Big Oil's Trouble, Drilling Rules were Top Energy Stories of 2015

Texans could hardly avoid the doom-and-gloom headlines about plummeting oil prices in 2015. But that was far from the only major storyline in energy this year.

Texans could hardly avoid the doom-and-gloom headlines about plummeting oil prices in 2015. 

But black gold’s lost luster wasn't the only major storyline for energy this year. Utilities examined landmark climate rules, Texas cities lost power to regulate drilling and the state’s largest power company looked to end its epic bankruptcy. Meanwhile, a two-month Texas Tribune-Houston Chronicle investigation raised serious questions about refinery safety.    

Here are the year’s top six energy stories:

1. Big trouble for big oil

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The Tribune spent much of 2014 chronicling how a surge in oil production was transforming life in South and West Texas drilling country and pouring cash into state coffers. So much for that. With oil prices plunging below $40 late in 2015, the boom took a pause, wiping out thousands of jobs in the oilfields and communities dependent on them and triggering bankruptcies among the smaller players in the petroleum world. The results were far from catastrophic for the Texas budget, but the turmoil ratcheted up pressure on Comptroller Glenn Hegar, who tried to foresee the state’s revenue future. And the conditions certainly slowed economic growth. Sales tax collections, for instance, were declining near the end of the year.

2. Obama climate plan could shake up power sector

The Obama administration unveiled its Clean Power Plan, a state-by-state effort to combat global warming by slashing carbon pollution in the climate sector. The landmark regulations could significantly affect Texas, an industrial juggernaut that spews far more carbon and generates far more electricity than any other state. Texas has already joined many states in challenging the rules in court, saying they would dramatically raise electricity prices and threaten the reliability of the electric grid. But some analyses have suggested that such risks might be smaller than initially anticipated, with utilities already shifting from coal to natural gas and renewable energy. It is not clear whether Texas will construct a backup plan to comply with the regulations, should it lose in court. That question will be a major storyline in 2016.

3. On drilling, local control loses

Denton residents spent several years pushing city leaders to address the less-desirable effects of urban natural gas drilling — noise, lights, fumes, traffic and the like. And at the end of 2014, the North Texas city’s overwhelming vote to ban hydraulic fracturing drew international headlines. In 2015, however, a multi-pronged attack by state and industry leaders obliterated that effort, culminating in the Legislature’s swift passage of House Bill 40. It defanged Denton’s ban by pre-empting local regulation of all “below-ground oil and gas activities” — like bans on hydraulic fracturing or drilling. The new law created a new test of “commercial reasonableness” for related local drilling regulations statewide. 

4. Energy Future eyes bankruptcy's end

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After more than a year and a half of wrangling between Wall Street firms and other creditors, Texas’ largest energy company took a major step toward resolving one of the largest corporate bankruptcies in American history. In December, a judge signed off on the conglomerate’s reorganization plan, ending court proceedings that cost it some $1 million each day. But Energy Future Holdings is not free of its $42 billion debt just yet; Texas regulators still need to sign off on Ray L. Hunt’s controversial plan to purchase Oncor, Texas’ largest transmission company. His proposal to restructure Oncor makes consumer advocates and staffers at the Public Utility Commission of Texas nervous. Two weeks of hearings will begin in January, and a decision could have major implications for ratepayers and the electric grid.

5. Earthquake study rattles energy politics

A team of Southern Methodist University researchers caused a stir in Austin when it published a peer-reviewed study concluding that a combination of gas industry activities “most likely” triggered a series of earthquakes that shook two North Texas towns from late 2013 through early 2014. More specifically, the study linked the quakes to waste disposal wells operated by XTO Energy and EnerVest, and it galvanized environmentalists who have called on Texas regulators to take more action on earthquake issues — or at least acknowledge the scientific consensus that industry activities can cause quakes. But after holding hearings on the issue, the Texas Railroad Commission ultimately sided with the companies, concluding that there was no connection between the shaking and waste disposal.

6. Blood Lessons: Preventable refinery deaths continue

On the 10-year anniversary of the BP refinery explosion in Texas City that killed 15 workers and injured 180 others, the Tribune joined forces with the Houston Chronicle to examine whether refiners and regulators delivered on promises to prevent on-the-job deaths. The findings? Not really. Though no single incident matched the 2005 devastation, the two-month investigation revealed the overall death toll at U.S. refineries barely slowed, and inspectors continue to identify refineries that aren’t following the safety recommendations that emerged from one of the most studied industrial disasters in U.S. history.

Disclosure: BP is a corporate sponsor of The Texas Tribune. Oncor and Energy Future Holdings were corporate sponsors of The Texas Tribune in 2012. Southern Methodist University was a corporate sponsor of The Texas Tribune in 2013. A complete list of Texas Tribune donors and sponsors can be viewed here.