Hinting at the potential future for their huge oil and natural gas industries, the governors of New Mexico, North Dakota and and Texas said in their recent state of the state addresses that they could be challenged by Biden administration initiatives on activity but they still see opportunities.
Texas Gov. Greg Abbott in his address early this month reflected on the challenging year Covid-19 created for the biggest energy-producing state in the country. In December alone, the state added more than 64,000 new jobs. According to Texas Petro Index, in the final months of 2020, Texas added 2,300 jobs back to the oil and gas sector.
Abbott remarked how Texas has led the U.S. in economic development for the past eight years, saying, “the Texas model inspires entrepreneurs and innovators and attracts job creators from across the country.”
“Think about this,” he said. “In the past year, Fortune 500 companies like Hewlett-Packard, Enterprise Products Partners LP, Oracle Corp. and Charles Schwab Corp. all relocated their headquarters to Texas.”
Abbott recently issued Executive Order GA-33 in response to President Biden’s order to pause oil and gas leasing on federal onshore and offshore acreage. Abbott said “more and greater threats to the Texas energy sector seem imminent as President Biden embraces Green New Deal policies.”
Abbott has directed “every state agency to use all lawful powers and tools to challenge any federal action that threatens the continued strength, vitality and independence of the energy industry. Each state agency should work to identify potential litigation, notice-and-comment opportunities, and any other means of preventing federal overreach within the law.”
New Mexico Transition
In her address in January, New Mexico Gov. Michelle Lujan Grisham detailed the accomplishments under the state’s Energy Transition Act (ETA). In 2019, Lujan Grisham implemented the ETA, which mandates a minimum 45% reduction in greenhouse gas (GHG) emissions by 2030 versus 2005 levels. It also requires New Mexico’s Environmental Department and the Energy, Minerals and Natural Resources Department to enact enforceable statewide methane controls for oil and gas companies.
“We’re adopting new building codes, saving New Mexico homeowners up to $400 a year on energy costs while reducing emissions,” said Lujan Grisham in her address. “We’re making solar energy more affordable for New Mexicans. We’re installing electric charging stations along popular highways spanning the state, and we’re creating hundreds of new clean energy jobs while investing in emissions-monitoring companies that will help us reach our climate goals.”
In 2021, she said, “we will enact the country’s toughest methane and air pollutant rules in the oil and gas industry…finally cracking down on waste and pollution in a way that is not punitive but innovative, capturing harmful emissions and, in the process, creating more revenue for our state and for our schools.
In two years, according to Lujan Grisham, the state has doubled its renewable resources. “New Mexico will be home to the largest single wind complex in the nation, and I expect we will soon rank in the top 5 in the country for per-capita wind energy production. We’re driving down energy costs for you and reducing emissions.”
Lujan Grisham’s remarks in her address aligned with the sentiments she gave in late January on President Biden’s EO. In response to it, she said, “We will work closely with the Biden administration to ensure the development of a balanced national policy that acknowledges and incorporates lessons from an all-of-the-above energy state like ours…”
The state plans to “work with the industry and develop stringent new methane rules, invest robustly in new renewable infrastructure and resources and enhance the accessibility of solar energy. And that, crucially, takes into account the individual circumstances and near-term financial reality of states like ours.”
North Dakota Diversity
North Dakota Gov. Doug Burgum in January advocated that the state maintain a diverse power grid with an “all-the-above” approach.
“On the energy side, oil production continues to rebound past 1.2 million b/d in October, and we are meeting our gas capture targets,” Burgum said. “We’re deeply grateful to those operators who continue to invest in production and infrastructure and that will keep our state well positioned for the future growth as the nation’s No. 2 oil producer as well as open up new opportunities to add value to our abundant ethane supply through plastics manufacturing and electricity production.”
According to the governor, North Dakota ranks sixth in total energy production because of its all-of-the-above approach. Burgum also noted the importance of increasingly popular hydrogen energy solutions in the state’s energy mix.
“There’s another rising opportunity before us using electrolysis to produce hydrogen from wastewater,” he said. “But the scale required to make hydrogen-produced energy work requires massive amounts of storage.”
Because of the work of the Energy & Environmental Research Center (EERC) in Grand Forks, “we now know that our western North Dakota geology has three salt beds more than a mile underground that show promise for creating salt caverns. These caverns would generate revenue for landowners while safely storing gases or liquids that are injected into them.”
Burgum said the salt caverns could not only benefit hydrogen storage, but they could also be used for natural gas storage.
“And with the advances being made in carbon capture, utilization and storage by the EERC and the private sector right here in North Dakota, we have an opportunity to become a world leader in securing a viable future for clean coal power while also unlocking 4-7 billion additional barrels of oil through enhanced oil recovery.”
Burgum also said he would continue to push for a “clean coal base load solution,” which he argued would place North Dakota in a position to shape global energy policy.
“And in doing so, we can support those North Dakota communities that wouldn’t exist without the coal plants and the coal sector workers who’ve been keeping the lights on dependently and cost effectively in America with North Dakota lignite for more than 100 years.”
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