An increase in industrial activity in two different energy sectors – one new and one traditional – helped power economic growth in Texas during the last decade.
Texas’ energy industry makes up 15 percent of the state’s GDP, according to the Texas Comptroller’s Office, and this industry grew around 77 percent between 2010 to 2018. A 16 percent increase in electricity production over the same period, including from new wind power, is one reason Texans enjoyed a decrease in electricity prices while the rest of the country saw increases.
“Communities that were previously unfamiliar with wind energy are now looking to it as an economic development opportunity — something that was not there even a decade ago,” Jeff Clark, president of the Advanced Power Alliance, told The Texan.
Support for wind energy coming from federal renewable tax credits has proved to be a major force driving American wind power. And it’s not just consumers who are buying new wind energy, but also oil and gas producers, according to Clark.
Not to be outpaced by wind, Texas’ crude oil and natural gas production grew when comparing nine months of 2018 and 2019. Production for oil and natural gas grew 17 percent and 32 percent respectively, according to Energy Information Administration data.
New oil and gas drilling techniques have improved the efficiency of product production as well as the quality of oil. Wells that produced 800 to 900 barrels of oil per day in 2010 produced 2,900 barrels per day in 2019, according to Soar Energy President Don Hooper.
Texas oil producers also had a boost from a change in federal policy. The U.S. in 2015 repealed a ban on exporting crude oil, which had been created in response to the 1973 oil crisis. The ban had curbed U.S. oil markets for decades.
Ed Longanecker, president of Texas Independent Producers & Royalty Owners Association (TIPRO), told The Texan, “This bi-partisan policy accomplishment enabled many significant milestones to come to fruition in recent years, including the U.S. officially becoming the world’s largest producer of oil and natural gas, with Texas accounting for 40 percent and 25 percent, respectively.”
The oil and gas boom looks likely to continue in the coming year, as oil production from July 2019 to October 2019 grew by more than 2 million barrels.
Plans are underway to send more natural gas to foreign markets, set to be shipped abroad via additional Liquid Natural Gas export plants. One company with a new natural gas export facility in Texas, Cheniere, recently tweeted about its Texas expansion plans.
A Potential trade war with China is one of the few clouds on the horizon for Texas’ growing energy sector.
