Energy policy in Texas

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Energy policy in Texas
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Quick facts
Major industry: Oil and natural gas
Energy department: Texas Railroad Commission
State population: 26.1 million
Per capita income: $41,471
Energy consumption
Total energy consumption: 12,207 trillion BTU[1][2]
Per capita energy consumption: 476 million BTU
Energy spending
Total state energy spending: $169.29 million
Per capita energy spending: $6,605
Residential natural gas price: $18.55 per thousand cubic foot
Residential electricity price: 11.68 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Glossary of energy terms
Energy policy in Texas
Fracking in Texas
Energy policy in Texas depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Texas, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. Texas has some of the largest traditional energy deposits in the U.S. and a long history of oil and gas production, which also influences policy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Texas

Energy overview

State facts

Below are quick facts about Texas's energy climate.


  • lead the nation in oil production in 2011.
  • produces more than a quarter of the natural gas in the United States.
  • was the first state to reach 10,000 MW capacity from wind power.
  • leads the country in electricity production.
  • leads the country in total energy consumption.
  • is the only state with a stand alone grid system.
  • consumes one-seventh of the nation's natural gas
  • mandates that at least 5 percent of its electricity be produced by alternative sources by 2015.[3]

In Texas

  • industry was the largest consumer of energy, using 6,088 trillion BTU in 2011.
  • almost half of the electricity generated in the state comes from natural gas plants.
  • there are 27 oil refineries, two nuclear plants and five non-nuclear electric plants.[3]

Available energy resources

Texas has massive traditional energy reserves making it the leading producer of nearly every fossil fuel in the country. The state has almost 25 percent of the nation's crude oil reserves, the largest of those being the Permian Basin in western Texas. Texas also leads the country in oil production, even topping federal offshore drilling. Almost one-third of U.S. natural gas production and reserves are in Texas with the majority of these fields located in northeastern Texas. Texas has large ignite coal reserves (the lowest quality coal) in the Texas Gulf Coast region. It also has bituminous coal reserves in the southwest and central northern regions of the state. Texas has an estimated potential reserve of 23 billion tons of lignite and 787 million tons of bituminous coal.[3]

While Texas certainly places significant emphasis on fossil fuels it also is a leader in wind energy production, producing nearly one-fifth of wind power energy in the country. While wind accounts for nearly all of the state's renewable production, Texas also has massive potential for solar energy production, particularly in its western region. Texas also has high potential as a biomass producer, although currently very little of the state's total energy production comes from biomass.[3]

Consumption and prices

Over half of the energy consumed in Texas goes to industry, nearly a quarter going to transportation and the rest to residential and commercial use. Natural gas is the largest energy source for Texas industries with about four-fifths of the natural gas in Texas being consumed by industrial and electric power producers.[3]

Energy consumption in Texas
TX energy consumption chart.png

     Transportation       Residential     Industrial       Commercial
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Petroleum is used mostly by the transportation sector with prices that track consistently lower than the U.S. national average.[5][6] According to the U.S. Energy Information Administration (EIA), Texans pays on average 20 cents for every gallon of gas and diesel fuel to the state and 18.4 cents per gallon and 24.4 cents per gallon for gas and diesel, respectively, to the federal government which means Texas has the 38th highest petroleum taxes in the United States.[7][8] Conventional gasoline is allowed to be sold in most of the state, but the eastern half of the state and El Paso County require special blends to meet their air quality requirements.[3]

Comparisons tables

The table below compares Texas' consumption and spending for energy, as well as prices for natural gas and electricity, and carbon emissions to those of California, which has similar population, resources and consumption needs. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Texas' rank of first in carbon emissions means that carbon emissions are higher in Texas than in California, which has a ranking of second.
  • Per capita income in Texas is lower than in California, which at 26th ranks 10 places behind California's ranking of 26th in per capita income.
  • These two states are as close a comparison as possible on population, overall energy consumption and spending because they are both large states geographically with large populations.
  • Per capita energy consumption in Texas (at sixth) is significantly higher than in California (at 47th).
  • Per capita energy spending in Texas is significantly higher because it ranks fifth to California's ranking of 47th.
  • Ranking in at 11th Texas has much higher natural gas prices than California. (A ranking of 49th means that California has the second lowest price in the nation.)
  • Electricity prices are significantly higher in California which was ranked at the sixth highest price, while Texas ranked 21st.
Consumption and Expenditures Comparisons Summary
Type TexasCaliforniaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population26.1 million238 million1313.9 million
Per Capita Income Average$41,47126$44,98016$42,693
Total Consumption12,207 trillion BTU17,858 trillion BTU297,301 quadrillion BTU
Per Capita Energy Consumption476 million BTU6209 million BTU47312 million BTU
Total Spending on Energy$169,290 million1$136.096 million2$1,394,088 million
Per Capita Spending on Energy$6,6055$3,61247$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$18.5511$10.3649$12.48
Price of Electricity, cents per kWh11.682115.71612.31
Total Carbon Dioxide Emissions, million metric tons (2010)652.61369.825,631
*Rank is from highest to lowest.

