history, the Obama administration has pledged to take action on climate change, unveiling a Clean Power Plan this summer to go after a prime target of those emissions: coal power plants. And true to form, that plan is running into opposition from lawmakers and regulators in Texas.

At a hearing of the Texas House Committee on Environmental Regulation Monday, both regulators and lawmakers expressed concern in the feasibility of complying with energy regulations proposed in EPA’s plan.

“One of our main concerns is that they don’t reflect the reality of electric markets, which operate at the literal speed of light” said Brian Lloyd, Executive Director of the Public Utility Commission of Texas. “[The plan] requires very long-life, hugely expensive capital expenses.”

Lloyd said the Public Utility Commission would need to collect an additional billion dollars from ratepayers in order to achieve energy efficiency standards proposed by the EPA. Energy efficiency is one of several initiatives, including renewable energy generation and switching from coal to natural gas power generation shifting, that the agency calls for in its plan.

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State Lawmakers Consider the Impacts of EPA Regulations

A recent drop in carbon emissions in the U.S. could only be temporary, a new report warns.

Photo by SAUL LOEB/AFP/Getty Images

A recent drop in carbon emissions in the U.S. could only be temporary, a new report warns.

Texas will need to make big cuts in carbon emissions over the next 15 years under a mandate from the Environmental Protection Agency.  You can expect to hear complaints about the EPA rule at a two-day meeting of the House Environmental Regulations Committee starting Monday.

The federal agency and state leaders have been at odds for years and many conservatives worry that limiting carbon emission to fight climate change will hurt the economy.

But there are some in Texas who see an upside. Click the player to learn more.

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