Texas Positive Response to Climate Change

by

Howard Adelman

Texas is not like Bangladesh. Bangladesh has a huge population and is the state most susceptible to the impacts of climate change. Given its low elevation and severe tropical storms, irreversible processes already underway guarantee massive numbers of environmental refugees from Bangladesh. Given the endemic corruption in the state, one can expect political and economic destabilization and a breakout of riots. Texas, however great the crisis it faces, is far from a basket case.
Yesterday, I wrote about aquifers. Texas has a detailed state-wide map of its aquifers and of all the wells that tap into them, the amount of water each takes out and any problems with the quality of that water. California, in contrast, knows next to nothing about its aquifers. With a history of water wars within the state and against other states, well-drilling records are not accessible to the public. Texas has a system for regulating groundwater use; California, though it is considering such measures, lacks such regulations. I begin with aquifers, not simply because I discussed them in the last blog, but because the aquifer regime in Texas speaks to the issue of Texas being an anti-regulatory state rhetorically. But a system of regulations that address the issue of the consequences of climate change already exist even if successive Texas governments denounced the climate change thesis as a hoax.

With the exception of minor aquifers that supply 3% of Texas water, nine aquifers supply 97 percent of the groundwater used in Texas with different annual pumping rates, recharge rates and projected safe annual availability rates to ensure that water quality is not affected.

1990
Pump Rates 1995
Pump Rates Annual Recharge Projected Safe Annual Yields
Ogallala 5.55 6.22 0.30 3.81
Edwards (Balcones) 0.53 0.47 0.44 0.44
Edwards-Trinity 0.19 0.25 0.78 0.78
Carrizo-Wilcox 0.45 0.49 0.64 0.85
Trinity 0.19 0.19 0.10 0.11
Gulf Coast 1.23 1.15 1.23 1.23
Others 0.32 0.39 0.43 0.97
TOTAL 8.56 9.16 3.92 8.19

One figure stands out. By far the largest aquifer source, Ogallala, has a projected safe level of extraction of 3.81 but a pumping rate twice that. This is an issue of concern to all Texans no matter what party or what their position on climate change. It is, I believe, the basis for cooperation on a number of resource issues that cross party lines. Further, it is an indicator that public policy on water as well as on energy sources will be based on pragmatic rather than ideological positions. Tough the state is ideologically anti-regulation, it has no trouble introducing regulations to handle issues on which there is consensus.

In a 2014 report (http://gov.texas.gov/files/ecodev/Renewable_Energy.pdf) on “The Texas Renewable Energy Industry, Texas is the No. 1 provider not only of wind energy, but of biofuel production, ranking number 6 in the world compared to all other countries as a source of renewable energy. Texas hosts the largest biomass power plant and the largest biodiesel plant in America and has the second largest number of workers of any state employed in the renewable energy industry. Texas is on schedule to have the largest solar PV R&D facility at Texas A&M and the nation’s largest 400 MW solar plant.

In terms of renewable energy, among American states, Texas ranks:
No. 1 in wind energy capacity
No. 1 in wind energy-related manufacturing
No. 1 in wind industry employment
No. 2 in total renewable energy employment
No. 1 in biodiesel production
No. 1 in solar potential
No. 6 in solar energy industry employment
No. 4 for clean energy-related patents.

How can a state governed by climate deniers be so advanced in renewable energy production and innovation? How can a state which has been so reliant on fossil fuel energy resources (it has the largest oil and gas industry in the country) also develop the largest capacity for renewable energy? In 2013, Texas ranked third in the nation by Ernst & Young in terms of the Renewable Attractiveness Indices, primarily based on its wind and solar energy production. Such a development seems counter-intuitive. Western Texas with its high plains and coastal winds was responsible for supplying 76% of renewable energy consumption in Texas in 2011. That percentage has continued to grow. Renewable energy industries, that began to take off in 2005, have experienced amazing growth, helped by a state-wide electrical grid that escapes any intervention of federal regulation since it exists solely within the state, reinforcing the state’s self-identification as an anti-regulatory state. With deregulation, competition increased as customers were allowed, even encouraged, to choose their electricity provider, even opting for companies that supplied electricity only from renewable energy sources. Costs have fallen and services increased.

