EnergyIssuesStatewide NewsTexas’ Reliance on Natural Gas Remains Steady

Texas' energy renaissance has produced strong economic results for the state. And natural gas has emerged as a big reason for that.
August 26, 2019
https://thetexan.news/wp-content/uploads/2019/08/Natural-Gas-1280x853.jpg

Texas is the largest energy-producing state. It exports more than California and New York combined. Even with its vast oil reserves and its relative prolific production of wind (more than three times the amount produced as the next state — Iowa), another energy source has arguably remained the bell cow for Texas energy production: natural gas.

According to the Texas Railroad Commission, natural gas production climbed to nearly nine trillion cubic feet in 2018 — almost 30 percent of the United States’ total production.

In 2017, Texans consumed over 3.8 trillion cubic feet of natural gas, with the vast majority of it powering industrial or electric power consumers.

Compared with the other energy sources in 2017, Texas produced 15 percent British thermal units (Btu) more of natural gas than oil, 94 percent more than coal, 95 percent more than nuclear, 99 percent more than biofuels, and 91.5 percent more than renewable energies combined.

The cost for natural gas has largely decreased, except for residential consumers for whom it has climbed back up to nearly 2008 levels of $13.75 per thousand cubic feet.

Get Unlimited Access for $7.50/month

With a $90 annual plan, you can become the most informed Texan you know for the cost of one overpriced sandwich per month.

For reference, it was about $3.40 cheaper in 2011 than in 2017.

When compared to wind energy (which relies heavily on subsidies and other government incentives), a recent article in ArsTechnica stated that natural gas is no longer the cheaper option. In 2018, the article states, the levelized cost (cost not including subsidies and other incentives) of wind was about $10 MW-hr less than natural gas.

But this analysis fails to account for the cost of storage and backup, says Dr. Brent Bennett with the Texas Public Policy Foundation.

“The cost to install wind power is cheaper, but the cost to back it up gets more expensive the more we add to the grid,” Bennett said.

He added, “There seems to be a purposeful blackout on that discussion in many articles about the cost of wind power. We’re only having half the necessary discussion.”

Overall, the vast discrepancy in production and consumption points to natural gas being the more cost-effective option.

As the wind versus natural gas discussion rages on, data shows consumers and producers are opting more for the latter.

It is clear Texans both rely heavily upon, and profit significantly from, natural gas. But many consumers may not be aware of how natural gas powers their home or business.

It’s a complicated process that begins, frequently, with hydraulic fracturing or “fracking.”

Fracking involves the high-pressure injection of a combination of water, sand, and chemicals into underground bedrock. This causes the rocks to crack, allowing the natural gas and other fuel contents to be captured.

From that point, the natural gas is gathered and taken to a processing plant which separates and cleans the natural gas from the other components of the bedrock well. From there it can be distributed into the main pipelines and dispersed for consumption. But the pipelines can only go so far, especially when efforts to create them are stalled by government regulations or public pressure.

A way around this problem is liquifying it, which allows the fuel to be transported more efficiently.

The largest importers of our liquified natural gas (LNG) are South Korea, Mexico, Japan, and China. Our LNG is more likely to be shipped to Asia since the consumption prices are high enough to make the shipping costs worth it.

Upon arrival, the LNG must be heated back into its gaseous state before being released into the main pipelines for consumption.

Texas is not only a leader in production and consumption, but it is emerging as an export leader. Currently Sabine Pass, LA is the largest export center for LNG with four “liquefication trains” (which is not a train, but a purification facility) in operation, one commissioned, and another approved.

Texas, meanwhile, has six facilities in development or early operation — three in Corpus Christi and three in Freeport.

Once the final facility in Corpus Christi is up and fully running in 2021, the Energy Information Administration estimates the United States’ LNG export capacity to reach 10 billion cubic feet per day.

One problem for American consumers and producers of LNG alike is that regions such as the Northeast have a high demand for LNG but are effectively prohibited to purchase it from American producers.

This is thanks to government policies like the State of New York’s blocking of pipelines and the Jones Act — which requires vessels shipping into America be American made, owned, flagged, and crewed — American energy is diverted to other continents and American consumers in the Northeast are stuck buying energy from Russia and other energy-rich foreign countries.

Texas’ energy portfolio is more diverse than any other state and the energy industry is a large reason its economy continues to thrive.

Everyone knows about Texas oil as the bedrock undergirding the state’s energy industry. And the hot political topic is currently wind energy, but natural gas has remained a quieter standard-bearer for some time — and it shows little sign of letting up. 

Get “KB's Hot Take”

A free bi-weekly commentary on current events by Konni Burton.

Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.