Oil Export Ban: No Fans in Texas

Oil Exports Bad for Eagle Ford

Railroad Commission Chairman David Porter joined Governor Abbott and other Texas legislators to urge the federal government to lift the ban on oil exports.

Related:Heitkamp Urges Repeal of Oil Export Ban

At a hearing before the U.S. Agriculture Committee this week, Porter testified to the immediate need for Congress to lift the ban on the archaic and outdated policy and made the case that keeping the 40 year old law is bad for Texas and the whole economy.

Related: Oil Export Ban Hurts Eagle Ford

“Technological advancements have allowed U.S. producers to tap new sources of oil and natural gas from shale formations, including from the Permian Basin and Eagle Ford in Texas. Development of our shale resources has been a game-changer and presents the US with the opportunity to be the world’s largest producer of both oil and natural gas.”

— David Porter

Highlights of Porter’s testimony to lift export ban:

1. Increase production resulting in new jobs, economic growth, increased state and federal revenue. U.S. GDP would increase by $38.1 billion in 2020 and every state and congressional district would also benefit from increased oil production due to the expansive supply chain it supports.
2. Consumers would save money at the pump
3. Enhance free trade and lower the U.S. trade deficit
4. Strengthen our national security

Read the full testimony at rrc.state.tx.us

Eagle Ford Task Force Turns to Natural Gas Flaring

Natural Gas Flare

The Eagle Ford Task Force is turning its attention to natural gas flaring. Texas set a record for flaring permits earlier in the year and the trend will continue until pipelines and gathering systems catch up with drilling.

In oil producing areas like the Eagle Ford, drilling and first production is reached weeks and sometimes months before pipeline companies get natural gas infrastructure to the area. Oil can be moved with a truck, but natural gas needs pipelines.

Flaring is commonplace in oil producing areas and is very rarely abused. More often than not, flaring lasts only a few days or weeks. It is in the operators best interest to get paid for natural gas they're producing.

The task force plans to work with companies to increase the use of natural gas generators on location. On-site generators can power electric machinery and will help limit the amount of flaring.

A main concern for the region is whether or not the Eagle Ford will push the San Antonio Metro Area over the federal limits for ozone standards. The ozone issue alone will have politicians anxious.

Comments from David Porter indicate the TX RRC is going to review its rules to make sure they are relevant in the modern shale era. I suspect there won't be major changes. Even if big changes come, infrastructure in the Eagle Ford will be catching up and flaring won't be near as prevalent by the time any legislation is enacted.

Eagle Ford Task Force - Water Issues at the Forefront of Agenda

The Eagle Ford Task Force met November 2, at the UTSA campus in downtown San Antonio. Water issues are at the forefront of the task force's agenda. Six experts invited by RRC Commissioner David Porter addressed the task force. Two of the presentation and the agenda can be accessed below

• EFTF Meeting Agenda November 2, 2011

Both Darrell Brownlow, a geologist, and Stephen Jester, an engineer with ConocoPhillips, indicated there should be ample water to supply fracking needs in the Eagle Ford. Brownlow estimates that for every 1 acre-foot of water used in fracking that 280 acre-feet are used for other purposes. Jester estimates that at peak consumption the Eagle Ford will only account for 5-6.7% of water demand in the 16 county region he evaluated. That's really focusing in on the core. The aquifers in the region cover much more than 16 counties.

Advancements in completions are also decreasing the amount of water used in each well. Early on, operators reported using 125,000 bbls or more in completions, but some are now using less than 85,000 bbls of water per well and Jester believes that number will continue to decline on an efficiency basis.

Brent Halldorson of Fountain Quail Water Management addressed the potential of recycling flow back water (water produced after a hydraulic fracture completion). The industry has the opportunity to recycle as much as 15-20% of the water it uses in hydraulic fracturing. Fountain Quail recently opened a water treatment plant in Kenedy, TX.

One attendee brought up the fact that water used in fracking is taken out of the hydrologic cycle and not replaced, but several industry participants made sure the panel was aware that natural gas combustion creates water and that some have estimated the same amount of water used in fracking is produced from combustion of natural gas in the first few years of an Eagle Ford well's life. Interesting.

The Eagle Ford Task Force plans to meet once a month to address issues and concerns related to the Eagle Ford. Stay up to date with task force news at our Task Force News page.

Eagle Ford Economic Impact and Threats

Good Eagle Ford economic impact summary from the Caller in Corpus. 13,000 full-time jobs are related to Eagle Ford production and that number could grow to 70,000 by 2020. The number of permits being issued by the TX RRC has also skyrocketed. The agency issued 1,200 permits in the first half of the year compared to just 94 in 2009. The article goes on and Porter identifies the EPA and the government as the largest threat to the oil & gas boom in South Texas.

The economic frenzy Eagle Ford Shale drilling has ushered into South Texas will continue as long as the federal government gives the state breathing room to regulate development, a state official said.

South Texas continues to post impressive economic numbers because of drilling activity, Texas Railroad Commissioner David Porter told attendees at the Corpus Christi Chamber of Commerce's luncheon Thursday.

A University of Texas-San Antonio study completed earlier this year showed 13,000 full-time jobs tied to Eagle Ford production, Porter said.

By 2020, that number is projected to reach 70,000 jobs.

The Railroad Commission issued 1,010 permits for Eagle Ford drilling in 2010, commission figures show.

This year, the commission had issued more than 1,200 through June. Only 94 permits were issued in 2009, Porter said.

Eagle Ford Shale Fracking on Task Force Agenda

The Eagle Ford Shale Task Force was announced and met for the first time this past week. High on the list of priorities will be setting best practices for Hydraulic Fracturing across the play. Drilling problems in other states have created a stir around the topic of fracking, which means the task force will help inform the public around the subject and alleviate any misinformation that is reported.

"For Texas, the consequences of fracking are big and getting bigger. Development of the Barnett Shale in North Texas and the Eagle Ford Shale, which covers a large swath of South Texas, has created an economic boom."

"The Center for Community and Business Research at the University of Texas at San Antonio looked at the economic impact of the Eagle Ford deposit. In a study released in February, the center estimated that by 2020 the Eagle Ford would account for close to $11.6 billion in gross state product, $21.6 billion in total economic output and support close to 68,000 full-time jobs."

Railroad Commissioner David Porter deserves praise for recognizing the promise and the peril of fracking. Having learned from problems in the Barnett Shale, Porter created a 22-member Eagle Ford Task Force of stakeholders — including environmentalists — to communicate with the public, address thorny issues such as water and develop a system of best practices.

Fracking presents Texas and the nation with a tremendous opportunity to develop domestic sources of natural gas, a relatively clean form of energy. The Eagle Ford Task Force can play a big part in turning that opportunity into a reality.

Read the full news release at MySanAntonio.com