By Georgina McCartney

HOUSTON (Reuters) –

A Texas commission unanimously approved the Permian Basin Reliability Plan to expand power grid infrastructure in the United States' largest oilfield, addressing growing demand from the oil and gas sector.

Background

The Public Utility Commission of Texas (PUCT) instructed the Electric Reliability Council of Texas (ERCOT) to compile this plan in December after a report from major companies, including ConocoPhillips, ExxonMobil, and Chevron, indicated a significant future increase in electric load demand in the area.

Context

Electrifying oilfield operations can help reduce emissions and alleviate pollution and noise from diesel-powered rigs and fracking equipment. The Texas grid faces challenges due to its energy-intensive industries—data centers, cryptocurrency mining, and oilfield operations—especially as demand reached record highs last month, spurred by population growth and heatwaves.

In the latest Dallas Fed Energy Survey, about 29% of respondents highlighted uncertainty around grid access as a major challenge in electrifying operations, while another quarter mentioned grid infrastructure as a hurdle.

By the Numbers

ERCOT predicts that electricity demand in the Permian Basin could rise to nearly 27 gigawatts by 2038, nearly a third of the summer demand of the entire ERCOT system. The cost of necessary transmission upgrades is estimated between $12.95 billion and $15.32 billion.

Key Quote

“Ensuring the Permian Basin has the reliable electricity it needs to power Texas’ world-leading oil and gas industry is a top priority for the Commission. We have taken swift action to direct ERCOT to develop a transmission infrastructure plan for the region,” said PUCT Commissioner Lori Cobos.