Economy

published : 2023-11-08

Texas Voters Overwhelmingly Approve Measure for Expanded Fossil Fuel Development

Measure to Strengthen the Reliability of Texas' Power Grid

An aerial shot of a natural gas power plant in Texas taken with a Canon EOS 5D Mark IV

In a resounding victory for proponents of fossil fuel development, Texas voters have overwhelmingly approved a measure establishing a billion-dollar state-managed energy fund. The fund aims to bolster natural gas power plant infrastructure, ensuring a more reliable power grid for the state.

Proposition 7, which creates the so-called Texas Energy Fund, received an impressive 65% to 35% vote in favor, with over 2.5 million ballots cast. Supported by the energy industry but opposed by environmentalists, the measure sets aside $5 billion to facilitate low interest loans for new dispatchable power generation.

Todd Staples, the president of the Texas Oil & Gas Association, expressed his satisfaction at the outcome, stating that the infrastructure propositions to expand water, electricity, and broadband had passed with overwhelming support from voters. He emphasized that Proposition 7 would play a crucial role in strengthening the reliability of the electric grid, regardless of weather conditions, while also increasing the supply of electricity through additional generation.

A group of Texas voters casting their ballots for the Proposition 7 measure taken with a Nikon D850

The ballot measure was the final step to enact Senate Bill 2627, signed into law by Republican Governor Greg Abbott in July. Under the bill, loans financed by the Texas Energy Fund will have a 20-year term and an interest rate of 3%. These loans can be utilized for upgrading existing dispatchable power generation, increasing capacity by at least 100 megawatts (MW), or for constructing new power generation with a capacity of at least 100 MW. With a single natural gas power plant of this scale capable of powering tens of thousands of homes, the measure is set to have a substantial impact.

The push to expand natural gas power generation in Texas stems from concerns surrounding the state's power sector. There have been growing worries that the current level of energy generation is insufficient, especially during emergency peak periods. Former Public Utility Commission Chair Peter Lake highlighted that between 2008 and 2020, while the state's population grew by 24%, dispatchable power supply only increased by 1.5%. This mismatch between demand and supply has become more pronounced due to Texas' increasing reliance on intermittent green energy sources like wind and solar.

The urgency to address this issue was emphasized by Pablo Vegas, the president and CEO of the Electric Reliability Council of Texas, earlier this year. According to federal data, in 2022, Texas generated 26% of all U.S. wind-generated electricity and has consistently led the nation in this category for 17 consecutive years. However, natural gas still accounts for the largest share of electricity generation in the state.

Todd Staples, president of the Texas Oil & Gas Association, speaking at a press conference taken with a Sony Alpha a7 III

Proposition 7 received support from influential organizations such as the Texas Oil and Gas Association, ConocoPhillips, Texas Association of Manufacturers, Texas Pipeline Association, and Valero Energy Corporation. On the other hand, it faced opposition from groups like the Sierra Club, Environment Texas, Texas Advanced Energy Business Alliance, and Texas Consumer Association. Those in favor of the proposition argued that expanding the state's clean energy capacity would strengthen the electric grid while protecting consumers and the environment.

As Texas secures the future of its power grid through this landmark measure, the implications for the state's energy landscape and beyond are immense. With fossil fuel development poised to receive a substantial boost, the outcome of this vote will have a lasting impact on Texas' position as a leader in energy production.