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Advising Texas to Eliminate Fossil Fuels Is Foolhardy

Jan 13, 2021

By Jason Modglin, President of the Texas Alliance of Energy Producers

Apparently, the Texas Alliance of Energy Producers is the poster child for holding on to an antiquated notion that fossil fuels are essential to modern life. After all, the Houston Chronicle used a picture of our buttons for its January 4 online editorial titled “The transition from fossil fuel is an opportunity for Texas.” As President of the Alliance serving 3,000 members, I felt the need to respond.

In its opinion piece, the Editorial Board recommends abandoning domestic production of oil and natural gas to “save the planet.” Somehow, this will magically improve our climate, protect our environment, and force consumers to choose new industries that purport to be green. This is a call for Houston to transform its economy to one dependent upon the Biden Administration’s mandates and largess to survive.

Energy transition should be considered, but not blindly pursued at the expense of this industry and the benefits it provides. The paper of record for the Energy Capital of the World should know better. All energy sources have advantages and disadvantages, and we should weigh those costs intelligently, not claim anything without a “green” label is inferior.

The Board’s editorial is centered on a critical theme and one Texas oil and gas producers wholeheartedly agree with: opportunity. Houston’s dynamic, innovative workforce seizes the opportunity to meet the world’s energy needs every day. They thrive on finding ways to expand energy options.

This includes both exporting Texas crude and liquefied natural gas globally and recognizing that many oil and gas companies have broadened their portfolios to include sources such as wind, solar and biofuels to meet their customer’s needs.

But you cannot eliminate oil and natural gas without also eliminating the critical building blocks necessary to power our economy. Beyond heating our homes and fueling our transportation, petroleum products have enabled countless advances in medicine, manufacturing, agriculture, chemical production, and construction. Each industry has the tools they need to deliver affordable products to meet America’s and the world’s demands. For example, without petroleum, how would we meet the demand for plastics and chemicals so critical to our public health response to COVID-19?

Since the editorial board is not calling for an end to these uses, we should assume they support relying on foreign sources of crude and natural gas to meet our needs. This is terrible economic policy, undoing the gains we have made over the past decade towards energy security. It would make us dependent again on the Middle East and other foreign sources such as Russia and Venezuela to meet global demand.

It would also be an environmental disaster since those countries have far worse environmental records than the United States. They allow for venting and flaring at rates far exceeding our own. If you support the goals of the Paris Climate Accord, then you should embrace domestically sourced natural gas: It has provided solutions to reduce U.S. emissions and put us on a path to meeting our emission reduction goals.

Contrary to the editorial’s suggestion that small domestic operators are somehow stopping global energy transition, they are always moving forward with ingenuity, innovation, and character. Independent operators are good stewards of the land, value a diverse and talented workforce, and put personal accountability first with every handshake or gate sign. Their stories deserve more coverage rather than being asked to endorse unrealistic litmus tests designed to put an end to their livelihoods in domestic oil and natural gas production.

Likewise, the real world does not lend itself to being exclusionary of different types of energy. Renewable sources of electricity rely on natural gas as backup to reliable power delivery. In addition, oil and gas producers are more frequently turning to renewables for energy needs when the electricity grid fails to meet their demands.

The board should know that the taxes generated by the Texas oil and gas industry overwhelmingly support rural government and help the state afford new investments in road and water infrastructure without considerable tax increases. The outlays from oil and gas severance taxes that Texas legislators made this past session supported retired teachers and the rebuild from Hurricane Harvey.

Finally, the board should take note of the critical role oil and gas taxes and state leases have provided public and higher education funding. If we are to transition, we should consider the amount of additional taxes renewable energy sources should start paying.

Opportunity is abundant and Texas’ oil and natural gas producers are finding ways, even under COVID, to produce clean, abundant, and affordable oil and natural gas. The high standards we have in the United States should be replicated the world over, and domestic producers are not afraid to see those standards raised.

Rather than calling for their end, policymakers should be asking how we can continue to lead by reducing emissions, meeting the world’s energy needs, and supporting our Texas economy. We urge the Chronicle to take up that challenge.