Year in Review 2013More in this series
Oil and gas production, pipelines, the Railroad Commission and questions about Texas’ energy grid all grabbed headlines in 2013 in the Tribune. Here's a look back at the year's biggest energy stories.
Texas’ oil and gas bonanza — spurred by technological advances such as the use of hydraulic fracturing — continued in 2013, reaching production levels unseen in 30 years. Texas is now producing more than twice the oil it did three years ago, and more than one-third of all U.S. production, according to federal data.
That was good news for the state’s budget. This month, the comptroller’s office predicted Texas will collect at least $2 billion more in taxes from energy developers this budget cycle than it originally expected, pushing its budget surplus even higher. The phenomenon, however, continued to raise questions about air and water and roads in oil country.
Oil started flowing late this year through the southern leg of the Keystone XL pipeline, which stretches from Cushing, Okla., to Port Arthur. That development came amid ongoing litigation between local landowners and TransCanada, the pipeline’s operator, over the company’s use of eminent domain. Other critics, meanwhile, raised new questions about the pipeline’s integrity. Keystone XL was just the most prominent of several pipelines in Texas — including ExxonMobil’s Pegasus — that saw increased scrutiny.
The Texas Railroad Commission, the state’s oil, gas and pipeline regulator, had a peculiar 2013. It narrowly avoided complete reorganization during the legislative session, but lawmakers, including many who were skeptical of the agency’s performance and relevance, left it as is for four more years during the "sunset" process. The Legislature also granted the agency permission to use millions of dollars in fees to upgrade decades-old computer and software systems that have strained its capabilities.
Meanwhile, the debate over whether regulators should transform Texas’ wholesale energy market heated up amid ongoing questions about whether the state’s lights will stay on during its scorching hot summers. The three members of the Public Utility Commission staked out tentative positions on the matter, with two indicating support for a “capacity market,” which would pay generators billions of dollars to maintain backup capacity. Generators say they have no incentive to build new capacity under current market conditions. But critics, including consumer advocates, big electricity users and some lawmakers, question Texas’ need for a market overhaul and say it could prove costly for ratepayers.
The grid also saw more upgrades in 2013. In December, developers flipped the switch on the final electrical transmission projects built under the state’s Competitive Renewable Energy Zone, or CREZ, initiative — the yearslong effort to connect windy, largely secluded West Texas to growing cities that demand more power. The project was seen as one of several factors that brought new investment in wind energy to West Texas.