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TxEnergyUpdate - July 27, 2021

The TxEnergyUpdate keeps you up to date on the energy sector's latest news and stories



The Biden Administration is introducing new cybersecurity regulations following the Colonial pipeline hack in April. TSA will enforce these new rules on pipelines they deem as critical infrastructure. But some pipeline operators fear a knee jerk reaction by the Administration will result in regulations that micro-manage day to day operations and do little in actually securing the nation's pipeline infrastructure.

A group of Republican legislators, including Texas Senators John Cornyn and Ted Cruz, sent a letter to the acting Director of the Office of Management and Budget (OMB), concerning the FY 22 Army Corps of Engineer budget. The budget as written would eliminate funding for port projects that are connected to fossil fuels. In the letter they point to the dire consequences if port projects related to fossil fuels were defunded: loss of revenue, jobs, and a drastic increase in the cost of consumer products.

Last week, the Texas Oil and Gas Association (TXOGA), and the American Petroleum Institute (API) released a joint report showcasing the true economic impact of the oil and gas industry on the Texas economy. Some key findings include: the industry supported indirectly/directly 2.5 million jobs and generated $411.6 billion towards Texas' GDP. While the data is from 2019, they expect that oil and liquid fuel consumption rates in 2022 will exceed 2019 levels.



The Texas Railroad Commission continues to improve and update their technology. Their latest addition is the PIPES Online System. It's a cloud based portal that improves the process through which oil & gas operators submit documents, including inspection and incident reports, while also increasing transparency to the general public. The PIPES system will also benefit operators, as it will reduce the amount of paperwork they have to submit, and will allow them to pay fees online. PIPES is the latest in a series of initiatives by the Commission to improve efficiency and increase transparency of reporting requirements.

Texas' oil and gas industry added 8,766 jobs via the upstream (exploration) process, during the first half of 2021. Ed Longanecker, President of the Texas Independent Producers and Royalty Owners Association (TIPRO), said, "The Texas oil and gas industry is resilient and will remain a cornerstone of our state economy for decades to come." As the oil and gas market returns, Longanecker foresees employment opportunities returning with it.

On July 22, the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) hosted a joint press conference to update Texans on the grid's stability as we approach the hottest days of summer. PUC Chairman Peter Lake said that the market will prioritize reliability moving forward and, "...that the market needs to move away from a crisis-based business model." Brad Jones, Interim ERCOT President & CEO, assured Texans that the electric grid is stable and will have enough power to face this week's record demand. You can watch the entire press conference here.

The Public Utility Commission of Texas is looking for feedback after submitting a list of new weatherization standards. Under the proposed standards there would be three different categories for generators, each of which would equate to a different level of extreme weather and would offer a different compensation incentive. One analyst noted that the new standards look "very similar to a capacity service," although the proposal differs from capacity markets because of the frequency of extreme weather events it is supposed to address. The PUC is accepting comments from the public until 3pm Friday, July 30th.

That's all for this edition of TxEnergyUpdate. Visit for further energy updates and publications.


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