There are several factors. Texas offers a low regulatory market for entrepreneurs. It takes at most 3 years to get approval for a project; the estimated time in California is 7 years plus. As a result, Texas, an anti-climate change state, has 2.5 times the production of renewable energy as California, a state steeped in incentives, regulations and programs to promote renewable energy. Secondly and perversely, Texas is not ideologically wedded to renewable energy. It is wedded to diversification and security in energy production. It couches these principles, not in terms of efforts to counter climate change, but in an ability to respond to changing economic and political conditions.

This does not mean that the state played no part in this robust environment for developing sources of renewable energy. Standards were set as well as targets with progress left to the private sector. Targets were surpassed in five years rather than the twenty years planned. Texas set up an investment fund to create jobs in the renewable energy field and a technological fund to invest in innovation in the renewable energy field. The state offered property tax exemptions and programs of renewable franchise tax deductions to provide incentives for renewable energy production. Texas now uses Smart Grid Technology to make energy distribution efficient.

In sum, money and profits rather than ideology have determined the extraordinary advances in renewable energy in Texas without the backlash of fears of job losses as renewable energy replaces and displaces fossil fuel energy sources. Most significantly, the cost of energy in Texas runs from one half to one-third of the cost of electricity in California while Texas has almost half as many employees as California employed in renewable energy companies. Further, the rural population of West Texas has been incentivized by rents for wind farms that are much higher than they could get from any other source. Further, there has been a spillover effect into manufacturing as companies engaged in wind energy production have become established to develop and improve the equipment needed for the extensive wind farms.

I have focused on wind sourced renewable energy rather than solar because it is in this area that Texas has a natural advantage. But solar sources are also being developed. In all areas of renewable energy, costs have dropped dramatically so that the only fossil fuel that is still competitive with efficient renewable energy production facilities is natural gas, and even here renewables are expected to overtake gas as the economic energy source in the very near future. I have also ignored the production of energy via nuclear plants. South Korea now gets half of its energy from such sources and the plants are considered to be among the safest in the world.

There is another factor that benefits renewables. Fracking to recover oil and gas uses water and water, if properly priced, should be more expensive than the fossil fuels obtained. Given the severe shortages of water, there is a strong collective incentive to shift to renewables without getting into a debate over the scientific validity of climate change. In some countries, like Israel, gas sources from the immense gas field off its coast will be used to make fresh water and help refill the aquifers, not only in Israel but in the West Bank and Jordan.

In sum, renewable energy sources have become very competitive in cost, are on route to displacing fossil fuels, have been a catalyst for innovation and at a time scale much shorter than anticipated ten years ago. Does that mean state regulations and incentives are not needed? Not at all. But they may not be needed as much as we previously believed. Research documenting progress in the development of renewable energy sources, in encouraging research itself, in attracting capital, in training labour and in fostering the development of renewable energy sources may be much more important than imposing carbon taxes. Far less regulation may be required, perhaps addressed to very different issues. Pull factors may be more helpful than push factors. If a carbon tax seems to still be needed, perhaps the rationale merely needs to be that fossil fuels pay the full cost of their employment and not just of their extraction.

Detaching indices of energy innovation and development, particularly in terms of renewable energy, from incentives for environmental innovation to counter climate change may be the best route. Uncoupling that which never really required coupling perhaps offers a route out of the climate change crisis.

Of course, Texas has had many natural advantages compared to California. Wind capacity is 45% greater than in California, so it is no surprise that Texas is the leading state for wind energy production. However, California (along with Oregon and Washington) remains the state which has been most innovative in both the environmental as well as the renewable energy sector. Perhaps in Texas, bolstering the research capacity may be a better way to deploy capital resources.

