Energy policy in Texas

in  Texas

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Fracking in the U.S.
Energy policy in the U.S.
State fracking policy
State energy policy
Glossary of energy terms

Energy policy involves governmental actions affecting the production, distribution, and consumption of energy in a state. Energy policies are enacted and enforced at the local, state, and federal levels and may change over time. These policies include legislation, regulation, taxes, incentives for energy production or use, standards for energy efficiency, and more. Stakeholders include citizens, politicians, environmental groups, industry groups, and think tanks. A variety of factors can affect the feasibility of federal and state-level energy policies, such as available natural resources, geography, and consumer needs.

This article outlines state-level oil and gas regulations, renewable energy programs, oil and gas production, energy usage, energy and electricity prices, fuel taxes, and utilities in Texas.

See the tabs below for further information:

1. Policy: This tab provides information about state regulations on energy production and policies related to oil and gas production, fracking, renewable energy generation, energy efficiency, and net metering.
2. Production: This tab provides information about total energy production by energy source in Texas.
3. Usage: This tab presents information about electricity consumption by energy source.
4. Prices and taxes: This tab presents information about average energy and electricity prices, per capita spending on energy, and fuel taxes.
5. Utilities: This tab presents information about public and private utilities, electricity markets, the types of utilities in Texas, and the electric reliability organizations in Texas.
6. Background: This tab provides information about the types of nonrenewable and renewable energy sources produced and used in the United States, an energy profile of Texas, and a state profile of Texas from the Almanac of American Politics (2016), and economic indicators in the state, such as median income.

## Contents

* 1 Policy
* 1.1 State regulations
* 1.1.1 Injection and disposal wells
* 1.1.2 Fracking
* 1.2 Renewable energy policies
* 1.2.1 Renewable Portfolio Standard
* 1.2.1.1 Compliance
* 1.2.2 Grant programs
* 1.2.3 Loan programs
* 1.3 Energy efficiency regulations
* 1.4 Net metering
* 1.5 Recent legislation
* 1.6 Ballot measures
* 1.6.1 Energy policy ballot measures
* 1.6.2 Utility policy ballot measures
* 2 Production
* 2.1 Total energy production
* 2.2 Nonrenewable energy production
* 2.3 Oil and gas production (2004-2014)
* 2.4 Oil and gas production on federal land
* 2.4.1 Land leased
* 3 Energy usage
* 3.1 Consumption
* 4 Prices and taxes
* 4.1 Energy prices
* 4.2 Energy spending
* 4.3 Fuel taxes
* 4.4 Federal tax
* 5 Utilities
* 5.1 Background
* 5.2 Electricity markets
* 5.3 Electric reliability organizations
* 5.3.1 Texas EROs
* 6 Background
* 6.1 Background on energy resources
* 6.2 Texas energy profile
* 6.3 State profile
* 6.3.1 Presidential voting pattern
* 6.3.1.1 Pivot Counties (2016)
* 6.3.1.2 Pivot Counties (2020)
* 6.3.2 Economic indicators
* 6.4 See also
* 6.5 Recent news
* 6.6 Footnotes

# Policy[edit]

The sections below outline state-level regulations on oil and natural gas production and transportation, the regulation of injection and disposal wells as well as regulation of fracking, renewable energy policies in Texas, including the Renewable Portfolio Standard and grant and loan programs, energy efficiency standards in the state, net metering in Texas, recent legislation in the Texas State Legislature, and ballot measures in Texas.

### State regulations[edit]

The Oil and Gas Division of the Texas Railroad Commission is responsible for regulating oil and natural gas exploration, production, and transportation in Texas. Under state law, the commission is responsible for natural resource management, pollution prevention, and worker safety. The division issues oil and gas permitting and reporting requirements, conducts oil and gas field inspections, monitors industry activities during oil and gas production, and implements programs to convert abandoned wells and sites back to their original conditions by levying fees and taxes on the oil and gas industry. Title 16, Part I of the Texas Administrative Code contains the rules and regulations on energy exploration, production, and transportation.[1]

State regulations cover the following areas. Click on the links below to read more on the specific rules and regulations:

* Oil and gas activities
* Environmental protection
* Pipeline safety
* Surface mining and reclamation
* Coal mining
* Use of compressed natural gas
* Use of liquefied natural gas
* Alternative fuels
* Underground pipeline damage prevention

#### Injection and disposal wells[edit]

Injection wells are shafts in the ground that are used to store and inject fluid such as water and non-hazardous liquids into a reservoir to increase oil recovery. Disposal wells are used to inject wastewater or salt water (brine) produced during oil and gas activities into underground areas where they can be disposed of in accordance to federal and state safety standards.[2]

The Railroad Commission of Texas regulates injection and disposal wells and implements national standards adopted under the federal Safe Drinking Water Act, which requires the protection of groundwater. The commission grants injection and disposal well permits for oil and gas activities, and state regulations require the public notice of proposed injection or disposal wells. In addition, the commission must determine if the proposed injection well is properly constructed for groundwater protection; ensure that wells have required surface casing and cement so all fluids are confined inside a well; and determine that a proposed injection well is not located at least one-quarter of a mile from an improperly completed, improperly plugged, or abandoned or unplugged oil or gas well.[3]

#### Fracking[edit]

Hydraulic fracturing, also known as fracking, is a method of oil and natural gas extraction. The process involves injecting fluid into subterranean rock formations at high pressure. The high pressure fluid produces a fracture network that allows crude oil and natural gas inside dense rocks to flow into a wellbore and be extracted at the surface. The fluid used in this process is made up of sand, water, and other chemical additives. Sand and water comprise approximately 95 percent of the fluid; the chemical additives comprise approximately 5 percent or less of the fluid.[4]

Fracking regulations in Texas include well construction requirements and steel casing and cement requirements. For more information on Texas fracking regulations, click here.

