Texas economy

Texas economy will be fine without oil and gas, with green energy jobs: Dallas Fed

  • Texas has slowly moved away from oil and gas, but its economy continues to outperform.
  • The Dallas Fed has said that in the long term, renewable energy will not dampen economic growth.
  • Texas could be a model for what the entire US economy might look like as it transitions to green energy.

President Joe Biden has campaigned to tackle the climate crisis by reducing carbon emissions and steering the country towards greener energy sources. And Texas could show how, in the midst of these changes, the American economy will do just fine.

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Economists Christopher Slijk and Keith R. Phillips recently released a report examining the impact a decline in the state’s oil and gas sectors would have on its economy. Texas has strong ties to the oil and gas industries and emits more carbon dioxide than any US state, according to the Dallas Fed, but while its prominence in the sectors has changed over the years, the impacts long-term economics on the state were relatively insignificant.

And now, even as Texas shifts more toward wind and solar power, growing from 8% to 25% over the past decade, “the state’s economy has continued to outperform the nation” as oil and gas production was declining.

“This experience suggests that the relative strength of the Texas economy may persist for decades to come even if the upstream oil and gas sector experiences long-term decline due to the energy transition,” the economists wrote.

Here are three reasons Texas shows the U.S. economy will do well as it transitions to greener energy:

  1. Texas is already the largest state for wind power. Texas now has more than 150 wind farms, and according to the Electric Reliability Council of Texas, wind power accounted for at least 15.7% of electricity generated in 2017. Despite the decline in oil and gas, Texas continued to be a leader in the energy field. production and presented interesting job opportunities. As Fed economists wrote, “a gradual transition to renewables is unlikely to change the state’s long-term trajectory.”
  2. History shows that the Texas economy has outperformed, despite the boom in wind and solar power and the decline in oil and gas. Oil and gas’s share of the Texas economy has only declined since its peak in 1980. At that time, more than 15 percent of the state’s gross domestic product (GDP) and nearly 5 percent of l State employment was due to the oil and gas sectors. Even the rise of hydraulic fracturing in 2014 – a process of drilling into the ground to extract oil and gas – did not cause a huge increase in demand.
  3. The various uses of oil and gas will continue to provide jobs. Even with full decarbonization, Texas has shown that oil and gas is still used in chemical manufacturing, which has helped boost employment in the sector.

Texas Governor Greb Abbott, however, has been a supporter of the fossil fuel industry. After a winter storm in February shut down the state’s power grid, Abbott blamed frozen wind turbines, telling Fox News’ Sean Hannity that green power “has thrown Texas into a situation where it lacked energy. statewide electricity. fuel is needed.” However, the Texas Department of Energy said the outages were due to a failure to invest in cold weather power sources, including fossil fuel infrastructure.

In Washington, Biden is pushing for the Democrats’ $3.5 trillion social spending bill to pass, including investments to tackle the climate crisis. However, centrist Democratic West Virginia Sen. Joe Manchin opposes the clean energy proposals in the bill and could put those provisions on the chopping block.

The United Nations released a heartbreaking report in August stating that some of the effects of global warming will be “irreversible for centuries, even millennia”, stressing that there is no time to wait when it comes to fight climate change – in Texas or elsewhere.