With the midterm elections approaching, one particularly important race for the energy industry is the election for Texas Railroad Commissioner. This week, we had the opportunity to host Representative Jon Rosenthal, one of three candidates running to succeed incumbent Commissioner Jim Wright. Jon is currently serving his fourth term in the Texas House and has 25 years of experience in the oil and gas industry as an engineer and project manager. We were excited to hear Jon’s perspective on the race, the role of the Railroad Commission, and the key energy issues facing Texas.
In our conversation, Jon shares the motivation behind his decision to run for the Railroad Commission and how his background in oil and gas shapes his perspective on the role. He discusses Winter Storm Uri, natural gas deliverability and grid reliability, and the importance of working collaboratively with industry to develop practical solutions. We discuss orphaned and zombie wells, the Commission’s resources and permitting processes, and opportunities to better support responsible operators while holding repeat violators accountable.
We examine produced water, including saltwater disposal constraints, seismicity, beneficial reuse, and opportunities to incentivize new treatment and reclamation technologies. Jon discusses Texas’s broader water challenges and the potential for reclaimed produced water to help meet growing demand from agriculture, power generation, industry, and data centers. We also explore the importance of coordination across the Railroad Commission, TCEQ, PUC, ERCOT, and other parts of Texas’s increasingly interconnected energy system.
Jon shares the different priorities he is hearing as he travels across the state, the importance of Texas energy leadership, and his vision for the Railroad Commission. He emphasizes his support for American energy independence as a “drill baby, drill Democrat” and an all-of-the-above approach to meeting growing energy demand. We also discuss his thoughts on strengthening the Commission through additional resources, improved employee retention, and greater collaboration with industry and other state agencies. For additional information, Jon’s campaign website is linked here.
To start the show, Mike Bradley characterized markets this week, and since our last COBT episode, as “grinding higher with narrowing breadth.” Treasury yields were largely unchanged, with the 1-year near 5.25% and the 30-year around 5.65%, despite several economic data releases coming in cooler than expected. With yields still near 25-year highs, Mike noted that bond traders may be signaling that the Federal Reserve is behind the curve.
In oil markets, WTI was trading around $89–$90/bbl, down ~$10/bbl over the past two weeks as Middle East oil flows have rebounded. Mike highlighted plans by G7 nations to release ~100 million barrels of diesel from strategic stockpiles to ease tight fuel markets, while U.S. diesel prices have fallen from ~$6.50/gallon to ~$6.30/gallon. He also noted that the largely idled St. Croix refinery could begin a phased restart next year. Turning to equities, the S&P 500 and Nasdaq advanced ~2% and ~3%, respectively, over the last five trading days, although Mike cautioned that gains are increasingly concentrated among the Magnificent 7. Energy equities gained ~4%, led by refiners at ~9%, despite lower crude prices. He also highlighted Cenovus Energy’s $5.7 billion acquisition of Athabasca Oil.
In power, utilities gained ~3%, with distributed generation companies and IPPs among the strongest performers. Mike highlighted the announced combination of Emera and Canadian Utilities, with a combined enterprise value exceeding $70 billion, as well as several positive nuclear developments. These included Vistra’s conditional DOE loan commitment of up to $4.2 billion to support ~430 MW of nuclear uprates and long-term PPAs between Constellation and Amazon and Google supporting ~1,100 MW of nuclear uprates.