In February 2012, the Railroad Commission of Texas adopted the Hydraulic Fracturing Disclosure Rule (Texas Administrative Code, Title 16, Part 1, Section 3.29). The rule requires Texas oil and gas operators to disclose all chemical ingredients used in fracking fluids. These ingredients must be posted to the website FracFocus.org, a public chemical registry managed by the Groundwater Protection Council (a national group of state groundwater and injection well control agencies) and the Interstate Oil and Gas Compact Commission (a national group of state oil and gas regulators).[5]

### Renewable energy policies[edit]

States have implemented funding and financial incentive programs to subsidize or otherwise increase investment in renewable energy resources such as wind, solar, and hydroelectric power. These programs include renewable portfolio standards, grants, rebate programs, tax incentives, loans, performance-based incentives, and more. The aim of the policies generally involves reducing the cost of renewable energy production for consumers, reducing regulatory compliance costs, reducing investment risks involving renewable energy, and/or increasing the adoption of renewable energy sources by individuals and businesses.[6]

#### Renewable Portfolio Standard[edit]

A Renewable Portfolio Standard (RPS), also known as a renewable electricity standard, is a mandate intended to increase the amount of renewable energy production and use. Under these standards, a utility company can be required by a state to have a certain percentage of its electricity come from certain renewable energy resources. In addition, states may give tax credits to utility companies to fulfill these requirements.[7]

In 1999, the Texas State Legislature passed Senate Bill No. 7, which requires that the state install an additional 2,000 megawatts (MW) of new renewable energy capacity by the year 2015 for a cumulative net capacity of 5,880 MW of energy. The RPS compliance schedule included the following cumulative renewable energy capacity deadlines:[8]

* 2,280 MW by January 1, 2007
* 3,272 MW by January 1, 2009
* 4,264 MW by January 1, 2011
* 5,256 MW by January 1, 2013
* 5,880 MW by January 1, 2015

Using its statutory authority to implement the bill, the Public Utility Commission of Texas in 1999 adopted a rule setting the state's RPS. The commission also set a voluntary target of generating 10,000 MW from renewable sources by the year 2025. Eligible sources of renewable energy include solar, wind, geothermal, hydroelectric, biomass, wave energy, and tidal energy. In 2009, Texas surpassed its 2025 renewable capacity target. In addition, Texas had approximately 13,359 MW of renewable energy capacity in 2013, 95 percent of which came from wind energy.[8][9]

The state’s RPS applies to investor-owned retail utilities, retail electric providers in deregulated areas, municipal utilities, and electric cooperatives. Each retailer or utility receives its share of the mandate based on its share of statewide retail energy sales. The RPS program administrator divides each regulated entity’s total retail energy sales in the state by the total retail sales in Texas and multiples the percentage by the total statewide RPS requirement for a particular compliance period. Further, the commission can require utilities to add to their electricity transmission systems to meet renewable energy mandates. Utilities are allowed to recover the cost of these projects in their electric rates. Beginning in January 2009, large utility customers were permitted to opt out of RPS requirements. As of 2013, 84 large transmission voltage customers opted out of RPS requirements.[8]

##### Compliance[edit]

To measure compliance with the RPS, the Texas Public Utility Commission established a renewable energy credit (REC) trading program in July 2001 and continued until 2019. Utilities are required to procure a particular amount of RECs to show compliance with the RPS. For every megawatt-hour (MWh) of qualified renewable energy source that is measured and verified, such as solar or hydroelectric energy, a retail entity earns one renewable energy credit (REC). A regulated retail entity must retire 1 REC every year for each 1 MWh requirement it has under the RPS. Providers that do not meet RPS requirements face an administrative penalty of $50 per MWh. The RPS program administrator manages an REC account for all regulated participants to track the production, sale, purchase, transfer, or retirement of RECs.[8]

#### Grant programs[edit]

States, nonprofit organizations, and/or private utilities may operate grant programs for renewable energy. These programs may include state or private funding for energy installation costs, research and development, infrastructure and business development, system testing, and renewable energy feasibility studies (studies that look into the potential for renewable energy use in specific areas). Grants can be provided with or without requiring a recipient to match the grant. Additional incentives, such as lower interest loans, may be included with a grant.[6]

As of March 2015, Texas was one of 26 states that did not have state-run, utility-run, or locally run grant programs for renewable energy. See the map below for grant programs by state.[6]

States with grant programs for renewable energy as of March 2015 (Source: Environmental Protection Agency (EPA)

#### Loan programs[edit]

Loan programs may be used to offer lower interest loans or other financing options to individuals and businesses to reduce the upfront costs of purchasing and installing renewable energy technologies. Loan programs may include programs that use payments from earlier borrowers to provide loans for new borrowers, programs in which building owners reduce their energy consumption to pay their upfront costs for renewable energy technologies, and programs that allow individuals with a higher debt-to-income ratio to purchase homes that use less energy, among others.[6]

As of March 2015, Texas was one of 36 states with a state-run loan program for renewable energy technologies and one of 46 states with locally-run, utility-run, or privately run loan programs for renewable energy. See the map below for loan programs by state.[6]

The Texas LoanSTAR (Saving Taxes and Resources) revolving loan program provides loans for retrofitting state, public school district, public college, public university, and tax-district supported public hospital buildings with renewable energy technologies. Borrowers repay the loans with any energy-related cost savings after the technologies are installed. As of January 2014, the program funded around 237 loans totaling approximately $395 million.[10][11]

