Energy & Water

The hottest of hot topics are: Open government & Open access to government records. There has been ongoing war waging over eminent domain and records at the Tarrant Regional Water Board. Wars breed bill filings.

Van Taylor’s  SB 335 , SB 336 & SB 337 clarifiy access to local governmental records.

This brewing war over eminent domain and transparency has resulted in :

• $235,000 in campaign contributions for  a local water board Information Intelligence
• Texas Tea Party Requests Information Concerning Eminent Domain from a Texas Water District  Information Intelligence 

A Texas Water Resources Institute-led initiative has received a $2.3 million grant from the U.S. Department of Agriculture’s Natural Resources Conservation Service to address water quantity and water quality concerns in the Lower Rio Grande Valley. 

Real Estate Center at Texas A&M   AgriLife Today

SJR 9 by Van Taylor would move the ball toward legislative approval of rule making.

Sound far fetched? It’s not.  Other states are doing it:

• 59 % of Arkansas Voters approved it this past November. 
• Utah does it. 
• Idaho tried. 50.59% of voters opposed it. 

A quick, non-exhaustive, list of contentious Texas rule making issues:

• The Railroad Commission common carrier rule making, which is a fight over eminent domain.
• Any urban-rural water rule making action.

Lower oil prices is expected to boost construction in downstream oil and gas.

AGC’s Chief Economist says: “In fact, petrochemical producers are probably helped by the drop in oil prices in dollar terms,” says Ken Simonson, AGC’s chief economist. “

The Flaw: Need for more skilled workers. “Texas builders report their main challenge as finding enough professional and craft workers to fill openings.”  

 Houston Public Media

It’s a toss up whether underwriters will increase scrutiny on debt and equity markets in Texas after lower oil prices. The pros & cons of whether it will impact lending:

• Con: Knee Jerk Reaction:
  • “There is a knee-jerk reactions to do that,” said Stuart Wernick, senior vice president of Dallas-based Berkadia Commercial Mortgage LLC. “I was in Miami last week at a conference, and two guys came up to me telling me, ‘You are in Texas, right? It’s going to be tough.’  “They said they are going to be more stringent in their underwriting.”
• Pro: No Current Impact: 
  • Anne Raymond, managing director of Crow Holdings, said investors will be discerning in their evaluation of the nuances of Texas’ real estate markets.

    “Of course, it is very early to understand the implications of the falling oil prices,” she said. “To date, however, we have experienced no concern from lenders and equity partners for deals in Austin or Dallas.

• Con: All of Texas is the Same:

  • “People lump the whole state together in terms of energy,” said Mark Dotzour, chief economist at the Real Estate Center at Texas A&M Univeristy. “Some underwriters may scrutinize loans in Texas more.

    “There are a lot of people who only read the headlines, and if they do, they will think Texas is in trouble.”

Dallas Morning News

It’s HB 30 for Representative Larson’s bill to develop bracking groundwater. He wants development of brackish water to be considered by:

• Regional Water Planning Groups
• TWDB 
• And, he creates a permit structure for brackish groundwater production zones

The University of Houston will lead an offshore energy project created with funding from BP Deepwater Horizon settlement. The highlights:

• “U of H was selected to lead the Subsea Systems Institute, a group of local universities, colleges and NASA, in the effort.”
• U of H beat the University of Texas at Austin, Texas Tech University and Texas A&M-Kingsville in its bid to lead one of the research coalitions
  • U of H offers the only subsea engineering academic program in the nation.
• The Houston coalition includes: Rice University, Texas Southern University, Houston Community College, Lone Star College and the Johnson Space Center.
• Another research center will be anchored at Texas A&M University-Corpus Christi

The research teams will study:

• Preventing blowouts
• Gaining an improved understanding of how oil flows from the ocean’s floor, where pressure is much higher

Funding will be administered by TCEQ.  Houston Chronicle  Houston Business Journal 

A January 5th 2015 Attorney General Opinion request asks whether the Barton Springs/Edwards Aquifer Conservation District authority extends outside the boundaries of the district.

The opinion requests raises these flags for the Attorney General Opinion Committee:

• The district claims to regulate all groundwater from aquifers in the area
• The requestor believes the authority of the district is only for the aquifers in its enabling statutes- the Barton Springs segment of the Edwards Aquifers. 
• The district’s boundaries were set in 1987 legislation and no legislation has expanded the boundaries.

Attorney General Opinion Request: RQ-003-KP

Before leaving office, Rick Perry funded a $4 million consurtium among higher education institutions for off shore energy exploration. The consortium ‘s purpose:

• research, training, and education
• for the advancement of offshore energy exploration
• help protect the environment and
• develop preventive measures against oil spills.

The funds are a result of the legal and regulatory negotiations after the BP’s Deepwater Horizon spill. 

TCEQ & Federal Connection

• TCEQ Commissioner Toby Baker announced the establishment of these centers of excellence in Texas last week.
• It’s all part of the ongoing implementation of the federal RESTORE Act.

Governor Perry Press Release

The US Geological Survey will issue a new map of earth quake risks in 2015. For the first time, it will include earthquakes that may be caused by human activity. What can this affect?

