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Published on: September 14, 2015

The Power to Regulate Pollution

During my vacation I read The Quartet: Orchestrating the Second American Revolution, 1783-1789, by Joseph J. Ellis. Ellis tells the story of the writing and passage of the US Constitution, orchestrated, he asserts, by George Washington, Alexander Hamilton, John Jay and James Madison (the quartet).

Before the adoption of the Constitution, the thirteen states were essentially independent countries who had won their independence but failed to found a new country. The “United States” were always referred to in the plural. The genius of the quartet, says Ellis, was the compromise they crafted in the Constitution in the debate over federal vs. state power. States were understandably reluctant to relinquish their sovereignty, but the quartet knew that the new nation, to survive, had to have federal power – to levy taxes, provide for common defense, and regulate commerce among the states. The Constitution enumerates the powers of the federal government. The Bill of Rights – the first ten amendments to the Constitution, passed simultaneously — enumerates the rights retained by the states and the people, limitations on federal power. The tenth amendment provides: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The contours of this compromise are still being debated in courts across the land. “States rights” were fighting words in the civil war, and today are the battle cry of states seeking to curb the federal government’s regulation of health care, water quality, voting rights, and abortion.

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Published on: August 25, 2015

States’ Reliance on Severance Tax and Oil Price Decline

By John McFarland

Last week, the US Energy Information Administration provided a summary of states’ severance tax revenue (click on image below to enlarge):

With the precipitous decline in oil prices, Alaska, North Dakota and Wyoming will be hurting.

According to EIA, Texas

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Published on: April 15, 2015

1,500 Uncompleted Wells in Eagle Ford Shale?

By John McFarland

FuelFix reports that companies have drilled but not completed wells, in effect storing the reserves in the ground until oil prices rise and completion costs decline. FuelFix says that IHS Energy counts 3,000 uncompleted wells in the US, including 1,500 uncompleted wells in the Eagle Ford alone. It says that Apache, Anadarko and Cabot have 845 uncompleted wells in Texas, with a potential to produce 373,000 barrels of oil and 528 million cubic feet of gas a day.

Published on: April 7, 2015

House Bill 1552 and Allocation Wells

By John McFarland

Yesterday the Energy Resources Committee of the Texas House of Representatives heard testimony on HB 1552, introduced by one of its members, Rep. Tom Craddick. The bill deals with “allocation wells,” of which I have written before. An allocation well is a horizontal well that crosses over two or more tracts without combining those tracts into a pooled unit or obtaining agreement from the royalty owners in the tracts on how production from the well will be allocated among the tracts.

Although the Texas Railroad Commission issues permits for allocation wells, there has been a lot of speculation about whether leases grant the authority to drill such wells. At the hearing, representatives of operators spoke in favor of the bill, and mineral owners spoke in opposition. I spoke in opposition on behalf of Texas Land and Mineral Owners Association.

A substitute for the original filed bill was introduced at the hearing. HB 1552 substitute

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Published on: April 3, 2015

Second Annual GDHM Seminar May 8

By John McFarland

Our firm will host a seminar in Austin for land and mineral owners on May 8. Open to the public, but you have to register. You can register here.

Published on: April 1, 2015

Major Banks’ Oil Price Predictions

By John McFarland

The below is from the Wall Street Journal. Conclusion? No one really knows.

(Click on image to view.)

Published on: February 20, 2015

A Picture Says a Thousand Words

By John McFarland

Rigs stacked near Odessa, Texas.

Published on: October 7, 2009

Great New Website from Energy Information Administration Explains Energy in Layman’s Terms

By John McFarland

The U.S. Energy Information Administration has launched a new website that contains wonderful information about energy described in terms laypersons can understand. It can be found at http://tonto/eia.doe.gov/energyexplained/ . Here are some examples of information you can find there:

— A British Thermal Unit (Btu) is the quantity of heat required to raise the temperature of one pount of liquid water by 1 degree Farenheit at the temperature that water has its greatest density (approximately 39 degrees F.).

— One Btu is about the amount of energy burned by a common kitchen match. One million Btu equals about 8 gallons of gasoline. One billion Btu eqals all the electricity that 300 households consume in one month.

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Published on: July 3, 2009

Gas Measurement 101

By John McFarland

A barrel of oil is a barrel of oil, but how much is an mcf of gas? Herein some basic facts about natural gas composition and measurement.

The first thing to remember: natural gas is measured by volume (cubic feet) but is sold based on its heating content (Btus).

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Published on: June 29, 2009

Environmental Groups Divided Over Support of Waxman-Markey Bill

By John McFarland

Environmental groups are debating whether to support the bill recently passed by the U.S. House of Representatives as the American Clean Energy and Security Act, in its present form. Principal criticisms are that it strips away some of the Clean Air Act authority to reduce coal pollution in new coal-fired power plants, it grants too muich money to carbon capture and sequestration projects, and its goals for near-term carbon dioxide emission reduction are too weak. Moveon.org has asked its members to vote on whether to support the bill in its current form.

A good summary of arguments pro and con can be found at the Yale Environment 360 website.

Meanwhile, even the Texas Legislature appears to have jumped on the renewable energy bandwagon. It passed two bills to encourage use of alternative fuels in fleet vehicles. Senate Bill 1759 creates a Clean Fleet Program that provides grants to fleet owners to replace their diesel vehicles with alternative-fuel vehicles. House Bill 432 amends the State’s Fleet Alternative Fuel Program to require that 50% of the state’s 27,000 fleet vehicles use clean alternative fuels 80% of the time, a requirement that will be phased in as state fleet vehicles come up for replacement. Law enforcement and emergency vehicles are exempt, and exemptions can be granted if the agency shows that it is not cost-effective to meet the requirements.