States with loan programs for renewable energy as of March 2015 (Source: Environmental Protection Agency (EPA)

### Energy efficiency regulations[edit]

In 2012, the State Energy Conservation Office (SECO) in Texas adopted the 2009 International Residential Code (IRC). The code requires all new single-family homes to comply with energy efficiency and water conservation standards. Further details on the 2009 IRC can be found here. In 2011, the state adopted the 2009 International Energy Conservation Code (IECC). Under the IECC, all commercial, industrial and residential buildings over three stories must meet certain energy efficiency standards. Further information on the process of developing and adopting energy efficient building codes can be found here. More information on energy efficiency performances standards in Texas can be found in the Texas Administrative Code. Information on all Texas building codes can be found here.[12][13]

### Net metering[edit]

Net metering is a billing system in which customers who generate their own electricity, usually using renewable sources (such as solar panels) are able to sell their excess electricity back to the electric grid, which is an interconnected network that is used to deliver electricity. This requires electricity to be able to flow both to and from a consumer.[14][15][16]

As of October 2016, Texas was one of nine states without a statewide net metering policy. Along with several utilities in Idaho, several Texas utilities offered voluntary net metering options for consumers as of February 2017. They included the following utilities:[17][18]

Net metering programs in Texas (as of February 2017)

Utility | Creation date
City of Brenham  |  1/31/2011
El Paso Electric |  9/12/2014
San Antonio City Public Service |  09/15/2014
Austin Energy  |  01/01/2000
Green Mountain Energy Renewable Rewards Program  |  5/27/2010
Source: DSIRE, "Net metering programs"

### Recent legislation[edit]

The following is a list of recent energy policy bills that have been introduced in or passed by the Texas State Legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

### Ballot measures[edit]

#### Energy policy ballot measures[edit]

See also: Energy on the ballot and List of Texas ballot measures

Ballotpedia has not covered any ballot measures relating to state and local energy policy in Texas.

#### Utility policy ballot measures[edit]

See also: Local utility tax and fees on the ballot

Ballotpedia has not covered any ballot measures relating to local utility tax and fees in Texas.

# Production[edit]

The sections below include statistics on total energy production in Texas, oil and natural gas production in Texas, oil and gas production in Texas over time (2004-2014), and oil and gas production on federal land, including the amount of federal land leased in Texas for production.

### Total energy production[edit]

The table below provides information on total energy production in Texas in British thermal units (Btu). A British thermal unit is used to measure the heat contained in different fuels. The U.S. Department of Energy defines a Btu as "the quantity of heat required to raise the temperature of 1 pound of liquid water by 1 degree Fahrenheit." Fuels are discussed in terms of Btu to compare fuels with different energy content and prices. For example, one gallon of gasoline equals 120,524 Btu.[19]

Energy production, 2014 (in billion Btu)

State | Biomass | Coal | Crude oil | Nuclear energy | Natural gas | Renewable | Total*
Texas |  43,833  |  576,803  |  6,702,967  |  410,907  |  9,379,513  |  526,915  |  17,640,938
Louisiana |  196  |  35,541  |  396,465  |  181,059  |  2,096,459  |  142,887  |  2,852,607
New Mexico |  3,267  |  400,158  |  717,379  |  0  |  1,355,013  |  42,194  |  2,518,011
Oklahoma |  0  |  20,607  |  736,873  |  0  |  2,659,412  |  155,938  |  3,572,830
U.S. average | 38,759  |  404,181  |  307,301  |  160,980  |  585,731  |  187,132  |  1,684,085
*Total figures were computed by Ballotpedia.
Source: U.S. Energy Information Administration, "Google Sheets API"

### Nonrenewable energy production[edit]

The table below provides information on nonrenewable energy production in Texas. For coal data, the phrase productive capacity refers to the maximum amount of coal that could be expected to be produced in 2014. The natural gas and crude oil production data refer to the amounts of natural gas and crude oil produced in December 2014 and April 2016, respectively.[20][21]

Nonrenewable energy production

State | Coal, productive capacity
(short tons)  | Natural gas
(million cubic feet)  | Crude oil
(thousand barrels)
Date  |  2014  |  December 2014  |  April 2016
Texas |  45,823,585  |  653,385  |  96,908
Louisiana |  3,274,070  |  154,749  |  4,903
New Mexico |  27,400,000  |  93,134  |  12,337
Oklahoma |  1,200,000  |  186,660  |  12,810
U.S. average |  24,874,314  |  43,350  |  4,388
Source: U.S. Energy Information Administration, "Google Sheets API"

### Oil and gas production (2004-2014)[edit]

Note: This section provides information about oil and gas production on private and state-owned lands. Information on oil and gas production on federal lands is accessible here.

The graph and table below provide information about crude oil production in Texas. Information from select surrounding states is provided for comparative purposes.[22]

Crude oil production in Texas and adjacent states,
in thousand barrels

State | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Percent of total 2014 production | 2014 Rank
Texas |  392,714 |  392,601  |  392,481  |  391,270  |  406,007  |  399,344  |  426,749  |  528,806  |  724,187  |  923,561  |  1,157,262 |  36.38% |  1
Louisiana |  83,272  |  75,199  |  73,621  |  76,979  |  72,353  |  67,288  |  67,280  |  68,969  |  70,648  |  71,812  |  68,569  |  2.16%  |  9
New Mexico |  64,517  |  60,964  |  59,454  |  59,180  |  60,143  |  61,143  |  65,377  |  71,286  |  85,218  |  101,373  |  123,623  |  3.89% |  6
Oklahoma |  63,977  |  61,262  |  64,236  |  63,951  |  67,357  |  66,637  |  68,909  |  76,433  |  92,988  |  113,610  |  124,253  |  3.91% |  5
United States | 1,991,394 | 1,891,227 | 1,857,044 | 1,853,166 | 1,830,002 | 1,952,670 | 2,000,861 | 2,060,398 | 2,377,806 | 2,722,171 | 3,180,813 |  \--  |  \--
Source: U.S. Energy Information Administration, "Crude Oil Production"
Note: The data above are field production data.