• Building Codes
• Insurance Rates and Requirements

Dallas area has had 120 quakes since 2008.   Dallas Morning News

What to do with bills that address endangered species?

The House Rules provide discretion for the Chair (The Speaker) to send bills to one of several committees, which is common.  Discretion is good.

During the House Rules debate, one committee wanted to stake claim to endangered species bills- House Energy Resources wanted first dibs. Its a hot topic for the energy industry, as endangered salamanders and prairie dogs can slow projects. 

Ultimately House Energy Resources will get first crack at bills that address endangered species “as it related to energy resources” The Amendment. The House Rules. 

Politico had speculated on the wealth of data that could be colelcted from smart meters, which garned an article in the Dallas Business Journal, and a response from AECT’s John Fainter. 

Fainter explained, ” We don’t get the kind of information that they were talking about,” Fainter said. “All we get is how much electricity they use, period. That information belongs to the customer. The customer can release it to other parties if they want to.”

Fainter also stressed the penalties in place by the PUC and Legislature for the sale of data. Dallas Business Journal

Waco Editorial stresses the need for aggressive water plans to meet Texas’ population growth.  Their ideas for the Legislature:

• Scrutiny of projects benefiting from state loans
• Much greater authority for state-created groundwater districts
• Aggressive strategies for water conservation must be part of the long-term package.

Waco Tribune 

In one place get:

• drought status
• links to financial assistance
• water and flow maps
• + more

Water Data For Texas

CTWC supports TCEQ recommendation to limit the “open” or unlimited water releases from Lakes Travis and Buchanan to flood rice fields in South Texas. 

The proposal to increase the trigger points for releases to rice farmers has been sent by the Lower Colorado River Authority (LCRA) to the TCEQ, the entity responsible for managing the state’s water plan. CTWC Press Release

Welcome to:

• Mac Abney of Marshall was elected as Board President. 
• Vice President Connie Ware of Marshall
• Secretary/Treasurer J. D. Jacobs of Rockwall and
• Secretary Pro-Tem Connie Wade of Longview. 
• Other members of the SRA Board include Past President Cliff Todd of Carthage, David Koonce of Center, Earl Williams of Orange, Stan Mathews of Pinehurst and Sharon Newcomer of Mauriceville.   The Orange Leader

Water recommendations: 

• More financial transparency for water districts
• Formal review of the purpose and function of water districts
• Performance measures of regulatory agencies should include measurable outcomes, like measured improvement in water quality
• Allow private investment in water projects
• Simplify TCEQ approval of water right amendments
• Reform junior rights restrictions on interbasin transfers
• Clarify policy of the Environmental Flow Standards
• Clarify Texas Water Development Board’s authority in Regional Groundwater Management Areas
• Allow private development of groundwater
• Uniform conflict of interest and record keeping for groundwater districts
• Simplify requirements for indirect re-use of water
• Integrate Regional Water Planning with Bay/Basin Environmental Flow
• Repeal junior rights related to interbasin transfers

TPPF Guide to the Issues 2015

Ardent private property rights supporters, TPPF, offers a litany of eminent domain recommendations, including: 

• Property owners right to buy back property if it is not used for the public use asserted when the property was acquired
• Limit the use of property to the public use for which the property was acquired 
• Limit eminent domain to public uses, not public purposes
• Place the burden of proof on the condemning entity, not the property owner
• Reduce judicial deference to executive agencies and local governments (hello, quasi governmental entities and private companies, you all are excluded from judicial deference)
• Restore a constitutional right to own and use property

TPPF’s 2015 Guide to the Issues

Whether a landman is an employee or a contractor is a big deal. The former carries a lot more liability. 

Tales of landmen treating elderly property owners unfairly float regularly through the Capitol. No one wants to be associated with people who are mean to sweet little ladies who want to serve ice tea on a hot day and ask about your well being. Hence:  HB 736 by Phil King

Is it deep underground fissures? Is it fracking? Did the drought open new faults and fissures deep under Texas?All possibilities being explored by scientists.

Scientists explain that very little is known about the faults and fissures under Texas, because the fault lines do not make themselves visible like they do in California.

An SMU team has ” linked the Cleburne and airport quakes to injection well activity.” What caused other recent quakes is being studied by teams of scientists. Dallas Morning News   NBCDFW

Speaking to the Texas Public Policy Foundation, Governor-elect Abbott connected Denton’s fracking ban to the California-ization of Texas. His quotes:

• “Now think about it — few things are more important in Texas than private property rights. Yet some cities are telling citizens that you don’t own some of the things on your own property that you have bought and purchased and owned for a long time. Things like trees. This is a form of collectivism,” Abbott said.
• “My vision is one where individual liberties are not bound by city limit signs…”

Houston Chronicle 

Whether science supports a causal connection between earthquakes and fracking is not the issue. The issue is the appearance of the link between earthquakes and fracking. 

The above the fold, front page headline from the Ft. Worth Star Telegram: Shaken & Stirred:  12 small quakes within 24 hours rattle residents and intrigue scientists.  

The City of Irving posted earthquake information on its website.  Irving schools are preparing by teaching students “drop, cover, hold on.”  

People want to feel safe, even if they already are safe. Its the rational that led to support of the City of Denton Fracking Ban.  

