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RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil & Gas Regulatory Conference San Antonio, Texas August 19, 2014

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Page 1: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Texas Natural Gas Initiative

David PorterTexas Railroad Commissioner

Oil & Gas Regulatory Conference San Antonio, Texas

August 19, 2014

Page 2: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

• The RRC is required by statute to promote natural gas as an alternative fuel to benefit Texas’ economy, air quality and/or energy security.

• My Texas Natural Gas Initiative, launched last year, encourages more use of natural gas in vehicles and E&P activities.

Railroad Commission Role

Page 3: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Opportunity

96 percent of gas produced in the United States is for the domestic market.Source: U.S. Department of Energy, Energy Information Administration

Page 4: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Dr. Ken Morgan, Director Texas Christian University Energy Institute George E. King, Distinguished Engineering Advisor Apache CorporationLynn Lyon, Director, Fuel Market Development Pioneer Natural ResourcesJason Isaac, State Representative Texas House of Representatives

Panelists

Page 5: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Texas Natural Gas Initiative

Channel production from the Eagle Ford, Permian Basin and other plays into markets that deliver the greatest economic benefits to Texans.

Page 6: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Texas Natural Gas Initiative: Engine Fuel

Sales of natural gas engine fuel exceed projections.

Natural gas is now the leading alternative fuel for vehicles in Texas.

Page 7: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Texas Natural Gas Initiative: Exploration & Production

Retrofit or new build 8 engines/frac spread Capital cost of retrofit ~$1.2MMPrice spread of $1.75/DGE, 50% diesel substitutionPayback for retrofit = 1.4 years

Page 8: RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil

RAILROAD COMMISSION OF TEXASAlternative Fuels Research & Education Division

Texas Natural Gas Summit Texas Natural Gas Summit October 23, 2014October 23, 2014

• Palmer Events Center, 900 Barton Springs Road, Austin 78704

• Combination Job Fair and NG Vehicle Expo• 60 exhibitors• Panels/workshops on E&P, fleet vehicles, grants and

incentives, regulatory issues