The graph and table below provide information about natural gas production in Texas. Information from select surrounding states is provided for comparative purposes.[23]

Natural gas production in Texas and adjacent states,
in million cubic feet (MMCF)

State | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | Percent of total 2013 production | 2013 rank
Texas |  5,844,893 |  5,778,864  |  6,043,769  |  6,351,218  |  6,990,087  |  7,847,441  |  7,691,458  |  7,622,271  |  7,958,480  |  8,160,016  |  8,225,291 |  27.41% |  1
Louisiana |  1,511,584  |  1,506,540  |  1,417,497  |  1,475,717  |  1,455,696  |  1,473,920  |  1,635,024  |  2,288,119  |  3,111,749  |  3,028,681  |  2,491,325  |  8.30% |  4
New Mexico |  1,616,179  |  1,644,738  |  1,656,850  |  1,619,528  |  1,555,450  |  1,487,123  |  1,425,222  |  1,341,475  |  1,287,682  |  1,276,296  |  1,271,185  |  4.24%  |  8
Oklahoma |  1,558,155  |  1,655,769  |  1,639,310  |  1,688,985  |  1,783,682  |  1,886,710  |  1,901,556  |  1,827,328  |  1,888,870  |  2,023,461  |  2,143,999  |  7.15%  |  5
United States | 24,118,978 | 23,969,678 | 23,456,822 | 23,535,018 | 24,663,656 | 25,636,257 | 26,056,893 | 26,816,085 | 28,479,026 | 29,542,313 | 30,005,254 | \-- | \--
Source: U.S. Energy Information Administration, "Natural Gas Gross Withdrawals and Production"
The data presented above are gross withdrawals in million cubic feet (MMCF). Production data for 2014 were estimated for some, but not all, states; "--" indicates data were not available.

### Oil and gas production on federal land[edit]

See also: Oil and natural gas extraction on federal land

The federal government leases federally managed land to private individuals and companies for energy development, including crude oil and natural gas drilling, solar energy development, and geothermal energy development. Approximately 166 million acres of federal land were available to be leased for energy development as of December 2014. The U.S. Bureau of Land Management (BLM) is responsible for regulating oil and gas drilling on federal lands in the United States.[24][25]

The table below provides information about oil and natural gas production on federal lands in Texas in 2014. Information from select surrounding states is provided for comparison.[26][27]

Oil and natural gas production on federal land, 2014

State  |  Oil production (in thousands of barrels)  |  Natural gas production (in million cubic feet)
Texas |  273  |  38,250
Louisiana |  340  |  11,125
New Mexico |  57,992  |  646,876
Oklahoma |  343  |  12,504
U.S. average |  2,976.06  |  49,996.92
Source: Office of Natural Resource Revenue, "Statistical Information"

#### Land leased[edit]

Private oil and natural gas companies apply for leases from the U.S. Bureau of Land Management (BLM) to develop energy resources on federal lands. After a lease is approved, the company must submit information to the BLM about how it will conduct its drilling and production operations. The BLM also inspects a company’s operations during production.[28]

The table below provides information about oil and gas-producing leases and acres on federal land in Texas from 2013 to 2015. Information from select surrounding states is provided for comparison.

Oil and gas producing leases and acres on federal land, 2013-2015

State  |  FY 2015  |  FY 2014  |  FY 2013
Producing leases  |  Producing acres  |  Producing leases  |  Producing acres  |  Producing leases  |  Producing acres
Texas |  278  |  166,227  |  272  |  162,102  |  253  |  156,590
Louisiana |  171  |  55,493  |  166  |  54,171  |  165  |  62,070
New Mexico |  6,579  |  3,751,887  |  6,556  |  3,727,864  |  6,535  |  3,697,459
Oklahoma |  957  |  147,341  |  938  |  141,496  |  912  |  134,511
U.S. average |  485  |  257,505  |  483  |  258,996  |  480  |  262,870
Source: U.S. Bureau of Land Management, "Oil and Gas Statistics"

# Energy usage[edit]

The section below includes statistics on electricity consumption in the state by energy type (in 2014).

### Consumption[edit]

The table below provides information about energy consumption by source in Texas in 2014. Information from select surrounding states is provided for comparison.[20]

Energy consumption, 2014 (in billion BtuBtu or British thermal units is a means of measuring the heat contained in fuels. "It is the quantity of heat required to raise the temperature of 1 pound of liquid water by 1 degree Fahrenheit." Fuels are often converted into Btu to make it easier to compare different types of fuels with different energy contents and prices. For comparison, one gallon of gasoline equals 120,524 Btu.[29])

State | Coal | Crude oil and petroleum products | Natural gas | Nuclear energy | Solar | Wind | Geothermal | Hydropower | Wood and wood waste | Biomass
Texas |  1,585,961  |  6,054,161  |  4,219,128  |  410,907  |  5,550  |  380,449  |  2,478  |  3,670  |  90,934  |  214,603
Louisiana |  209,973  |  2,052,439  |  1,563,857  |  181,059  |  1,496  | 0  |  1,842  |  10,366  |  128,987  |  144,404
New Mexico |  215,348  |  246,508  |  256,085  | 0  |  6,595  |  21,633  |  451  |  936  |  9,313  |  17,189
Oklahoma |  336,080  |  556,153  |  665,799  | 0  |  62  |  113,519  |  24  |  13,585  |  28,748  |  42,870
U.S. average |  359,931  |  716,746  |  544,353  |  172,585  |  20,739  |  531,323  |  16,555  |  61,397  |  65,345  |  101,581
Source: U.S. Energy Information Administration, "Google Sheets API"

# Prices and taxes[edit]

The sections below include information on energy prices and spending in Texas, fuel taxes and state taxes in Texas and in neighboring states, and an overview of the federal tax on gasoline.