A couple weeks ago, we see a push for economic incentives for solar energy in Texas, and now the Tea Party in Florida & Georgia is in on the action.  

The Tea Party is offering a constitutional amendment that would allow a resident to sell electricity generated from the sun directly to their neighbors, tenants and friends, by passing utilities.  

A Georgia Tea Party advocate calls the proposal “…opening up the free market and giving people choice is a core conservative principle.” 

Washington Post

Judon Fambrough of the Texas A&M Real Estate Center writes about the Rule of Capture as it relates to oil, gas and groundwater in this month’s issue of Tierra Grande.   

He says additional groundwater taking claims may arise due to 2013 legislation that lessened liability. He relies on 2 statutory changes:

• Article I, Section 17[a] was amended to provide for ownership with possession, and
• Article I, Section 17[a] was amended to allow for a transfer of liability.

When it comes to fracking, the oil and gas company has the right to use, but not to own, usually. His conclusion:  “Any subsequent transfer of “ownership” by the lessee without the landowners’ consent may constitute a taking even though authorized by the statute. ” Tierra Grande 

For those hoping for a nationwide impact for fracking ban litigation; don’t hold your breath. Even Danish Guiness World Record Holder, Stig Severinsen, couldn’t hold his breath that long.  

The local and state bans are being litigated in state court, which means there will be no nation wide guidance on fracking bans.  New York Times

Interior Secretary Sally Jewell has criticized local and state bans on fracking as the impetus for confusion for the oil and natural gas industries. The Hill 

Dan Hunter will serve as Assistant Commissioner for Water and Rural Affairs.     

Kellie Housewright-Smith will serve as Assistant Commissioner for Operations.

Ft. Stockton Pioneer

Environment Texas supports economic incentives for solar power based on these facts:

• Solar is currently the fastest growing industry in the country
• In 2013 it  added 143,000 jobs nationwide
• Employs 4,000 people in Texas
• Is on its way to providing 20% of Texas power

Houston Chronicle 

LCRA broke ground on a new $250-million water supply reservoir near Lane City, Texas. The facts:

• Set to be completed in 2017
•  40,000-acre-foot (13-billion-gallon) reservoir constructed off the main channel of the Colorado River.
• Will secure water sources for the drought-prone Texas region.  Water World

Supporting landowners and economic prosperity simultaneously gets tricky. VT Governor supports a pipeline. But,  at the request of landowners, the Governor asked the pipeline company to pause legal proceedings and allow for negotiations.

Landowners want to be reimbursed for legal expenses they have incurred. The pipeline company initially said no, but now it says it is “definitely willing to consider reimbursement for legal expenses.”    VT Digger

Examining conventional wisdom on the economic impact of a decrease in the price of a barrel of oil, 538 analysis concludes- conventional wisdom is always wrong.  

 Why? It’s too complicated to predict what happens when the price of oil falls because the calculations include:

• politics, geo-politics greatly affects the price of oil
• complicated drilling economics
• complicated drilling financing
• no one knows what oil prices will do

Remember these are the guys with the instinct and analysis to predict Presidential elections that no one else contemplated. They did it with precision and accuracy.   538

Wind has estalished itself as a provider of power. By November, wind exceeded its power output for 2013.

With that leap into establishment power, the favorable tax treatment wind power relied on to grow may soon disappear.  Austin Business Journal  

New York prohibits fracking. Mineral rights owners and companies with existing leases may file suit claiming that the fracking prohibition is tantamount to the state government taking their private property.  

Shale Plays Media

Denton’s fracking ban has garnered a lot of attention. Law suits are proceeding. Bills have been filed.  

HB 539 would require cities to reimburse the state for taxes lost due to bans

HB 540  would require the Attorney General to approve measures before they can be placed on a ballot.  

The City of Denton’s response to the lawsuits contends that fracking is a public nuisance, and municipalities have long had the ability to regulate nuisances.  Courthouse News Service 

1. Fracking Bans: Will the Legislature Kill Local Control? Will the Legislature Support the Need for Texas to Remain the Premier Oil Producing State.    See HB 539 & 540 by Phil King

2.  Transportation funding for shale roads.  

3.  Water Use and Fracking  

4. Taxes- severance tax reductions, margins tax fixes, margins tax repeals…

5. Re-naming the Texas Railroad Commission

6. Eminent Domain, especially in relation to pipelines. Austin Business Journal 

Bruce Bullock, director of Southern Methodist University’s Maguire Energy Institute, says oil prices will begin recovering in early 2015. 

He predicts the value of a barrel should increase to $75. Additional increases will depend on global oil demands.  Dallas Morning News

National Energy Technology Lab study at the University of Texas is looking at the best ways to stabilize foams for fracking with carbon dioxide, nitrogen or gas liquids.

Several companies are field-testing new technologies that use high-pressure carbon dioxide, propane or butane instead of water.