In Texas over half of the population uses electricity as its main home heating source. This is mainly due to the high demand for air conditioning during the state's hot summers, which can also help explain its high per capita energy spending.[3]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Texas
Source Texas 2011 U.S. average 2011
Natural gas 37.3% 49.5%
Fuel oil .1% 6.5%
Electricity 58.1% 35.4%
Liquid Petroleum Gases (LPG) 3.5% 5%
Other/none 1.0% 3.6%

Production and transmission

Texas produced 12,528 trillion BTU of energy in 2011. Nearly half of that was natural gas and coal, with nuclear providing most of the remainder of its energy. One percent came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[3]

Energy production by type in Texas, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 3,082.8 24.5% 25.77%
Natural gas 8,047.4 63.96% 30.38%
Coal 605.3 4.81% 2.74%
Nuclear 414.9 3.3% 5.02%
Biofuels 44.1 0.35% 2.3%
Other 387.7 3.08% 5.44%

Electricity used in Texas is primarily fueled by natural gas. The large majority of the natural gas and coal used for electricity in Texas is produced within the state. The state has dozens of interstate natural gas pipelines including: ANR Pipeline Co., Centerpoint Energy Gas Transmission Co., Colorado Interstate Gas, El Paso Natural Gas Co., Enbridge Pipelines (East Texas), Florida Gas Transmission Co., Gulf South Pipeline Co., KM Interstate Gas Co., Mississippi River Transmission Corp., Natural Gas Pipeline Company of America, Northernal Natural Gas Co., Oneok Westek Pipeline Co., Oneok Gas Transportation Systems, Panhandle Eastern Pipeline Co., Southern Natural Gas Co., Southern Star Central Gas Pipeline Co., Tennessee Gas Pipeline Co., Texas Eastern Transmission Corp., Texas Gas Transmission Co., Transcontinental Gas Pipeline Co., Transok Inc., Transwestern Pipeline Co. and Trunkline Gas Co.[3]

Texas has 116 retail electric providers, its five largest being: TXU Energy Retail Co LP (private), Reliant Energy Retail Services LLP (private), City of San Antonio (public), Entergy Texas inc. (private), Southwestern Public Service Co (private).[9][10]

Where electricity comes from in Texas[11]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 7,000 0.02% 0.02%
Natural gas-fired 15,362,000 47.16% 1.52%
Coal-fired 10,513,000 32.28% 0.61%
Nuclear 3,170,000 9.73% 0.4%
Hydroelectric 68,000 0.21% 0.02%
Other renewables 3,197,000 9.82% 1.58%
Total net electricity generation 32,572,000 100% 0.79%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Ten percent of electricity produced in Texas comes from its two nuclear power plants, Comanche Peak and South Texas Project. Comanche Peak was built in 1990 and a second unit was added 1993 and is licensed to operate until 2033. The South Texas Project has a license to operate until 2027.[12][13]

Coal produces nearly one-third of the electricity generated in Texas. Texas is also the country's largest coal consumer. Most of the coal used in Texas is shipped by rail from Wyoming, while two-fifths is a low quality form of coal mined within Texas known as ignite.[3]

Energy policy

Policy Issues
Texas is the country’s biggest energy producer. It is the nation's leader in natural gas, crude oil and wind energy production and it is also among the nation's highest coal producers. While Texas has a diverse portfolio of energy sources, its main sources for electricity are natural gas and coal. Electricity prices in Texas are largely dependent on natural gas prices and between 1999 and 2000 prices nearly doubled causing a sharp increase in the cost of electricity within the state. Only in recent years have those prices dropped back down.[14][15]
See also: Fracking in Texas

