MIDLAND, Texas—As far as attorney Ben Rhem is concerned, gauging Texas’ longstanding relationship with energy is in the numbers.

Rhem, a partner at Jackson Walker LLP, cited a study conducted by Texas Tech in 2014 looking back at the midstream sector numbers in 2013 to tell the story of how closely tied Texas and energy are to each other. During that year, the midstream sector alone had an overall $33 billion economic impact on the Texas economy. It supported 165,000 jobs and contributed $1.6 billion in state and local tax revenues.

“I certainly think Texas knows where its bread is buttered and certainly is an energy-friendly state,” Rhem said during a legal roundtable discussing if Texas remains energy friendly at Hart Energy’s Midstream Texas conference and exhibition.

The overwhelming opinion among the three legal panelists was Texas is and shall continue to be an energy-friendly state for years to come. Texas and its economy are dependent on the oil and gas industry.

There is no other state in the U.S. that produces more energy and uses more energy.

“The proximity to all of that energy production also makes it a good place for other industries, not just oil and gas,” Rhem said. “In Texas, there is a robust energy infrastructure that industries are able to access more easily than they are in other places.”

The opportunities seem almost limitless especially with all of the activity that is going on in the oil- and gas-rich Permian Basin.

But the panelists, including Jason Fleischer, senior associate at Gibson, Dunn & Crutcher, and Joseph R. Dancy, executive director of the University of Oklahoma College of Law, also discussed some of the issues related to energy in the state.

The panel talked about the growing concerns over cybersecurity, the use of drones, the impact of environmental groups and ongoing litigation between producers and shippers. But it was the discussion on regulations and challenges that drew the most interest.

Fleischer pointed to the Federal Energy Regulatory Commission, which controls interstate pipelines, and the quandary the regulatory body face as it determines how to process applications for new interstate pipelines. There is no bigger concern than in the Permian Basin where transportation and infrastructure issues continue to be challenged in keeping up with the production in West Texas.

“However FERC decides to come out on that issue is going to change how you guys are going to need to apply for those permits,” Fleischer told the audience. “Similarly on oil pipelines, the Corp of Engineers has authority over certain river and water crossings.

“A lot oil pipelines in recent days have done what they can to avoid any type of federal permitting; there is some permitting that is still needed,” he continued.“Beyond that you have your continued aggressions, I would call it, but environmental groups against the industry and that has been ramping up in recent years so I think that is another issue.”

Still, Rhem doesn’t see any of those issues being big enough to change the relationship Texas has with the energy industry. He only sees it strengthening.

“There is a lot of energy being produced whether it’s oil and natural gas, wind and solar or coal,” Rhem said. “I see that as being a steady relationship going forward, but at the same time knowing these industries must responsibly address environmental concerns and landowners rights.”

Terrance Harris can be reached at tharris@hartenergy.com.

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