### Energy prices[edit]

The price of electricity is affected by supply and demand. The supply of electricity is affected by fuel prices, environmental and energy regulations, power plant capacity, weather, and other factors. Demand for electricity also affects the price. Because electricity cannot be stored for long periods of time, it must be produced and used when it is needed. As demand for electricity increases, the price also generally increases.[30][31]

The table below provides information about energy prices in Texas as of April 2016. Information from select surrounding states is provided for comparison.[20]

Note: In comparing dollar amounts across the states, it is important to note that the cost of living can from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis.

Energy prices

State | Natural gas
Dollars per thousand cubic foot  | Electricity
Cents per kilowatthour
Date  |  April 2016  |  April 2016
Texas |  $11.66  |  7.7
Louisiana |  $11.32  |  7.1
New Mexico |  $7.44  |  8.4
Oklahoma |  $10.97  |  7.3
U.S. average |  $11.20  |  10.41
Source: U.S. Energy Information Administration, "Google Sheets API"

Electricity prices can vary depending on the type of consumer. Consumer categories include residential, commercial, industrial, and in some cases, transportation. The ratemaking process is both political and economic. The table below presents information about electricity prices by consumer type in Texas in April 2016. Information from select surrounding states is provided for comparison.[20]

Electricity prices by sector (in cents per kilowatthour)

State | Commercial | Industrial | Residential | Transportation | Average (all sectors)
Date  |  April 2016  |  April 2016  |  April 2016  |  April 2016  |  April 2016
Texas |  7.4  |  4.8  |  11.3  |  7.4  |  7.7
Louisiana |  8.6  |  4.8  |  9.2  |  8.6  |  7.8
New Mexico |  9.0  |  5.6  |  11.3  |  9.0  |  8.7
Oklahoma |  6.9  |  4.4  |  10.9  |  6.9  |  7.3
U.S. average |  10.48  |  7.45  |  13.05  |  10.47  |  10.36
Source: U.S. Energy Information Administration, "Google Sheets API"

### Energy spending[edit]

The table below provides information about energy spending in Texas as of 2014. Information from select surrounding states is provided for comparison.[20]

Energy spending, 2014 (in millions of dollars except per capita spending)

State | Petroleum | Coal | Natural gas | Nuclear | Per capita spending
Texas |  $117,944  |  $3,214  |  $16,884  |  $298  |  $6,025
Louisiana |  $33,806  |  $627  |  $5,792  |  $153  |  $9,766
New Mexico |  $6,171  |  $812  |  $975  |  $0  |  $4,325
Oklahoma |  $13,053  |  $680  |  $3,454  |  $0 |  $5,283
U.S. average |  $17,267  |  $1,322  |  $3,786  |  $574  |  $5,304
Source: U.S. Energy Information Administration, "Google Sheets API"

### Fuel taxes[edit]

Click to enlarge.

Revenue collected by federal, state, and local governments from fuel taxes is usually used to fund transportation infrastructure such as roads and bridges. Some states may charge an excise tax based on how much gas or diesel is purchased. Some states may charge retail tax based on the average price of gas over a certain period. Additionally, some states may charge an environmental tax to be used for environmental projects. The Tax Foundation, which created the map to the right, used data from the American Petroleum Institute, which converted each state's different tax structure into cents per gallon to compare each state's gas taxes. In 2016, gas taxes accounted for 23 percent of the price of gasoline. Crude oil accounted for 40 percent of the price of gasoline, refining accounted for 24 percent of the price, and distribution and marketing accounted for 13 percent of the remainder.[32][33]

The table below provide state taxes on motor fuel in Texas and neighboring states. As of January 2016, Texas levied a 20-cent tax on gasoline and a 20-cent tax on diesel fuel. Texas ranked 42nd in total gasoline taxes (federal and state) and 43rd in total diesel fuel taxes as of January 2016.[34][35]

State motor fuel taxes in cents per gallon, January 2016

State | State gasoline tax | Total gasoline tax | Rank | State diesel tax | Total diesel tax | Rank
Texas |  20.0  |  38.4  |  42  |  20.0  |  44.4  |  43
Louisiana |  20.0  |  38.4  |  41  |  20.0  |  44.4  |  42
New Mexico |  18.9  |  37.3  |  44  |  22.9  |  47.3  |  37
Oklahoma |  17.0  |  35.4  |  47  |  14.0  |  38.4  |  49
U.S. average |  30.29  |  48.69  |  N/A  |  30.01  |  54.41  |  N/A
Source: American Petroleum Institute, "Motor Fuel Taxes"

### Federal tax[edit]

The first federal tax on gasoline was proposed by Secretary of the Treasury Ogden L. Mills under President Herbert Hoover (R) as a revenue generating measure to balance the budget during the Great Depression. A 1-cent tax per gallon of imported gasoline and fuel oil was passed as part of the Revenue Act of 1932 and signed by President Franklin D. Roosevelt (D). The 1-cent tax continued until 1951 when the tax was increased to 2 cents in part to raise revenue during the Korean War. In 1956, the tax was raised to 3 cents to fund the Interstate Highway System. During this time, the Highway Trust Fund was created as a means to fund highway construction. Since 1956, there have been increases to the tax. As of April 2016, the gas tax was last raised by President Bill Clinton (D) in 1993 to 18.4 cents per gallon.[36]

# Utilities[edit]

The sections below include general information on utilities, an overview of utilities and electricity markets, information on the types of utilities in Texas, an overview of electricity reliability organizations (EROs), and the EROs that oversee electricity in Texas.

