Houston Matters

Texas Regulator: Oil Markets Should Remain ‘Relatively Stable’ Through 2018

Texas Railroad Commissioner Ryan Sitton spoke with Houston Public Media about a variety of issues that will affect the future of the state’s energy industry.

Ryan Sitton speaks at NAPE, an energy industry gathering in Houston, on February 9, 2018

 

Texas oil and gas regulator Ryan Sitton expects energy markets to remain “relatively stable” through 2018, with prices for West Texas crude oil hovering between $58 and $66 per barrel for most of the year.

Sitton outlined his forecast on Friday at “NAPE”, a Houston energy industry gathering of companies and investors that bills itself as a place “where deals happen.”

As a Texas railroad commissioner, Sitton is overseeing an industry that’s producing more and more oil, and in some places, expanding its footprint. A new federally-funded fracking experiment in the West Texas “Delaware Basin” has the potential to unleash drilling in new parts of the state.

Sitton spoke with Houston Public Media about a variety of issues related to the industry’s future in Texas. Here are some highlights, listen to the full conversation above.

On whether he’s seeing oil and gas companies interested in parts of Texas that they haven’t been interested in before:

Absolutely, and that’s a relatively constant thing.

As we’re developing a new perspective, and understanding geology a little bit better, and modern-day precision and directional drilling and long horizontals, when we understand those things more, then we say well, how can those open up particular developments that may not have been economical before?

It’s a constant evolution of technology to drill in locations that either they’ve tried before, or haven’t tried, and how can they unleash those hydrocarbons given what we know today versus what we knew a year or two ago.

On talks to renegotiate NAFTA, and what’s at stake for the Texas energy industry:

I actually think regardless of what happens there, we’re going to continue on the trend that we’re on.

The fact is, Mexico in particular wants to buy U.S. natural gas and Texas natural gas. They want to buy more and more U.S. refined products. And then on the flip side, Canada’s got all of this crude oil coming out of their tar sands operations that they need to have refined, and we’ve got the capacity here to do that.

I think in a lot of areas, NAFTA’s going to have huge implications in terms of what trade means. I don’t think it’s going to have a major effect on the energy industry, just because there’s so much natural synergy between those countries to work with each other and to do business. So regardless of that specific agreement, we’re going to continue to do trade. 

On how regulations may need to change to keep up with evolving oilfield technology:

Regulation’s going to play a role, but the end result of a regulation has always got to be the consumer, the resident, the citizen has to feel safe about whatever operations are going on. Any time we get outside of that, whether it’s a federal level or a state level, and you’re playing politics, then you’re not doing your job.

Yes, we need to evolve a lot. As new techniques are used, new technology, automation is used, how do we put regulation in place, how do we evolve our rules? We work on that constantly.

These days, because things are moving so quickly, we always feel a little bit like we’re behind the eight ball, but to some degree we’re going to be. We’re not developing new technology, industry is, so we [have to] always hurry to keep up and make sure that our rules, our processes, our information is keeping up with where industry is. If we do a good job of that, then the person at home says, “I may not love this pipeline coming through my neighborhood, but I feel okay about it, I know it’s safe, I know it’s good for the state, I know it’s good for the economy, therefore I’m happy with our regulators.”

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Travis Bubenik

Travis Bubenik

Energy & Environment Reporter

Travis Bubenik reports on the tangled intersections of energy and the environment in Houston and across Texas. A Houston native and proud Longhorn, he returned to the Bayou City after serving as the Morning Edition Host & Reporter for Marfa Public Radio in Far West Texas. Bubenik was previously the...

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