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Access to electricity is the biggest concern for Permian Basin oil and gas industry

September 12, 2024

NewsWest 9

by Hunter Alcocer

MIDLAND, Texas —

At the Petroleum Meeting on Thursday, there were various speakers and even a panel featuring state lawmakers Tom Craddick, Brooks Landgraf and Kevin Sparks.

According to Permian Basin Petroleum Association Executive Vice President, Stephen Robertson, the main issue on the industry's mind in the Permian Basin is access to electricity.

“If you look at West Texas, we are greatly underserved by the ERCOT grid with electricity delivery and where that impacts greatly is not just prices for people buying electricity for homes and for businesses, but specifically out in the oil and gas industry," Robertson said. "So, one of the projects that we've been focused on as an association is trying to increase electric delivery to operations out in the Permian Basin.”

It’s become such an important issue that last year Governor Greg Abbott signed House Bill 5066 so the Public Utilities Commission (PUC) and ERCOT can investigate the issue further.

“So, the legislature last session basically demanded that the PUC come out and actually do its own study on the electric needs, both infrastructure and the amount of electricity that's needed for the for the Permian Basin," Texas Senator for District 31 Kevin Sparks said. "So, they understand how critical our industry is to not just the state but our whole country.”

Sparks also said in the future the oil and gas industry won’t be the only industry wanting a slice of the grid.

“We're also seeing other influences out here, like data mining and Bitcoin mining, and potentially AI that's looking to come out here because we're lightly populated and those industries use tremendous amounts of electricity that's going to be another issue that we're going to have to try and figure out how we get a handle one because those things can set up very quickly and soak up because right now, they're not required to build their own power," Sparks said. "They're tying into the grid and potentially can pull all of those new electrons that we had anticipated were going to be used for oil and gas.”

Sparks said the next step for lawmakers is to go over the results of the study and then come up with the “most free market approach” to offsetting all of the federal subsidies that are distorting the electric market in the state.

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