December 26, 2016
Oil, water and weather dominated news about energy and the environment in 2016, a fitting mix for the Lone Star State. The continued slump in oil prices continued to send tremors through the state’s economy, but fracking — and its side effects — carried on albeit at a sluggish pace. Court rulings in two major legal cases pumped some money into state coffers, and Houstonians confronted the growing risk they face from storms and flooding. Here are the year’s highlights:
1. All eyes (still) on oil prices
After oil prices plunged in 2015, the outlook improved in the Texas oil patch throughout much of 2016, with West Texas Crude climbing from a rock-bottom $26-per-barrel range in mid-February to where it is today: hovering above $50. But even as rig counts climbed, particularly in parts of the Permian Basin, Texas felt plenty of oil patch pain, and prices remained far below the $60-$65 that many economists say is needed for a true recovery. The Tribune examined the reversal of fortunes in drilling towns that were booming not so long ago. (Producers are hopeful prices will rebound significantly in 2017 after the Organization of the Petroleum Exporting Countries agreed on voluntary production cuts last month.) Meanwhile, Texas Comptroller Glenn Hegar spent much of 2016 telling lawmakers that Texas was weathering low oil prices far better than other states — but warning that the conditions had stalled tax collections, setting up a 2017 legislative session that will be even more tightfisted than usual. And in June, lawmakers appeared to have dodged a budgetary bullet when the Texas Supreme Court sided with Hegar in a tax case that could have spurred $4.4 billion in state refunds to oil and gas drillers in 2017 alone.
2. Texas gets big bucks in BP settlement
Six years after BP’s Deepwater Horizon explosion killed 11 people and spewed millions of barrels of oil into the Gulf of Mexico, a federal judge signed off on a $20.8 billion settlement between the energy giant and plaintiffs including the U.S. Department of Justice, Texas and four other Gulf Coast states and hundreds of local governments. Approved in May, the agreement was expected to send some $800 million to Texas for restoration projects — on top of $275 million that a series of agreements had already yielded. The settlement was considered the largest with a single entity in American history, and it included the biggest civil penalty in the history of environmental law.
3. Texas stops helping poor families pay their electric bills
Lite-Up Texas, a program that offered discounts to hundreds of thousands of poor Texas families over the years, ran out of money at the end of August — ending a 17-year run. Consumer advocates expected that fate after lawmakers declined to extend the program’s funding source three years ago, but they were concerned that long-time beneficiaries would be blindsided when their assistance vanished. About 700,000 households relied on the program in 2015, with state subsidies reducing their electric bills by as much as 31 percent. Lawmakers created the program, funded by electric ratepayers across Texas, in 1999 to help poor Texans pay their utility bills in the state’s newly deregulated electricity market.
4. Toxic aquifer injections not tracked
In August, a Tribune story revealed that the Texas Railroad Commission had permitted toxic injections into at least “a handful” of zones fitting the broad legal definition of drinking water sources. The agency did not know how many times that has happened over the past decades, even though it long ago agreed to track such injections. At issue were Class II injection wells, which plunge deep underground and hold often-hazardous industrial byproducts from oil and gas production. The commission acknowledged it has allowed injection into zones that could qualify for drinking water protections, but it had not tallied these instances. In 1982, state and federal regulators set up criteria for exempting certain aquifers from protections against injections. The Railroad Commission could not produce a map of which aquifers it exempted. Both the commission and the U.S. Environmental Protection Agency called the few injections they know of low risk, and said they have no evidence pointing to fouled water supplies, but environmental watchdogs said the revelations highlighted disorganization at the agency and raised questions about its ability to protect groundwater. The EPA has instructed the Railroad Commission to prioritize gathering the data.
5. Texas vs. the Feds, continued
The Obama administration unveiled a host of new environmental regulations in 2016 that Texas and other Republican-led states promptly sued to block. The most attention went to the Clean Power Plan, Obama’s most ambitious effort to fight climate change. (To the surprise of environmentalists, the U.S. Supreme Court blocked the policy as legal challenges wind through the courts.) Texas’ first lawsuit of the year against the U.S. Environmental Protection Agency was over the agency’s rejection of parts of a seven-year-old state proposal to reduce haze in wilderness areas under the Regional Haze Rule. (Late last month, the EPA told the Fifth Circuit Court of Appeals it was voluntarily withdrawing the rule for Texas, where it had targeted seven coal-fired power plants.) And then there was the hotly disputed Waters of the United States rule, which the EPA finalized in May. The stream of lawsuits the Texas Attorney General’s Office has filed against the federal government during Obama’s tenure — nearly 50 of them in all — is likely to dry up after President-Elect Donald Trump takes office. Trump, who has appointed a climate change skeptic to head the EPA, indicated on the campaign trail he would pull out of the Paris climate agreement.
