The Biden administration’s temporary pause on new federal export authorizations for LNG projects, if not reversed, could be a “devastating blow” to the Texas energy industry, according to the Texas Oil and Gas Association (TXOGA).
The trade organization estimated marketed natural gas production in the state remained unchanged at 31.8 Bcf/d versus 2022, according to its 2023 Annual Energy and Economic Impact Report, which relied on U.S. Energy Information Administration (EIA) data.
Crude oil production rose to 5.5 million b/d versus 5.2 million b/d in 2022, according to TXOGA estimates. Oil output also set a record in November at nearly 5.7 million b/d, according to EIA data.
“Growth like we’ve seen in Texas is not only unprecedented, it is not guaranteed,” TXOGA President Todd Staples said recently. Federal policies “throw roadblocks in the way of world-leading environmental efforts and responsibility in oil and natural gas development.”
He cited a myriad of the Biden administration’s policies. The latest hurdle, said Staples, is the administration’s directive to the U.S. Department of Energy (DOE) to pause liquefied natural gas facility authorizations. According to Staples, Texas LNG exports to Europe reached an all-time high of 8.1 Bcf/d in October, and more than doubled to 6.8 Bcf/d in fiscal year (FY) 2023 versus 2.8 Bcf/d in 2021.
Staples noted the trade organization is aiming to have the DOE directive “rolled back quickly because this will have a ripple effect.” Investors “are making decisions on continued infrastructure growth, and if you eliminate opportunities for American companies to compete in another market, you stop all opportunities for this growth and you weaken our position as an energy leader.”
Economic, Environmental Impact
In FY2023, TXOGA reported that the oil and gas industry’s state and local tax and state royalty payments reached a record $26.3 billion, up more than $1.5 billion from FY2022.
Funds collected by the state from natural gas production decreased to $3.35 billion in FY2023, versus $4.47 billion in FY2022, according to TXOGA, which cited Texas Comptroller data. The value of mineral properties also “more than doubled in a single year,” fueling a year/year increase of $1.8 million to reach $6.75 billion in FY2023.
On the environmental front, “emissions are trending in the right direction,” Staples said. He credited the growing use of natural gas in the power sector. Exploration and production companies in the Permian Basin of West Texas have been working to electrify operations. However, Staples said, “Texas needs more pipelines and a cost-effective electrical power generation market that puts consumers’ needs first and incentivizes dispatchable power.”
