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Economic Perspective

American Clean Energy and Security Act

by Susan Combs

Susan Combs at podium...But the cap and trade provisions of the American Clean Energy and Security (ACES) Act of 2009, sometimes called Waxman-Markey, will have a significant impact on Texas families, businesses, and consumers....

...“Skyrocketing” energy prices will have a disproportionate affect on the Texas economy.

Read entire article by Susan Combs

What Cap and Trade Could Mean for the State of Texas

As an energy and manufacturing leader, Texas will be disproportionately impacted by the proposed cap and trade legislation to limit emissions from fossil fuel and nonrenewable energy dependent industries.

Texas historically has lead the U.S. in energy production and remains the nation’s largest producer and refiner of oil and gas, producing the largest share of the nation's fossil fuel reserves and contributing a quarter of all U.S. refining capacity.

Texas has a high concentration of energy-intensive industries, such as aluminum and glass manufacturing, the forest products industry and petrochemical production. Much of Texas’ energy consumption is due to Texas industries making products used across the United States and around the world. As a result, Texas leads the nation in total energy consumption, accounting for nearly 11.5 percent of all U.S. energy use.

Texas Jobs on the Line

In 2006, the Texas energy industry employed nearly 375,000 people who earned more than $35 billion in wages. The oil and gas industry in 2006 contributed 14.9 percent of Texas’ gross state product. Coal production in Texas contributed 2,241 mining jobs and $168 million in wages in 2006. These industries play a significant role in our state’s economy. Any caps on emissions will have a negative impact on these industries, resulting in an impact to the state’s economy.

According to a recent analysis by the University of Texas Center for Energy Economics, Texas could lose 137,000 to 313,00 jobs by 2020 and 170,000 to 425,000 jobs by 2030 as a result of increased energy prices due to the proposed cap and trade program. Though Texas has opportunities for jobs in the green industry, it will be difficult to mitigate the widespread losses from the cap and trade program. The National Renewable Energy Laboratory estimates that six to ten permanent operations and maintenance jobs are created for every 100 MW of installed wind capacity. Texas is the nation's leader in wind energy, with more than 8,200 megawatts of installed wind capacity, but using these estimates, this high level of capacity only creates 500 to 800 permanent jobs.

So what could cap and trade mean for Texas? A weaker economy. Fewer jobs. And lower disposable income. All at a time Texas and the nation are riding out a recession.

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