From black gold to green power: Texas, weirdly, is leading America's clean energy future

US Highway 83, running between North Dakota and Texas, cuts America in half. The road runs mostly through rural, isolated parts of the country, which has earned it the nickname the "Road to Nowhere."

John Davis, a roofer and rancher in Menard, Texas, is trying to make his little slice of US-83 a "somewhere" for road trippers, freight truckers, hunters, and a smattering of locals. Davis bought an old gas station about a year ago and has spent his free time turning it into a farmers market, rest stop, and gathering place. Menard Station opened in September and is gaining a fan base.

On Saturdays, Davis' family heads down to the Station to serve customers Wagyu steak burgers from their ranch outside of town, where seven white wind turbines tower over the cattle, sheep, and goats that graze in the grassland. The giant turbines are also the reason that Davis was able to open up the Station: In 2018, he signed a deal with RES Americas, which was developing 43 wind turbines in central Texas. The Davis' 1,300 acres of windy prairie were an attractive site for some of the turbines, which now crank out 24 megawatts of power.

"Everybody else struck oil. I struck wind," Davis told me.

Deals like Davis' have made Texas — America's oil capital for more than a century — the top producer of renewable energy in the US. The state has long generated the most wind power and is second only to California as a solar-energy producer. While fossil fuel still reigns supreme in the state's energy mix, wind and solar account for a growing share of the total. As of October, wind and solar met between 25% and 41% of Texas' energy demand, depending on the month, according to data from the state's grid operator ERCOT. Add in nuclear power, which doesn't produce greenhouse-gas emissions, and green energy met upward of 50% of the state's demand in some months.

The rapid rise of green energy in deep-red Texas couldn't come at a better time: The state's population is growing and the strain on the electrical grid is only getting more intense. But the boom has also triggered a Texas-size showdown: Gov. Greg Abbott and a group of his fellow Republicans in the state legislature launched a campaign to prop up fossil fuels and penalize renewables, arguing it would make the grid more reliable. Critics aren't convinced that subsidizing fossil fuels will solve the state's electricity crunch.

The high-stakes battle for Texas' energy future is a microcosm of how tricky America's green transition is shaping up to be, especially when politics are involved. Slowing down renewable energy could cost Texas in the long term, both economically and socially. Billions of dollars of public and private investment are pouring into low-carbon industries. Meanwhile, the US is already losing billions to deadly climate-fueled disasters that scientists warn will get worse unless the world rapidly shifts away from fossil fuels. Yet there's still money and political points to be earned in oil and gas, indicating the fight is far from over.

From black gold to green energy

Given the current battles, it's a bit ironic that Texas' ability to become America's green-energy leader was the result of two Republican governors and the state's conservative, pro-business bent. The runway was laid more than two decades ago when then Gov. George W. Bush pushed through a plan to deregulate the state's energy market. Instead of letting utilities control all the generation and transmission of power, the law created a competitive market that allows customers to choose their power provider. The goal was to lower the cost of turning on the lights for households and businesses. The plan also included a target for Texas to produce 2,000 megawatts of power from renewable-energy sources by 2009. The plan was so successful that in 2005, Republican Gov. Rick Perry raised the target to 10,000 megawatts by 2025 — a threshold Texas quickly surpassed. An energy market that prioritized the cheapest supply, combined with a quick process to approve and build new transmission lines, proved to be a winning formula in a state with vast swaths of open land, wind, and sunshine. Last year, the state generated about 30% of its power from wind and solar.

Some Texans are profiting directly from this shift. While Davis said he signed a nondisclosure agreement with RES that prevents him from sharing how much he earned from his deal, the trade group Advanced Power Alliance said renewable-energy developers pay more than $70 million every year to Texas landowners who lease their property. Another $237 million is paid by these developers in state and local taxes, creating new revenue for rural areas like Menard, where Davis' ranch is, to use for education, infrastructure, and emergency services. This adds up to billions of dollars over the life span of these projects.

Texans who don't have land to lease have benefited, as well. Since electricity from solar and wind farms is cheaper than coal and gas plants, renewable energy reduced wholesale electricity costs by $31.5 billion between 2010 and 2022, according to a study led by a researcher at the University of Texas at Austin. Divide that up, and residents have saved a couple thousand dollars on their utility bills during that period. And that doesn't include the tens of billions in healthcare costs that have been avoided thanks to a reduction in air pollution. A flurry of headlines this summer also noted that solar and wind power helped stabilize the Texas power grid as temperatures soared to the triple-digits for weeks on end and people jacked up their ACs. Battery storage and natural-gas plants were key when the sun wasn't shining and wind wasn't blowing, energy analysts said. Plus, the sector is bringing in jobs: As of last year, the renewable-energy sector employed 239,000 people in Texas, a 7% increase from 2021, according to an analysis by E2, an environmental business group.

No green deed goes unpunished

Despite these wins, Texas' green transformation became a punching bag for Abbott and some fellow Republicans in the state legislature after Winter Storm Uri cut off power for millions of residents and caused 246 deaths in 2021. Temperatures plunged to as low as 6 degrees Fahrenheit, freezing gas production and power plants that supply the majority of the state's power. Wind turbines also froze, but that was the "least significant" factor in the blackouts, an official at ERCOT told Bloomberg at the time.

That hasn't stopped Abbott and the GOP from using the crisis to attack renewable energy and push for adding more fossil fuels to the grid. Backed by groups like the Texas Public Policy Foundation, a conservative nonprofit that lobbies against climate action and receives funding from the oil and gas industry, the state legislature this year introduced a flurry of legislation that either subsidized building gas-fired power plants or put renewables at a cost disadvantage. One law, which was approved by voters in November, set up the $10 billion Texas Energy Fund, which sets aside $7.2 billion for low-interest loans and grants for "dispatchable" power — gas, coal, and nuclear power that can be deployed regardless of weather conditions. Notably, Texas lawmakers exempted battery storage from the subsidies, even though it's also dispatchable. Another law requires renewable-energy developers to pick up a greater share of the cost of transmission infrastructure that connects projects to the grid and creates other programs to compensate dispatchable power for being available when demand is high. (Abbott did not respond to a request for comment.)

