President and CEO of the Texas Economic Development Corporation (TxEDC). TxEDC’s mission is to promote Texas as the premier state to locate or expand the business and to offer insight and key resources to advisers and decision-makers. Follow Robert and TxEDC on Twitter at @GoBiginTexas.
Texas’s energy sector goes beyond oil and gas
If Texas were a country — and many of us feel like it already is — it would rank fourth in the world for crude oil production, behind the United States, Russia and Saudi Arabia.
Overall, Texas reigns as the No. 1 state for energy production, with the energy sector valued at $172 billion and employing more than 292,000 people. Simply put, Texas is a global powerhouse in the energy industry.
Since energy in Russia and everywhere else has been in the news a lot lately, I thought it might be a good time to remind ourselves of just how vital the energy sector is to Texas and the rest of the world.
By one account, the oil and gas industry alone makes up about 9% of Texas’s GDP. In the United States, Texas accounts for:
- 43% of crude oil production
- 26% of natural gas production
- 31% of refining capacity
But the state’s energy sector goes well beyond oil and gas these days. It also comprises wind, solar, biodiesel and other types of renewable energy. Renewable energy represents a massive growth opportunity for the Texas economy.
The state ranks first in the nation for wind energy capacity and second for solar power capacity. The entire clean energy industry employs about 55,600 workers in Texas. By itself, the wind sector is responsible for nearly 10,000 jobs in the Lone Star State.
The Texas energy sector certainly has come a long way since the momentous discovery in 1901 of Beaumont’s Spindletop oilfield. And we’ve got a much greater distance to go as renewable energy gains momentum. For instance, solar capacity in the state is expected to triple by the end of 2022 compared with 2020, according to the Federal Reserve Bank of Dallas. That will build on Texas’ position in 2021 as the leading state for installation of renewable energy projects.
I join Gov. Greg Abbott in vowing to ensure Texas remains the energy capital of the world, whether that means oil and gas or wind and solar.
“The people of the energy industry are the lifeblood of our economy, and Texas would not be the economic juggernaut we are today without their hard work, commitment to innovation, and dedication to serving their customers,” Gov. Abbott said during a March 29 roundtable discussion with oil and gas stakeholders at Champion X in Odessa.
Odessa sits in the heart of the Permian Basin, the enormous oil- and gas-producing region in West Texas and southeastern New Mexico. But, of course, Odessa is not the only community in Texas where the energy industry plays a critical economic role.
Houston, for instance, is the Energy Capital of the World. The Houston area is home to more than 4,600 energy-related businesses and nearly one-third of the country’s jobs in oil and gas extraction. In the Rio Grande Valley, the Port of Brownsville is a key component in the state’s booming energy industry. The port generates about $3 billion in annual economic activity.
In Odessa, Houston, Brownsville and many other places in our great state, the energy sector is directly or indirectly adding lots of jobs. According to the Texas Independent Producers and Royalty Owners Association, upstream employment in February rose by 20,700 positions compared with the same time last year. And that’s just upstream employment. The state’s clean energy workforce, estimated at 223,406 in 2020, is poised to keep expanding as well.
It’s my hope and belief that Texas will continue to capitalize on its enviable status as one of the world’s leaders in oil and gas. And one day in the not-so-distant future, we are bound to see Texas, if it were a country, rank among the overall global leaders for all types of energy. Wouldn’t it be fitting if Texas reached that stratosphere by 2026, the 125th anniversary of the Spindletop discovery?