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President Underscores Need for New Infrastructure During Permian Visit

The need for new infrastructure and the importance of American energy were the key messages during President Donald Trump’s speech during his visit to  Midland-Odessa, the de facto capital of the Permian Basin. The president was in the world’s largest oilfield to tour an oil rig and speak to constituents about the importance of the oil and gas industry in helping boost our nation’s economy, protect the environment and achieve U.S. energy dominance.

During his visit, President Trump touted Texas energy and underscored the need for additional infrastructure build-out by signing four vital pipeline and rail line permits that help promote U.S. energy security. New pipelines – like the Permian Highway Pipeline – and other infrastructure projects are essential to the continued growth of Texas and American energy and will help support economic recovery in a post-pandemic world.

As Garcia, chairman of the Texas Independent Producers and Royalty Owners and president of San Antonio-based Hurd Enterprises explained:

“Despite an unprecedented array of challenges facing our industry, the Texas oil and gas sector remains one of the most significant economic contributors in the Lone Star State, as evidenced by findings of the new midyear TIPRO report. In the first half of the year, the Texas oil and gas industry yet again accounted for 40 percent of all oil and gas jobs nationwide, and today is still the largest producer of oil and natural gas in the country by a substantial margin.”

TIPRO’s report found that Texas oil production increased by 20 million barrels during the first half of 2020 compared to the same timeframe in 2019, with a total 909 million barrels of oil produced. To continue the industry’s significant economic impact statewide and nationally, more infrastructure is needed to support production now and in a post-pandemic environment

The President also touted the industry’s contributions toward environmental progress. Between 2011 to 2018, methane emissions from production decreased by nearly 45 percent in the Permian Basin, despite an 170 percent increase in natural gas production during this timeframe.

However, takeaway capacity is vital in continued emissions reducing efforts, including reducing the amount of natural gas flared in the basin. recent Rystad Energy analysis cautioned that delays in pipeline permitting could have significant environmental impacts:

“If these projects are not approved early enough, the basin might end up with another period of degradation in local differentials and potentially increased gas flaring.”

Also at stake are global environmental benefits from Texas energy. In addition to permits, President Trump announced that the Department of Energy will be issuing a final policy extending the term for U.S. liquefied natural gas (LNG) exports to non-free trade agreement countries to 2050. As U.S. Secretary of Energy Dan Brouillette said:

“This policy to utilize export terms through 2050 is the latest of several measures DOE, under President Trump, has taken to support U.S. LNG exports and the benefits they bring both to the United States and to our allies around the world. Just this year, LNG exports from the United States will reduce our trade deficit by over $10 billion. Furthermore, LNG exports in the United States are providing tens of thousands of jobs and have led to the investment of billions of dollars in infrastructure. This Administration is following through on our commitment to make U.S. LNG – a long-term, reliable, cleaner-burning energy source – available to the world.”

The global economy still relies heavily on traditional fuel sources; in India coal makes up 74 percent of power generation, in China it is 66 percent, and in Germany 30 percent. But the U.S. natural gas supply is helping to reshape the global energy market by providing affordable, reliable and cleaner energy. Since 2010, the global coal-to-gas switch has saved around 500 million tons of carbon dioxide, according to the International Energy Agency.

President Trump’s visit to the Permian Basin reinforced that the Texas energy industry is essential to unleashing America’s full energy potential, powering our society, decreasing global emissions and helping to provide much needed economic relief. Moving forward, new infrastructure is critical to support these goals, and every inch of new pipeline constructed contributes to a brighter, cleaner and more prosperous future.

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