U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Ian Wagreich

There's an energy renaissance in the air along the Texas plains.

In places where locals once boasted you could sleep in the middle of the road because of no traffic, scores of wind utility vehicles can be seen among the farm trucks.

Texas has quietly built an "all of the above" energy empire, expanding its legacy oil and coal mining to include natural gas production and wind power. And harnessing wind energy has propelled scores of tiny traditional ranching communities along the Texas prairie into the 21st century - and injected billions of dollars into local tax coffers.

The movement has created jobs and changed not just the physical landscape but cultural terrain as well. Where ranchers and farmers once were threatened to sell off land to cover the cost of diminishing returns, now many find a steady income regardless of cattle prices or drought.

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With the help of a climbing harness, we documented the state's transformation in places like Sweetwater and Sterling City - and wind energy's impact on schools and communities across Central and East Texas.

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The wind blows consistently in Capricorn Ridge, where 407 turbines operate under the watchful eyes of 32 NextEra Energy technicians. With all those moving parts, it is a 24/7 operation to manage, service and ensure that wind-generated electricity continues to flow for parent company Florida Power and Light.

Jarret Bray, 24, and his partner Mike Havlak, 47, play the role of part climbers, part technicians and part electricians. Bray, shown in this photo, and Havlak were on the first of four planned climbs for the day.

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Eighth-graders learn about the properties of gravity and friction in Logan Rawls' class at the newly renovated Highland School in Nolan County.

Since wind began to fill the school district's tax coffers, an update of the building's foundation, laid in the 1800s, is underway. And every student in grades 7 through 12 receives a laptop.

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The turbines have become a familiar site and just part of life in Nolan County - even for schoolchildren enjoying recess. The kids recognize wind energy as a part of their lives.

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Miesha Hand Adames, 23, is the next generation in charge of 1,200 acres of important real estate. Beyond leases to wheat and hay farmers, Adames is seeing income from the rail line that traverses her property, a 24-inch oil pipeline and a string of massive electrical towers (and a 10-acre substation) that carry wind-powered electricity. Additionally, Sunoco just broke ground on a natural gas pipeline, a source of more one-time revenue. Adames studies accounting at Western Governors University and works with a local energy cooperative to educate ranchers and citizens on energy policy.

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Kathy Dickson is a survivor. Not just of the historic 1956 Andrea Doria shipwreck, but as the caretaker of the massive 69 Ranch in Roscoe, Texas. "Aren't they wonderful," she says of the turbines silently spinning on the horizon. "They are what let me stay on the land after my husband died in 2006."

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Ranching is no longer as profitable as it used to be, and ranchers like Rodney Kinsey -- above checking a cow's age at the J2 Ranch outside of Sweetwater - are now pooling resources to save the cost of hiring additional ranch hands.

Another solution: Ranchers at J2 also partnered with the Lower Colorado River Authority to house an electric substation on the land that allows them to maintain their way of life.

"These people wouldn't be out there working the cattle if it weren't for wind," says former Sweetwater Mayor Greg Wortham. 

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Wortham is a larger-than-turbine energy stalwart in the region. He is the go-to guy and advocate for all things energy. He shepherded the economic renaissance for Sweetwater during his seven-year tenure.

"There was a time not too long ago when folks would say, 'Why do we care? This town's going away.' That was the attitude," he says. "If we hadn't gotten wind, we wouldn't have gotten one-thousand new jobs in the county, a new science wing, billions in new tax revenue and so much more. This town broke the mold that [only ranchers] benefit from wind energy."

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Texas is the energy leader among states in the production of crude oil, natural gas and wind-powered generation capacity. Oil and wind can make for strange bedfellows, but in Texas they regularly complement each other.

When oil prices are down, wind has been up; and when wind tax credits were cut, oil was up. And if it weren't for oil, local energy experts say, the infrastructure to install and initially transmit wind power would have been much more difficult.

Texas definitely has the wind at its back.

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David Kinkade

Part of an ongoing series on Emily, a rising entrepreneur 

Emily was learning on the job as she grew her graphics business - and sometimes those day-to-day lessons popped up at the least expected moments.

That was the case during a recent client conversation that morphed into a tutorial about energy policy and the government.

The meeting started out simple enough, and Emily had a good feeling about working with Tony and his company, Rapid651 Sign & Graphics, a custom sign manufacturing business in St. Paul. The company was picking up steam by focusing on high quality design and construction at a reasonable price.

In fact, things were going so well that Tony needed to contract out work to another graphic designer, on top of the two full-timer designers he already employed. That's where Emily came in.

