Oil Industry

In the endless boom and bust cycle of the oil business, there has never been anything like 2020. The oil patch is reeling from historically low prices. Futures for West Texas Intermediate crude closed at $25 a barrel on Friday, down from more than $60 a barrel at the beginning of the year.

On a normal day in Andrews County, you can look in any direction and see the bobbing horse heads of pump jacks stretching to the horizon, sucking up oil from deep in the Earth. But these are anything but normal days.

An oil rig outside Midland, Texas.
Gabriel C. Pérez / KUT

For months, the state agency that regulates oil and gas in Texas has considered reducing the amount of crude companies can pump from the ground. Supporters of the plan hoped it would reduce a supply glut and stabilize oil prices. But the proposal died Tuesday without a final vote.

In Texas, a proposal to cut the amount of crude that oil companies are allowed to pump from the ground appears dead. The regulator who proposed it — Texas Railroad Commissioner Ryan Sitton — says commissioners "still are not ready to act" on the plan, which would have cut production 20% to try and stabilize prices amid a historic oil glut. Regulators had been expected to vote on the plan Tuesday.

An oil rig and gas flares in far West Texas
Jorge Sanhueza-Lyon / KUT

A meeting of Texas oil and gas officials started Tuesday with a prayer both ominous and inscrutable.  

“Father, we come to you this morning recognizing an attack upon us as a country, as an industry,” Railroad Commission Chair Wayne Christian intoned.

An oil pump jack in Odessa.
Gabriel C. Pérez / KUT

For the first time in history, a barrel of West Texas oil was so worthless Monday that oil companies would pay you to take it. Oil prices have been low for months, but the negative pricing of a valuable commodity can be hard to wrap your head around. How does it happen?

Updated at 4:53 p.m. ET

The dramatic collapse in worldwide demand for oil led to an extraordinary development on Monday: U.S. oil prices fell below zero for the first time ever, and kept falling.

The key U.S. oil benchmark, West Texas Intermediate, settled at negative $37.63.

Driven by a trading contract deadline, traders desperately looked for buyers for the barrels of oil they normally hold in their books. But buyers were hard to find — even when the oil was being given away for free.

An oil rig outside Midland, Texas.
Gabriel C. Pérez / KUT

In a move that would have been unimaginable just a couple months ago, Texas is considering limiting oil production in the state. Capping the amount of crude that can be pumped is a power the state has not used in nearly 50 years. But, at a meeting Tuesday, regulators heard it may be needed to stabilize an industry in freefall.

Oil prices bounced back a bit after President Trump said the Department of Energy would buy crude for the nation's strategic petroleum reserve.

"We're going to fill it right to the top," Trump said Friday in a wide-ranging news conference at the White House. He said it will save taxpayers "billions and billions of dollars" while helping an industry that's been reeling.

While oil prices increased nearly 5% after Friday's announcement, that was just a fraction of the amount they lost earlier in the week.

Laborerers work on the helipad of an offshore oil platform in the Gulf of Mexico.
Gabriel C. Pérez / KUT

Coronavirus hit the global markets this week, sending stocks reeling and pushing economies toward possible recession. In Texas, the view could be even bleaker thanks to plummeting oil prices. Analysts say the state can expect layoffs, bankruptcies and state revenue shortfalls in the months ahead if prices remain low.

An oil rig outside Midland, Texas.
Gabriel C. Pérez / KUT

The head of the Texas Oil and Gas Association said Tuesday his group agrees fossil fuels contribute to global warming and that the industry will find ways to reduce emissions.

U.S. Geological Survey

Earthquake activity has skyrocketed in Texas over the last dozen years because of increased oil and gas activity. But those manmade quakes are not included in a long-term earthquake hazard map released Wednesday by the U.S. Geological Survey.

Gabriel C. Pérez / KUT

When the Trump administration announced plans to roll back Obama-era rules limiting methane emissions from oil and gas operations, even some in industry cried foul. Many saw the regulations as a modest attempt to curb Earth-heating emissions.

A piece of an old pipeline that ran through the Hill Country in the early 1900s.
Julia Reihs / KUT

Charles Chaney Jr. has Utopia on his mind. The Texas City resident is a month away from retirement, and Utopia is the name of the scenic Hill Country town where his family has lived for generations. He had planned to build a house on land he owns there near his brother and sister.

Now, he’s not so sure.

Call it a sign of the times.

Renewable energy has gotten so cheap that even oil giant Exxon Mobil, which reported $20.8 billion in earnings in 2018, is getting in on the savings.

Greenpeace activists in Texas recently rappelled off a key bridge over the Houston Ship Channel, unfurling streamers and hanging in midair in a scene that looked kind of like high-rise window washers meets Cirque de Soleil. Their aim was to protest the oil and gas that funnels through the waterway every day by disrupting bridge and water traffic.

Bob Daemmrich for The Texas Tribune

T. Boone Pickens, a brash and quotable oil tycoon who grew even wealthier through corporate takeover attempts, died Wednesday. He was 91.

Updated Oct. 1, 2019, 9:28 a.m. ET

Half a dozen men in hard hats watch as their construction rig rises more than 100 feet. On top, an American flag flutters in the sun. At the work site in Adams County, Colo., northeast of Denver, the crew is preparing to close off an abandoned well.

