The Texas Energy Paradox



Can Texas really lead the way in building a large-scale renewable energy sector? In an article entitled “Why Texans See Green Gold in Renewable Resources,” Popular Mechanics, of all publications, argues that we can – and are. There are some interesting insights in the article:

And that is the curious paradox of Texas: While seemingly more virtuous states labor over environmental impact assessments, Texans see a business opportunity and grab it—and so could very well end up leading the nation in clean energy.

“In Texas, because we don’t care about the environment, we’re actually able to do things that are good for the environment,” says Michael Webber, assistant professor of mechanical engineering at the University of Texas at Austin. “It’s the most ironic, preposterous situation. If you want to build a wind farm, you just build it.”


“If you’d like to build a wind farm off the coast of Texas, you only have to deal with the Texas General Land Office, and we’re a very eager leaser,” Jim Suydam, the office’s press secretary, says. “My boss is a Texas Republican. He’s an old Marine lieutenant colonel who carries a gun in his boot. But you’ll find no bigger proponent of offshore wind power, because he sees it as a vital part of a diversified revenue stream for public education.”


At its core, the idea that we’ll protect the environment by not caring about it is about as intellectually sound as the Vietnam-era notion of “destroying a village in order to save it.”

But, Webber and the others do have a point: The Texas wind industry has been able to grow in part because Texans aren’t afraid of energy production and are fairly agnostic about what type makes for good business.

The closest we’ve come to Cap Cod-like controversy over wind turbines is the recent dust-up between the King Ranch/birders and the Kenedy Ranch, which wanted to build a large wind farm on its spread in South Texas. The Kenedy Ranch won; the last time I was fishing on the Upper Laguna Madre, many of the mammoth turbines were up and spinning.

Communities in rural West Texas have embraced wind power not because they’re excited about reducing their carbon footprint, but because wind is one of the only growth industries in their area. It helps keep farmers and ranchers on their land and provides young people with employment. Even environmentalists are promoting wind turbines as the “sound of money.”

The problem, however, with the Texas renewable energy model is that the market-based approach has its limitations. For example, the deregulated power generation sector here is “energy-only,” meaning that citizens and regulators play almost no role in deciding what new power plants should be built. Instead, investors must listen to market signals – and the market, oblivious to the external costs of air pollution and climate change, mostly chants coal, coal, coal.

Government is sometimes needed to spur new industries, especially those that have societal and environmental benefits beyond new jobs and tax revenue.

Indeed, the primary reason why Texas now leads the nation in wind energy is that the Texas Legislature passed a renewable portfolio standard in 1999, requiring that 2000 megawatts of green power be developed by 2009. (The standard was expanded in 2005.)

But the government’s leadership is starting to slip, something Popular Mechanics mentions only briefly. Still coasting on wind power successes, the Lege hasn’t been playing as active a role in promoting solar. As a result, solar projects have been draining away to other states. For example, Chinese-owned Suntech Power last month chose Arizona over Texas to site a new solar panel-manufacturing plant. Arizona’s stronger incentives program was almost certainly a factor. This session, the Lege had considered solar incentives but never got around to passing the bill.

“I think we’re a little schizophrenic,” James Marston, the director of EDF’s Texas office, says. “We know wind worked and we got some jobs, but we’re not as aggressive as Colorado or New Mexico or even Michigan [on renewable energy], and we’re missing out.”

And let’s not lose perspective: Fossil fuels still dominate Texas to a greater extent than any other major state.

You’re not going to find too many top-tier Texas polticians – awash in dollars from oil, gas and coal interests – who are willing to talk about a rapid transition away from fossil fuels. Instead, you’ll get Gov. Rick Perry flogging an “all-of-above” approach to energy. Oil, gas, coal, wind, solar – it’s all good. This might be a smart political stance but it’s not good public policy if you accept the need to drastically reduce greenhouse gas emissions. (Perry of course thinks climate change is some liberal fairy tale and that cap-and-trade will bring the destruction of the Lone Star economy.)

I’m not so sure that the “curious paradox” introduced in the article is such a paradox at all. The two energy economies exist side by side: On one hand, there is the growing but still relatively small “green energy” sector in Texas. On the other, there’s the vast oil, gas, coal, and petrochemical infrastructure that constitutes the traditional Texas economy.