Texas Energy Day in the state capital, held during the session of the Texas Legislature, typically attracts thousands showing support for the state’s energy industry.
This year thousands met again with 50 partners and sponsors of the industrial alliance, but this time practically in the middle of the pandemic. Texas Energy Day still attracted high-ranking state officials from Governor Greg Abbott to Texas House Speaker Dade Phelan, Railway Commissioner Wayne Christian, Senator Jane Nelson, and Commissioner Emily Lindley of the Texas Commission on Environmental Quality. Everyone spoke to Todd Staples, president of the Texas Oil and Gas Association.
Governor Abbott
“The most important thing we can do as a state is to work with you so you can recover from the pandemic while finding a way forward,” said the governor, referring to the important role the industry played in creating Jobs and economic growth.
He called for new strategies that would enable the industry to have a robust future over the next two to four decades. During a visit to Cudd Energy Services in Midland Odessa in January, he signed an executive order calling on state authorities to report any federal measures that could adversely affect the energy industry.
“I was with the workers myself,” he said to Staples. “I found it important to be close to and get information from the men and women whose jobs are at stake and whose paychecks depend on the industry. It is because of these men and women that I made this order to make sure that we protect these jobs. “
The governor noted technical advances, industry-led, that have reduced emissions – the equivalent of removing 88 million vehicles from the roads in Texas. He sees the export of Texan natural gas in the form of liquefied natural gas as an opportunity to export emission reductions to other countries if these switch from burning coal to natural gas. For example, India has increased the amount of imported LNG, and Osaka and Japan are also major importers of LNG and discussions are ongoing with European countries.
“We are at the beginning of a long runway that will result in LNG being transported from LNG export facilities in Texas to ports around the world. Not only will this kickstart Texas’s economy, but it will also help transform other countries and wean them from coal to natural gas from the Lone Star State. It’s a win-win situation for the state and other countries. “
Wayne Christian
The railroad commissioner said he believes the agency’s discussion last spring of the split of oil and gas production in Texas in response to the pandemic oil market collapse fueled the industry’s recovery.
When economies around the globe closed and oil demand fell, the agency was asked to limit production to limit supply and help the industry. Ultimately, the commission decided against introducing prorationing, but Christian said he believed the discussion had brought security back to the market and helped it turn the corner.
“I always claim that the price went from $ 32 to over $ 60 today because we brought security back to market. He was around the corner then. The Commission has worked with industry and brought security and the market has responded. “
Christian expressed concern about the actions taken by the new government, from the suspension of the Keystone XL pipeline, which will force operators to ship tar sands on more expensive ships and trains, to the suspension of oil and gas leasing in states.
In addition to the challenges posed by the new government, he listed challenges from investors avoiding the industry due to flaring or environmental issues and focusing on developing wind and solar energy versus oil and gas.
“How can we convince the public and get the message across that we are planning for the future?” he asked. “No nuclear facilities are currently planned for the USA. No coal-fired power plants are planned for the future. A small number of gas systems are planned. All future power generation systems are intended for wind and solar systems. Here, too, we invest most of our tax money in unreliable, cost-intensive energy sources. “
Daniel Yergin
Yergin, vice chairman of IHS Markit and author of The New Map, on the impact of the shale revolution on not only US energy but global geopolitics, said the revolution had reached its next phase, the relationship between businesses and Investors.
Changing the focus of investing into drilling more wells and increasing production to capital discipline and returning cash to investors is changing the way the industry works, he said. Achieving reliable returns and focusing on the environment, social issues and governance will bring investors back into the industry, he predicted.
He was asked by Staples how the revolution is being influenced by demand, especially from countries like India and China.
“There is a lot of debate about what happens to oil demand,” Yergin replied, saying there is some thought that oil demand will peak in 2030. Still, real growth in demand from emerging economies and oil and gas supplies will be critical to them. The fact that the US can export to these emerging markets is also vital. For example, the Prime Minister of India said at IHS Markit’s recent CERAWeek event that the energy relationship between India and the US is the foundation for improved relations between the two countries.
Staples noted that Yergin also talked about the energy transition and what it means to eliminate oil and gas.
Energy transition means a transition to low-carbon fuels, Yergin said, which the Biden government will encourage. Carbon capture has been a dominant topic at CERAWeek and will play an important role, he added.
And as the wind and sun grow in countries like China and India, so will the demand for oil and gas. The conclusion is that we will have an energy mix. Natural gas plays a role and so does oil. “
