American Oil and Gas Reporter - July 2017 - 14

IndustryDigest
Increases Keep Coming
In Prices, Permits, Rigs
For Texas Petro Index

WICHITA FALLS, TX.-Upstream
oil and gas development in Texas
rallied for the fifth straight month in
April, with the Texas Petro Index
climbing to 164.8. The index, a service
of the Texas Alliance of Energy
Producers, also posted its first yearover-year increase in 27 months.
According to the index, indicators
logging big year-over-year gains in
April were wellhead prices for crude oil
and natural gas, the number of drilling
rigs at work, well-permitting activity,
and the value of Texas-produced oil and
gas. Other positive signs include total
upstream oil and gas employment,
which registered the first year-over-year
jump since February 2015, and the
volume of oil produced in Texas, which
was up more than 2 percent compared
with April 2016.
"Texas producers are responding to
higher wellhead prices, which have
resulted from coordinated efforts by the
Organization of Petroleum Exporting
Countries, Russia and others to curtail
oil production," assesses Karr Ingham,
the economist who created the index
and updates it monthly for the Alliance.
"But, in large part, production growth in
Texas and the United States is keeping a
lid on crude oil prices, which continues
to frustrate parties to that agreement."
Ingham points out the volume of
crude oil being exported from the
United States-1.3 million barrels a day-
is only slightly less than the crude
volume the production curtailment
agreement has been able to remove
from global markets.
"Producers in Texas and across the
United States will gladly take the
market share given up by nations that
attempt to manage oil markets and
prices by centralized decisions to
manipulate production," he says.
A composite index based on a
comprehensive group of upstream
economic indicators, Ingham says
April's Petro Index increased from 160.4
in March, and was 0.3 percent higher
than the April 2016 mark of 164.3.
Before the market downturn, the index
peaked at 313.5 in November 2014.
Other highlights of the April index
include:
* Texas crude oil production totaled
14 THE AMERICAN OIL & GAS REPORTER

more than 99.55 million barrels, 2.3
percent more than in April 2016. With
April oil prices averaging $47.62 a
barrel, the value of state-produced crude
oil amounted to nearly $4.7 billion.
* Estimated natural gas production
in Texas surpassed 651.8 billion cubic
feet, a year-over-year decline of 4.5
percent. With prices averaging $2.95 in
April, the value of Texas-produced gas
increased 44.1 percent, to $1.92 billion.
* The Baker Hughes count of active
drilling rigs in the state averaged 425
units, 116.8 percent more units than in
April 2016, when an average of 196 rigs
were working.
* The number of original drilling
permits issued totaled 909, 33.1 percent
more than the 683 permits issued in
April 2016.
The index says an estimated average
of 204,550 Texans were on upstream oil
and gas industry payrolls in April, 2.7
percent more than in April 2016, and
33.2 percent fewer than the estimated
high of 306,000 in December 2014.
"Upstream oil and gas companies
have added more than 12,000 jobs in
Texas in the past six months, providing
growth momentum to the state economy
rather than a drag, as was the case for
the better part of 2015 and 2016,"
Ingham applauds. r

Dakota Access Flowing
As Federal Judge Rules
On Tribal Complaints

WASHINGTON-A federal judge
says the environmental review used by
the Dakota Access Pipeline is
inadequate in several areas, but his
decision does not immediately block
pipeline operations. Instead, he
expresses plans to issue a definitive
decision after a separate hearing later
this summer.
In his decision responding to a
request filed by the Standing Rock
Sioux Tribe and Cheyenne River Sioux
Tribe to vacate permits, U.S. District
Court Judge James Boasberg says
although the Army Corps of Engineers
substantially complied with the
National Environmental Policy Act
when it granted river crossing permits
to Dakota Access Pipeline LLC, it did
not adequately consider the impacts of
an oil spill on fishing and hunting
rights, or environmental justice, nor the

degree to which the pipeline's effects
were likely to be controversial.
To remedy those violations,
Boasberg's decision says the Corps
must reconsider those sections of its
environmental analysis on remand by
the court. On June 21, Boasberg
approved a schedule that required both
sides to submit written arguments in
July and August, with his decision
likely to be issued in September, court
documents say.
The two tribes failed in earlier
attempts to halt the pipeline's
construction. Their first lawsuit argued
that preparing the land for the project
threatened sites of cultural and
historical significance, and that the
Corps failed to engage in tribal
consultations required by the National
Historic Preservation Act. The tribes
next claimed the presence of oil in the
pipeline under Lake Oahe would
desecrate sacred waters, violating the
Religious Freedom Restoration Act
(AOGR, April 2017, pg. 14).
The 1,172-mile Dakota Access
Pipeline is planned to move as much as
570,000 barrels a day from the Bakken
oil fields of North Dakota to a storage
hub at Patoka, Il., where it would be
shipped to Gulf refineries. The pipeline
began commercial service on June 1.
Dakota Access says the pipeline will
continue to operate as the legal process
continues.
"It is important to note that while
Judge Boasberg asked the Corps to
provide greater substantiation for its
conclusions, the court did not find the
prior determinations to be erroneous,"
Dakota Access spokeswoman Vicki
Granado is quoted in media reports.
"Dakota Access believes the record
supports the fact that the Corps properly
evaluated both issues, and that the
record will enable the Corps to
substantiate and reaffirm its prior
determinations." r

BOEM Plans To Assess
Marine Species In Gulf

WASHINGTON-The Bureau of
Ocean Energy Management says it is
funding and participating in a federal
research partnership that has begun a
three-year program to improve
assessment studies of protected marine
species in the Gulf of Mexico.
American Oil and Gas Reporter - July 2017

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