Alex Mills
By Alex Mills
The terrorists’ attacks in Paris on Nov. 13 have caused concern in the U.S. about protection of oil and gas infrastructure. Officials also wonder what impact the ensuing military action will have on crude oil supplies and price.
Railroad Commission Chairman David Porter wrote a letter on Nov. 16 renewing his call for heightened security along the Texas border with Mexico, which he contends provides a gateway for ISIS terrorists to attack oil and gas pipelines and facilities as they have in the Middle East.
“It’s been more than a year since I first asked the Department of Homeland Security to take the threat of a terrorist attack against our critical infrastructure seriously, and we are still in the same position,” Porter wrote in a letter to Secretary of Homeland Security Jeh Johnson.
“In light of the Paris attacks, I am compelled to reiterate concerns I have vocalized about the security of our energy industry, which is the backbone of the Texas economy,” Porter added.
Porter expressed fears to federal officials in 2014. He pointed out that the U.S. failing to secure the Texas-Mexico border endangers critical energy infrastructure in Texas. He noted that a significant portion of the state’s 425,000 miles of pipeline is located in South Texas’s Eagle Ford Shale, “which remains vulnerable due to its proximity to the unsecured border.”
Porter said there have been news reports of terrorists’ attacks on a natural gas plant in France and oil pipelines in Yemeni.
“In light of these facts, I would encourage you to pressure the White House and instruct Customs and Border Protection to take these concerns seriously, instead of waiting until it is too late,” Porter said, offering his office to provide advice and council to protect Texas assets from “any and all nefarious groups.”
Some analysts predicted that crude oil prices will come under pressure to increase as the fighting escalates.
However, crude oil prices around the world remained flat through Nov. 18. Trading on the New York Mercantile Exchange (NYMEX) opened at $41.11 per barrel for 30-day delivery. West Texas Intermediate (WTI) traded at Cushing, OK traded at $37.75. Brent crude traded at $42.23 on the London exchange.
All of these prices were pretty much in line with the prices on Nov. 13.
After the attack in Paris, the French Air Force dropped bombs on crude oil storage facilities in Syria, which ISIS was using to trade crude oil in an effort to finance their war on western civilization.
Apparently crude oil traders believe that the removal of that crude oil from circulation will not have a major impact on oil supplies around the world.
Some analysts said they believe the outbreak of violence will hurt demand, because consumers will pull back, and have a negative effect on the economy. A reduction in demand will put more downward pressure on crude oil prices because of the huge oversupply worldwide.
Alex Mills is President of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
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