### Background[edit]

Utilities are firms that own and/or operate facilities to generate, transmit, and/or distribute electricity, gas, and/or water to the public. Electric utilities are commercial entities that own and operate facilities to generate, transmit, and distribute electricity to the public and/or the industrial sector. State and local regulators oversee transmission and distribution charges. Local utilities read electric meters and bill individuals or businesses, generally on a monthly basis.[37][38]

Utilities are defined differently in each state and in federal legislation. Two general types of utilities are private and public utilities. Private utilities, commonly known as investor-owned utilities, provide stocks to investors and sell bonds. These utilities are regulated by state regulatory agencies. State agencies are also responsible for setting retail rates charged by investor-owned utilities, overseeing utility infrastructure, and ensuring that investor-owned utilities respond to customer service demands. Public utilities include member-owned cooperatives or government or municipally owned utilities. Another type of utility is an electric cooperative. Cooperatives are nonprofit businesses voluntarily owned and managed by the individuals and businesses that use their services. They are commonly used in rural areas.[38]

### Electricity markets[edit]

Electricity markets in each state are defined as regulated or deregulated. A regulated market includes utilities that own and manage the power plants that generate the electricity, the electricity transmission lines, and the distribution equipment (such as wires and electric poles). In addition, the utility rates are approved and regulated by local and state agencies. A deregulated market requires utilities to divest ownership in the generation and transmission of electricity. In this market, utilities oversee the interconnection from a meter at a household or business to the power grid and is responsible for billing ratepayers.[39][40]

Depending on the state and/or area, public utilities may provide most or all energy services to homes and businesses, or a state may allow other private electricity providers to transmit and distribute electricity in addition to utilities. For example, one type of private provider is a retail energy provider, which sells electricity in areas with retail competition. The provider purchases wholesale electricity and the delivery services (such as transmission lines) and can price electricity to particular consumers.[39][40]

As of February 2017, Texas was one of 17 states with a deregulated electricity market. Additionally, Texas had the following electric utilities as of February 2017:[41]

* 106 retail electric providers
* 32 investor-owned utilities
* 168 municipal utilities
* 214 electric cooperatives

Complete lists of these electricity providers can be found on the Public Utility Commission of Texas' website.

### Electric reliability organizations[edit]

The Energy Policy Act of 2005 required the Federal Energy Regulatory Commission (FERC) to designate an electric reliability organization (ERO) for the United States. An ERO oversees the reliability of a nation's electric grid. In 2006, FERC granted authority to the North American Electric Reliability Corporation (NERC) to develop and enforce grid reliability standards for the United States. NERC, a self-regulated nonprofit corporation, is authorized to enforce grid reliability standards for all users, owners, and operators of the U.S. electrical system.[42]

NERC works with eight regional reliability organizations to oversee the U.S. electrical system. These organizations, known as regional entities, are composed of officials from investor-owned utilities, federal power agencies, electric cooperatives, and state and municipal utilities. Regional entities enforce NERC and regional reliability standards. Further, they forecast electricity demand and coordinate operations with other regional entities.[43]

#### Texas EROs[edit]

As of February 2017, Texas had four electricity reliability organizations overseeing the state's electricity:[44]

* The Electric Reliability Council of Texas (ERCOT) is a nonprofit organization that manages electric power for most of Texas. As of 2016, it managed electric power for approximately 24 million Texas residents and represented approximately 90 percent of Texas' electric power as of 2016. The Public Utility Commission of Texas and the Texas Legislature have regulatory authority over ERCOT.[45]
* The Midcontinent Independent System Operator manages electricity delivery in eastern Texas.
* Southwest Power Pool manages electricity delivery in the Texas Panhandle (northern Texas) and in northeastern Texas.
* The Western Electricity Coordinating Council manages electricity delivery in western Texas.

# Background[edit]

The sections below include an overview of the types of renewable and nonrenewable energy produced and consumed in the United States, an energy profile of Texas (from the U.S. Energy Information Administration), a general profile of Texas (from the 2016 edition of the Almanac of American Politics), and various economic indicators in Texas.

