The TxEnergyUpdate keeps you up to date on the energy sector's latest news and stories
INTERNATIONAL & NATIONAL ENERGY NEWS
Occidental Petroleum has selected Australian engineering firm Worley to design its renewable fuels manufacturing facility in Canada. The “direct air capture-to-fuels” facility will operate by using carbon dioxide captured directly from the air. Construction will begin in 2023 and is expected to be finished by 2026. The Chronicle reports that the facility is expected to be the first of its kind, with its focus on reducing the footprint of industries like “marine, aviation, rail and truck transportation.” Oxy is also set to start construction next year on its West Texas carbon capture facility, which is set to remove up to 1 million tons of carbon dioxide per year. These projects highlight Oxy’s commitment to carbon management. Oxy CEO Vicki Hollub said “we believe that’s a gap that nobody else is filling,” and that “the transition will take some time, but over the next 10 to 15 years, I think we’ll make a lot of progress toward becoming a carbon management company and a go-to company for those that need (carbon) offsets.”
Former Energy Secretary Rick Perry pushed back against President Biden’s current energy policies. Saying “disaster” could be near if the Administration continues to hamstring the U.S. gas industry, Secretary Perry argues that “The Biden administration’s restrictive actions — no to pipelines, no to drilling, no to the financing of oil and gas projects overseas … is a stunning reversal of the energy independence achieved under the Trump administration.”
Furthermore, to relieve rising gas prices, the Biden Administration has tried and pressure the foreign countries of OPEC+, to include Russia, to increase production. Secretary Perry highlighted the hypocrisy saying: “On the one hand, you’ve got John Kerry, jetting all around the world, lecturing people about the use of fossil fuels, and then you have the Secretary of Energy Mrs. Granholm standing up and begging His Royal Highness Abdulaziz bin Salman to send more crude so we can drive down the cost of gasoline.” Now rumors are circulating that the Biden Administration will tap into the U.S. oil reserves. Typically used as a backup in case of natural disasters or war, Secretary Perry said diving into the reserves would be “a fool’s errand.” He added, “You go in, you use it, it’s [for] a short period of time,” Perry said, adding, “I don’t know what tools [Biden]’s got in the toolbox. I think he’s making it up as he goes.”
A group of countries within the European Union (EU) are pushing for nuclear power to be considered a green source of energy. This would be a step forward towards energy independence for the countries. Jessica Johnson from Foratom, a nuclear trade association based in Brussels, says the push comes from “…more member states recognizing that, in order to achieve the decarbonization goals, we need nuclear in the mix.” The recent energy shortage has also caused many countries to reflect on their vulnerability from depending on energy imports from countries like Russia. Reports say that Russia is toying with the block of countries by turning the gas supply on and off at will. The block of countries who are calling for an expansion of nuclear energy are Bulgaria, Croatia, the Czech Republic, Finland, France, Hungary, Poland, Romania, Slovakia, Slovenia, Sweden, and the Netherlands. A proposal from the European Commission to accept nuclear as a green energy is expected by the end of the year.
To help reduce global emissions, the U.S. and U.K., along with several other countries, have pledged to end using public financing for overseas oil and gas projects, for the most part. The announcement comes from Glasgow, Scotland as the COP26 Conference attendees continue to look for ways to limit warming to the Paris Climate Agreement’s coveted 1.5 degrees Celsius. Off the bat, the pledge carves out any project that incorporates carbon capture and sequestration technology. A senior Biden official said there will be further exceptions for oil and gas projects that each country will determine for themselves. A spokesperson from the State Department said in a statement "no one should doubt the direction in which we are headed, toward a clean energy future." However, the statement did mention some possible exemptions. "That said…as is reflected in today's statement, the Biden Administration acknowledges that limited exemptions will be necessary — for example, in cases where there are national security implications or severe energy access concerns. Such exemptions will be part of the Administration's responsible approach to accelerating the energy transition."
