Home / Opinion / Oil boom brings high cost of electricity to the Permian Basin

Oil boom brings high cost of electricity to the Permian Basin

Zachary Toliver | Shale Plays Media

Usually when a conversation about infrastructure and oilfields comes about, it revolves around the lack of pipelines or refineries. But thanks to resurging oil production in the Permian Basin, the infrastructure of the electric grid in the region is has become crowded with new users working within the oil boom. This is creating a headache for many users who remember prices prior to the current shale revolution.

Many residents in West Texas are now paying a larger-than-average electricity bill due to the lacking infrastructure needed to meet the demands of the boom. According to The Texas Tribune, the deficiency has now lead to increasing costs for a host of nonprofits, churches, schools and other businesses in the region’s once-quiet communities.

Although charges have steadily decreased since the record hot summer of 2012, some experts claim it could take years for prices to resemble pre-boom averages. West Texas is still overflowing with oil, and just like housing, pipelines and roads, power lines and cables are still playing a difficult game of catch-up.

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According to the Electric Reliability Council of Texas, energy consumption in West Texas increased by nearly 14 percent from 2007 to 2012.

In 2012, the Priority Power Management estimated that West Texas paid around $11.47 per megawatt-hour compared with rest of Texas which averaged about 53 cents per megawatt. The Texas Tribute states that a megawatt-hour can power 500 typical Texas homes for an hour during mild weather.

The most current prices reveal that things are finally shaping into order. Although still relatively high compared to the rest of the state (most of Texas is averaging 43 cents), the average prices in the west are closer to $5 per megawatt-hour.

Check out the full report from Texas Tribune journalist, Jim Malewitz, to understand how the Permian Basin landed in this mess as well as what is planned for the future to fix the bottleneck calamity of the electric grid. “West Texas Energy Bills Show Boom’s Unexpected Costs.”

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