Editor’s Note: This op-ed is in response to a story “Texas Oil Industry Not Jumping for Joy Over Biden Presidency” RA News published on Nov. 6.
By Ed Longanecker, President, Texas Independent Producers and Royalty Owners Association (TIPRO)
In response to a recent article published by Reform Austin entitled Texas Oil Industry Not Jumping for Joy Over Biden Presidency, some corrections, data and context based on an interview with the Texas Independent Producers and Royalty Owners Association (TIPRO) are warranted. Whether intentional to advance a certain narrative, or simply a misunderstanding, accuracy in reporting and the portraying of opposing views are of critical importance, particularly on the topic of domestic oil and natural gas production and its impact to our country. Several corrections to the article were requested, but no response was given.
The article accurately reported that TIPRO is concerned with a likely increase in regulations targeting the U.S. oil and natural gas industry under a Biden Administration and other actions that could impact its recovery. The industry will indeed survive, but increased regulations would make it more costly to operate. Larger producers would be better equipped to absorb additional regulations, but thousands of small businesses don’t have the same financial wherewithal and resources to monitor and comply with an expanded regulatory framework for oil and natural gas.
As mentioned during the interview, any shutdown of the U.S. economy related to COVID-19, regardless of scope or warrant, would likely impact demand and the oil and natural gas industry’s recovery. The same is true for banning permits for hydraulic fracturing at any level. As an example, the American Petroleum Institute (API) recently released analysis outlining the negative consequences from a proposed ban on leasing for oil and natural gas development on public lands and waters. The analysis projected that a ban would shift the U.S. to become more reliant on foreign energy sources, cost nearly one million American jobs, increase carbon dioxide emissions and reduce revenue that funds education and key conservation programs. During the interview, these issues were highlighted as concerns and that such a ban could result in a loss of 120,000 jobs in Texas alone, not the 20,000 that was reported.
Hydraulic fracturing continues to be demonized by many in the media, but utilizing this technology has been standard practice for over 60 years in the U.S. Regarding references to groundwater contamination from hydraulic fracturing, there are more than 25 scientific, peer-reviewed studies and expert assessments which have concluded that the practice is not a major threat to groundwater. In fact, many studies have examined groundwater pollution and specifically ruled out fracking as the cause. This includes a study by Pennsylvania State University in 2018, which noted that “the most interesting thing we discovered was the groundwater chemistry in one of the areas most heavily developed for shale gas – an area with 1,400 new gas wells – does not appear to be getting worse with time, and may even be getting better.”
Regarding a line of questioning related to the wind industry, information to confirm the employed data provided is readily available to the general public, but the journalist indicated that it could not be confirmed. It would certainly take time and effort to track down the information, but a simple question to verify the data by TIPRO would have taken no time at all. During the interview, it was expressed that Texas is the top state in the nation for wind power generation, but that it was a challenge to compare wind to oil and gas in Texas from an employment standpoint. While the oil and gas industry has suffered significant jobs losses this year, employment in the wind industry is still small in comparison. For instance, when examining Wind Electric Power Generation, and Turbine and Turbine Generator Set Units Manufacturing sectors, there was only an increase of 649 jobs in Texas over the past 10 years for a total of 3,354 jobs in 2019. This is compared to an increase of 41,467 jobs in the Texas upstream sector alone during the same timeframe, for a total of 234,000 direct jobs.
Further, Texas business establishments for Wind Electric Power Generation and Turbine and Turbine Generator Set Units Manufacturing totaled only 81, compared to more than 9,000 Texas upstream businesses last year. Also, interesting to note that wages for Texas upstream jobs averaged $136,000 in 2019, compared to $98,000 for wind generation and turbine manufacturing. The data provided by TIPRO during the interview did not include the midstream and downstream sectors for oil and gas, and there are of course other industry sectors used to define wind, although a complete definition cannot be easily found. Regardless, if one added all legitimate industry classification codes for both sectors, the disparity in jobs and economic impact only increases.
The international and geopolitical concerns highlighted by TIPRO during the interview are legitimate, but a little more context and data would have been helpful. As mentioned during the interview, if Biden rejoins the joint nuclear deal and relaxes sanctions on Iran, some are estimating an increase of 1.5-1.8 million barrels per day (Bpd) of oil exports that could return within a year to the market, and eventually up to 2.5 million bpd. A deal would likely see Iran’s oil production soar, inundating an oversupplied market. Without pressure from the U.S., it is hard to imagine Saudi Arabia holding back its crude while Iran, its geopolitical foe, recaptured a chunk of market share. Russia, the United Arab Emirates, Iraq, could also follow suite and expand oil supply. Finally, sanctions on Iran were never described as a “boon” to the U.S. oil and natural gas industry.
On the topic of environmental stewardship, TIPRO has frequently written and provided public testimony on this topic, but some of the data in the article did not accurately match what was offered during the interview. As a result of an ongoing commitment to improve the U.S. oil and natural gas industry’s environmental footprint through innovation, investment of $300 billion in greenhouse gas mitigating technologies over the past 20 years, and other voluntary actions, methane emissions from oil and natural gas systems are down 23 percent since 1990, according to 2020 data from the EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sink. Also, since 2005, total U.S. greenhouse gas (GHG) emissions, not “carbon production,” have dropped by 12 percent and total GHG emissions from fossil fuel combustion have decreased nearly 15 percent. Rising use of natural gas to fuel power generation is also a key factor in the reduction of U.S. emissions of carbon dioxide to the lowest levels in a generation.
The U.S. Department of Energy’s Office of Fossil Energy released a report in October that reinforces the benefits provided from domestic development of oil and natural gas, and quantifiable results in advancing environmental stewardship through innovation and investment. As captured by government leaders in the report, oil and gas accounted for two-thirds of the total energy consumed in the U.S. last year and its continued development remains essential to meeting America’s energy needs, both now and in the future. It is integral to our country’s standard of living, and our economy is also fundamentally dependent on energy at every level. Put clearly, all Americans directly benefit from domestic production.
It’s interesting that the article highlights India as a leader in environmental stewardship compared to the U.S., when in reality the country ranks among the top 10 worst for air pollution in the world, according to World Health Organization (WHO) and International Energy Agency data. Conversely, the U.S. ranks in the top 10 for the lowest air pollution, while also leading the world in oil and natural gas production and ranking as one of the highest for energy consumption per capita.
Finally, rejoining the Paris Accord under the Biden Administration is expected via Executive Order, but TIPRO acknowledged a challenge expressed by many on why the U.S. should be bound by such an agreement and be forced to subsidize other countries that do not share the same environmental standards, especially when all other signatories lag behind America in overall emissions reductions. The U.S. has already proven that leading the world in oil and gas production, energy diversity and environmental stewardship are not mutually exclusive.
Maintaining a legislative and regulatory environment conducive to economic growth and opportunity is a key strength and differentiator for Texas and should be a topic that all policy leaders embrace and collaborate on for the benefit of our state and country. TIPRO stands committed to working with all officials, regardless of party affiliation, to reinforce the importance of the oil and natural gas industry and to help promote sound, science-based energy policies at all levels of government.