As Congress and the Obama administration reshape how Americans consume energy, the state that produces more energy than any other is mostly fighting the process.
The state's governor and one of its top congressmen maintain that global warming isn't caused by man-made emissions. While congressional Democrats want the country to get more of its energy from green sources, many Texas politicians want to protect their fossil fuel constituents.
Two weeks ago, the House Energy and Commerce Committee approved massive legislation that would impose pollution limits on industry and try to wean the nation off fossil fuels. As Congress returns today, other committees will consider the bill and it may reach the full House for a vote this summer.
Texas Democrats and some industry experts worry that if Texas doesn't embrace President Barack Obama's agenda, the state will lose out on energy goodies and abdicate its status as the energy capital of the U.S.
Texans have struggled to influence greenhouse gas regulations and recently lost out on a federally funded clean coal project and a battery research consortium. Texas lags other states in the growing field of solar energy.
"We're stuck in 30-year-old thinking, not only in the companies, but in our politicians, and we're not understanding that there is a sea change that is coming," said Amy Jaffe, associate director for Rice University's energy program. "There's a lot of money to be made in that transformation, and we're not preparing ourselves for it."
"The governor is really the problem."
Gov. Rick Perry and his supporters say the state will have to fly solo no matter what, because the Obama administration isn't interested in Texas.
"If the answer is Washington, D.C., then I would suggest to you that most people in America would rather go it alone," Perry said. "My argument here is that we have, by our own volition, by our own innovation, led the country in a lot of the alternative energy side of things."
Ahead in some ways
Texas hasn't shunned green. By some measures, it's ahead of other states.
The state has more wind power capacity than any other. State regulators have approved a $5 billion plan to transport more renewable electricity to Texas cities, and authorized installing high-tech meters in homes. Congress is slowly developing a federal transmission plan and other states aren't as far along with smart meters.But some experts say disjointed initiatives aren't enough. The budding renewable industry will take up residence in states like California and Iowa, not Texas.
"They need a statewide strategy, not a little piece here, a little piece there kind of thing," said Jeff Morris, chief executive of Dallas refining company Alon USA.
Texas emits more carbon dioxide than any other state, yet Texas Republicans have opposed programs to cut greenhouse gas emissions. So as Congress considers a scheme to cap emissions, lawmakers have taken cues from states such as California and Massachusetts.
"I'm more concerned about climate change legislation than I am about climate change," PUC chairman Barry Smitherman has said.
During recent negotiations on the climate change bill that passed the House Energy and Commerce Committee two weeks ago, Smitherman and other state Republicans appealed to Rep. Gene Green, D-Houston.
Green, whose district hosts five refineries, often expressed frustration that fellow Democrats didn't realize how the bill could hurt the oil and gas industry. Green was able to negotiate some concessions for refineries, but said he could have accomplished more if Texas Republicans had helped.
"We could have done better if the Republicans had been part of the solution, rather than just saying 'Vote for our amendments,' " Green said.
Republicans have been content to oppose the global warming bill as an "energy tax" and think it could backfire against Democrats if the regulations cause energy prices to spike.
"I think the science is still out there and it's not settled yet," Perry said, adding: "You can't pass the largest tax in history based on mixed science."
Last year, Perry's competitiveness council issued an energy report that said Texas would suffer under regulations that limit greenhouse gas emissions. The council included state officials and representatives of major Texas-based companies such as AT&T, Dell and Exxon Mobil. It didn't include representatives of any renewable energy firms.
"The deck was stacked to represent the interests of the old, rather than the interests of the new," said Joel Serface, entrepreneur in residence at venture capital firm Kleiner Perkins Caufield & Byers, and a former member of Perry's energy task force. "The leadership is putting Texas at a disadvantage."
Lost opportunities
The state has already lost some federal renewable energy programs. Kentucky earlier this year beat out Texas to host a $600 million facility for the National Alliance for Advanced Transportation Batteries. Austin had lobbied hard to host the battery consortium, which is seeking federal stimulus funds."There's no question in my mind that Texas was handicapped" by politics, said outgoing Austin Mayor Will Wynn, who will soon work for Dallas energy efficiency consultant LPB Energy Management.
"I'm disappointed to see the state leadership lately either diving under the table or, worse, pounding their chest, instead of taking part in the energy discussion," he said.
Last year, Texas lost its bid to host a federally funded coal gasification power plant, which would create close to no emissions. Illinois was awarded the project.Energy experts say Texas is an obvious place to build such a plant because of ample coal reserves and carbon dioxide storage options, from old oil fields to underground salt water formations.
The Department of Energy canceled the FutureGen project last year, but Illinois Democrats have pushed the Obama administration to revive funding for it. Many observers think FutureGen will be resurrected with $2.4 billion in stimulus funds that are devoted to coal research.
Meanwhile, Texas is going it alone on coal.
The Legislature appeared poised to pass a bill that would provide up to $100 million in tax credits to any company that builds a coal gasification plant that captures and stores its carbon dioxide emissions.
But a landmark solar bill, which would have provided $500 million in incentives for solar panel installation, died over the weekend.
Advocates said the incentives were needed to help Texas catch up to other states – Texas gets less than 1 percent of its power from solar energy – that have moved quickly to attract the solar industry.Kleiner Perkins' Serface said Texas could be the "largest solar producer in the United States."
"By not passing the bill, we are potentially missing out on a major opportunity," said Luke Metzger, director of Environment Texas.
Yet another bill that would have required Texas to get 1,500 megawatts of power from solar energy died earlier in the session, which ends today.
That "was really what could help the solar market grow more quickly and more broadly in Texas," said Jose Beceiro, director of clean energy for the Austin Chamber of Commerce. "That is exactly what the [policy] did for wind in Texas."
Elizabeth Souder reported from Dallas, and Dave Michaels from Washington; staff writer Marcus Fink in Austin contributed to this report.