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Texas is a leader among the states in wind energy generation producing nearly one-fifth of the wind power made in the country. In 1999, the state put forward a Renewable Energy Mandate (similar to the Renewable Portfolio Standards found in other states), which was revised in 2005 to require that the state have 5,880 MW in renewable energy by 2015 (about 5 percent of the energy demanded in the state). The state met that standard ahead of schedule in 2009, with the energy from renewables coming almost entirely from wind power. Texas gave each electricity retailer in the state a share of this MW goal in proportion the company’s share of statewide electricity sales. If the companies did not meet the share assigned to them by the benchmark dates then they would be given an administrative fine of $50 per MWh. The state's next benchmark for the mandate comes in 2025 in which it must have 10,000 MW of renewable energy within the state, of which 500 MW must come from sources other than wind. Acceptable resources for meeting these standards include: solar water heat, solar thermal electric, photovoltaics, landfill gas, wind, biomass, hydroelectric, geothermal electric, geothermal heat pumps, tidal energy, wave energy and ocean thermal.[3][16][17][18][19]

The American Council for an Energy Efficient Economy (ACEEE) is a non-profit organization dedicated to improving energy efficiency policy in the United States. They focus on energy policy, research and outreach. Each year, they rank each state according to its energy efficiency. Texas ranked 33rd out of 50 on the Energy Efficiency Scorecard produced by the ACEEE in 2013.[20] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are some studies reporting on what is called the "rebound effect," which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[21][22]

Major legislation

  • Senate Bill No. 7, the Texas Renewable Portfolio Standard (RPS) required 2,000 MW of new renewable energy capacity to be installed statewide by 2015. The RPS is administered by the Texas Public Utility Commission (PUC). In August 2005, the Texas Legislature extended the RPS to expand the state's generating capacity from renewable energy sources to 5,880 MW by 2015 and included a target of 10,000 MW by 2025, with 500 MW coming from non-wind sources.[23]
  • Texas Tax Code § 11.27, Texas Enterprise Fund is a general fund to promote economic development within the state and to draw large and small businesses to Texas. This fund offers 100 percent property tax exemption to commercial and industrial renewable energy companies.[24]
  • Texas Utilities Code § 39.905, was originally designed to get investor owned utilities (IOUs) to meet 10 percent of annual growth in electricity demand through energy efficiency, this law has most recently been revised to 30 percent of annual growth. Utilities can meet these standards through commercial and industrial energy efficiency incentives and other various incentive programs.[25]
  • Texas State 2158.004 to 2158.009 requires that state agency fleets with more than 15 vehicles, excluding emergency and law enforcement vehicles, may not purchase or lease a motor vehicle unless the vehicle uses an alternative fuel source.[26]
  • House Bill 3328 (2011) requires oil and gas companies to disclose chemicals used in the hydraulic fracturing process to promote transparency and public safety.[27]

Ballot measures

Below is a list of energy related ballot measures across Texas. These ballot measures cover issues from fracking bans, to utilities and related tax questions.

Government agencies and committees

  • Within the Texas State Legislature there are two committees that oversee energy issue within the state of Texas. The House has the Energy Resource Committee that is responsible for all matters in the house pertaining to the conservation of the energy resources of Texas, the production, regulation, transportation and development of oil, gas and other energy resources, regulation of mineral rights under public lands, using alternative energy sources, and increasing energy efficiency throughout the state. The Texas State Senate committee's is called the Natural Resources Committee. This committee's main responsibilities are to ensure water quality and proper use of water resources, ensure that the processes for environmental permitting do not interfere with reasonable economic development or the growth and establishment of small businesses, and to monitor all other legislation regarding energy, water or other natural resources.[28][29]
  • The Texas Public Utility Commission was created 1975 by the Texas state legislature to "provide statewide regulation of the rates and services of electric and telecommunications utilities." The PUC's mission is to protect customers, foster competition and promote high quality infrastructure.[30]
  • The State Energy Conservation Office (SECO) was established by the state to reduce energy costs and maximize efficiency within the private and public sectors and in people's homes. SECO provides incentives and loans for citizens and companies to use renewable energy sources, educating contractors and the general public on efficient building practices and enforcing building code to improve energy efficiency.[31]
  • The Texas Railroad Commission is responsible for regulating the oil, natural gas and mining industries. Established in 1891 to regulate the railroad industry by preventing discrimination in railroad charges and establishing reasonable tariffs, the commission's duties eventually expanded to oil.[32]
  • The General Land Office has been tasked with preserving state history, protecting the environment, expanding economic opportunities and maximizing state revenue through its management of state lands and resources. The Texas Land Commissioner is the head of the General Land Office.[33]

Major organizations

Policypedia energy logo.PNG
State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.