### Background on energy resources[edit]

Nonrenewable energy sources, such as coal, oil, and natural gas (sometimes known as fossil fuels), and renewable sources, such as hydropower, wind, biofuels, and solar energy, are produced in each state, though at different levels depending on a state's geography, energy consumption, and the raw materials available in a particular state. For example, several states do not have coal, oil, and/or natural gas resources. States that lack these resources import these fuels.[46]

According to the U.S. Department of Energy, oil, coal, and natural gas comprise the majority of the resources used to generate power in the United States. In 2014, the top five energy-producing states were the top five fossil fuel-producing states—Texas, Wyoming, Pennsylvania, Louisiana, and West Virginia. These states' fossil fuel production accounted for approximately 42 percent of U.S. energy production in 2014. States with fewer coal, oil, and natural gas resources generally consume less energy. In 2014, the bottom five energy-producing states—Rhode Island, Delaware, Hawaii, Nevada, and New Hampshire—produced 0.2 percent of U.S. energy and consumed approximately 2 percent of total U.S. energy.[46]

The production of biofuels (liquid fuels created from plant or plant-derived materials) is generally concentrated in the Midwest—states such as Illinois, Iowa, Nebraska, and South Dakota—given the region's agricultural production of crops such as corn, which is used to make ethanol, a biofuel that can be blended with gasoline and used as a transportation fuel.[46]

Other renewable sources are used to generate power in the states include hydroelectric power, which accounted for about half of all renewable energy production in the United States in 2014.[46]

### Texas energy profile[edit]

Texas has many energy-based industries, including oil refineries and chemical manufacturers. In 2014, Texas was the top producer of crude oil and natural gas among the 50 states. The state accounted for approximately 13 percent of U.S. energy consumption in 2014. Texas ranked sixth in per capita energy consumption in 2014. The largest share of the Texas' energy consumption in 2014 was its industrial sector, and the state was ranked first nationwide in residential energy consumption. Moreover, due to the state's population, per capita energy consumption in the Texas residential sector was in the bottom one-fifth nationwide in 2014.[47]

## State profile[edit]

Demographic data for Texas

| Texas| U.S.
Total population:| 27,429,639| 316,515,021
Land area (sq mi):| 261,232| 3,531,905
Race and ethnicity**
White:| 74.9%| 73.6%
Black/African American:| 11.9%| 12.6%
Asian:| 4.2%| 5.1%
Native American:| 0.5%| 0.8%
Pacific Islander:| 0.1%| 0.2%
Two or more:| 2.5%| 3%
Hispanic/Latino:| 38.4%| 17.1%
Education
High school graduation rate:| 81.9%| 86.7%
College graduation rate:| 27.6%| 29.8%
Income
Median household income:| $53,207| $53,889
Persons below poverty level:| 19.9%| 11.3%
Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015)
Click here for more information on the 2020 census and here for more on its impact on the redistricting process in Texas.

* * *

**Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here.

### Presidential voting pattern[edit]

See also: Presidential voting trends in Texas

Texas voted Republican in all five presidential elections between 2000 and 2016.

#### Pivot Counties (2016)

Ballotpedia identified 206 counties that voted for Donald Trump (R) in 2016 after voting for Barack Obama (D) in 2008 and 2012. Collectively, Trump won these Pivot Counties by more than 580,000 votes. Of these 206 counties, one is located in Texas, accounting for 0.5 percent of the total pivot counties.[48]

#### Pivot Counties (2020)

In 2020, Ballotpedia re-examined the 206 Pivot Counties to view their voting patterns following that year's presidential election. Ballotpedia defined those won by Trump won as Retained Pivot Counties and those won by Joe Biden (D) as Boomerang Pivot Counties. Nationwide, there were 181 Retained Pivot Counties and 25 Boomerang Pivot Counties. Texas had one Retained Pivot County, 0.55 percent of all Retained Pivot Counties.

More Texas coverage on Ballotpedia

* Elections in Texas
* United States congressional delegations from Texas
* Public policy in Texas
* Influencers in Texas
* Texas fact checks
* More...

### Economic indicators[edit]

See also: Economic indicators by state

Texas' GDP increased by 5.2 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.[49][50][51]

Between 2011 and 2013, residents in Texas had a median annual household income of $51,752, highest among neighboring states. The state also had the largest portion of residents that earned incomes above 400 percent of the federal poverty level in 2013.[52][53][54][55]

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

Various economic indicators by state

State  |  Distribution of population by FPL* (2013)  |  Median annual income (2011-2013)  |  Unemployment rate  |  Total GSP (2013)†
Under 100%  |  100-199%  |  200-399%  |  400%+  |  Sept. 2013  |  Sept. 2014
Texas |  17%  |  20%  |  31%  |  32%  |  $51,752  |  6.3%  |  5.2%  |  $1,532,623
Louisiana |  19%  |  22%  |  29%  |  29%  |  $40,844  |  6%  |  6%  |  $253,576
New Mexico |  22%  |  20%  |  28%  |  30%  |  $44,472  |  6.9%  |  6.6%  |  $92,245
Oklahoma |  14%  |  24%  |  31%  |  31%  |  $47,282  |  5.6%  |  4.7%  |  $182,086
United States | 15% | 19% | 30% | 36% | $52,047 | 7.2% | 5.9% | $16,701,415
* Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government."
† Median annual household income, 2011-2013.
‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state."
Source: The Henry J. Kaiser Family Foundation, "State Health Facts"

## See also[edit]

* Energy in the U.S.
* Fracking in Texas
* Net metering
* Renewable Portfolio Standard
* Environmental policy in Texas

## Recent news[edit]

The link below is to the most recent stories in a Google news search for the terms Texas energy policy. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Energy policy in Texas - Google News

