Oil boom increases demand for electricity

Fuel Fix:

The Texas shale boom has led to record growth in the demand for electricity in West Texas, experts said in at the Gulf Coast Power Association panel on Wednesday afternoon.

Oil and gas worker camps and drilling activity have dramatically increased demand for electricity in previously unpopulated parts of Texas, including the Eagle Ford and the Permian Basin regions.

The growth has left transmission and utilities scrambling to keep up.

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For example, Oncor, which provides the transmission lines for the territory around Midland, Abilene and Odessa, added 247 megawatts to its system in the last three years, a thousand percent increase over the 22 megawatts added from 2006 to 2009.

Utility representatives said they also are investing heavily in infrastructure in these regions to meet the huge leap in demand.

“You can just see the exponential growth in the transformer infrastructure and capacity that we have added in the last year,” said Robert Knowles, senior distribution planning engineering for AEP Texas, a utility that operates in South Texas.

The demand has skyrocketed local prices in the interim — electricity prices have reached as much as 10,000 percent higher in the Midland area compared to Houston or Dallas prices in the last year.

Hooking up the new oil and gas infrastructure is dramatically more expensive because it is not developing in places with well-established existing electric lines, according to David Woody, senior manager of distribution planning for Oncor.

Land costs are one of the most significant drivers of these prices, especially in securing the right of way for new distribution lines.

“Landowners are wanting to make quite a profit,” Knowles said.

And while there are laws that could access land by claiming public interest, utilities say that they would rather pay higher prices than use this strategy.
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I am surprised worker camps need that much electricity.  Usually they are made up of RV's which are not big users.  However you do need to run the lines to them and install the infrastructure.  There are housing shortages in the area which also increase the demand for RV parks and mobile homes.  The latter could be big users of electricity.

The story is an example of how the oil and gas boom creates spin off work that industry critics have tended to discount.