Thus, the fact that Donald Trump suffers from mindblindness about climate change may be beside the point. He described environmentalists as romantic tree huggers in his 2015 volume, Crippled America. But those battling climate change need not be ideologues or puritans in addressing the resolution rather than the depiction of the issue. If they are not, then they might be far more open to partnering with entrepreneurs and the private sector rather than relying on a government regulatory regime as the prime mode of making progress. If anti-tax, anti-subsidy and anti-regulation Trump decides to eliminate the two key tax credits, the renewable energy sector might be set back. But the sky will not fall in. There are enough incentives in place already. Enough players as well as enough momentum that the replacement of fossil fuels by renewables might be slowed down, but it will not be reversed.

The apocalypse will be avoided.

Is this true? Or is this just another expression of vain hope? After all, both wind and solar are not yet cheaper than gas. Remove the two U.S. federal tax credits and they will be even more expensive and make oil competitive. Inertia, however, is there, not the inertia of inaction but the inertia of continuous movement. If in Texas, just over 100,000 are employed in the renewable energy field, 600,000 are employed across America. (U.S. Energy and Employment Report) In equipment manufacturing and solar installation, “solar electric generation technologies employ about 209,000 workers across the nation; an additional 91,000 workers also spend some amount of time working with solar technologies. In the U.S., the solar sector has grown by just over 20% between November 2014 and November 2015, and employers expect to increase total employment by another 15% over the coming 12 months.” (p. 28)

“Wind generation firms employ just over 77,000 workers. The majority of employers reported difficulty hiring qualified workers over the past 12 months; about seven in ten reported hiring difficulty, while 18% note it was very difficult to find qualified applicants. The most cited reason for difficulty was lack of experience, training, or technical skills (44%), followed by insufficient qualifications, certifications, or education (33%) and competition or a small applicant pool (19%). Firms report the most difficulty in hiring for management positions (27%), as well as engineers (27%) and sales, marketing, or customer service representatives (16%).” So the most important impediment to growth in the industry may be skills shortages.

Skilled labour shortages are not only a problem for the renewable energy field but for the fossil fuel industry as well as construction and installation. “Over three‐quarters of construction and installation firms (77%) report hiring difficulty over the past 12 months; three in ten (32%) note it was very difficult to find qualified applicants. Almost half of all firms surveyed note that lack of experience, training, or technical skills (43%) was a significant reason for hiring difficulty, as well as insufficient qualifications, certifications, or education (33%). Construction firms encountered difficulties trying to find installation workers (30%), technicians or technical support (26%), and electricians or general construction workers (25%). “This is where government intervention is most important – in education and training.

And this does not touch the manufacturing and the distribution sectors as well as professional and business services connected to energy, particularly the renewable energy sector. Of course, renewables still represent only 10% of the energy market. Coal alone is 18%. Gas is over 27% and petroleum represents almost 35% of the market. The rate of growth of renewables, however extraordinary, may not be nearly sufficient to offset the fossil fuels within a reasonable time. This is why the renewable sector requires a quantum push. But if that push comes from demands and penalties, political resistance and insufficient and inadequately trained personnel might undercut any push. The changeover will take time no matter how it is accomplished. Encouragement of and impetus from the private sector may be the more reliable force for ensuring rapid change. In any case, at least in Texas, wind energy has become cheaper than coal or oil and this will soon be the case with even natural gas.

If Trump promotes infrastructure, that means renewing the electrical grid to better accommodate solar and wind energy sources and the distribution of that energy from areas of economic production. What if Trump cancels the Production Tax Credit, the subsidies on costs of renewables for the first ten years, or the Investment Tax Credit subsidizing both consumers and manufacturers of renewable energy? The Investment Tax Credit will not phase out until 2019 and the Investment Tax Credit not until 2023. The subsidies are probably sufficient to get renewables over the hump so that they become more than competitive across the board in most areas of America, especially true if the subsidies for coal, oil and gas are also phased out at the same time. In any case, cancellation would meet strong resistance from Congressional Republicans since these two measures were introduced in the two Bush regimes.

