02242020Mon
Last updateFri, 21 Feb 2020 3pm

Texas Oil Production to Grow at Slower Pace in 2020

Texas’ oil production rose to an estimated 5.4 million barrels per day (bpd) in December, a Rystad Energy analysis shows, and is expected to rise almost every month this year due to sufficient statewide fracking activity levels, but the growth’s pace is seen slowing ahead.

The pace of growth is set to decelerate naturally in the next few months amid a new phase of steepening in base decline. Further activity increases or an upward shift in average well productivity would be needed to achieve material growth in 1Q20. Both events are seen as unlikely in the current environment, but the present activity remains above the balancing point needed to maintain production.


Solar Now Fastest Growing Electricity Source in Texas

“Solar power is emerging as the state's fastest growing electricity source, according to the state grid manager, the Electric Reliability Council of Texas.” The Houston Chronicle reports that developers “are expected to install about 68 gigawatts of solar power capacity, representing 61 percent of the power projects expected to come on the grid between now and 2023. One gigawatt provides enough power for about 700,000 homes.” 

Coronavirus Leads to First Decrease in Oil Demand in a Decade

According to the International Energy Agency (IEA), global oil demand has been hit hard by the coronavirus and the widespread shutdown of China’s economy. Demand is now expected to fall, in the first quarterly contraction in more than 10 years. The IEA has cut their 2020 growth forecast by 365 kb/d to 825 kb/d, the lowest since 2011. Lower-than-expected consumption in the OECD trimmed 2019 growth to 885 kb/d.

The coronavirus outbreak has also led them to revise down the outlook for global refinery runs. Chinese crude throughputs for 1Q20 have been cut by 1.1 mb/d and are now expected to contract by 0.5 mb/d year-on-year. As a result, global runs are forecast to expand by just 0.7 mb/d in 2020.

DOE Announces $64 Million for Clean Coal Projects

The U.S. Department of Energy (DOE) announced up to $64 million in federal funding for cost-shared research and development (R&D) projects under the funding opportunity announcement (FOA), Critical Components for Coal FIRST Power Plants of the Future.

DOE’s Coal FIRST (Flexible, Innovative, Resilient, Small, Transformative) initiative will develop the coal plant of the future needed to provide secure and reliable power to the U.S. grid. Evaluation of potential future power plant concept designs assisted in defining the R&D sought under this FOA. DOE will solicit cost-shared projects focused on developing the critical components required by Coal FIRST and transformational coal-fired systems.

The National Energy Technology Laboratory (NETL) will manage the projects supporting Coal FIRST, which is a joint initiative among the Office of Fossil Energy’s Transformative Power Generation, Supercritical Carbon Dioxide Technology, Advanced Turbines, Gasification Systems, and Carbon Capture research programs.

Greater Demand for Plastics a Boon for Petrochemical Industry

“Rising U.S. energy production is providing vast amounts of affordable feedstock for PVC and polyethylene plastic resin production, and producers worldwide are taking notice. The demand is there as well—global demand for petrochemical feedstock is forecast to rise to nearly 18 million barrels per day by 2050.”

According to the Greater Baton Rouge Business Report, “energy companies are investing billions of dollars in the petrochemical sector, with the heaviest concentrations along the Gulf Coast.”

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