 Some argue these new technologies are costly; and others say its the answer to economic and environmental issues related to fracking.  Shale Plays Media | Eagle Ford Texas

The Mexican government released the rules of the game for its energy de-regulation. It’s a very big deal for Texas firms.  Mexico’s Ministry of Economy Energy Rules  

According to the Energy Council of the Americas 40% of Mexico’s gas is imported from Eagle Ford Shale.  San Antonio Business Journal 

Texas A&M Bush School, Mosbacher Institute for Trade, Economics & Public Policy report on hydraulic fracking calls for better knowledge on Texas water usage. It recommends legislative and regulatory changes that will provide for:

South Texas Energy & Economic Roundtable sent a letter to TXDOT calling on more Prop 1 transportation funding dollars to support road improvements in Eagle Ford and Permian Basin oil producing regions. 

Letter highlights:

• “South Texas county judges, mayors and all elected officials, along with the oil and natural gas industry, put a premium on safety.”

• Increase in accidents in the region

• Roads were not designed to withstand the increased activity

• An investment in South Texas roads will help sustain long term economic development in a region driving the state’s economy.

• Only 15% of funds from Prop 1 will fund Energy Sector roads, & this should be reconsidered   Fuel Fix

This week TPPF released a private property rights paper about a pipeline company facing a judgment in excess of $1.6M against it. The judgment is unpaid and no bond is posted for appeal. It has ruffled feathers.

In the paper, TPPF reminds us transmission lines are no different that pipelines in that they both are private companies that have the power of eminent domain. 

TPPF stresses 2 major points:

• When private companies have eminent domain authority the scrutiny is higher
• private property rights, and the compensation for a taking of property, are fundamental 

TPPF

Information Intelligence has written about the pending TX Supreme Court case about a pipeline that owes a landowner a hefty judgment and hasn’t paid it. The case is gaining attention and momentum. TPPF weighs in on the case of the non-paying pipeline:

• “…energetic property rights is what enables individuals to attain self-sufficiency and assert their independence…”
• “Democratic government is not exempt from the temptation to circumvent the boundaries of private property rights for the sake of expediency.”
• “Texas has granted the power of eminent domain to electric trans- mission utilities and pipeline companies operating as a common carrier. ” 
• “By extended the power of eminent domain to private enti- ties, the government has introduced greater uncertainty for landowners into the eminent domain process when it comes to just and adequate compensation.”
• “Unadorned assertions of public use are constitutionally insufficient.”
• Merely registering as a common carrier does not conclu- sively convey the extraordinary power of eminent domain or bar landowners from contesting in court whether a planned pipeline meets statutory common-carrier require- ments. ” 
   
   
  A friendly reminder: When eminent domain is exercised by a private company, like a pipeline, the public and legislative scrutiny is higher.  TPPF

Washington Governor Inslee proposes a carbon charge on the state’s industrial pollution as a method to fund transportation.

The carbon fee will generate $7 Billion over 12 years, and will generate revenue equal to raising the gas tax by 12 cents.   AP via SeattlePi

Compensation of land owners is a common refrain in eminent domain debate. When property is taken by private companies, such as pipelines, the debate grows more intense. 

Massachusettes is considering a 12.5 percent royalty on any oil and gas transported in a pipeline through Massachusettes and ultimately sold to a foreign country. The royalty would be split amond land owners and is in addition to any compensation from taking of land through eminent domain. Daily Hampshire Gazette

Local control; Private Property Rights; and Economic Growth and Development all take center stage with HB 539 by Phil King. His bill seeks to dissuade future fracking bans. 

The method to curtail future bans on oil and gas production: Force cities to make up for lost revenue, and pay those lost revenues to the state. 

Dallas Morning News | HB 539 

The Houston Chronicle listed the top 10 legal stories for 2014.

# 10 Mexico Energy Deregulation

#4 Denton’s Fracking Ban

it’s been a banner year for energy and the law. 2015 will be energy, the law, and policymakers and regulators.  Houston Chronicle 

The Mosbacher Institute for Trade, Economics, and Public Policy publication, The Takeaway, features a study by Bush School students that says while fracking has brought these benefits:

• Economic benefits
• Environmental benefits

Fracking has also brought these harms:

• Adds to Texas water problem
  • The water used in fracking is pulling groundwater at a rate of 2.5 times the rate of aquifer recharge 
  • Estimated cost to fill the water infrastructure gap: $53 Billion

The study makes policy recommendations, including:

• “Incentives should be used to encourage reductions in HF water use;
• “Oil and gas com- panies could be offered severance tax reductions to substitute brackish groundwater for fresh groundwater;”
• ” Accurate and transparent data reporting on all water consumption (irrigation, munici- pal use, mining, and others)”; and
•  “policy changes to address inefficient water use practices in all sectors are needed. “

  KTBX College Station  The Bush School Report

Commissioner Craddick is considering increasing inspections in urban areas to combat safety concerns of residents.  Safety was a top concern for voters supporting passage of Denton’s fracking ban. Law 360

The South San Joaquin Irrigation District was granted approval to enter the retail electric market. South San Joaquin has its eyes on acquiring PG&E’s transmission lines, transformers and poles.  

South San Joaquin co-owns hydroelectric damns. It’s not new to electric world. PG&E wants $600 million for its infrastructure. South San Joaquin wants to pay $125 million.

The two sides are far apart in compensation. Since South San Joaquin has the authority to use eminent domain coupled with the number of lawyers involved in the negotiations, compensation will most likely be determined by the courts.  [SFGate]

Economic growth or local control? That’s the shorthand version of the battle cry from the two sides of the lawsuit over Denton’s fracking ban.

