Like the (probably apocryphal) village destroyed that it might be saved, Texas’ legislature is rampaging across the state’s energy industry purportedly to preserve it. One measure in particular, which just passed the state senate, strikes a blow not just at renewable energy but also the quintessentially Texan prerogative of what you do with your own acres.
The bill in question, SB624, is ostensibly permitting reform for renewable energy projects but, on closer examination, turns out to be a red-tape dispenser. Anyone seeking to develop a wind or solar project would be required to get a permit from the state and an environmental impact statement from the Parks and Wildlife Department. Upon receiving an application, the utility regulator must then inform “affected parties, including any property owner within 25 miles” and offer to hold a hearing for them, plus notify any county judges in the same radius if requested (for projects above 15 megawatts, which is basically all of them).(1) In addition, permitted facilities must be at least 100 feet from any property line and 200 feet from any habitable structure unless written permission has been obtained from each neighbor (those distances appear to have shifted around in drafting). For a wind project, that required setback increases to 3,000 feet, or a bit more than half a mile. And so on.
If just reading all that makes you think “Phew! Glad I’m not a renewables developer in Texas!” then you’re getting the idea.
The irony here is that the bill’s Republican sponsors have borrowed a tactic from environmentalists. Over the years, those seeking to block things like new oil and gas wells or pipelines learned that, rather than simply try to block access to sites, it was far more effective to tie up those projects in legal and regulatory purgatory. For example, the Keystone XL pipeline, although officially killed off by President Joe Biden, had been held up for 13 years by then. Time is, of course, not friendly to project developers, whittling away at their returns and will to live as it drags on. This proposed Texas reform would do much the same thing by creating points of friction among agencies, county authorities and neighbors.
The fact that this is directed only at wind and solar projects is striking on several levels. First, if it need be said, renewables, especially wind farms, may present aesthetical issues and also a (relatively small) hazard to birds. On the infeasibly giant other hand, however, gas-fired power plants aren’t exactly Taj Mahals and come with associated impacts on local air quality, water usage and, of course, carbon emissions. Any energy project usually comes with tradeoffs and requires careful planning in sensitive areas. Singling out cleantech, however, looks a tad unreasonable.
Second, as I wrote here, while Texas is known as an oil and gas powerhouse, it is really an energy powerhouse and that very much includes renewables. Kick-started by legislation signed by that famous tree-hugger, then Governor George W. Bush, Texas’ wind-power sector has led the US for many years. It is catching up fast to California on solar power too. Indeed, over the past three years, Texas installed almost 20 gigawatts of wind and solar capacity, more than any other state and roughly a quarter of the entire US build-out, according to figures compiled by ClearView Energy Partners, a Washington-based analytics firm.
Those projects have saved Texas’ homeowners and businesses money on wholesale power prices, especially during last year’s gas-price spike, and also provide royalties and local taxes where they are hosted. Texas’ abundant resources of open land, high wind and sunshine also make it a magnet for the extra incentives provided by the Inflation Reduction Act; indeed, if the state finds a way to knock those back, it’s not like many other states are in a position to pick them all up. In addition, wind and solar generation employs almost 39,000 Texans. When an industry is doing that well, why tailor-make roadblocks to its continued success?
Thirdly, since when did Texas conservatives fall in love with big government? Or allowing neighbors to dictate what you can do on your ranch?
That last point may yet prove too much and prevent SB624 being passed in the Texas House. The current legislative session has been proposing various energy-market reforms that overturn supposedly bedrock principles in Texas; for example, a planned public gas-fired power plant fleet funded by ratepayers. In theory, these all trace back to the terrible blackouts of February 2021; as drafted, they look designed chiefly so as to not let a good crisis go to waste.
As the energy sector changes, state laws will necessarily change, too. But the naked tilt against renewables on display here also comes in the context of nationwide Republican ambivalence or outright hostility to the sector, even where it doesn’t jibe with reality (hello Kentucky). With any luck, Texas will recognize SB624 for what it is, consider what it means for property owners and economic growth, and keep it at least 3,000 feet from the governor’s desk.
More From Bloomberg Opinion:
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(1) Of 120 planned solar and wind projects in Texas listed in the Energy Information Administration’s EIA-860 report for March 2023, 110 are above 15 megawatts of capacity. The median capacity is 200 megawatts.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Liam Denning is a Bloomberg Opinion columnist covering energy and commodities. A former investment banker, he was editor of the Wall Street Journal’s Heard on the Street column and a reporter for the Financial Times’s Lex column.
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