Instead of drilling a mile beneath the surface to extract oil, they're about to rip pipe out of the ground. In its place, they'll leave concrete plugs strong enough to seal the hole permanently.

Gabriel C. Pérez / KUT

In Washington, D.C., on Thursday, the Environmental Protection Agency announced plans for a major rollback of rules aimed at reducing methane emissions from oil and gas infrastructure. In Texas, environmentalists and even some in the industry are arguing in favor of keeping the rules.

Salvador Castro for KUT

Protesters could face up to 20 years in prison for interfering with oil and gas pipelines under a new proposal from the Trump administration.

Caroline Covington/Texas Standard

From Texas Standard:

Energy is the invisible driver of nearly everything we do. It gets us to work, lights our homes – it even powers the equipment we use to broadcast Texas Standard. Energy – and access to it – determines the wealth, health and growth of societies. Michael Webber explores how energy has shaped civilization in his new book “Power Trip: The Story Of Energy.

Webber says he became interested in the topic during an undergraduate history class at the University of Texas at Austin.

Rows of chairs in the House chamber of the Texas Capitol.
Gabriel C. Pérez / KUT

On its face, you might think a bill to treat wastewater from oil and gas operations would get the support of environmental groups. But you'd be wrong.

Pierce Place/Flickr (CC BY-NC-ND 2.0)

From Texas Standard:

Most of the liquefied natural gas, or LNG, the U.S. exports leaves on big tanker ships. But with so much natural gas being produced right now, companies are seeking out other ways to move LNG internationally. In fact, at least one company has carved out a niche by shipping natural gas overland, tapping into a growing market south of the border.

Sergio Chapa reports on the oil and gas industry for the Houston Chronicle. He says the tankers transporting LNG are similar to the 18-wheelers that deliver gasoline or diesel, but much bigger.

Jorge Sanhueza-Lyon / KUT

Natural gas is a valuable commodity in most of the world – but not in parts of Texas. Now, in West Texas, oil well operators will pay you to take their natural gas. The practice is called “negative pricing,” and it could change everything from the price of electricity to the use of renewable energy.

Gage Skidmore/Flickr (CC BY-SA 2.0)

From Texas Standard:

In a tweet Monday, U.S. Secretary of State Mike Pompeo said the situation in Venezuela is "deteriorating," and announced plans to remove all diplomatic staff from the country, amid a six-day nationwide power outage, ongoing violence and food shortages. The U.S. also recognizes opposition leader Juan Guaido as the country's president, though Nicolás Maduro still occupies the presidential palace. But it's unclear what the consequences will be with U.S. diplomats out of Caracas.

Secretary Pompeo, who's in Houston Tuesday for the CERAWeek energy conference, told Texas Standard he's ordering diplomats to leave for their safety. As a diplomat himself, he also says much of his focus is on finding ways to enhance America's security at home, including promoting U.S. oil and gas production. He says so-called energy independence gives the U.S. greater security and more leverage to negotiate with other countries.

Despite growing energy independence, the U.S. has relied for years on Venezuelan oil exports. But Pompeo says right now, the U.S. mainly wants to ensure the well-being of the Venezeulan people.

Gabriel C. Pérez / KUT

A couple years ago, Texas had a problem with abandoned oil and gas wells.

It still does.

That was the takeaway Wednesday from a hearing at the state Senate, where lawmakers learned the agency responsible for plugging wells can't seal them as quickly as they're being abandoned.  

A man carries a sign in protest of the planned pipeline at the Wimberley Community Center Tuesday night. His sign says, sign says, "Our Founding Fathers saw England's rule as unjust. I see Kinder Morgan's rule over my community as unjust."
Salvador Castro for KUT

A public meeting Tuesday on a planned natural gas pipeline in Central Texas often felt more like a protest, as Hays County residents shared concerns about the project and speakers vowed to fight it.

Julia Reihs / KUT

A fight over a pipeline is never only about the pipeline. It’s about the environment, property rights, public safety and a community’s sense of itself. Just such a fight is now brewing in the Texas Hill Country, where company Kinder Morgan plans to lay a part of its 430-mile natural gas Permian Highway Pipeline.

Pexels

From Texas Standard:

If you're the investing type, it's likely the stock market has given you a little bit of whiplash in recent weeks. If you're not the investing type, you've probably seen the major ups and downs as a reason to avoid stocks. Ups and downs are par for the stock market course, but has the recent volatility been an outlier? And what explains it? President Donald Trump said this week there was a "glitch" in the market December, so what are we to make of that?

Ray Perryman is an economist with the Perryman Group in Waco. He says the stock market's current fluctuations are unusual.

KUT

From Texas Standard:

Taxes. They tend be something many of us avoid thinking about until a certain time of the year. But they are, of course, an everyday reality when you buy something at the store or when you fill up your gas tank.

Martin do Nascimento / KUT

Texas-based oil giant Exxon Mobil got some good press this week when it announced it was donating $1 million to a campaign to enact a carbon tax in the U.S. But many worry the tax proposal would not slow emissions quickly enough and could harm the environment through its legislative giveaways to the oil and gas industry. 

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