Energy Exchange

Steven F. Hayward and Kenneth P. Green’s report “Texas Energy and the Energy of Texas” written for the Texas Public Policy Foundation and published last week is pseudo-economics underwritten by the Koch brothers (some of the world’s biggest polluters).  The report simply ignores the health and economic costs of the pollution caused by coal production.

Most egregiously, the report claims that “only modest Nitrogen Oxides (NOx) reductions – if any – [will] be achieved by switching from coal to natural gas” (page 11).  The fact is that in 2009, using data from the EPA’s public emissions database, natural gas power plants in Texas emitted 73% less NOx than did coal-fired power plants per unit of electricity produced.  In addition, reducing Texas’ use of coal by switching to natural gas would reduce emissions of Sulfur Dioxide (SO2) by 99.9% and eliminate 100% of power plant mercury emissions.   These estimated environmental benefits say nothing of the economic benefits of new jobs related to natural gas exploration and production as well as increased royalties and taxes for the state.

Every year of delay in a switch to natural gas means Texas sends another $1.91 billion to out of state to coal companies in faraway places like Wyoming.  It protracts the challenge to cities like Dallas-Ft. Worth, San Antonio, Houston and Austin to comply with federal clean air standards, making it harder for them to attract new businesses and increasing the cleanup burden for businesses already located in Texas.  

I have one thing to say in response to Hayward and Green’s “If It Ain’t Broke, Don’t Fix It” conclusion:  Come down and tell that to the children losing funding for health, education and wellness programs, their mothers and fathers who fear losing their state jobs or the almost 4 million living with lifetime asthma in Texas.

We want to commend  Lt. Governor David Dewhurst who announced his interest last week  in increasing Texas’ use of its abundant natural gas resources by using market-based incentives to shift power plants from burning coal to natural gas.

This move would have a tremendous impact on the Texas economy when we need it most.  We can finally stop the one way train filled with the $2 billion Texas sends to other states every year in exchange for coal that provides no real benefit to our economy and pollutes our air.  Natural gas will help create jobs through exploration, construction and maintenance of new facilities.  It is homegrown and could help solidify Texas’ continued energy dominance as we reduce our dependence on imported fossil fuels and focus on Texas’ domestic energy resources, including renewable energy.  

Texas could maximize the economic benefits of natural gas if the Legislature would adopt proposals to reduce the unnecessary waste of natural gas.  An October 2010 report by the US Government Accountability Office says that 4.2% of gas produced on federal leases is lost through venting or flaring.  And at least 40% could be captured with available technologies that pay for themselves with the additional revenue from selling the captured gas.  As noted in the Comptroller’s recent “No Regrets” report, changing state policy to require the economic capture of vented and flared gas – meaning that 40% of the 4.2% now vented or flared would be captured — could enable the state to collect an additional 1.7% in income from royalties and severance taxes.   We estimate that this would translate to a range of $50 million to as much as $100 million for the state over the biennial budget period.  As the 82^nd Legislature scours the budget, program by program, those millions of dollars mean more teachers in classrooms or more doctors in our hospitals.