The United States took significant steps toward achieving energy independence in 2013 with Texas oil fields and companies leading the way.
Whether the country will ever be able to cut out foreign oil imports completely is a matter of debate. But there’s no question imports from the Organization of Petroleum Exporting Countries (OPEC) declined significantly this year in large part of increased shale drilling in places such as the Eagle Ford Shale in South Texas, Permian Basin in West Texas and the Bakken Shale in North Dakota.
Oil imports in 2014 are expected to be about 5.4 million barrels a day compared to 12.5 million barrels in 2005.
Plano-based Denbury Resources (NYSE: DNR) started capturing carbon dioxide emissions from a hydrogen plant in Port Arthur. The CO2 will be piped to Denbury’s oil fields in South Texas, where the company is doing enhanced oil recovery. The CO2 gets injected into older fields, increasing the pressure in the reservoir, which sends the oil to the surface.
If Texas were a country, it would rank 15th in the world in terms of oil production.
This will be remembered as the year the Peak Oil Theory died, putting to rest decades of doomsday predictions that the world will run out of oil. A website dedicated to warning about that day officially stopped publishing content in August
None of this would be possible without hydraulic fracturing and horizontal drilling, both processes perfected by George Mitchell and his company, Mitchell Energy in the Barnett Shale. The Texas Legislature honored Mitchell as the “Father of Fracking” in May before he passed away at age 94 in July.
Demand for these techniques has gone global with Dallas-based Breitling Oil & Gas CEO Chris Faulkner visiting potential shale plays from Poland to South Africa. In October, Allegiance Capital, a Dallas-based M&A firm, joined Globalscope Partners, a network of 34 M&A firms in 25 countries, to facilitate the buying and selling of oil and gas related companies worldwide. The goal is simple: Take the expertise that exists here in North Texas around the world.
All that oil has to get to market somehow and that’s created a whole infrastructure building craze and its own set of controversies.
TransCanada is doing final testing on the 485-mile, 36-inch Gulf Coast Pipeline that will transport 700,000-barrels of crude oil a day from Cushing, Okla. to refineries in Nederland near Houston. The pipe is expected to start operating on Jan. 22. The pipe will reduce the over supply of oil that’s occurred in Cushing, reducing supply and possibly sending oil prices up again.
TransCanada hasn’t been so lucky with its Keystone XL Pipeline, which sat in limbo on President Barack Obama’s desk throughout 2013. The pipeline requires presidential approval because it crosses the border into Canada. The president faces pressure from environmentalists to deny the pipeline to cut down on carbon emissions.
Meanwhile, the oil industry has largely turned to railroads to move oil from places like North Dakota. The amount of oil hauled by rail went up 2,361 percent from 2008 to 2012 and continued to go up even more in 2013.
Midstream companies such as Bridger, based in Addison, have ordered hundreds of railcars from Trinity Industries also based in Dallas, to keep up with demand. Demand for new oil tank cars is so high that it can take months or even a year before the cars are delivered.
There are even calls to start exporting both oil and natural gas, something that was unheard of a decade ago.
Liquid natural gas terminals on the Texas coast that were built just five years ago to accept imports could be switched around to go the other way. Several big companies, including Irving-based Exxon Mobil Corp. (NYSE: XOM) and Dallas-based Energy Transfer Partners (NYSE: ETP), are investing billions of dollars to convert those terminals for natural gas export. Energy Transfer even got approval to from the U.S. Department of Energy to start exporting by mid-2019. Exxon has not gotten approval for its LNG export conversion proposed just outside Port Arthur.
Activity in North Texas’ Barnett Shale slowed down considerably in 2013, in large part because the price of natural gas stayed below $4 per British thermal unit for most of the year.
The low price of natural gas didn’t stop Trinity East Energy from trying to drill and build a compressor station in northwest Dallas.
Protestors rallied against the controversial proposal, attending multiple city meetings to voice concerns about drilling on park land and in a flood plain. They convinced enough City Council members to sink the project, though drilling supporters were concerned that Trinity East would be better off suing Dallas than actually drilling anyway.
No lawsuit has been filed, yet.
In December, the Dallas City Council voted 9-6 in favor of new drilling regulations that include a 1,500-foot buffer between gas wells and homes and other protected uses.
Environmentalists praised the new regulations while industry officials blasted it, calling it a de facto moratorium.
Article Author: Nicholas Sakelaris