## Footnotes[edit]

1. ↑ Railroad Commission of Texas, "Oil and Gas," accessed February 28, 2017
2. ↑ U.S. Environmental Protection Agency, "Basic Information about Injection Wells," May 4, 2012
3. ↑ Railroad Commission of Texas, "Injection and disposal wells," accessed February 28, 2017
4. ↑ Frack Wire, “What is Fracking,” accessed January 28, 2014
5. ↑ Railroad Commission of Texas, "Hydraulic fracturing," accessed February 28, 2017
6. ↑ 6.0 6.1 6.2 6.3 6.4 U.S. Environmental Protection Agency, "Chapter 3. Funding and Financial Incentive Policies," accessed March 1, 2017
7. ↑ National Renewable Energy Laboratory, “State & Local Activities,” accessed January 30, 2014
8. ↑ 8.0 8.1 8.2 8.3 DSIRE, "Renewable Generation Requirement in Texas," April 29, 2016
9. ↑ State of Texas, "Texas Renewable Energy Report," July 2012
10. ↑ State Energy Conservation Office, "LoanSTAR Revolving Loan Program," accessed March 1, 2017
11. ↑ Texas Secretary of State, "Texas Administrative Code, Title 34 §19.41-45," accessed March 1, 2017
12. ↑ StateImpact, "Texas Building Energy Performance Standards," accessed February 28, 2017
13. ↑ State Energy Conservation Office of Texas, "Texas Building Energy Codes," accessed February 28, 2017
14. ↑ Database of State Incentives for Renewables and Efficiency, "Glossary," accessed October 22, 2014
15. ↑ Edison Electric Institute, "Straight Talk About Net Metering," September 2013
16. ↑ Call Me Power, "What is the difference between wholesale and retail electricity?" March 12, 2015
17. ↑ DSIRE, "Net metering programs," accessed February 28, 2017
18. ↑ Entergy Texas, Inc., "Net Metering," accessed February 28, 2017
19. ↑ U.S. Energy Information Administration, "British Thermal Units (Btu)," December 15, 2014
20. ↑ 20.0 20.1 20.2 20.3 20.4 U.S. Energy Information Administration, "Texas State Energy Profile," May 19, 2016
21. ↑ U.S. Energy Information Administration, "Table 13. Productive Capacity and Capacity Utilization of Underground Coal Mines by State and Mining Method, 2014," accessed July 19, 2016
22. ↑ U.S. Energy Information Administration, "Crude Oil Production," July 31, 2015
23. ↑ U.S. Energy Information Administration, "Natural Gas Gross Withdrawals and Production," July 31, 2015
24. ↑ Congressional Research Service, "Federal Land Ownership: Overview and Data," December 29, 2014
25. ↑ U.S. Bureau of Land Management, "Public Land Statistics 2014," May 2015
26. ↑ Western Energy Alliance, "Production," accessed November 25, 2015
27. ↑ James M. Inhofe - U.S. Senator, Oklahoma, "Inhofe Introduces Bill to Achieve Domestic Energy Independence Through State Control of Federal Energy Resources," June 26, 2013
28. ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales," accessed October 20, 2014
29. ↑ U.S. Energy Information Administration, "British Thermal Units (Btu)," December 15, 2014
30. ↑ RWE, "How the electricity price is determined," accessed April 21, 2015
31. ↑ Forbes, "How The Price For Power Is Set," December 26, 2012
32. ↑ U.S. Energy Information Administration, "Gasoline and Diesel Fuel Update," accessed April 25, 2016
33. ↑ Tax Foundation, "How High Are Gas Taxes in Your State?" July 23, 2016
34. ↑ Tax Policy Center, "Excise taxes," accessed October 20, 2014
35. ↑ American Petroleum Institute, "Motor Fuel Taxes," accessed April 27, 2016
36. ↑ U.S. Department of Transportation, "When did the Federal Government begin collecting the gas tax?" November 18, 2015
37. ↑ Business Dictionary, "Electric utility," accessed February 28, 2017
38. ↑ 38.0 38.1 U.S. Department of Energy, "A Primer on Electric Utilities, Deregulation, and Restructuring of U.S. Energy Markets," May 2002
39. ↑ 39.0 39.1 Electric Choice, "Map of Deregulated Energy States and Markets (Updated 2017)," accessed February 28, 2017
40. ↑ 40.0 40.1 Allied Power Services, "Deregulated States," accessed February 28, 2017
41. ↑ Public Utility Commission of Texas, "Market Directories: Electric Companies Serving Texas," accessed February 28, 2017
42. ↑ WhatIs.com, "North American Electric Reliability Corporation (NERC)," accessed February 28, 2017
43. ↑ North American Electric Reliability Corporation, "Frequently asked questions," August 2013
44. ↑ Association of Electric Companies in Texas, Inc., "Texas Electricity," accessed February 28, 2017
45. ↑ StateImpact, "What Is The Electric Reliability Council Of Texas (ERCOT)?" accessed February 28, 2017
46. ↑ 46.0 46.1 46.2 46.3 U.S. Department of Energy, "How Much Energy Does Your State Produce?" November 10, 2014
47. ↑ U.S. Energy Information Administration, "Texas State Profile," accessed February 28, 2017
48. ↑ The raw data for this study was provided by Dave Leip of Atlas of U.S. Presidential Elections.
49. ↑ Academy Health, "Impact of the Economy on Health Care," August 2009
50. ↑ The Conversation, "Budget explainer: What do key economic indicators tell us about the state of the economy?" May 6, 2015
51. ↑ Health Affairs, "Socioeconomic Disparities In Health: Pathways And Policies," accessed July 13, 2015
52. ↑ The Henry J. Kaiser Family Foundation, "Distribution of Total Population by Federal Poverty Level," accessed July 17, 2015
53. ↑ The Henry J. Kaiser Family Foundation, "Median Annual Household Income," accessed July 17, 2015
54. ↑ The Henry J. Kaiser Family Foundation, "Unemployment Rate (Seasonally Adjusted)," accessed July 17, 2015
55. ↑ The Henry J. Kaiser Family Foundation, "Total Gross State Product (GSP) (millions of current dollars)," accessed July 17, 2015

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