Testimony: Texas’ economy will benefit under an energy expansion
The following testimony by Senior Policy Advisor Jeremy Mazur was given June 13, 2024, to the Senate Natural Resources & Economic Development Committee on the interim charge to study the impact of federal actions in the energy sector on the Texas economy.
Mr. Chairman, members, my name is Jeremy Mazur and I am a Senior Policy Advisor for Texas 2036. Many of the federal policies described in this interim charge directly affect our energy sector.
Rather than discuss the implications and impacts of these federal policies, I’d like to share some data on what Texas’ energy sector could achieve absent new federal regulations.
Earlier this year, Texas 2036 released our “Future of Texas Energy” scenario models. We did this to gain a better understanding of what the state’s pursuit of different energy pathways would mean for long-term energy production, emissions, and economic growth.
Our scenario models are based on stated energy policies as of last year. They do not include LNG export limits, Net Zero emissions targets, or other federal restrictions.
The one modeled scenario that we think best reflects Texas’ future is what we call an “Energy Expansion,” which is an “all-of-the-above” strategy where all types of energy — including oil and gas, renewables, hydrogen, and others — undergo aggressive cost and technology efficiency improvements in the state’s market.
There are three key findings from this scenario model that I’d like to share here.
First, Texas’ total energy production will grow significantly.
When we look at the data from our Energy Expansion scenario, by 2050 we could see oil production increasing by 36%, natural gas by 77%, and renewable generation by 317%.
Second, higher energy production leads to greater energy exports from Texas.
Between now and 2050, our model indicates that the state’s export of oil, natural gas, and refined products to domestic and international markets will increase. In particular, natural gas exports will grow by 115%, oil by 23%, and refined product exports will increase by 101%.
Again, our models do not assume limitations — such as an LNG terminal pause — on exports.
This export potential reinforces Texas’ salience towards national energy security and points to greater in-state economic opportunities in the form of production, refining, shipping, and the sale of energy products.
Lastly, Texas’ economy will benefit under an energy expansion.
When we look at the data from our models, an “all-of-the-above” Energy Expansion offers higher economic returns for the state when compared to the other modeled scenarios. This includes greater GDP growth, job creation, and tax revenues.
The reasons for this include increased oil and gas production, larger export volumes, lower production costs for the manufacturing sector, and, among others, lower wholesale electricity prices owing to additional renewable generation. Combined, these elements contribute to greater economic growth for Texas in the long-run.
Before I close, I would like to point out that our modeling study did look at emissions. What we found were significant improvements in certain sectors, especially the transportation and electric generation sectors, as well as an improvement in the state’s overall emissions intensity.
Thank you for your time, and I welcome any questions that you may have.