"I'm excited about working with Tony and his team," Emily says. "I'm glad to pick up another contract that looks like it'll be a steady flow of work, of course, but I also like the fact that Tony is really dedicated to providing his customers with very sophisticated, compelling designs for logos and signs."

The conversation about contract terms, work arrangements and the next steps quickly turned into a talk about the complications that come with running a small business.

Tony first asked Emily how her freelance graphic design business was going. She said things were going well but that she was frustrated by the time and expense that went toward tasks like keeping track of her taxes and getting her health insurance squared away.

"Get used to it," Tony said with a grim laugh. "It doesn't get any easier. The longer you're at it and the bigger you get, the more it feels like you've just got a target on your back for another mandate or regulation from the government."

Tony's business was only 6 years old, and he now employed 12 people. That meant he was well below the threshold for many of the most intrusive government regulations, but he worried about how he could expand his business and workforce in the years to come.

"We've always tried to offer a better product at a competitive price, which is tough," Tony told Emily. "I operate on a pretty narrow margin, and I can't just pass along every increase in costs to my customers without losing business."

One of Tony's biggest cost centers, he said, was the cost of utilities. A small manufacturing concern like his runs up a pretty hefty electric bill, and he was keeping a close eye on new carbon regulations from the Environmental Protection Agency (EPA) that he expects will only drive his costs higher.

"I never thought I'd care about energy policy, but once I started paying those utility bills for the factory every month, I got real interested real fast," Tony told Emily. "The Obama administration has some kind of crusade against power plants that run on coal, and the EPA's carbon regulations are going to push a lot of those plants to shut down. And I know who is going to pay the price: consumers."

He added: "I guess it could be worse, though. At least I'm not in California or New York, where the costs are even higher."

Emily had never thought of it that way. She always thought it sounded like a good idea when politicians talked about "clean energy." Who wouldn't want that?

But based on what she was learning, it seemed like that was more easily said than done -- and in the meantime, government regulations would drive up costs for business and consumers while making energy service less reliable.

"It's funny how you don't think about these things so much when you're an employee," Emily says. "You just kind of figure someone's taking care of all that stuff like paying the bills and keeping the lights on.

"But once you start running your own business, it really hits home how things like taxes and regulations can have these effects on smaller businesses and make it tough for them to grow," she continues. "It makes you wonder -- is anyone in the government even thinking about the consequences of what they're doing?"

Sean Hackbarth U.S. Energy Secretary Ernest Moniz.U.S. Energy Secretary Ernest Moniz. Photo credit: Andrew Harrer/Bloomberg.

On Capitol Hill, Energy Secretary Ernest Moniz pitched the need for energy infrastructure improvements found in his department's Quadrennial Energy Review (QER).

Specifically Secretary Moniz was selling natural gas pipelines modernization, but let me quote two selections from the QER that apply more generally:

These [transmission, storage, and distribution (TS&D)] infrastructures simply have not kept pace with changes in the volumes and geography of oil and gas production. The Nation's ports, waterways, and rail systems are congested, with the growing demands for handling energy commodities increasing in competition with transport needs for food and other non-energy freight, and much of the relevant infrastructure--pipelines, rail systems, ports, and waterways alike--is long overdue for repairs, not to mention modernization.

And

Industry has responded to the infrastructure gap by expanding pipeline capacity where it can; reversing flow direction on other pipelines; converting natural gas lines to oil; and seeking new "workaround" solutions to transportation bottlenecks by moving increasing amounts of oil by truck, barge, and rail.

Hmm. What shovel-ready project could help ease the "growing demands for handling energy commodities?" What could help ease some of the energy bottlenecks the QER cites?

Before I answer that question, here's a Reuters story from 2014 [h/t Hot Air] [emphasis mine]:

The energy boom of the last decade that has boosted oil and gas production in the United States has outpaced the development of critical infrastructure to transport the raw and refined materials, U.S. Energy Secretary Ernest Moniz said on Thursday.

...

"The core approach, really, is that our infrastructure needs to build out," Moniz said in an interview with Reuters Insider.

"Here we have a case, especially with the production in North Dakota, where the Bakken shale (output) zoomed from essentially nothing to past 1 million barrels a day," he said.

By now you should know where I'm going. An answer to some of the problems the QER lays out is the Keystone XL pipeline. Not only will it move Canadian crude oil, but also transport oil from North Dakota and Montana to Gulf Coast refineries. But it's been caught in a regulatory web spun by anti-energy activists.

The pipeline is ready to be built, and based on the logic of the Energy Department and Secretary Moniz, it's very much needed. President Obama simply needs to end the years of delays and approve it.