 In supporting local control argument, Denton residents point to:

• Denton, a home rule municipality, has approved drilling permits over the years. 
• A Denton approved special use permit for drilling across from a park and hospital percipitated the fracking ban [Texas Observer]

2014 Rio Grande Valley Water Awareness Summit highlights:

• Raymondville’s desalination plan is popular
  • $1.8 million TWDB grant and the agency’s $1.9 million low-interest loan to fund a $3.8 million project to drill a well and
  • install a reverse osmosis system to generate as much as 1 million gallons of water a day
• Mexico has failed to release 269,000 acre-feet into the region’s watershed causing:
  • the loss of 4,840 jobs and
  • an economic impact of $394 million a year [Valley Morning Star]

Water keeps declining in the lower Rio Grande, and New Mexico wants its share. To get its share of water, it has to fight Texas. Messing with Texas has its litigation costs. Here’s the facts:

• NM irrigators want to intevene in the current water dispute before the U.S. Supreme Court. 
• TX argues “that New Mexico is permitting groundwater pumping that effectively deprives Texas of water as the Rio Grande flows through the southern part of New Mexico. “
• NM retorts, “that it is meeting the legal requirements of the Rio Grande Compact, the interstate deal apportioning the river’s water, by delivering water downstream of Elephant Butte Reservoir.” [ABQ Journal]

Refreshing Recollection:  Previously on Informtion Intelligence:

This week the US Supreme Court appointed a Special Master to move the Texas-New Mexico water case along.

The Special Master is A. Gregory Grimsal of New Orleans. [US Supreme Court Orders 11.3.14]

The new pipeline rules were approved on December 2nd. They’ll become official March 1st. But, the fight is headed to the Legislature which favors private property rights. 

The supporters and the opposition remain the same since the rules were first announced this summer. 

• landowner groups remain skeptical to opposed
• industry remain supportive  [Ft. Worth Star Telegram] [RRC Press Release] 

Business Insider says 3 sentences from Charles Schwab’s Liz Ann Sonders sums up the economic benefit of lower oil prices:  

• Consumer spending represents 68% of the US economy.
• Oil and gas capex represents about 1% of US GDP and less than 9% of US total capex (which in turn represents about 12% of US GDP).
• Therefore, the benefit of lower energy prices to the consumer and many businesses greatly outweighs the significant hit to energy companies and/or energy-oriented capex, especially in energy-oriented states.

[Business Insider]
 

If you drill a horizontal well and go through another person’s mineral interest, did you trespass? The Texas Supreme Court will ultimately tell us yes or no.

Odds are also high that the Legislature will address this before the court says anything. [Agrilife] [Lightning Oil Company v. Anadarko E&P Onshore LLP via The Oil & Gas Lawyer]

The City of Denton is alleging that fracking creates a nuisance (think: noise, traffic, etc). Because fracking is a nuisance,  it is within the city’s authority to regulate. [Denton Response to GLO suit] [Denton Repsonse to TXDOT] [TXTribune] [Ft. Worth Star Telegram]

Background: In November 2014, Denton residents passed a proposition to prohibit fracking within its city limits. The day after the proposition passed, lawsuits were filed. The above is Denton’s response to the lawsuits.  

What’s more important than job growth to Texas economy? Research according to noted economist Ray Perryman. Quality research leads to quality education with leads to a quality, educated workforce. It’s a chicken and egg situation. [Perryman Group, ” US Energy Workforce”] [Corpus Christi Caller]

Land ownership is to Texans like blue is to the sky. Tarrant Regional Water District  (TRWD) needs to move water around to meet supply demands. The project is expected to cost $2.3 Billion in tax revenues.

Two big flags in this fact pattern:

• Billions of tax revenue draws attention of lawmakers. 
• To accomplish its goal, TRWD needs privately owned land from Texans who love their land.    

The land TRWD needs is owned by private citizens who want to continue to own their land without government interference.

State Representative Gooden requested information from TRWD, dissatisfaction ensued, campaign contributions flew around (all above board), and a grand jury is looking into the how TRWD is conducting its business. [Ft. Worth Star Telegram]

Fuel Fix honed in on Friday’s State Auditor Report on Chapter 313 Tax Abatement Agreements as cause for concern for energy industry. [SAO]  

State Auditor Keel offers these recommendations to the Legislature:

• “require independent verification”
• “set tighter policies on school board members and district employees who handle tax break applications.” [Fuel Fix]

Sen. Van Taylor has titled SB 109, ” “Opening Access to Water Act.”  It establishes a timeline for TCEQ to respond to applications for new reservoirs.  From Sen. Van Taylor: 

• The application process is “long, cumbersome and bureaucratic”
• There are “no time limit to issue permits”
• A lack of time limits has resulted in “projects have been stalled over a decade” 

From Rep. Leach:

•  “ one of the greatest challenges that still remains is the bureaucratic permitting process that hinders our ability to build reservoirs in an efficient and timely manner,”
• HB 201 will allow  “expediting much-needed projects through a more timely, reasonable and efficient system.” 

