American Oil and Gas Reporter - December 2019 - 88

ConventionCoverage: Permian Basin Petroleum Association
Paddie also discussed passage of his
bill, HB 3557, the Critical Infrastructure
Protection Act, which made it a seconddegree felony to intentionally trespass with
the intent to damage or destroy critical infrastructure, including oil and gas facilities.
He said the law already was being used to
prosecute a group of anti-oil protesters
who hung off a bridge over the Houston
Ship Channel to disrupt operations.

Discussing state political issues at the Permian Basin Petroleum Association's annual
meeting, Oct. 24 in Midland, were Texas lawmakers, from the left, state Representative
Chris Paddie, R-Marshall; PBPA President and panel moderator Ben Shepperd; state Representative Tom Craddick, R-Midland; and state Senator Brian Birdwell, R-Granbury.

promised media passes to the House floor
and provided Sullivan a list of moderate
Republicans targeted for electoral defeat,
according to reports.
Texas has no mechanism to replace a
speaker when the House is not in session,
Craddick observed, and a special session
to pick a speaker is unlikely. Complicating
the issue is that the speaker is in charge
of appointments to interim committees
and charges, he added.
Bonnen's departure also means his
work as a key political fundraiser ends at
a crucial time for GOP fundraising, Paddie
mentioned. "Your homework when we
leave here is to be engaged in that because
your future depends on it as well, not
only personally but professionally," he
said. "Your industry depends on the results
of this election."
2019 Legislation
Craddick recounted work on eminent
domain legislation that was passed by
the Senate this year and amended in the
House, but that did not make it out of
conference committee. He said the issue
likely would be debated again in the next
session.
"It's one of those bills you can count
on coming up every session, and it's also
one that is highly emotionally charged.
But interestingly, as I understand it, eminent domain for oil and gas pipelines is
used only 5% of the time," commented
Shepperd, who moderated the legislative
88 THE AMERICAN OIL & GAS REPORTER

session.
On another issue, Craddick remarked
that while his bill to permanently designate
a portion of Texas' Rainy Day, or Economic Stabilization, fund to transportation
projects in oil and gas producing regions
failed during the 2019 session, the Permian
Basin and other areas continue to grow
and face infrastructure constraints.
Growth of the Rainy Day Fund, which
is supplied mostly from oil and gas severance tax revenue, has allowed lawmakers
to set aside more money for transportation,
education and hurricane relief along the
Gulf Coast, said Senator Brian Birdwell,
R-Granbury, chairman of Senate Natural
Resources and Economic Development
Committee.
Birdwell referred to the oil and gas
industry as the "pacing" segment for the
Texas economy, and said the state had a
responsibility to avoid effectively overcommitting the industry to bear a larger
share of state government funding.
"The main thing you should expect
from us corporately as a legislature is
making sure that we are not creating
an expectation that you always are
going to produce the amount of revenue
that you are producing now," Birdwell
said. "There are going to be good times
and there are going to be down times.
One of the challenges when people
make a permanent commitment to something is an expectation that it will always
be there."

Long Live Oil
Luncheon keynoter, Mark Mills, senior
fellow at the Manhattan Institute, told
PBPA that despite claims to the contrary,
accelerated changes in technology and
the use of renewable energy sources would
not eliminate the need for oil and gas.
Historically, he said, 60%-80% of
gross domestic product was devoted to
food and fuel, but that fell to 5%-10%
with the advent of hydrocarbon use.
Although renewables have gotten
cheaper, and their increased use has been
subsidized, claims that they will replace
hydrocarbons in a similar mass transformation are false, Mills insisted. If by
2050, every nation that signed the Paris
Climate Accord met its stated goals-and
only Gambia has thus far-renewable energy still would provide only 16% of the
world's energy supply, up from about
12% currently, Mills predicted.
"That's not nothing, but it's not a revolution," he insisted, calling claims that
technological advances from Silicon Valley
would replace hydrocarbons "comic book
physics."
While battery technology is improving,
he said the batteries needed to power an
A380 passenger liner-the world's largest
airplane-would weigh five times more
than the plane itself, while the fuel weight
is about 20% of the aircraft's. "'We will
make the batteries better,' people say. Of
course we will, but you are not going to
make them as good as hydrocarbons,"
Mills assured.
Spending one dollar on hardware to
drill a shale natural gas well will provide
350 kilowatts of power compared with
50-60 kilowatt hours for each dollar spent
on wind or solar hardware, he contrasted.
And while recovery rates can improve in
shale plays, Mills added, simple physics
and conversion measures indicate that
solar and wind have far less room for efficiency gains.
"We are going to be using a lot of the
product you guys produce for a very long
time," he concluded.
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American Oil and Gas Reporter - December 2019

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