OKLAHOMA CORPORATION COMMISSION The Agency was established by the - - PowerPoint PPT Presentation

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OKLAHOMA CORPORATION COMMISSION The Agency was established by the - - PowerPoint PPT Presentation

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D ANA M URPHY C OMMISSIONER O KLAHOMA C ORPORATION C OMMISSION C HANGING D YNAMICS IN O KLAHOMA E NERGY : L OOKING B ACK TO G O F ORWARD M ARCH 7, 2018 www.occeweb.com OKLAHOMA CORPORATION COMMISSION The Agency was established by the Oklahoma

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DANA MURPHY COMMISSIONER

OKLAHOMA CORPORATION COMMISSION

www.occeweb.com

CHANGING DYNAMICS IN OKLAHOMA ENERGY: LOOKING BACK TO GO FORWARD

MARCH 7, 2018

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OKLAHOMA CORPORATION COMMISSION

  • The Agency was established by the Oklahoma

Constitution at statehood (1907)

  • 3 Commissioners, elected statewide, head the agency
  • 504 employees, 2 main offices, 4 field offices
  • The Oklahoma Corporation Commission (OCC) has

regulatory powers over: – Transportation – Oil and gas – Petroleum storage tanks – Public utilities

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OKLAHOMA CORPORATION COMMISSION

Jurisdiction

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  • 8 Electric utility companies ● Wind power companies
  • 8 Gas utility companies ● Transportation network
  • 367 Telephone companies companies
  • 10 Water companies
  • 25 Cotton gins
  • 3,000 Oil and gas well operators
  • 249 Natural gas pipeline operators and 32 hazardous liquid

pipeline operators operating over 40,000 miles of pipeline

  • 24 Railroads with over 4,100 public at-grade crossings
  • 7,473 For-hire and private motor carriers authorized to
  • perate in intrastate commerce
  • 12,150 Petroleum storage tanks currently in use
  • 1,743 Owners of 2,925 active retail fueling stations
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TRANSPORTATION DIVISION

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The Public Utility Division

Regulatory Areas

Energy  Telecom  Oklahoma Universal Services Fund  External Regulatory Affairs  Utility and Telecom Enforcements  Consumer Services and Field Enforcement  Administration

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Oklahoma Electricity Average Residential Prices

OG&E PSO Empire Oklahoma National

  • Avg. price

2017 (per kWh) 10.12 10.1 9.10 10.56 12.90 Generation Mix NG: 50% Coal: 38% Wind: 10% Solar: 2% PP: 48% Wind PPA: 21% NG: 14% Coal: 17% NG: 55.35% Coal: 25.99% Wind PPA: 15.10% Coal PPA: 2.96% Hydro: 0.95% NG: 48% Wind: 28% Coal: 22% Hydro: 2%

*Est. 2017

  • Avg. 2017

price Wind (per kWh) 3 ‐ 6

*AWEA

Number of rate regulated customers (OK) 771,427 550,022 3,776 (> 150,000 MO) Q1 2017 price Solar (per kWh) 12.9‐16.7

*NREL

EIA 2017 data

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U.S. Regional Electricity Average Residential Prices

West South Central

New England

Middle Atlantic East North Central West North Central South Atlantic

East South Central

Mountai n

Pacific Contig . Pacific Non- contig .

States AR, LA, OK, TX CT, ME, MA, NH, RI, VT NJ, NY, PA IL, IN, MI, OH, WI IA, KS, MN, MO, NE, ND, SD DE, DC, FL, GA, MD, NC, SC, VA, WV AL, KY, MS, TN AZ, CO, ID, MT, NV, NM, UT, WY CA, OR, WA AK, HI

Avg. Price 2017 (per kWh)

10.80 19.36 16.04 13.26 12.07 11.97 11.28 11.89 15.01 26.05

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ted Rate Increase ($M)

  • $5

$20 $45 $70 $95 $120 $145 $170

PSO 2006 PSO 2008 OG&E 2009 ONG 2009 PSO 2010 OG&E 2011 ONG 2012 PSO 2014 ONG 2014 CNP 2014 CNP 2015 PSO 2015 ONG 2015 OG&E 2015 CNP 2016 ONG 2017 PSO 2017

47.9 132.6 110.3 66.1 82.3 73.3 16.2 37.7 16.0 1.5 0.9 84.4 50.4 149.5 0.5 0.0 170.0 9.8 59.3 48.3 54.5 30.3 4.3 9.5 0.0 13.7 0.3 0.9 14.5 30.0 8.8 0.0 0.0 75.0 Requested Rate Increase ($M) Granted Rate Increase ($M)

RATE CASES Requested -vs- Granted

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Oklahoma Wind Facts

  • Wind Projects Online: 45
  • Installed Wind Capacity (MW): 7,495
  • State Ranking for Installed Capacity: 2nd
  • Number of Wind Turbines: 3,717
  • Percentage of In-State Energy Production (2016): 25.1%
  • Wind Capacity Under Construction/Advanced

Development (MW): 3,525

  • Since 08/25/2016, the Oklahoma Corporation

Commission has received 42 Notices of Intent to Construct a Wind Energy Facility in the State.