[Plano Star Courier]

ERCOT released a report that said the EPA’s Clean Power will cost Texans more and harm reliability in the grid. [Texas Tribune] We all want our A/C’s to function properly in August, which makes reliability a our electric grid a big deal.

A Forbes contributor writes that ERCOT got a couple things wrong, including:

• under-estimating solar power
• not including wind and energy storage
• the ability to avoid rolling blackouts with demand response systems
• improving efficiency   [Forbes]

BBVA Economist released a new report. OPEC is worried. Texas is not. Texas economy is more diverse than it was in the 1980s. A quote from the economist: 

“Today there are striking differences with the 1980s – when Texas suffered one of the worst recessions ever – which suggest that the downside risks are relatively contained…For example, greater economic diversification, increased trade openness, regional and national bank financing, and absence of a real estate bubble, to name a few.”

[Dallas Morning News BizBeat]

Houston’s South Texas College of Law is opening the region’s first oil and gas law institute.

Start brewing coffee, new oil and gas law publications await. [Houston Chronicle]

A newly released U.S. Geological Survey water use report, analyzing water use across the country, has reached its lowest recorded level in nearly 45 years. 

Texas specific statistics from the report:

• Texas accounted for about 7 percent of total withdrawals for all categories, predominantly for  thermoelectric power, irrigation and public supply. 
• Oklahoma and Texas accounted for about 70 percent of the total saline groundwater withdrawals in the nation, mostly for mining.  [Water World]

San Antonio Water System approved a deal to allow two private companies to build the $3.4 billion Vista Ridge pipeline project. The private companies involved are:

• Austin-based BlueWater Systems, which holds groundwater rights in Burleson County and will pump the water, and
• Abengoa, a Spanish company, which will build the 142-mile pipeline  [Texas Tribune]

An oil company executive penned a piece illuminating how the passage of the Denton fracking ban highlights the divide between the oil, gas and energy companies and citizens. 

It’s an opportunity for oil interests and citizens to work together for Texas growth. Lest not forget that when we work together, we catch more flies with honey than vinegar. [Mark Plummer, Chestnut Exploration]

The fracking ban is heading to court for the age old juggling act- How does Texas grow, allow  businesses to economically thrive, and protect private land use? It’s been a week. The issue keeps gaining traction worldwide. 

Denton’s Fracking Ban Numbers:

• 1 week since the ban passed
• 2 lawsuits filed to stop the ban from taking effect
• 58% of Denton voters supported a localized fracking ban
• 137 media clips

What’s being written and said about the ban?

• Courts Will Take Up Case of Fracking v. Drilling [Texas Tribune]
• Faulkner: Spending big bucks was the wrong strategy to defeat Denton frack ban [Dallas Business Journal]
• Texas Messes with Denton [Aljazeera America]
• Denton Fracking Ban Passes in Landslide [Dallas Morning News]
• After Banning Fracking, Denton Braces for Backlash from Drillers, a Bush and its Own Lawyer [Dallas Observer]
• Courts Will Take Up Case of Fracking v. Drilling [My High Plans]
• Texas Oil Regulator Says It Will Not Honor Town’s Vote To Ban Fracking [Think Progress via the Minted]
• Railroad Commission head talks Denton frack ban, what agency did wrong [San Antonio Business Journal]
• Railroad Commission head talks Denton frack ban, what agency did wrong [Houston Business Journal]
• Fracking Has Amazing Benfits. Why did this Texas Town Just Ban it? [The Daily Signal]
• In Denton, Texas, voters approve ‘unprecedented’ fracking ban   [LA Times]
• What Oklahoma Can Learn From A Municipal Ban On Fracking In Texas [KGOU]
• Voters in Texas city OK ban on hydraulic fracturing expansion [Penn Energy]

A Florida city wanted to protect seagrasses. So, it prohibited docks to promote seagrass growth. Property owners, with riparian rights, wanted to build docks to access the water.  The conflict ended up in court.

Landowners went to state court seeking property right protections for their riparian rights. The city moved the suit to federal courts. The 11th Circuit held that riparian rights, state based property rights, are not protected by the US Constitution. Litigants await word from the US Supreme Court. [Owner’s Counsel] [US Supreme Court Docket] 

“The data from JPMorgan Chase & Co. (NYSE: JPM) and the Greater Houston Partnership in their “Houston Skills Gap Report” indicates that a lot more Houstonians need a high school diploma, or equivalent, and some additional community or technical college training — but not a university degree — in order to adequately fill the jobs void. 

Chemical companies have committed to spending more than $100 billion in expansion projects from 2010 to 2023, most of which are in southeastern Texas and along the Gulf Coast.” [Houston Business Journal]

U.S. Energy Information Administration says last year Texas added 19,000 private sector energy jobs. For those who like to keep score- that’s more than any other state & 6 times more than the #2 state.

The EIA’s count is only jobs that are boots on the ground, and doesn’t count the many corporate headquarters jobs that have also been created. [Fuel Fix] 

Forbes digs into why a fracking ban emerged in the heart of fracking’s home turf? Appears as though people were concerned about their private property and roads. Texans like their land, driving their trucks, and owning their guns. Forbes doesn’t mention guns, but looks at how fracking got too close for comfort.

