SAN ANTONIO—Two-dozen speakers covered a wide array of topics at Hart Energy’s 2nd annual Midstream Texas conference, held Sept. 12-14. But a packed house of several hundred attendees heard five recurring themes through multiple presentations. Presenters emphasized these factors are critical to the sector in the Lone Star State, the U.S. and beyond. They were:

1. The importance of oil and gas to economic growth—A.J. (Jim) Teague, CEO of Enterprise Products Partners LP, reminded the audience in his opening keynote address just how vital affordable crude oil, natural gas and NGL supplies are to the modern economy. He opened his presentation with a film clip from the 1967 movie, “The Graduate,” in which Dustin Hoffman’s character is advised to go into “plastics” after graduating from college. It was good advice then and now, Teague told a standing-room only crowd, “because today, plastics are in everything.”

The plastics business depends on NGL and crude feedstocks, Teague noted. And plastics find their way into virtually every product nowadays, even airplanes. He noted that Boeing’s 787 Dreamliner is composed of 50% advanced composites, “and advanced composites start out as plastics.”

Meanwhile, fuel switching to gas has enabled the U.S. to make serious inroads in carbon emissions, more than any other developed country. He cited U.S. Energy Information Administration numbers that show the nation’s CO2 emissions in 2015 were scarcely above 1980 levels although the economy has quadrupled in size in the past 35 years.

“The U.S. GDP grew from $4.2 trillion in 1967 to $16.6 trillion in 2015; that’s a compound annual growth rate of nearly 3%. This would have been impossible without hydrocarbons as a reliable and affordable engine of growth,” Teague said.

2. Public misperception of oil and gas—Unfortunately, oil- and gas-based fuels and feedstocks “are things we take for granted.” This attitude allows extreme environmentalists to mount successful campaigns to halt industry growth, Teague warned.

Brydon Ross, vice president of state affairs for the Consumer Energy Alliance, echoed Teague’s observation and said the industry must become more active in telling its positive story to an indifferent—and sometimes antagonistic—public.

He said the alliance works to build the credibility of pro-energy positions; counters opponents’ emotional arguments with facts to create a more meaningful public dialogue; creates relationships with consumers, labor, businesses, landowners, stakeholdersand public officials; and seeks to bring new voices and viewpoints into the discussion of energy.

“Someone will define you if you don’t define yourself,” he told attendees.

Ross outlined the pro-energy association’s new “Pipelines For America” effort, launched in August, to tell the public how important energy is to the economy. Its campaign emphasizes public education and awareness on pipeline/midstream consumer benefits and seeks to provide an advocacy gap for critical midstream infrastructure.

“Pipeline and midstream industry must expect opposition on nearly everything” because environmentalist opponents’ “goal is to end fossil fuel development and means of delivery. There are no more free passes for the industry anymore, Ross said. Opponents turn routine regulatory reviews into anti-fossil fuel campaigns.

Mark Sutton, president and CEO of the GPA Midstream Association, described how his organization has taken on a new commitment to working with regulators, building on its well-established technical and research roles.

“We are the only trade group that advocates for the midstream’s position,” Sutton said, noting GPA Midstream has created a political action committee (PAC) in addition to hiring a full-time federal government affairs staff member.

“If you don’t have a PAC, it’s hard to play the game in D.C.” he added. “We realize the big issues are federal regulation and legislation. I don’t see a lot of change, no matter which party wins in November.”

3. Mexico’s changing energy industry—Several presenters talked about the growing importance of Mexico to the state’s midstream since the southern neighbor opened its energy industry to the private sector at the end of 2013. Those changes have created major growth opportunities.

Brandon Seale, president of Howard Energy Mexico, a unit of San Antonio-based Howard Energy Partners, said Texas producers “are at the front door of the most exciting new market in North America.”

He discussed Mexico’s growing demand for oil and gas in general and his firm’s growth south of the border in particular. Howard’s Nueva Era gas pipeline, now under construction, “will link the biggest gas-producing county in Texas [Webb County] to the biggest gas market in Mexico,” the industrial hub of Monterrey.

“We need to remember that what is good for Mexico is good for Texas—and vice versa,” Seale added. He noted Mexico is not just an export market; it strives to incorporate U.S. business practices to stimulate its energy sector and economy.

4. Permian Basin growth—The hydrocarbon-rich region that sprawls across West Texas and laps over into New Mexico has continued to grow in importance as a world-scale producing region, according to several presenters.

Three panelists who participated in a discussion of “The Permian Powerhouse” agreed it has bucked the two-year-old industry downturn and has continued to develop. Drilling and completion improvements have allowed the Permian’s output to remain remarkably steady despite a 75% drop in the number of rigs making hole.

Michael J. Latchem, president and CEO of Lucid Energy Group, asked a rhetorical question at the start of his presentation on the panel: Is the Permian the last man standing from the earlier boom or the first man up for a new boom? Latchem said it is the latter.

What’s important now “is matching capital to the market as there is a shift in momentum” back to a growing oil and gas industry. The criteria of capital providers and midstream operators are not always the same, and the two sides need to work together closely, he said.

Joining Latchem on the panel were Brett Wiggs, CEO of Oryx Midstream Services, and Robert A. Milam, president and CEO of EagleClaw Midstream.

Wiggs noted that “regional transportation capacity is an issue—not just capacity out of the basin” for the midstream. Milam said it is important for midstream operators “to understand the producer’s economics” as they respond to the Permian’s shifting active drilling areas. All three panelists rated the Permian’s Delaware Basin as underserved.

Milam said the Alpine High discovery announced in early September by Apache Corp. (NYSE: APC) in Reeves County, Texas, represents a particular concern for the midstream because it lies at the southern extreme of the already underserved Delaware—but noted that could be good for EagleClaw since it operates the nearest active midstream assets to Alpine High.

5. Waterborne exports—The state’s midstream needs to shift its focus from predominantly domestic customers to waterborne exports of LNG, crude, petroleum products and petrochemicals. John LaRue, executive director of the Port of Corpus Christi Authority, described how the South Texas port has adapted to a growing role as a hub for the energy industry by adding infrastructure and deepening its channel. The same holds true for all 16 deepwater Texas ports, he said.

LaRue pointed out the port will have LNG liquefaction and ethylene cracking plants operating by 2020 at Ingleside, Texas, on the north shore of Corpus Christi Bay, adding to its importance as an export hub.

Michele Joy, vice president of regulatory and major projects for Shell Pipeline LP, described the recent changes and improvements to Shell’s Zydeco system around the Gulf Coast. Built originally as an east-to-west crude system to move imported oil landed in Louisiana to Texas refineries, Shell rebuilt the line as a header that can batch 14 different crude grades in either direction. “When someone puts crude into our system, they want the same crude out of our system,” she said.

Zydeco will become more important as the Gulf Coast grows as a refining and petrochemical hub, Joy said.

Nozomu Nagai, general manager of upstream business development for Tokyo Gas America Ltd., discussed the role of the North American unit for one of the world’s largest LNG customers.

He predicted the emergence of a “homeless LNG” market—LNG not produced under a long-term contract that will be freely traded. That market will be more like the freely traded market for crude oil, he said. Nagai added that worldwide LNG is moving toward pricing off of the U.S. Henry Hub benchmark rather than crude oil-based prices.

Tokyo Gas has purchased gas reserves in Texas’ Barnett and Eagle Ford shales, he noted. That gas may or may not be liquefied and shipped abroad, but the Texas reserves will enable the Japanese firm to better hedge its fuel needs in the future.

Paul Hart can be reached at pdhart@hartenergy.com.