Part V: Renewable Energy On the Rise; Oil Still the Leader

By Shane Longoria and Travis Bremner

Editor’s note: This is Part V in a series by TheHub@TTU examining the state of energy in Texas. 

Despite rapid growth and innovation in renewable energy, the oil industry in Texas — and around the U.S. — is not slowing down anytime soon.

Todd Staples, president of Texas Oil and Gas Association (TXOGA), told a group of students at the Rawls College of Business that in September.

In 2016, Texas Oil and Gas companies paid $9.4 billion in local taxes and state royalties, which directly funds roads, schools, universities, and first responders across the state, Staples’ presentation said.

The level of investment in the state is enormous and Texas leads the nation in oil and gas production because of it, Staples said in a separate phone interview.

“In the 40s and 50s, the United States was clearly a net energy import and relied on sources of energy from other parts of the world.” he said. “In the next few years, the U.S. will be a net energy export.”

via George Brainard

In 2016, Greg Abbott said if Texas were a country, it would rank as the 10th economy in the world. This claim was checked by PolitiFact and rated ‘Mostly True’ as California would have ranked higher if all 50 states were included.

According to the TXOGA Energy Dominance in Texas report, 41 percent of the upstream merger and acquisition value in the United States occurred in the Permian Basin with investments totaling $25.6 million in 2016. This is more than any other U.S. shale play, which refers to natural gas trapped within shale formations, according to Geology.com.

Money spent on mergers and acquisitions refers to acquiring the rights to drill, mineral leases, or assets of another company.

Development of renewable alternatives to fossil fuels has increased in the market as a whole, and according to the World Oil Outlook 2017 report, it will be the fastest-growing energy source to 2040, seeing a 6.8 percent annualized growth rate.

However, this increase does not challenge the state of the oil and gas industries, which are well-established and investing in the future.

In this regard, TXOGA supports an all-of-the-above approach. Staples said they believe renewable fuels have a future in an energy supply capacity, but cannot displace the quality of life that oil and gas affords us as Americans.

“Ninety-six percent of the products you use from the water bottles on your desk to the smartphone in your pocket contains some form of oil and gas,” Staples said.

via TXOGA.com

He said renewable energy is not yet ready to become a major player because it lacks a variable or reliable source, even in a place like Lubbock, since the wind is not always blowing.

Reagan County Judge Larry Isom has invested in the oil industry in Big Lake, Texas, since 1981, and said in a phone interview he now owns 100 shallow oil wells, overseeing daily maintenance and development.

Isom said he has seen success since investing in Big Lake’s oil fields and is confident oil companies will continue to make oil the most economically viable energy option.

“Oil companies are going to make the price of oil compatible with renewable alternatives,” Isom said.

According to a report by Reuters, companies like Beyond Petroleum, Chevron and Exxon are using their drilling and processing assets to fund investor payouts, believing they will be able to enter new energy fields when they are profitable.

A large share of future profits for oil will come from transportation, which will see a 25 percent increase by 2040, according to the Reuters report. Cars account for 20 percent of this usage, so if electric cars become a viable market, there will still be profits from air, rail and trucking industries.

Staples, a former State Senator, said technological innovation plays a greater role in keeping the U.S. globally competitive. Specifically he said data analytics helps recover hydrocarbons, a process which, according to the UK Department of Energy and Climate Change, is vital for reducing greenhouse gas emissions.

In the automobile transportation service industry, companies are also working to reduce emissions oil refinement in vehicles.

Charles Bolton, president of Bolton Oil, said companies are using oils with lower viscosity which allows a car’s engine to run hotter. Low viscosity oil flows like water while a high viscosity oil is more resistant, like syrup, per Kew Engineering.

“Pouring that oil out of the can it runs just like water and lets the engine run cooler because it causes less friction,” Bolton said. “The whole dynamic is to decrease emissions and increase horsepower, fuel mileage, and the longevity of the automobile.”

The TXOGA energy report showed the oil and natural industry supported 325,500 jobs in 2016 with an average salary of $130,000. It states upstream jobs have grown in Texas for 10 consecutive months, most recently reported on in July 2017.

According to the American Petroleum Institute, the U.S. supplies billions of dollars of manufactured goods and services annually. The foreign investment by the U.S. in the Canadian and Mexican oil and natural gas sectors leads to more jobs for Americans than if the U.S. only supplied goods and services solely at a domestic level.

As a result, the report shows, North America could achieve self-sufficiency of liquid fuels, in terms of supply and demand, as early as 2020.

“Our nation’s energy security is at a higher level than its ever been because of the productivity of oil and gas,” Staples said.

About Shane Longoria

Shane is the Entertainment Reporter for The Hub@TTU. He enjoys writing about music, reading about politics and improving his Twitter game. He is almost finished with his bachelor's degree in electronic media and communications, and hopes to pursue a career in music journalism.

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