State Rep. Tom Craddick has worked with the oil and gas business for decades and has never seen times like these, but said he believes that problems with financing, supplies and coping with the whims of the federal government will eventually pass and the industry will round back into shape.
The 82nd District Republican from Midland said recently that a Midland man who had arranged financing for independent producers for six years had just returned from Wall Street and Boston, Mass., with the bad news that none of the big finance firms wanted to do anything.
“A lot of companies don’t want oil and gas on their balance sheets or investment portfolios because of the negatives out there,” said Craddick, a member of the House Energy Resources Committee. “They’re looking more for the green aspect of it.”
Asked if the industry has reached a point where it is in effect working against itself, he said, “Yes, there is a big push to see if we can get more done because of the national need and a lot of people in the country think we can solve it just by producing faster. But we don’t have the refining capacity.
“I think we will work out of this. There are always ups and downs in oil and gas and the pendulum will swing back the other way.”
Craddick cited bills passed in the spring 2021 legislative session in Austin that should help, but he said solons are waiting to see if those laws have the needed effects before determining if follow-up legislation should be pursued.
They were Senate Bill 13 to prohibit state contracts with and investments in companies that boycott energy companies; House Bill 1284 to have the Texas Railroad Commission and Public Utilities Commission share jurisdiction over the injection and storage of carbon dioxide, rescinding the jurisdiction of the Commission on Environmental Quality; and HB 2483 to authorize electrical transmission and distribution utilities to lease or own and operate facilities to provide temporary emergency power in the cases of extreme cold or heat.
West Texas Intermediate crude oil was selling for $110.30 a barrel and natural gas for $8.26 per thousand cubic feet on Tuesday.
Looking toward the 88th Legislature in January 2023, Craddick said the situation is so unsettled that he, Odessa Rep. Brooks Landgraf, Sen.-elect Kevin Sparks of Midland, the Permian Basin Petroleum Association and other key players are as yet undecided about what legislation should be filed next year.
“The costs of mud, sand for fracking, pipe and rig use are really high right now,” he said. “They produced a lot of pipe and small parts for rigs at that big steel plant in Mariupol, Ukraine, which has been bombed out.
“I’m sure ExxonMobil is not having any problems with cash flow, but large independents like Pioneer Natural Resources and the smaller companies were used to getting money through limited partnerships on Wall Street. There is too much uncertainty right now.”
