Railroad Commissioner Rallies for Natural Gas

A Texas oil and gas regulator is taking a leading role in promoting new uses for natural gas.

“It’s abundant, it’s clean, it’s affordable,” Railroad Commissioner David Porter said Thursday in an interview.

The Republican kicked off his “2015 Natural Gas Initiative” with a half-day gathering of lawmakers and industry leaders at the Railroad Commission’s office to discuss ways to utilize the fuel, whose low price has benefited some power generators but bedeviled operators and other energy companies that bet big on it years ago.

Porter, who has been organizing natural gas workshops since 2013, plans to host more events this year in Fort Worth, Houston and San Antonio.  

Though tumbling oil prices explain the latest mass drawdown of drilling rigs in South and West Texas, operators atop North Texas’ gas-rich Barnett Shale have struggled with low prices for much longer.

“Natural gas prices really have been low for five to six years – particularly compared to oil prices,” Porter said. “So that certainly spurs the need for this and the advantage from an economic standpoint.”

In looking for new uses for natural gas, the commissioner and a host of state lawmakers are focused on Texas roads.

Oil, of course, has a stronghold in the auto industry, compounding the long-standing barriers to the expansion of vehicles that run on natural gas. Those barriers include a lack of fueling stations across the U.S. and the relatively high up-front cost of natural gas vehicles. Folks have been reluctant to pay more for the vehicles because of the lack of fueling stations, and companies have hesitated to build those fueling stations because of the low demand for the vehicles.

But that mind-set appears to be shifting in Texas and elsewhere.

As of mid-March, Texas was home to 130 natural gas fueling stations, up from 104 in September 2014, according to the Railroad Commission. Those 77 public stations and 63 private stations serve about 7,200 vehicles.

Porter credits much of the surge to simple economics: With natural gas far cheaper than diesel, truckers, large companies and even public agencies across Texas are increasingly purchasing natural gas vehicles in hopes of saving on long-term costs and bolstering their green credentials.

But the commissioner thinks his workshops have played a role, too.

“There have been a lot of business agreements struck, conversations started that have led to” more fueling stations and fleets, he said.

Texas in recent years has also doled out millions of dollars in grants for fueling stations and storage and compression equipment in counties that struggle to meet air regulations.

This session, Lt. Gov. Dan Patrick made further incentives a top priority. He’s backing legislation – Senate Bill 12 – that would incentivize state agencies, counties and cities to purchase natural gas vehicles.

Porter said it’s among the proposals he’s most closely watching this session.

Cheap natural gas has also driven major shifts in the utility sector, with natural gas crowding out dirtier-burning coal. The Obama administration’s proposed “Clean Power Plan” – which would require Texas to slash carbon by 43 percent in the next 18 years – could hugely accelerate that shift.

But Porter said that’s not reason enough to support the plan, which Texas' Republican leadership – like most proposals from Washington – have blasted.

“Yes, natural gas is great. I think it’s going to be more dominant in the future,” he said. “But right now we need everything we’ve got in the electricity market.”