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Economic Benefits of Wind in OK

  • Employment: 8,000 – 9,000
  • Manufacturing Facilities: 7
  • Total Project Investment: $12.3 Billion
  • Annual Lease Payments to

Landowners: $20-$25 Million

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OK Solar Data

  • OG&E, PSO, WFEC, Oklahoma Electric

Cooperative, Central Electric Cooperative, Tri-County and perhaps

  • ther co-ops have some solar of their
  • wn installed and operating. However,

this solar installation is small scale community solar that is interconnected directly to the utilities distribution system.

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OK Solar Data

  • Solar Installed (MW): 21.75

– WFEC: 18 MW – OG&E: 2.5 MW – PSO: 0.3 MW – OEC: 0.2 MW – CREC: 500KW

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OIL AND GAS CONSERVATION DIVISION

Tim Baker, Director

POLLUTION ABATEMENT DEPARTMENT

Underground Injection Control Hydrology Brownfields Seismicity

TECHNICAL DEPARTMENT Virginia Hullinger

Engineering/ Geology

Compliance/ Proration/ Production

Document Handling

FIELD OPERATIONS DEPARTMENT Jim Marlatt District 1 District 2 District 3 District 4

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Oil and Gas Division District Offices

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OKLAHOMA OIL AND GAS INDUSTRY

  • Active wells:

64,000 Natural gas 115,000 Oil 11,663 Injection/disposal 190,663 Total active wells

  • ~350,000 plugged and abandoned wells
  • ~500,000 wells drilled in Oklahoma history
  • ~3,010 active operators of oil and gas wells

(2/2018)

  • ~41,000 miles of gathering/transmission pipelines
  • ~257 pipeline operators

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* Data for 1961-1966 is Estimated

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2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000

Intents

Approved Intent to Drill Applications (1945 ‐ 2017)

Calendar Year

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Intents to Drill: 2008 – 2018 Comparison

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100 200 300 400 500 600 700 800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Intents to Drill

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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Statewide OCC Well Completions All OCC/IHS Wells 01/01/11‐11/30/17

Updated to include May 2013

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Oklahoma Corporation Commission Horizontal Wells 01/01/11‐11/30/17

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644 929 588 770 1,266 1,648 1,917 1,947 1,334 798 3,654 3,938 2,046 2,237 1,901 1,515 746 736 343 190

500 1000 1500 2000 2500 3000 3500 4000 4500

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Well Completions

Horizontal Non‐Horizontal

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OGS Uses about 100 Stations to Locate Oklahoma Earthquakes

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Human Activity Can Induce Earthquakes

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Fluid Pressure increase from injection

Figure modified from: http://www.earthmagazine.org/article/ground-shaking-research-how- humans-trigger-earthquakes

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Earthquake magnitude & frequency

100,000 150 18

Krakatoa eruption Hiroshima atomic bomb

Large lightning bolt

Oklahoma city bombing Moderate lightning bolt

Chile (1960) Alaska (1964) Sumatra (2004) Chile (2010) New Madrid (1812) San Francisco (1906) Charleston SC (1886) Haiti (2010) Northridge (1994) Long Island (1884)

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Magnitude Earthquakes Energy Equivalents

Largest recorded earthquakes Vast destruction Massive loss of life Great earthquake Severe impact Large loss of life Strong earthquake Damage in $Billions Some loss of life Moderate earthquake Property damage Light earthquake Some property damage Minor earthquake Felt by humans

9 8 7 6 5 4 3 2

1 10,000 1,500

Average tornado Loma Prieta (1989)

Mount St Helens eruption Magnitude 2.0 and below = typical micro-seismic events

<1

World’s largest nuclear test (USSR) Injection induced earthquakes Typical <3.5 (Highest recorded = 5.6) Richter Scale (logarithmic)

Frequency of Occurrence

  • Avg. per year (est.)

Average T

  • rnado

Large Lightning Bo lt

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Enhance Recovery Low Risk

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Disposal Low Risk

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Disposal into basement High Risk

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SEISMICITY ISSUES –LOGAN COUNTY TREND AREA

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FAIRVIEW TREND AREA

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OCC WELL & SEISMIC MONITORING (O.W.S.M.)

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50 100 150 200 250 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Earthquake Count 2.7+ OGS Catalog Year to Year 2015 ‐ 2018

2015 2016 2017 2018

Statewide EQ/day Year to Year

a.o. February 26, 2018

2015: 5.41 2016: 3.62 2017: 1.66 2018: 1.18 03/07/2018 45

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*Source: OMES State of Oklahoma FY-2018 Revenue Certification Presentation February 21, 2017

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*January 2018

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DANA MURPHY COMMISSIONER

OKLAHOMA CORPORATION COMMISSION

www.occeweb.com

CHANGING DYNAMICS IN OKLAHOMA ENERGY: LOOKING BACK TO GO FORWARD

MARCH 7, 2018