Supporters of renewable energy told me that the premise behind these bills — improving the reliability of the grid in times of extreme stress — are actually a smokescreen for the laws' true purpose: protecting the Texas oil and gas barons who donate to Republicans lawmakers. Improving reliability is necessary, but slowing renewables only undermines that goal. It's better to have a mix of energy sources rather than tipping the scales in favor of one. Plus, investing in energy efficiency so homeowners and businesses use less power in the first place would also help.

"I think this is a small, but wealthy and powerful group of ultra-right conservatives who are protecting small and midsize oil and gas producers," Judd Messer, the vice president of Texas' Advance Power Alliance, said. His group lobbies on behalf of large-scale renewable-energy developers. "They are concerned about the wind and solar development coming down the pipeline and protecting their donors who sell natural gas. This is cloaked under the guise of reliability."

Madeline Gould Laughlin, the senior manager of regulatory affairs in Texas for the renewable-energy developer Enel North America, said no single energy source is immune to outages.

"Adding diversity is how we'll build out a reliable grid," she said. "And the fastest-growing resources are essential during the extreme heat we experienced this summer, particularly solar."

Even Davis, who described himself as conservative, said he doesn't understand the GOP attack, given the immense benefits the state has experienced.

"They're discouraging economic development in rural Texas," Davis said. "Why would you do that as a Republican?"

Brent Bennett, the policy director of Life:Powered, an initiative of the Texas Public Policy Foundation, is the son of an oil and gas entrepreneur and grew up in Midland, Texas — the heart of the US fracking boom. Bennett said that even though wind and solar electricity is cheap to produce, customers are picking up the tab for expensive transmission projects that connect renewables in remote places to the grid. Wind and solar power also depend on the weather, he said, which can lead to unpredictable price spikes for backup power when supply is low — costs that are passed on to customers. He added that as federal subsidies for renewable energy outpaced those for fossil fuels over the past six years, Texas has underinvested in more reliable power.

"I can't say I'm unbiased," Bennett said. "But when it comes to the grid, our donors want my team to be studying the grid so we can fix it and do the best thing for ratepayers."

Even though the renewable-energy industry took some losses during the last legislative session, the most egregious proposals were killed, Messer said. That's because his group joined forces with a coalition of strange bedfellows: more moderate rank-and-file Republicans in the Texas House of Representatives whose rural school districts benefit from property taxes from wind and solar projects, climate-conscious urban Democrats and environmental groups, and groups like the Chamber of Commerce that represent big energy users in the business sector. Messer said the coalition didn't face opposition from global oil majors, such as ExxonMobil and Chevron, either.

The coalition seems to be growing stronger, even as Texas politicians shift further to the right on issues beyond renewable energy. That's because companies flocking to the state, from tech giants to manufacturers, want to keep their electricity costs down. Meanwhile, the Inflation Reduction Act, President Biden's signature climate law, could inject an estimated $65 billion into Texas' economy by 2030 to help the state reduce emissions. Some oil and gas companies are also investing in renewable-energy projects, and Texas towns are diversifying their economies.

"Our approach to energy is all of the above," Michael Looney, the vice president of economic development at the Chamber of Commerce in San Angelo, said. "You'd think that the West Texas Chamber of Commerce is all in on oil and gas and we dislike renewables. That's not correct. There's no antagonism. We have to work together."

The long arc of history bends toward green

Texas' transition is marching on: The state leads the US in planned wind and solar projects, and by 2035, their capacity is expected to double and account for 45% of total power generation in the state. This year, Texas is on track to surpass California in large-scale solar power. Several years ago, the state hardly had any battery storage, but by the end of this decade, there could be more than 30 gigawatts of storage — enough to power roughly 22.5 million homes.

People in the renewable industry who I spoke to were optimistic about the future of Lone Star green energy. Enel's Laughlin said the company, which entered the state in 2006, isn't slowing down its expansion plans in Texas. Enel currently has about 1.8 gigawatts of solar capacity under construction and expects another four batteries to come online in 2024. EDP Renewables North America similarly told me that the company has nearly 1,000 megawatts of solar under construction.

"With the IRA, there is a significant amount of renewable energy that can be deployed in Texas," Sandhya Ganapathy, the CEO of EDP, said. She noted that in addition to tax credits, the company is eligible for "add-ons" if projects are sited in communities with high unemployment or where coal mines closed.

That doesn't mean Texas is going to be totally green anytime soon. Even with all the new renewable development underway, the industry's supporters acknowledged that achieving 100% emissions-free power is unrealistic.

"If we were to completely get away from fossil fuels in Texas, I think we'd be close to economic catastrophe," Messer said. "It is still such a boom for our economy, and a lot of products are made from oil and gas like chemicals and plastics."

Still, renewable-energy technology is evolving fast. Right now, it's not very cost-effective to develop pricey battery storage only for it to hold enough backup power for several hours. But in 20 years, those rates will improve and storage may be the answer to wind and solar intermittency, Messer said.

In the meantime, Davis is doubling down on his burgeoning renewable-energy business. At Menard Station, he wants to install a suite of rapid electric-vehicle chargers and add it to all the apps showing travelers where to power up. Renewable energy may turn Davis' stretch of the "Road to Nowhere" into a destination after all.

Catherine Boudreau is senior sustainability reporter at Insider.