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Texas Energy Services from Dynowatt

On April 22, 2010, an explosion occurred on the Deepwater Horizon, an offshore oil rig in the Gulf of Mexico. The rig was collecting oil and natural gas in a reservoir under the ocean floor, under approximately a mile of water. After the rig was lost (along with the lives of eleven crewmen), the pipes on the bottom of the ocean broke, releasing a spray of oil and natural gas into the Gulf of Mexico. The event has already had serious repercussions for the United States and its energy profile. The deaths of the crewmen, of course, are the worst part of the situation, but Texas will be dealing with additional Texas energy sector challenges for years to come.

One of the difficulties in trying to predict the consequences of this particular event is the fact that the situation is somewhat unprecedented. While there have certainly been unfortunate offshore drilling accidents in the past, the size and scale of this spill is testing the skills of the British Petroleum scientists and Environmental Protection Agency (EPA) officials. When they think of oil spills, many people think of the Exxon Valdez, an oil tanker than ran aground in Alaska twenty years ago. Unfortunately, the Gulf oil spill is somewhat different. The Alaska shore was rocky and somewhat barren; the shore of the Gulf Coast is dotted with marshy islands and lots of plants. The Valdez poured its oil onto the surface of the ocean; this spill is originating at the bottom of the ocean. While many experts have made guesses about the outcome of the current spill, it is very difficult for any of these predictions to be completely accurate.

Texas gets over 60 percent of its electricity from plants that burn natural gas. Just like any other commodity, the price of natural gas fluctuates for many reasons. Most of the time, the change in price is directly connected to supply and demand. You might think that because a large supply of natural gas is being ejected from the ocean floor, eventually being dispersed into the atmosphere, the reduced supply would increase your natural gas rates. This could have some effect, but Gary Lamphier of the Edmonton Journal points out another possibility. He advocated transitioning more of the North American energy supply to natural gas. This has two clearly positive effects. Natural gas is far more abundant in North America than oil; shale oil, in fact, can be found in great quantities in Canada. Additionally, natural gas burns cleaner than oil. Sound good? Sure, but there’s one possible problem for Texas energy customers; if more North Americans are using a lot more natural gas, the supply will decrease and the demand will increase, likely leading to higher prices.

In the past hundred years, Texas became the center of the petroleum business in the United States. In the weeks before the spill, the Obama Administration indicated an open-mindedness about opening up more offshore drilling, which would lead to more jobs for Texans, both in the home offices of the oil companies and on rigs in the Gulf. If the Deepwater Horizon spill has a chilling effect on that expansion, those jobs could be lost. Hugh Holub, a writer for the Tuscon Citizen, points out a possible way to offset these losses: boosting investment in alternative energies. This means that Texas energy consumers could be installing solar panels instead of guiding machinery into the ocean floor.

The most visible effect of an oil spill is the vast plume of petroleum in the water and the viscous globs of oil on the shoreline. In the months to come, it will be difficult to avoid having our heartstrings tugged by images of pelicans covered in oil. Elizabeth Souder analyzed a Wall Street Journal article written by Curtis Ebbesmeyer in which the oceanographer hazarded a guess as to how much oil will end up on the Gulf Coast of Texas. One projection from the National Center for Atmospheric Research (NCAR) indicates that the oil will be carried along the western coast of Florida before creeping along the eastern seaboard of the United States before it heads across the Atlantic. Ebbesmeyer has noted that a finger of oil has been caught and is heading toward the Texas coast. Even worse, the porous coast of Louisiana will act as a sponge, holding oil that will later be released, bit by bit, into Texas waters.

No matter which projections and hypotheses you take to heart, one thing is clear: Texas will be dealing with the Deepwater Horizon oil spill for years to come.

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