6. Texas is woefully underprepared for the next, big hurricane
Texas was spared yet again during the 2016 hurricane season, marking eight consecutive years since a full-fledged tropical cyclone has made landfall in the state. Meanwhile, scientists are still fine-tuning plans to protect the coast — particularly the Houston area, with its massive, waterfront petrochemical complex — from a monster hurricane they say could kill hundreds, if not thousands, of people and cripple the economy and environment. The Texas Tribune and ProPublica explored those dramatic consequences in March in an interactive story, Hell and High Water. State lawmakers have asked scientists to settle on a plan to protect the coast, but they’re still in disagreement.
7. Houston hit with more flooding
Less than a year after intense rainstorms led to widespread flooding in Houston and across the state, the Bayou City found itself underwater yet again. An unusual amount of rain fell on the city in April and again in May, inundating many areas outside any known floodplain. Residents are now suing the city of Houston and a local tax reinvestment zone over what they say are chronic and escalating flooding problems. Scientists agree that flooding in the Houston area is getting worse thanks to a combination of unchecked development and changing climate. But some key local officials disagree with those claims and say they have no plans to look into them. The Texas Tribune and ProPublica explored these trends in another interactive story that published this month, Boomtown, Flood Town.
8. Pipelines approved, protested
In May, a group of energy companies — including Dallas-based Energy Transfer Partners — cleared its last regulatory hurdle before running a controversial pipeline beneath 143 miles of largely untouched West Texas land in the Big Bend area and into Mexico. Months later, Native American-led protests against another Energy Transfer Partners project, the 1,170-mile Dakota Access Pipeline, erupted in North Dakota. Since then, solidarity protests have been held in cities across the country, including in Austin, where hundreds of demonstrators last month rallied at the Capitol and stormed a Texas Parks and Wildlife Commission meeting demanding Energy Transfer Partners CEO Kelcy Warren step down from his post. Gov. Greg Abbott appointed the prolific GOP political donor to the parks commission last year.
9. Hunt loses Oncor bid, NextEra swoops in
After months of wrangling at the Public Utility Commission, the Ray L. Hunt family’s $18 billion effort to purchase and reshape Oncor, the state’s largest electric transmission and distribution utility, died in May — setting the stage for Florida-based NextEra to swoop in. The Hunts led a consortium of investors that wanted to transform Oncor into a real estate investment trust, allowing investors to save millions of dollars each year in federal taxes. Consumer advocates, staff at the utility commission and a host of lawmakers ultimately pushed back, raising concerns about that and other aspects of the deal, suggesting that ratepayers should get a piece of the tax savings. The commission approved the transaction but added a litany of stipulations that caused the Hunt group to balk. Following that deal’s demise, NextEra bid on the coveted utility. In 2017, the utility commission appears more likely to approve that deal, which is more straightforward than the Hunt group’s was. Such a move would ultimately help Oncor’s parent — Energy Future Holdings — emerge from a mammoth bankruptcy.
10. Texas’ highest civil court decides major water cases
The Texas Supreme Court ruled on two water cases in 2016 with widespread implications for future water battles in fast-growing, drought-prone Texas. In February, it handed a victory to farmers, ranchers and other longstanding water rights holders by declining to take up a Brazos River case. Denying a state petition for review, the justices left in place a lower court’s ruling that said Texas cannot give special treatment to cities or power generators over more “senior” water rights holders on parched rivers — even if the state declares it necessary to protect the “public health, safety and welfare.” In June, the court sided with a South Plains ranch in a dispute with the city of Lubbock. While agriculture and landowner groups heralded the ruling as a major win for private property rights, some lawyers and conservationists painted the decision as more of a win for developers and water marketers.
11. Volkswagen forks over millions to Texas
Following in the footsteps of Harris County and the city of Dallas, the state last year sued Volkswagen in connection with the German automaker’s admitted use of software that allowed its vehicles to circumvent emissions limits. In 2016, VW agreed to pay the state $240 million — $150 million for environmental violations and another $50 million for breaking state consumer protection laws that ban deceptive advertising. A majority of the $50 million will go toward indigent legal services, according to the judgment. About 32,000 vehicles capable of emissions cheating were sold in the Lone Star State.
This article originally appeared in The Texas Tribune at https://www.texastribune.org/2016/12/26/oil-prices-pipeline-protests-top-2016-energy-envir/.