Texas Panel Finishes Energy Blueprint

The Texas Energy Planning Council has created a blueprint its members believe will ensure the state remains the nation's leading energy producer.

The Texas Energy Planning Council has created a blueprint its members believe will ensure the state remains the nation's leading energy producer. The council recently released its Texas Energy Plan 2005, which includes 10 recommendations for the state Legislature to consider when it reconvenes in January. The council is urging lawmakers to consider:

--Making the council a standing body that will "advise, coordinate and streamline energy-related initiatives and issues."
--Consolidating the energy-related functions of other state offices under the Texas Railroad Commission; transferring regulation of rail safety to the Texas Department of Transportation; and renaming the rail commission the Texas Energy Commission.
--Promoting energy education in schools and among the public and financing the initiative using a refundable tax of less than 1 percent of revenues from oil and gas production.
--Establishing the Texas Emerging Technology Fund to help the state tap a new $2 billion federal energy program devoted to developing unconventional and ultra-deepwater energy sources.
--Offering financial incentives for exploratory drilling in 2006-2009; for enhanced oil recovery and high-cost gas drilling; and for marginal well production.
--Encouraging the development of liquefied natural gas terminals along the Gulf Coast to establish Texas as the U.S. hub for LNG imports.

"I commend my fellow council members who have devoted almost a year's time and effort toward helping formulate recommendations for this energy plan, which will serve the citizens of Texas well and help meet our state's growing energy needs," council Chairman Victor Carrillo said.

Texas Gov. Rick Perry formed the council in 2003 at the urging of Carrillo, chairman of the rail commission whose idea it was to create a statewide energy plan.

In previous interviews, Carrillo has said he was concerned with the ability of Texas oil and gas producers to keep pace with current and project levels of demand.


"Producers are caught on a constant treadmill," Carrillo told a meeting of industry personnel last year. "We cannot sit idly by. The time for action is now," Carrillo said.

Rep. Buddy West, an Odessa Republican, serves on the council.

He said the goal of the council is to push Texas to the "very forefront" as a source of non-renewable and renewable energy.

West said renaming of the rail commission would not change its role as an oil and gas industry regulator.

And he said he backs any way to prevent wells that produce only marginal amounts of crude oil and gas from being plugged. West said he thinks eliminating taxes on production from so-called marginal wells will promote that end.

"Is it better to give some severance-tax relief to a small producer and to keep it in production, to keep it on the (property) tax rolls in the existing tax entities?" West said. "Some people say it's not economical to keep a well that only produced three barrels a day in production. But at $50 a barrel, that's $150 a day. If you plug that well, it reduces the properties' value."

West said the energy plan could be presented to the Legislature as one large "omnibus" bill, which he doesn't think will happen. Or he said it could be broken up into several smaller bills, each one being assigned to the appropriate House and Senate committees.

He also said it may take more than one session for lawmakers to act on the entire plan.

Source: Knight Ridder/Tribune Business News