By John Hall, HARC President & CEO
Texas missed an opportunity this legislative session to extend our energy leadership position for generations. But there’s still time.
I’m not talking about oil, gas, wind, or solar – though all of these will be important parts of Texas’ energy future. I’m talking about carbon management, a burgeoning expansion of the energy industry born from a shifting global energy market.
Carbon management refers to the capture, transport, conversion, and/or sequestration of carbon dioxide. Texas already leads the nation in the number of carbon storage wells, and industry insiders say more carbon, much more, is on the way as the energy industry expands and responds to global demand.
That’s because carbon is becoming increasingly important to energy producers, users, and importers around the world. Oil companies use it to maximize the production of aging wells. Individual countries and trade blocs are prioritizing the life-cycle emission intensity of the energy they buy. Large energy users, like power plants and heavy industry, are seeking ways to reduce emissions from their use of fossil fuels. The financial success of the nascent hydrogen industry, which is already attracting investments in Texas, is also reliant on successful carbon management.
Texas stands to gain greatly from this global shift. Texas’ geological carbon storage potential is too great for the global energy market to ignore. In addition to the number of existing carbon wells, we lead the nation in unused geological capacity. According to the Department of Energy, Texas has over 1,655 billion metric tons of storage resources, or more than 4,000 years of current annual carbon emissions. We simply have more places to store carbon than anyone else, and we lead the nation – and most likely the world – in the kind of energy experience and infrastructure required to capture and store carbon.
The energy industry already knows all of this. Analysts expect carbon storage in Texas to increase by up to 500 million metric tons by 2050. The National Petroleum Council projects that between $15 and $150 billion will be invested in carbon management in Texas through 2050, producing thousands of new jobs and more than a billion dollars a year in new tax revenue.
All of this is promising. But doing it right will require a strategy Texas leaders have not yet designed.
The Cynthia & George Mitchell Foundation, HARC, and a broad group of stakeholders from the oil and gas industry, other businesses, academic, civil society, and environmental organizations have been examining the potential benefits and risks of this emerging new energy sector and the questions it poses for Texas leaders.
For example, how will Texas responsibly maximize the economic benefits of this energy expansion – not just for the companies but for the landowners and communities where it will occur?
Who will be responsible for safety or environmental failures? Carbon dioxide doesn’t explode like natural gas, but extreme leaks can be deadly.
How will communities be protected from these impacts, and who will enforce the rules and guidelines?
Today, carbon capture, transport, and storage are regulated by several rules, including some enforced by federal bodies like the Environmental Protection Agency and Department of Transportation. However, federal law allows states to develop their own rules, permitting procedures, and enforcement schemes as long as they meet the standard of protection outlined in federal laws.
This is called primacy, and it’s fairly simple and popular with energy companies. Most would rather deal with Texas rules than the federal government. Just this week, EPA administrator Lee Zeldin said Texas is best qualified to enforce environmental and safety rules, and he may be right. But a hasty and insufficient primacy scheme poses significant risks that could cause more harm than good and slow industry’s carbon investments here.
In other words, “getting primacy” is not enough. Texas has to address some critical questions if its management of carbon is to attract long-term industry interest and protect its communities, environment, and drinking water resources from accidents or failures. There was some movement this session about Texas primacy, but not enough to resolve the issue. That leaves the interim between this and the next session as a critical chance to address some fundamental primacy questions. For example,
None of these are simple questions. But their answers are critical if we are to seize this opportunity while protecting and benefiting Texas communities. Texas shouldn’t wait until the next session to get ahead of the carbon boom. We should start now.
