Texas has long been known as an energy powerhouse, built on a foundation of oil and natural gas. However, in recent years, Texas has become a trailblazer in renewable energy. Unfortunately, the future of Texas energy — from all sources — is threatened by a misguided court decision earlier this year.
In August, the U.S. Court of Appeals for the District of Columbia issued a ruling in City of Port Isabel vs. FERC (Federal Energy Regulatory Commission) that took the unprecedented step of vacating the federal permits of two South Texas liquefied natural gas facilities — the $18.4 billion Rio Grande LNG terminal and Texas LNG — more than a year after they were issued. But the ramifications of this decision extend far beyond LNG. If it stands, the ruling would set a precedent that could derail future development for all forms of energy, and Texas’ position as a clean energy leader could be squandered.
In 2023, wind farms in Texas generated nearly 108 terawatts of electricity, accounting for more than 25% of all U.S. wind energy production, according to the Electric Reliability Council of Texas. If Texas were its own country, it would be the fourth-largest wind producer in the world. Texas also recently surpassed California as the largest solar-generating state in the country, thanks in large part to the Lone Star State more than tripling its annual rate of solar installations between 2020 and 2023.
But energy is only as reliable as the infrastructure that supports it. Building energy infrastructure of all kinds requires navigating a complex regulatory process that can take years to complete, even when the process runs smoothly and the projects don’t encounter significant roadblocks. The D.C. Circuit’s revocation of already-issued permits only adds more uncertainty to this process.
One of the primary challenges for expanding clean energy over the coming decades is building transmission lines to carry electricity from where it’s produced to where it’s most needed. Moving power from wind farms in West Texas and solar farms in South Texas to population centers in Houston and Dallas, for example, will require investing billions of dollars on a grid that has not received significant investment since the 1970s. ERCOT is planning to spend $13.6 billion on transmission projects between 2024 and 2026, but that investment combined with additional planned transmission line upgrades is still predicted to fall short of development needed to meet the state’s 2030 energy demands.
The same is true for other clean energy technologies like carbon capture and storage. Texas, with its vast oil and gas infrastructure and geologic storage potential, is an ideal location for this development, which is why the U.S. Department of Energy has committed billions of dollars toward carbon capture and storage projects along the Gulf Coast. These projects require pipelines to transport captured carbon dioxide to storage sites, but adding permitting uncertainty would delay the buildout of this necessary infrastructure. And that’s on top of the significant delays these projects are already facing from slow permitting for CO2 storage wells at the Environmental Protection Agency.
While there are some who view delaying the development of an LNG plant as a “win” for clean energy, in reality, the D.C. Circuit Court’s ruling imperils the future of all energy projects, Texas renewables included. If a project is suddenly forced to halt construction more than a year after it began — simply because some dedicated opponents kept filing frivolous legal challenges — who would even bother with building infrastructure? Who would risk that level of capital for something so uncertain?
Permits don’t carry any weight if they can be so casually tossed aside.
Texas became a global energy leader by reducing regulatory uncertainty. That incentivized developers to take the initiative and expand infrastructure, which has moved us toward energy independence. The D.C. Circuit Court decision, if allowed to stand, takes us in the opposite direction.
Matt Welch is state director for Conservative Texans for Energy Innovation, a group promoting energy innovation and clean energy policies grounded in the conservative principle of common sense and market-based solutions.
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