(The Center Square) – As the Texas oil and natural gas industry continues to break production records and create jobs, it is also calling on Congress to pass permitting reform legislation.
In July, Texas again posted record employment. Among the new jobs created were 1,600 in the upstream sector of the Texas oil and natural gas industry alone. The upstream sector includes oil and natural gas production and some mining. It does not include refineries, petrochemicals, fuel wholesale, oilfield equipment manufacturing, pipelines and gas utilities, all of which create hundreds of thousands of additional jobs.
Since the COVID-19-era low point in September 2020, the industry has added 37,100 upstream jobs. Upstream job gains outnumbered job losses by 35 to 11, the Texas Oil & Gas Association notes. Jobs in the industry are among the best-paying in Texas, with employers paying a median salary of about $124,000 in 2023.
“Texas continues to be the nation’s manufacturing powerhouse and the U.S. continues to lead the world in meeting basic energy needs,” said Todd Staples, president of TXOGA. “The men and women in the oil and natural gas industry make this possible. While there are economic disparities in most industries, it is undeniable that oil and natural gas are essential to maintaining the high quality of life Americans deserve, and the men and women in this field deliver the goods every day.”
According to the state comptroller’s office, Texas energy producers paid $557 million in oil production taxes last month, 27 percent more than in July of last year, and $164 million in natural gas production taxes.
But “with great production comes great responsibility,” says the Texas Independent Producers and Royalty Owners Association (TIPRO). TIPRO is calling on Congress to support pipeline infrastructure expansion and permitting reform. As pipelines in the Permian Basin in West Texas and southeastern New Mexico reach capacity, future production is at risk, it argues, due to a lengthy and sometimes complicated permitting process by federal regulators.
To address this and other problems, the U.S. House of Representatives passed the Energy Permitting Reform Act of 2024 (EPRA) last month.
“Texas producers continue to lead the way in providing reliable energy access to meet growing global demand, and it’s time for policymakers in Washington to work together to quickly pass EPRA,” said TIPRO President Ed Longanecker. “This important legislation will eliminate infrastructure permitting delays and associated federal red tape to ensure our vital energy reaches communities across the country and our allies abroad safely and efficiently.”
EPRA received bipartisan support in the Senate Energy and Natural Resources Committee, but has yet to be considered in the Democratic-dominated Senate.
At the national level, it is now “more difficult than ever to obtain permits to build energy infrastructure and connect it to the electricity grid,” TIPRO notes.
In Texas, the Texas Railroad Commission, which regulates the state’s oil and natural gas industry as well as intrastate pipeline safety, is much more efficient than the federal government at processing permits, industry sources say. Last month, it processed “805 oil, 222 gas and 355 injection completions for new wells, reentries and recompletions.”
It also revised a 40-year-old oil and gas waste disposal rule to protect groundwater and address other issues, and imposed $2 million in fines for violations, announced this month. RRC Commissioner Wayne Christian said, “The Railroad Commission continues to prove that a robust, responsible oil and gas industry can thrive while ensuring a safe and clean environment for all.”
Republicans in the U.S. House of Representatives have passed a series of bills to promote domestic energy production that are important “to counter the anti-energy and anti-consumer Biden administration and its war on U.S. domestic energy,” said Karr Ingham, economist and president of the Texas Alliance of Energy Producers. “Promoting and expanding abundant, affordable and reliable energy production from petroleum and supporting efforts to keep our economy going is critical to our industry, our country and the world.”
The bills still have to pass the Democratic-dominated Senate.
The Institute for Energy Research has identified more than 200 actions the Biden administration has taken against the U.S. oil and natural gas industry since January 2021. Recent actions include a temporary ban on new permits for the export of liquefied natural gas, which a federal court blocked.
But the disruption to LNG exports “led to global uncertainty about America’s ability to deliver reliable and affordable energy, resulting in a 15% decline in LNG purchase contracts in the first half of 2024 compared to the same period in 2023. This allowed suppliers from Asia and Canada to enter and gain larger market share, and Russia was able to once again become Europe’s largest natural gas supplier,” Longanecker said.
Noting that the administration is aggressively halting lease sales and imposing permitting restrictions on federal lands and offshore areas, he said, “As we saw earlier in this administration with the postponement of the suspension of federal oil and gas leases, court orders do not necessarily lead to immediate action from the Biden administration. And that’s what we need now – real and immediate evidence that the administration will expeditiously review permits to reduce uncertainty in the markets.”
