Texas Embraces Renewable Energy
As Texas goes, so goes the U.S.
It’s certainly true when it comes to energy – the infrastructure in that one state sometimes seems to prop up the entire country. But just because Texas has been linked to oil for decades doesn’t mean that oil must be the future of American energy.
In fact, the energy landscape in that region is changing rapidly.
So today, we’re digging into Texas’ past to predict its future.
Let me tell you a story…
December 2019, I spent a week in Abilene, Texas.
It’s one of my favorite towns in Texas. The little downtown is great – it has excellent restaurants and bars. I look forward to driving out to Buffalo Gap for steak at Perini Ranch.
Normally, I stay in Abilene when I visit the industry in the Permian Basin – the large oil and gas field in West Texas and New Mexico.
On this trip, though, the oil bust was in full stride. So instead, I ended up learning about a totally different form of energy production that Texas leads the nation in: wind.
One of the things I admire about Texans is that they understand boom and bust economies. Many families, particularly in Abilene, have history all the way back to the cattle booms and busts of the 1800s. That represents a uniquely American cultural memory.
The first big boom coincided with the California Gold Rush. Thousands of hungry miners flocked to the gold fields of California and drove up the price of beef. The boom ended when the gold market went bust in 1857.
In 1868, a boom in population and wealth in the eastern states spurred demand for beef yet again. Cattle that sold for $4 each in Texas could go for $40 in New York. This was the heyday of the great cattle drives. Cowboys drove herds up the Chisholm Trail from Texas through Kansas to the stockyards in Kansas City. There, the animals went on trains to the big cities on the East Coast.
However, an economic panic in 1873 ushered in another big bust. The fall crushed the price of cattle, and many ranchers went bankrupt.
Then, the oil industry exploded onto the scene. In 1901, the iconic Spindletop well was discovered. It produced an enormous 100,000 barrels per day and over 17 million barrels per year. That single well exceeded the entire state of Texas’ oil production in 1900. It kicked off a boom that brought about $235 million ($7.2 billion in today’s dollars) in exploration and investment into the state.
For a decade, oil prices soared on scarcity, only to plummet when drillers found the next gusher. In 1930, the discovery of the super-giant East Texas Oil Field sent oil prices into a tailspin. There was so much extra oil around that the government had to step in and shut down wells to prop up the price.
Texas’ economy has relied on commodities other than just oil and cattle. Over the years, it has been a big cotton and lumber producer, too.
By the time of my trip in 2019, Texas’ oil prices had fallen nearly 20% in the past few months. And it would get much worse in 2020 (it has recovered since then). I saw just one drilling rig on a three-hour drive through this decade’s most prolific oil fields.
But I saw hundreds of wind turbines.
I went to a ranchers’ dinner one evening. It was a serious affair. I ate some of the best steaks in my life, both elk and beef. Discussions ran the gamut of old stories, jokes, and eventually the business of ranching. The men in the room owned thousands of acres in West Texas. As we sat outside around a fire pit, I could hear the rhythmic whoosh of a giant wind turbine.
The host told me that the wind turbine leases were a godsend. They smoothed out the income from his cattle operation and flattened the typical highs and lows of agricultural prices.
Ranchers and oilmen in Texas are turning to wind because it’s quite simply a necessity. That’s why we like wind, too. We plan to talk more about wind power in 2023 and beyond.
For The Good,
Numbers to Know
The number of wind turbines in the US. There has been an average of 3000 wind turbines built every year since 2005. (usgs.gov)
The estimated number of birds killed by wind turbines in the US every year. But that pales in comparison to other things like communication towers, automobiles and pesticides.(energymonitor.ai)
The number of Americans living in counties experiencing higher temperatures than the 20th century normal. (usafacts.org)
Renewable project financings are expected to pick up in 2023, backed by federal policy, an increasing focus on environmental principles and energy security. (spglobal.com)
Deloitte’s Renewable Energy Outlook for 2023 report, forecasts growth and expansion into new areas, such as offshore wind, and harnessing new opportunities opened by IRA incentives, such as clean hydrogen production and low-income area solar programs. (deloitte.com)
Video Of The Week
The New Texas Oil… Wind!
If Texas were a country it would be fifth in the world for wind energy generation.
Texas with its history and can-do approach, will be instrumental in developing a portfolio of energy solutions for the future