There are 272 active wells in Denton city limits. It wasn’t the usual environmental concerns driving the fracking ban. It was wells too close to homes and a park and increased traffic congestion. 

The citizens of Denton by all appearances wanted their land, parks and roads respected. There are always bad actors that trounce respect. The backlash in a community is directly proportional to how bad these bad guys are.  

Denton’s backlash was solid but not overwhelming. Denton passed the fracking prohibition with 59% of its voters supporting it. Lawsuits have been filed and legislation is imminent. [Forbes| Loren Steffy]

Junior high biology taught us all that plants need water. Texas needs water too. Balancing these two interests is a goal of the annual meeting of  Texas Association of Plant Protections.

Texas plant and agricultural producers need water to support their industry. Water management and innovation is here to stay. [Byran-College Station Eagle]

After soliciting statewide public comment and holding public hearings throughout the state, the Texas Water Deverlopment Board’s rules for water funding are official.

TWDB released a series of documents to help applicants navigate the new funding rules:

• SWIFT Prioritization Criteria
• SWIFT Application Timeline
• Water Supply Demand Projections
• TWDB Financial Assistance Programs

   [Midland Reporter Telegram] [TWDB Press Release]

This week the US Supreme Court appointed a Special Master to move the Texas-New Mexico water case along.

The Special Master is A. Gregory Grimsal of New Orleans. [US Supreme Court Orders 11.3.14]

California passd a bond proposal to inject $7.5 billion into California’s water infrastructure. The bonod package breaks down like this:

• 1/3 will be for water storage
• $800 million for regional water infrastructure projects
• $500 million for drinking water and wastewater treatment in small communities
• $800 million to clean up contaminated groundwater
• $725 million for recycling and reusing existing water or desalination
• $395 million for flood protection
• $1.5 billion for environmental projects around the state
•  $100 million for groundwater management plans. [Sacramento Bee]

2: The number of lawsuits filed to prohibit implementation of the Denton fracking ban. TXOGA and the Texas General Lawsuit both filed suit.

4: The number of days before bill filing begins to legislatively stop the fracking ban.

2: The number of days since 59% of the Denton voters approved the fracking ban. [Texas Tribune via Governing]

Voters in Denton, along with other commuities in the US, passed a ban on fracking. This land use campaign trend will become a legal trend as the fracking ban quickly gets booted to the courts to resolve.

An opinion piece in the Dallas Morning News sums up the fracking ban as Denton residents’ desire to protect private property rights and assert local control. It also raises the possibility of legislation to overturn Denton’s vote.  [Opinion | Dallas Morning News]

A federal court in Utah gave a win for energy permitting and for private land use. The court found the federal prohibition, preventing the taking of a threatened species, to be an overreach by the federal government.

Judge Dee Benson sums up his rational in People for the Ethical Treatment of Property Owners v. U.S. Fish & Wildlife Service:

Although the Commerce Clause authorizes Congress to do many things, it does not authorize Congress to regulate takes of a purely intrastate species that has no substantial effect on interstate commerce. Congress similarly lacks authority through the Necessary and Proper Clause because the regulation of takes of Utah prairie dogs is not essential or necessary to the ESA’s economic scheme.

[Washington Post | Volokh Conspiracy]

58.64% of Denton voters approve the ban on fracking. Next stop for the fracking ban- the courthouse. [NPR]

Bragg v. Edwards Aquifer is a story about a pecan farmer who wanted to water his pecan orchards. His request for water was denied. He went to court. The trial court and the appellate court agreed with the pecan farmer, the denial of the water permit was a taking of his private property rights and he deserved compensation.  

We’re now at the Texas Supreme Court. The landowner has won twice. The response brief is due December 22nd. Time will tell whether denying a water permit is a compensable taking of private property in Texas. [Bragg v. Edwards Aquifer]

BBA Compass economic analysis supports economic benefit for Texas from the deregulation of energy in Mexico. Mexico’s energy deregulation will “add 217,000 jobs, about $3.5 billion in state revenue, and $45 billion in gross domestic product to the economy in Texas.”

It’ll take private companies to enter the market. But, since when have private companies shied away from capitalistic opportunities? [Eaglefordtexas.com]

Usually when you think eminent domain, you think a governmental entity is trying to acquire land. The Mountain Water Company is facing eminent domain by Missoula, MT.

By all accounts, Mountain Water Company is privately owned and operated. [Missoula Independent]  Legal fees in this eminent domain case for Missoula are $750,000 and there remains 6 months before trial. Public support favors eminent domain. [Missoulian]

The ordeal raises an interesting question, can a private utility company be acquired by eminent domain?

