The year 2021 brings Texans a giant gift from the oil and gas industry: the Permian Highway Pipeline (PHP). Apart from the jobs the project initially created–around 2,500 local construction jobs and nearly 20 full-time positions — PHP will bring close to a $1-billion bounty in tax revenues for schools, first responders and other vital state and county needs. Individual leaseholders in Texas stand to gain a collective $2 billion each year in new oil and natural gas royalties. That’s just the beginning.
Worried about air quality due to methane flaring and other adverse environmental impacts? The new pipeline provides Permian producers a much-needed conduit to reduce natural gas flaring. Natural gas (methane) is a by-product of oil and natural gas production, and there was not enough infrastructure in place to capture it, store it or transport it to market – until now.
Approximately 400 million cubic feet per day (Mcf/d) of methane emissions from flaring and leaks can be avoided altogether or reduced significantly because producers can now collect and transport this natural gasthrough PHP and do something constructive with all that gas.
This is good news for producers, air quality and people in Texas.
PHP provides 2.1 billion cubic feet per day (Bcf/d) of natural gas takeaway from the Waha to Katy, Texas area, with connections to the U.S. Gulf Coast and Mexico markets.
Even more importantly, Permian natural gas can now be collected for compression into natural gas liquids – or NGLs – a commodity in high demand around the world, and shipping right from the Texas Gulf Coast.
To expand the takeaway capacity forsurplus natural gas from the Permian, Kinder Morgan, , developed the proposed pipeline route, which interconnects with other existing pipeline systems. PHP is routed safely through areas that minimize the pipeline’s impact on the environment.
EagleClaw Midstream, Kinder Morgan(KM) , and Altus Midstream each hold an ownership interest of approximately 26.7%, and an affiliate of an anchor shipper owns a 20% interest. Kinder Morgan is the operator of the pipeline.
What does this all mean? Most Texans know that oil and gas production in the Permian has been booming for several years. What people may not appreciate is that all this new production has been “bottlenecked” for some time, pent up with nowhere to go, or, in the case of natural gas, flared off during the production process as producers saw no other viable option.
Permian production is a major advantage for Texas. Severance taxes paid by oil and gas companies provide significant funding for the TXDOT’s highway fund, as well as the Permanent University Fund.
According to Kinder Morgan’s fact sheet, in 2018, the oil and natural gas industry paid more than $14 billion in state and local taxes and state royalties—equal to a whopping $38 million per day to fund schools, roads, universities and first responders throughout Texas.
PHP helps boost the state’s economy adding a massive source of tax dollars, all good news in challenging times.