Electrification of Oil and Gas Operations in Permian Basin Spurs Approval of Texas's First 'Extra-High-Voltage' Transmission Line
The buildout will represent the largest high-voltage transmission investment in Texas in more than a decade.
Operators in the Permian Basin in West Texas, the US's largest crude oil and natural gas-producing basin, have been electrifying their field operations in recent years. Rather than relying on readily available and cheap natural gas to run drilling rigs, pumpjacks, and pipeline compressors, oil and gas operators have chosen to electrify drilling rigs and other equipment to reduce methane and CO2 emissions. This decision, made years ago by large companies operating in the region, not only enhances public relations but also lowers operating costs.
Companies like BP and ExxonMobil were early leaders in the plan. After acquiring BHP’s Permian assets in 2018, BP faced pressure to align its West Texas operations with its global emissions goals. It invested $1.4 billion to electrify 95% of its Permian wells by 2023, reducing flaring intensity to under 0.5%. In 2021, ExxonMobil announced its goal to achieve net-zero Scope 1 and 2 greenhouse gas emissions in its Permian Basin operations by 2030, focusing explicitly on methane reductions as a priority. This commitment was detailed in a company press release on December 6, 2021, titled "ExxonMobil Targets Net Zero Emissions in U.S. Unconventional Operations by 2030," where the company outlined plans to electrify operations, eliminate routine flaring, and deploy advanced methane detection technologies to meet the target.
The problem of inadequate electricity in West Texas became apparent during the February 2021 Texas power crisis, caused by Winter Storm Uri. This event exposed numerous grid vulnerabilities, particularly in the Permian Basin, and led to a series of studies by the Public Utility Commission of Texas, PUCT, of the growing demand for electricity in West Texas due to oil and gas electrification, crypto mining, and data centers.
On April 24, 2024, the PUCT approved the state’s first extra-high-voltage transmission line to increase the electricity supply to West Texas. The 765 kilovolt (kV), or 765,000 volt, line is an integral part of the PUCT’s Permian Basin Reliability Plan adopted last September to support the growing electricity demand in West Texas. This was a significant step, as Texas has historically relied on 345 kV lines. The 765 kV lines can carry approximately six times more electricity than the standard 345 kV lines (e.g., 3,000–4,000 MW vs. 500–700 MW per line), making them ideal for high-demand regions like the Permian Basin. The extra-high-voltage plan is estimated to cost 22% more than the lower-voltage alternative but will reduce the need for future expansions.
PUCT Chairman Thomas Gleeson said in a news release:
The PUCT is fully committed to building an ERCOT grid that will serve Texans reliably for decades to come.” Extra high voltage lines are more efficient and strengthen reliability. Because each line can carry more power, fewer lines are necessary to serve the needs of the Permian Basin Region, meaning less disruption to Texas landowners, natural habitats, and landscapes. Our priority now is ensuring utilities execute these projects quickly and at the lowest possible cost to Texas consumers.
My Take
Approving Texas’s first extra-high-voltage transmission line is the next step in accommodating very high electricity growth projections. Texas’s electricity demand is expected to grow by 50–75% by 2030, from 85.508 GW in 2023 to 130–150 GW, with high-end estimates reaching 208 GW under aggressive growth scenarios.
Very high growth in electricity demand is expected statewide. CenterPoint Energy’s Houston-area reported that it expects customers to require 50% more electricity during peak usage by 2031. All metro areas in Texas have similar expectations.
The daunting question is how Texas will meet the challenges of extremely high growth rates in electricity demand, and who will pay for the expansions. Electricity consumers have traditionally paid for power lines, but that may change. Proposals to require wind and solar companies to pay for the long-distance power lines needed to transport power from their wind and solar farms to metropolitan areas failed a few years ago, but will likely be revisited.
It is fair to say that everything is on the table regarding how Texas will handle the extremely high expected increase in electricity demand. Texas was a leader in deregulating the electricity market in the late 1990s, and needs to recreate the same high level of innovative thinking to address the growth challenges facing the state and its electricity grid in the next five years.
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Is it true that accidental rotating blackouts cut off electricity to the compressors in Feb. 21? Also, was it because of climate policy that electric compressors replaced gas-powered compressors before Feb. 2021? Electric powered equipment appears to be less reliable than gas-powered, which take fuel from the pipeline. Further, I read research that the Feb 2021 cold wave was more disruptive than the December 1989 cold wave because oil field valves and instruments used to be manually operated, whereas in Feb. 2021 they were electronically controlled, and thus more sensitive to termperature extremes and freeze ups. Based on what research I could gather, electronic controls seemed to have more risk of failing than the old methods.
Thank you for the history lesson on this subject I have been watching closely for almost a year now.
I may be a bit naive, but has always seemed ridiculous to me that we have to electrify the center of our natural gas and oil production, other than the equally ridiculous mandate of Net Zero. Thank you Biden for reinforcing that move. Are we bringing power from there - or sending it to there or both?
The hype on the growth may also be overrated, but what do I know.. After listening to senate hearings last year and the comments from both PUC and ERCOT on their "sudden" estimation revelations it all seemed to be a little tenuous. If they could not see this coming doesn't give me much faith.
I remember the Lone Star line was going to save us all- then it didn't, we had no wind in West Texas to bring during URI. But it brought it's own issues, as in anywhere you see large power lines you will most lightly see wind and solar facilities pop up along those lines. That line runs just a few mils from me, with several solar facilities planned.
Now we will have a second line going through our county, since the more northern line will go just north of Stephenville over to Hood County. For now, anyway that's the plan - who knows. It could end up in my back yard. In which case I will play a NIMBY and loose! However it might change the plans of the wind facility across the street, since they appeared to be planning on the 345 kV line going just down the road.
Who will pay for it. My guess - you know who - us of course. Sure won't be the wind and solar companies - our legislators can revisit that all you want. Won't happen. After listening to their bs at the senate hearing over a nothing bill - well, if you hit them with real charges they will come screaming like a bunch of teenage girls after loosing their cell phones! Still it looks like that bill may well pass, so I guess anything is possible, but it is a bad bill with not much more than a tap on the wrist and fill in a form, for the solar and wind people.
I'd like to call an endangerment finding on all us rural Texans. We will be an endangered species before too long. Baked by solar panels and or shredded by wind turbines. Then, they will be wishing for a farmer when food is missing from the table.