Since taking office, my overarching goal has been to utilize the natural resources we have been blessed with to ensure energy is cheap, plentiful, and reliable for Texans. Under President Biden’s tenure, the cost of energy for American families has soared (the energy inflation index has risen 7.3 percent over the past 12 months alone) — and high costs will continue as his radical “green” agenda cements itself further into our economy after the passage of the so-called Inflation Reduction Act (IRA).
To make matters worse, Environmental, Social, and Governance (ESG) investing is choking off necessary investment in cheap and reliable natural gas infrastructure, while taxpayers continue to subsidize unreliability with massive handouts for wind and solar energy. The Biden administration is even floating the idea of banning natural gas stoves, which would leave Americans with no options for cooking and heating during blackouts and grid failure.
Oil and gas production is vital to Texas. It represents roughly 30% of the economy and pays about $12 billion annually in taxes and royalties. The $33 billion in state surplus is largely because of businesses in our oil and gas sector. In 2019, the U.S. became THE global oil and gas leader, decreasing overall US energy costs by over 7%. If we want to keep the Texas Miracle alive, we must prioritize defending the oil and gas industry against federal overreach and woke Wall Street.
Texas became a global energy leader because of our renegade, wildcatter spirit. We have fought back against federal overreach and to keep our state independent. Our consistent, predictable regulatory environment encourages innovation while protecting the environment and property rights. As the legislative session begins, below are my suggestions on how we can make energy cheaper and more reliable for Texas families:
Continue the Fight Against Environmental, Social, Governance (ESG) Investment
Last session, Texas Sen. Brian Birdwell and state Rep. Phil King authored and passed legislation to prohibit our state from investing in ESG financial products that boycott Texas energy companies. The law has been successful, spurring the Comptroller to release a list of companies subject to the divestment provisions outlined in the legislation. Last month, the Senate Committee on State Affairs Chairman Bryan Hughes subpoenaed BlackRock for ESG-related documents and held a hearing where companies were grilled about their double-speak and hypocritical stances. Other states have used this legislation as a model for similar efforts.
Just last week, BlackRock CEO Larry Fink acknowledged their company had lost around $4 billion in assets due to the political fallout associated with their ESG policies. Our efforts are working, but we must do more than just hold the line if we are going to put these policies to bed for good. If left unchecked, a handful of globalist elites will be able to utilize ESG to completely transform our economy and society closer toward a dystopian, socialist reality with social credit scores like those found in China. I encourage our legislature to go on the offense and continue to provide political and economic pressure to force this practice out of our state.
Improve the Reliability of Our Electric Grid
Texas taxpayers have spent $22 billion subsidizing wind and solar energy, which have shown they cannot perform when Texans need them most. In fact, over the four coldest days last December, intermittent power generation at the times of highest energy demand went from 23,253 megawatts (MW) to 12,151 MW to 5,065 MW to 6,007 MW or 32%, 16%, 8% and 10% of total generation on the grid. Meanwhile, natural gas increased 33% on the electrical grid providing 73% of the power.
With the federal passage of the Inflation Reduction Act (IRA), investment in these unreliable forms of energy is going to increase exponentially, with $370 billion of our tax dollars going to prop up renewables. State agencies and local governments will find it difficult to turn down “free” federal dollars. The legislature should stand opposed to the IRA and fight against every cent that harms Texas oil and gas. Additionally, Texas must not add to this problem with additional subsidies, tax-breaks, or other forms of financial or preferential treatment for wind and solar (such as including them in any revival of 313).
Natural gas is required to replace any power it cannot generate on the spot market. Wind and solar, however, are not. This gives wind and solar energy producers a massive economic advantage, as they can always make money, whether they are successful or not. It is no wonder, investment in electric generation from reliable forms of energy lags so far behind. Why build natural gas power plants when politicians guarantee your wind farm will be profitable no matter what?
Because of these incredibly unfair market conditions, future planned generation heavily favors unreliable forms of energy – even in the wake of Winter Storm Uri. In fact – according to the U.S. Energy Information Administration, wind and solar together are projected to overtake natural gas as energy sources on the grid by the end of the year. Presently, the Public Utilities Commission (PUC) projects our state will add 23,686 MW of solar, 8,123 MW of wind, and only 3,790 MW of natural gas with no coal or nuclear to power the grid.
Last session, a provision was removed from Senate Bill 3 (SB 3) that would have required renewable generators to “purchase ancillary services and replacement power sufficient to manage net load variability.” The legislature should look to this and other regulatory solutions that would help correct this market imbalance.
Improve Public Image and Increase Awareness of Texas Oil & Gas
The American energy sector has proven in recent years that oil and gas production and a clean environment are not mutually exclusive. Our nation has gotten cleaner as the production, the technology, and use of fossil fuels have increased. Unfortunately, the message has not reached the masses due to hyperbolic claims of climate catastrophe being perpetuated by the media and in our schools. As a result, 14% of millennials said they would not want to work in the oil and gas industry because of its negative image, and two out of three teenagers believe the industry causes problems instead of solving them.
To help address this, the Railroad Commission of Texas (RRC) recently established an Office of Public Engagement. This office will be one of the many tools the RRC uses to improve communications with the general public and ensure they receive the truth about our state’s robust oil and gas industry. Over time, it is our hope this initiative will provide a powerful counter voice to the incorrect mainstream narratives that have convinced an entire generation oil and gas would be better off “kept in the ground.” The legislature should look at ways to enhance this new office to ensure we have the resource necessary to have a statewide impact.
Establish a Texas Strategic Petroleum Reserve
Summer of 2022 saw record high gas prices and 30 percent overall energy inflation. Putting a band-aid on a bullet wound, Biden released oil reserves from the U.S. Strategy Petroleum Reserve (SPR) instead unleashing American oil and gas production. Biden depleted the SPR to a 40-year low with reports some oil went to China. Texas needs to establish its own SPR to support the Texas oil and gas industry and shield the state from poor federal energy policies.
Prohibit Political Subdivisions from Banning Gas Stations and Combustible Engines
Last session, legislation was passed to protect consumers by prohibiting cities and counties from passing California-style ordinances that ban gas hook-ups in new buildings or homes.
We are seeing similar ordinances pop up in communities in other states seeking to ban the use of combustion engines or even the construction of new gas stations. Texas should get ahead of this trend by prohibiting political subdivisions from enacting ordinances or otherwise tacitly encouraging this practice through RFPs and contracts.