The Asia-Pacific region accounted for 52% of the world’s carbon emissions last year, according to British Petroleum’s latest report. The biggest contributor was China, producing 59% of the region’s emissions, followed by India, producing 13.7% of the region’s carbon emissions, according to the report. Coal makes up almost half of the region’s energy source, coming in at 47.8%. The rate is higher than Africa, Europe, and North America. Gavin Thompson, the Asia-Pacific vice chairman for Wood Mackenzie, says the region’s move to renewables is “far too slow,” and that “much of this stems from government policy. And while net zero targets come thick and fast … virtually all lack details on how these will be achieved.” As of today, China announced 2050 will be its target year for net-zero emissions, and India is aiming for 2070. However, both countries claim that more assistance from developed countries will be necessary to make the transition to net-zero.
Energy Secretary Jennifer Granholm, said “The President is all over this,” when referring to rising gas prices during an interview on Sunday. However, OPEC+ has rejected President Biden’s call for increased production, announcing that they will maintain a steady increase in production at an increase of 400,000, barrels per day during December. Reports now say President Biden will counter by considering using U.S. reserves to lower gas prices. Secretary Granholm, speaking about the EIA report on consumption projection and other information, said "I think we'll be looking at that forecast that's coming out on Tuesday." Indicating that the report will possibly influence the President’s decision to tap into reserves or not.
TEXAS ENERGY NEWS
Governor Greg Abbott didn’t mince words after U.S. Energy Secretary Jennifer Granholm said she hopes gas prices won’t reach $4 during an interview Sunday. In a tweet, Governor Abbott responded saying “There’s no reason to “hope” gas prices won’t reach $4 (which ithey already have in parts of U.S.) Gas prices would go down if Biden stopped hindering the energy sector in America. There’s no reason to beg OPEC for more oil. Texas can produce it & make America energy independent.” Governor Abbott’s tweet summarizes the feelings a lot of Americans who are left perplexed by the current administration’s energy policy, which includes relying on foreign powers for energy.
- Texas Railroad Commission Chairman Statement After President Biden’s Administration announced the new EPA methane standards.
“While Americans are paying $144 million more for gas per day than in the past, the Biden administration continues their efforts to tax and regulate the oil and gas industry out of existence,” said Christian. “Texas is the number one oil and gas producer in the nation, and these continued anti -oil and -gas policies will kill jobs, stifle economic growth, and make America more reliant of foreign nations to provide reliable energy.”
Chairman Christian continues, “It’s hypocritical to kill clean fossil fuel jobs here in America claiming it ensures a clean environment, and then beg our foreign adversaries to produce more using much less environment-friendly methods. The U.S. is a global leader in reducing emissions, not through regulation – but technological innovation. In fact, over the last fifty years, the six major pollutants regulated by the EPA have fallen by 77 percent while the U.S. economy grew 285 percent and its population by 60 percent.”
“With a looming global energy supply crisis and inflation on the rise, we need more economic certainty not less; we need more oil and gas production, not more clean energy fantasies,” said Christian. “I remain committed to ensuring Texans have access to plentiful, reliable, and affordable energy.”
In an opinion piece, Ben Shepperd, Executive Director of the Permian Basin Petroleum Association (PBPA), argued “that this is a time for more focus on ways to deliver access to affordable energy to those struggling to pull their way out of energy poverty.” Mr. Sheppard then immediately addresses the issue of emissions by saying “This is not to say that we should not be focused on addressing our operations to the highest standard.” He says operators in the Permian Basin have reduced both carbon and methane emissions in recent years. Citing the Texas Railroad Commission, he says flaring from August 2020 to July 2021 was reduced by 75% in the Permian Basin. While methane intensity was reduced by 77% from 2011-2019.
Mr. Sheppard and the PBPA are shining examples of what we promote at the TxEnergyProject: Private companies innovating to produce a smaller carbon footprint to protect the environment, while providing reliable energy to people around the world. He goes on to articulate a point that often falls through the cracks: “Americans do not have to settle for false choices. They do not have to settle for energy production or environmental stewardship. They deserve both, and the PBPA and our members know that we can and do so much to move our world forward, and we can continue to deliver results that lessen our environmental impact.”
- ERCOT Announces New Board Members
Last week the ERCOT (the Electric Reliability Council of Texas) Board Selection Committee added three new directors to the ERCOT Board. The new Board Members include Former U.S. Representative William H. “Bill” Flores, who will serve as Vice Chair. Elaine Mendoza, founder, President & CEO of Conceptual MindWorks, Inc,. And Zin Smati, a corporate director and former president and CEO.