As the report by Maggie Koerth-Baker on renewable energy published two days ago, and sent to me by my eldest son, pointed out, climate change is politically contentious, but energy change is not. 73% of Americans favour renewables replacing fossil fuels, including a majority of Republicans. Is that report naïve, as some ecologists contend? Those critics tend to be the puritans and the ideologues who only have faith in government initiatives and are suspicious of the private sector providing a significant impetus. But Texas suggests otherwise.

One of my other sons sent me another article by Michael Webber published yesterday in The New York Times arguing convincingly that “The Coal Industry Isn’t Coming Back” in spite of The Donald’s promises that he made to the West Virginia ex-coal miners. To repeat, natural gas beat coal, not Washington. And it is illusory to believe that Trump can and will resist these market forces. As in many other areas, expect Donald Trump to rely on lying and circus entertainment to distract the many West Virginians that voted for him.

Donald Trump may bring the American economy to its knees. Donald Trump might even instigate World War III or at a minimum expand violence around the world. But it is highly unlikely that he will now be able to impede the momentum behind enormous growth in renewable energy sources, even if he wanted to try. And there is little reason for him to make that effort.

One of my readers, who appears to be a critic of tree huggers, wrote, “in the field of climate science there are no eloquent scientists that speak intelligently or regularly as experts on this subject in North America.” This is blatantly false and reinforces the climate change deniers. He wrote, “Howard, where are the people who are proving their scientific theories in mass media? Up until now, the load is left on the inferior shoulders of politicians and now philosophers.” However, all recognized scientific associations endorse the enormous danger of climate change and link it with the use of fossil fuel. “Observations throughout the world make it clear that climate change is occurring, and rigorous scientific research demonstrates that the greenhouse gases emitted by human activities are the primary driver.” (2009) The American Association for the Advancement of Science in 2006 issued a bulletin that stated that, “The scientific evidence is clear: global climate change caused by human activities is occurring now, and it is a growing threat to society.” In 2012, the American Meteorological Society proclaimed that, “It is clear from extensive scientific evidence that the dominant cause of the rapid change in climate of the past half century is human-induced increases in the amount of atmospheric greenhouse gases, including carbon dioxide (CO2), chlorofluorocarbons, methane, and nitrous oxide.”

The conclusions are unequivocal. Climate change deniers simply live in an alternate universe that is a fool’s paradise. Nevertheless, the forces underway are sufficient to get around troglodytes and self-deceivers like Donald Trump. That same correspondent wrote that the hole in the ozone layer and its growth proved to be a fiction. It was not. The banning of freon (R-12, R-22 and CFC-122 refrigerants) in 1995 reversed the process. My correspondent also wrote that, “Strangely though, carbon usage to create energy to create electricity will vanish soon. New solar science in Saudi Arabia is so revolutionary that the Saudis believe their solar energy creation will allow them to generate enough electricity that petroleum will cease to be the Saudis largest export. Bell Laboratories is leading a plan to have the world’s arid areas to create massive solar electrical plants, sufficient to stop usage of carbon in the whole world of creating electricity.” The only fault with this statement is that it is not strange but becoming the new norm.

What about my claim that the private sector initiatives already underway with sufficient momentum will prevent Armageddon? No guarantees. Of course, Donald Trump would not agree with this. He is a climate change denier. This does not mean that his business model will not threaten to bankrupt America because of greatly reduced taxes alongside enormous increases in public expenditures. His economic policies will accrue to his associates, the media interventions he proposes and his new bankruptcy laws will create enormous distortions. Renewable energy replacement may not proceed at the same pace as if it had enormous government backing. But deregulation may, in certain ways, help such developments if Texas is any indicator, in spite of climate change deniers. My only claim is that there is enough momentum that I for one do not have to despair about Trump reversing the replacement of fossil fuels by renewables. I may despair about Donald Trump in a myriad of other ways, but the fact that he is a climate change denier says more about his persona than it does about impeding significantly changes underway in the energy sector.

With the help of Alex Zisman