With much of drought-stricken Texas being ravaged by wildfires, the energy industry has its eyes on infrastructure that could be threatened by flames and potential production shut-ins. However, production volumes from fire-afflicted Texas counties “seem unaffected so far,” Bentek Energy LLC said in a note Friday.
“Bentek’s sample of production receipts from East Texas and [the] Haynesville [Shale] has not yet shown a distinct decline in production receipts that could be directly attributable to the fires,” the firm said.
However, some fires have erupted around the perimeter of Haynesville counties. The Haynesville, which is in East Texas and Louisiana, produces a little more than 5 Bcf/d, according to Bentek.
In Louisiana the state’s Department of Natural Resources advised energy interests to be mindful of fire locations there. “As drought conditions persist in many areas of our state, so does the risk of wildfire and the potential for wildfires to grow quickly out of control once they start,” said Commissioner of Conservation Jim Welsh. “I am asking our oil and natural gas operators to be proactive in ensuring their sites are as fire-safe as possible and to be informed and ready to take action if wildfires are burning near their facilities.”
However, the wildfire situation is worse in Texas than in Louisiana or Oklahoma, Bentek noted. Fires have burned in Harrison County, one of the Haynesville Shale’s core Texas counties, and in the non-core counties of Gregg, Marion, Nacogdoches and Rusk, Bentek said Friday.
“If fires were to erupt in more developed areas of the [Haynesville] Shale, operations would undoubtedly have to be shut in, restricting production,” the firm said. Even without a fire, downed power lines or disruptions in power transmission could also impact operations of pump jacks and compressor stations.”
Gas demand from power generation was being affected in Texas due to the fires. Power demand was down due to downed power lines as well as evacuated/destroyed homes and businesses, Bentek said.
Analysts at Tudor, Pickering, Holt & Co. on Thursday estimated that eight publicly traded drilling companies and about a dozen public exploration and production companies were potentially at risk in Texas counties affected by the fires. “We have spoken with several companies, and so far no reports of disrupted activity,” the analysts said.
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