Texas has a booming decade, best in its history

TEXAS – Texas is basking in its best energy-producing decade in history and the growth is expected to continue.

The record-breaking U.S. oil production is expected to continue for decades. The growth is driven largely by the Permian Basin, the U.S. Energy Information Administration (EIA)  said in its Annual Energy Outlook in 2019.

Don Hooper, president of Soar Energy in Houston, told The Texan the most significant contributor to the energy boom was lifting the crude oil export ban. The U.S. lifted the ban in 2015.

Hooper said that in 2009 and 2010 Texas was producing 800 to 900 barrels per day on average. In 2019, however, the same type of wells produced about 2,900 barrels per day, a 241 per cent increase over the last decade.

Over the last decade, Crude oil production in Texas increased by 920 million barrels (bbl) from 2010 to 2018. And in 2019 oil production was about 17 per cent above the same point in 2018.

Texas’ oil production hit a record level not seen since 1973, according to the Texas Independent Producers Royalty Owners Association. Their record in 1973 was 1.28 billion barrels. Texas oil wells produced more than 1.54 billion barrels of crude in 2018.

Natural gas production increased to 8.8 trillion cubic feet (tcf) in 2018.

The number of natural gas producing wells decreased by a few thousand but production increased 1.25 trillion mcf (thousands of cubic feet). Gas production was at least 32 per cent higher in 2019 than 2018.

Wind energy also saw a boom. Texas had a 188 per cent increase in wind energy over the last decade. Electricity generated from wind was about 11 per cent higher in 2019 than 2018.

Even with all this growth, emissions from the energy sector decreased. In the last decade carbon dioxide emissions decreased eight per cent, nitrogen oxide gas emissions decreased 16 per cent, and sulfur dioxide emissions dropped 53 per cent.

Employment in Texas’ energy sector grew 32 per cent. The number of unemployed Texans dropped by more than 50 per cent and remaining at record lows for most of 2019, according to the U.S. Bureau of Labor Statistics.

Another factor, according to Ed Longanecker, president of Texas Independent Producers and Royalty Owners Association (TIPRO), is Texas’ steady liquefied-natural gas (LNG) business. The use of LNG has meant a drastic decrease in emissions from Texas, he added.

Jeff Clark, president of the Advanced Power Alliance, said the partnership between the renewable industry and oil and gas improved. Some oil and gas companies are using wind energy to power their drilling operations.

Another driver of Texas’ booming oil industry is the federal renewable tax credit.

Texas’ oil and gas industry is expected to see more growth and expansion because of trade. Texas has six new LNG export facilities planned, which will increase export capacity to 10 billion cubic feet per day.

With all of the prosperity, people are flocking to the lone star state. Texas is the most popular destination for Californians wanting to move. In 2018 86,200 Californians moved to Texas, according to the American Community Survey data released Oct. 31, 2019.

Bleak picture in Alberta

The contrast with Alberta’s energy sector couldn’t be starker as the province sinks further into a deep recession.

Federal government policies are hurting Alberta’s energy sector, such as Bills C-48 and C-69.

Premier Jason Kenney called Bill C-48, (Oil Tanker Moratorium Act) “a prejudicial attack on Alberta, banning from Canada’s northwest coast only one product – bitumen – produced in only one province, Alberta.”

He said Bill C-48 is punitive to Alberta because there’s no similar ban on tanker traffic anywhere else in Canada. Bill C-69, dubbed the ‘No More Pipelines Law,’ makes it difficult for any new pipeline projects to be approved.

Calgary-based Martin Pelletier, portfolio manager and OCIO at TriVest Wealth Counsel, said business insolvencies in Alberta have skyrocketed by more than 70 per cent.  

He said personal insolvencies are up nearly 28 per cent from their 2014 lows as compared to a 15 per cent decrease in Canada over the same period.

There have been massive job losses sending unemployment rates in Calgary and Edmonton higher than seven per cent, above the Canadian average of 5.5 per cent. 

Pelletier said with no resolution in sight for the five-year-long beating in oil and natural gas prices, things are going to get worse before they get better.

In November alone, Alberta lost 18,000 jobs, according to Statistics Canada.

In an interview with Rex Murphy in November, Premier Jason Kenney said many Albertans feel fear, anger and often despair with the deep recession in the province and the oil and gas resources being blocked from getting to market. 

“The human costs of this are vast,” said Premier Jason Kenney.

“The per capita rate of suicide in Alberta right now is 50 per cent higher than Ontario. The U of C school of public policy economists have estimated for every additional point in unemployment rate we see 17 additional suicides. We have an unprecedented wave of opioid addictions, which is connected to an unprecedented crime wave, a 400 per cent increase in property crimes in many parts of rural Alberta, family break up people losing their homes their hope young people leaving the province.”

Alberta pays billions to other provinces in transfer payments

Still, Alberta is forced to pay billions in transfer payments.

In the last 11 years, Alberta has paid almost $240 billion to the rest of Canada in transfer payments – about $5,000 a year for Alberta taxpayers, according to Statistics Canada.

But Alberta hasn’t received any money back in transfer payments in the last 11 years.

And while Quebec boasts billions in surplus and a booming economy, Alberta continues to cut spending battling billions in debt and a weak economy.

In November the Quebec government gave an economic update showing a $4-billion surplus for 2019-20 and a revised surplus of $8.3-billion for 2018-19. With their surplus budget, Quebec Premier François Legault said that province will give back $857-million to its taxpayers.

Premier Legault said he wants to eventually get Quebec off federal equalization payments but this year Quebec will receive $13.1-billion in transfer payments.

In Alberta, however, the provincial government was forced in October to cut $1.3 billion in spending and will have billions in deficit after five years of tough economic times. According to the Alberta government, the provincial debt is about $63 billion.

Alberta’s Finance Minister Travis Toews met with federal Finance Minister Bill Morneau in November and asked for an immediate $1.7 billion equalization rebate. In spite of Alberta’s hard times, transfer payments out of Alberta to other provinces continue without a cap.

Toews asked the federal minister to respect provincial jurisdiction by removing natural resources from the calculation of equalization entitlements and end the automatic escalation of the floor for equalization to ensure Albertans aren’t paying for ever-increasing equalization while struggling through the deepest recession in a generation.

Alberta government eyes more independence

The province created the  Fair Deal Panel to consult Albertans on how best to define and to secure a fair deal for Alberta. The panel will also look at how best to advance the province’s vital economic interests, such as the construction of energy pipelines. The panel will research the province seeking more independence such as establishing a provincial police force and pulling out of the Canada-Alberta Tax Collection Agreement.

The panel is having public consultations between Nov. 16 and Jan. 30, 2020, and will complete its report to the government by March 31, 2020.

Wexit

As dissatisfaction with the federal Liberal government grows, Wexit events across the province continue. Wexit applied for federal party status, which is now under review by Elections Canada. If successful, the group will run MP candidates in the next federal election. The group also formed a provincial Wexit party and plans to have candidates run as MLA’s in the next provincial election. 

Laura Upshaw photo

-Alberta Press staff

-reporter@albertapressleader.ca

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