Two Years Later, What's Up With The Trans-Pecos Pipeline?
By Sally Beauvais
It’s been over two years since the Trans-Pecos Pipeline went into service in remote West Texas, amid eminent domain lawsuits and backlash from industry opponents.
Because of market forces, the pipeline -- which was built to export US natural gas to Mexico -- has sat largely idle since then. Despite the slow start, environmental advocates say it’s leading to more oil and gas development in previously untouched parts of the region.
The 42-inch natural gas line runs beneath 148 miles of West Texas -- from the heart of booming oil and gas country in the Permian Basin, down south through the remote wilderness of the Big Bend region.
It's the first pipeline of its kind in this part of the borderlands, known for sprawling ranches and dark skies.
Before it was officially tucked underground in March 2017, resistance to the project was coming to a head.
Local opponents and Native American organizers fighting to protect the area’s natural resources chained themselves to fences and bulldozers, inspired by protesters battling the Dakota Access Pipeline over 1,000 miles north. Landowners went to court with the pipeline’s parent company -- Energy Transfer Partners -- over private property disputes.
But they didn’t stop the pipeline. And over two years later, it’s still in the early stages of doing what it was built for -- transporting natural gas from the booming Permian Basin of West Texas over the border to Mexico, where domestic production has been waning for over a decade.
"Over the past three to four years there's been a significant build-out in cross-border capacity, mainly from Texas to Mexico," John Hilfiker, an energy analyst with S&P Global Platts, told Marfa Public Radio.
By capacity, Hilfiker means pipelines. There’s over a dozen of them like the Trans-Pecos at points along the southern border, positioned -- eventually -- to fuel Mexico’s power grid. In fact, the country's state-owned utility, the Comisión Federal de Electricidad, sponsored the Trans-Pecos Pipeline with the aim of feeding Mexico's growing electric sector.
But construction on the Mexican systems that the pipeline will connect to is lagging behind.
That means for the time being, the Trans-Pecos line is moving far less gas than it was designed for. According to Hilfiker, it's currently carrying a low volume to a power plant in the state of Sinaloa, operating at approximately 7% of its capacity, year-to-date.
"The extremely low West Texas natural gas prices that we're seeing," Hilfiker offered.
The price of gas out of the Permian Basin's Waha Hub -- a header system that many West Texas pipelines, including the Trans-Pecos, connect to -- has recently been hovering in the negatives. That means drillers in the Permian Basin are essentially paying to have their gas taken away.
"The majority of their revenue from drilling in West Texas is coming from oil," Hilfiker explained. "So they’re doing whatever they can to move their natural gas supply."
Gas is a byproduct of drilling for oil. And with limited options for storage or transport, US companies are struggling with an excess.
That means if gas was flowing along the Trans-Pecos line at a higher rate right now, drillers probably wouldn’t be making much money off of that, directly.
This frustrates Coyne Gibson. He’s a member of the Big Bend Conservation Alliance -- a local advocacy group that attempted to sue the Federal Energy Regulatory Commission over the way the agency classified and reviewed the pipeline.
"It begs the question, 'Why so fast? Why so furious? Why not be more economically responsible as well as environmentally responsible?'" Gibson said.
Gibson is tracking oil and gas development as it progresses further south of areas that have traditionally been tapped during Permian Basin boom times. He says despite the sluggish natural gas market, the Trans-Pecos Pipeline is poised to become a crucial piece of a network for major companies drilling closer to the pristine Big Bend region than ever before.
Houston-based Apache Corporation -- the company behind a major 2016 oil discovery in southern Reeves County -- is one such example. While Apache recently scaled back much of its gas production, a new processing facility that's being developed by Apache's new midstream company, Altus, could help them bring their gas output back online.
According to Gibson, Apache's facility build out in the southern Delaware Basin makes it possible for the company to connect directly to the Trans-Pecos Pipeline, as well as the nearby Comanche Trail gas line, bypassing the sales and capacity constraints at the busy Waha Hub.
A spokesperson for Apache said the dry natural gas the company's producing in the region can be also be transported to market via the Roadrunner Pipeline.
Moving this particular byproduct, also known as "residue gas," is critical to companies drilling for more profitable reserves in the Permian Basin.
"One day you’re driving down the highway and you’ve got your usual horizon. The next day you drive it and there’s cranes, and the next, you drive it, and there’s a gas processing plant," Gibson said. "And it’s just one domino in a chain after another."
This kind of rapid development is happening already -- just north of the Davis Mountains that mark the informal edge of the Big Bend Region.
Gibson says he thinks it’s just a matter of time before more of it extends further south.