State environmental policy

See also
Local fracking on the ballot

Statewide fracking on the ballot

  • The Texas Campaign for the Environment is a nonpartisan non-profit that attempts to mobilize and inform Texans to protect the quality of their lives, their health, their communities and the environment.[34]
  • The Texas Renewable Energy Industries Association (TREIA) is a non-profit group interested in promoting the development, marketing, sales, installation, servicing and manufacturing of solar, wind, biomass, geothermal or hydrokinetic energy technologies. TREIA has been in existence since 1984 and works with private companies, individuals and provides counsel to the state government to promote the use and understanding of renewable energy.[35]
  • Webber Energy Group is a research group based out of the University of Texas at Austin that focuses on "address[ing] critical issues at the intersection of energy, technology, policy and the environment." They try to inform policy makers on the more technical aspects of renewable energy.[36]
  • North Texas Renewable Energy Group was established in 2001 and primarily focuses on educating Texans on renewable energy and its benefits.[37]
  • Texas Alliance of Energy Producers is a group that mainly represents oil and gas companies and tries to protect their interests. It was formed in 2000 and works to lobby the federal and state government on behalf of the companies they represent.[38]

In the news

This section displays the most recent stories in a Google news search for the term "Texas+Energy+Policy"

All stories may not be relevant to this page due to the nature of the search engine.

Texas Energy News Feed

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See also

External links


  1. These figures come from the U.S. Energy Information Administration State Profiles and Energy Estimates, Texas Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Texas Overview," accessed February 5, 2014
  3. 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 U.S. Energy Information Administration, "Texas Profile Analysis," December 18, 2013
  4. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  5., "Retail Price Chart," accessed March 4, 2014
  6. To compare current gasoline prices in Texas to the U.S average, go to
  7. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014
  8. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  9. U.S. Energy Information Administration, "State Electricity Profiles," accessed March 12, 2014
  10. Public Utility Commission of Texas, “Alphabetic Directory of Retail Electric Providers,” accessed March 12, 2014
  11. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Texas Overview," December 18, 2013
  12. U.S. Nuclear Regulatory Commission, "South Texas Project, Unit 1," February 26, 2014
  13. U.S. Nuclear Regulatory Commission, "Comanche Peak Nuclear Power Plant, unit 2," February 26, 2014
  14. U.S. Energy Information Association, “Texas Natural Gas Prices Sold to Electric Power Consumers” February 28, 2014
  15. Texas Coalition for Affordable Power, "Electricity Prices in Texas," December 2013
  16. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  17. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  18. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  19. Database of State Incentives for Renewables and Efficiency, “Texas Renewable Generation Requirement” March 13, 2013
  20. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  21. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  22. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013
  23. State of Texas, "Texas Renewable Energy Report," July 2012
  24. State of Texas, "Texas Renewable Energy Report," July 2012
  25. Database of State Incentives Renewables and Energy, "Texas Incentives/Policies for Renewables and Efficiency," July 6, 2012
  26. Alternative Fuels Data Center, "Texas Laws and Incentives" accessed March 14, 2014
  27. Texas State Legislature, "Texas House Bill 3328," June 17, 2011, accessed March 14, 2014
  28. Texas State Senate, "Senate Committee on Natural Resources," accessed March 14, 2014
  29. Texas House of Representatives, "Energy Resource Committee," accessed March 14, 2014
  30. Public Utilities Commission, "Mission and History," 2013, accessed March 14, 2014
  31. State Energy Conservation Office, "Programs”, accessed March 14, 2014
  32. Railroad Commission of Texas, "About RRC, accessed March 14, 2014" (dead link)
  33. Texas General Land Office, "What We Do," accessed December 21, 2011
  34. Texas Campaign for the Environment, "About TCE," accessed March 14, 2014
  35. Texas Renewable Energy Industries Association, "What is TREIA?," accessed March 14, 2014
  36. Webber Energy Group, “About,” accessed March 15, 2014
  37. North Texas Renewable Energy Group, "Home," accessed March 14, 2014
  38. Texas Alliance of Energy Producers, “What is the alliance?” accessed March 17, 2014