A new report from the Texas A&M Institute of Renewable Natural Resources links Texas’ economic boom to the loss of privately owned ranches and farms. Researchers say open spaces are vital to Texas water supply. [The Atlantic’s City Lab] [Texas A&M Institute of Renewable Natural Resources]

Commisser Porter wants increased protection for inspectors and pipelines. [KVUE Austin]

Refreshing our recollection, the Houston Chronicle reported that cartels illegally tap pipelines in Mexico, transport the oil and gas to the U.S. and sell it for refining. The original Information Intelligence Post from September 25th:

Mexico recently de-regulated its energy market, creating a plethora of opportunities for enterprising companies. It’s a energy business’ dream to enter the nascent and booming markets south of the border. Businessman will find themselves with some new challenges such as illegal pipeline taps. The cartels are also enterprising businesses. Cartels discovered they can tap Mexico’s existing oil pipeline system and have been syphoning off what could amount to billions. Figures show that nearly 2500 illegal oil taps have been drilled in 2014 alone. [Houston Chronicle] 

Eagle Ford Shale area hopes some of the $1 Billion in transportation funding will help their roads. Roads and bridges in shale areas experience higher use rates from heavy truck traffic which transports the oil and gas equipment into and out of the area.    [San Antonio Express News]

Denton is not alone in asking voters to vote on whether to ban fracking. This year, the following locations have fracking ban propositions:

• Four Ohio towns;
• Santa Barbara, San Benito and Mendocino counties in California; and 
• Denton, TX.     [Think Progress]

Bill Riley is the new water utility director for San Angelo. He talks about the New Hickeory Aquifer, recapture, and the economic viability of the water department. [Go San Angelo]

Oil prices are falling, oil production is up, rig counts are up, but where is the business growth? The Houston Businss Journal points to midstream companies which have growth that is outperforming all others in the energy sector. [Houston Business Journal]

In 2013, the Texas Legidlature Passed SB 1756. The goal is to make the permitting process at TCEQ move more swiftly. Permittees that qualify will pay a surcharge to move the process more quickly. [TCEQ Executive Summary] 

Wildlife advocates are trying to solve a water problem that has been killing whooping cranes in the Aransas National Wildlife Refuge. They’ve tried to take a page from cattlemen to use drinking water wells, but have hit brackish water that the cranes can’t drink.  One successful solar powered well has been drilled.

Crane supports received $750,000 in grant money from the Texas Water Development Board to help their cause. An alternative source of funding is a pending lawsuit under the Endangerd Species Act.

The suit is pending a rehearing at the 5th Circuit Court of Appeals. Crane supporters claim the state took too much water out of the San Antonio and Guadalupe rivers, which resulted in the death of whooping cranes. [Victoria Advocate]

A Brookings Institute study shows that areas that have the most scarce water supply do not have the highest water rates.

The study also notes that the highest water users are not residential users, but residential water rates are most often measured. This leads to a disconnect in policy discussions about water useage and rates. Should residential customers pay more for their water than large entities that use far more water?  [New Republic] 

Crowdfunding is trendy financial avenue for business. The Texas Securities Commissioner approved rules for crowd source funding which will go into effect in November. Experts agree that the sectors that will benefit the most for this new funding avenue will be energy and real estate. Crowdfunding is perfect for Texas’ entreprenurial spirit. [Austin Business Journal]

Fascinating poll reveals differing views of energy based on age. The highlights:

• 41%under age 35 say the U.S. should permit export of natural gas 
• 22%  age 65 and older support exporting natural gas
• 68% under age 35 say they would be more likely to vote for candidates who support steps to reduce carbon emissions
•  50% of those age 65 and older would be more likely to support candidates who support  reduction of carbon emissions
• 72% of younger consumers strongly support subsidies for renewable energy
• 58% age 65 and older strongly support renewable energy subsidies.

[UT]

Unprecendented spending from environmental groups is occuring this election cycle. The campaign spending is anchored by billionaire Tom Steyer. NextGen Climate has itself spent over $50 million this election cycle. [Washington Post]

The Weekly Standard sums the AEI Report up: “Without the energy-driven economic stimulus from the fracking revolution, and without the gusher of jobs in the state of Texas, there’s no question that the Great Recession would have been much worse and lasted much longer, and the jobs picture today would be much bleaker. ” [Weekly Standard]  [AEI]

$700 million are at stake in a huge royalties lawsuit that begins in Bexar County this week. Mineral Rights Owners in the South Texas Syndicate Trust are upset by the trustee, JP Morgan Chase Bank.

The bank entered into agreements on behalf of the mineral rights owners in the trust. Some of the agreements were made with other clients of JP Morgan Chase. the trial is expected to take 5 to 6 weeks.  [San Antonio Express News]

Baker Hughes Inc. announced 8 new rigs in Texas. Rigs are primarily in the Permian Basin and Eagle Ford. The new rigs are also targeting higher production fields. [Longview News Journal]

Americans for Tax Reform say the Clean Power Plan is economically irresponsible, because it disproportionately impacts the household economics of young families and the elderly. [Americans for Tax Reform]

Mexico recently loosened government control of its energy sector. This week Mexico’s Deputy Secretary for Energy Planning said that 500,000 direct and indirect jobs will be created from Mexico’s energy market expansion.  

U.S. and Texas experts say that the infrastructure for Mexico’s energy expansion rests largely with Texas. Its safe to say the economic benefits will be felt North of the border. [Rio Grande Guardian]

U.S. Energy Secretary Moniz, speaking to the American Energy and Manufacturing Competitiveness Summit today, said that the energy boom has also yielded a boom in increasing innovation and eficiency. Together these booms strengthen the economy, job creation, and the environment. [Breaking Government]