Texas could eliminate its carbon pollution in fewer than 30 years, and decarbonizing would actually strengthen the state’s economy, according to new research from energy scientists at The University of Texas at Austin.
The report warns that global markets are already casting a wary eye on goods and services that rely on fossil fuels. Those shifting consumer preferences could mean trouble for Texas, which built an economy larger than those of most countries on the strength of its oil and natural gas industries. Texas risks losing its economic footing unless it embraces new approaches to energy production, the report says.
“The market is already demanding that we move in a different way than we have been,” said Isabella Gee, a postdoctoral fellow in the Cockrell School of Engineering and lead author of the report.
But Texas, despite its reputation for big rigs and black gold, is also an emerging clean-energy hub, with breathtaking solar and wind potential. The state is well positioned to decarbonize, according to the report, titled “Don’t Mess with Texas: Getting the Lone Star State to Net-Zero by 2050.” The researchers studied four approaches to reaching net-zero emissions. To their surprise, all four approaches produced greater economic output than “business as usual” — the state’s annual gross domestic product was anywhere from 1.6% to 7.9% higher.
Decarbonization would not require eliminating Texas’ fossil-fuel industries, either. In one approach examined in the report, Texas would continue along business-as-usual conditions, continuing to rely heavily on oil and natural gas, but it would supplement it by building facilities that suck carbon dioxide right out the air, like a vacuum. These systems are still new but gaining interest — there are now 19 such facilities operating around the world, with another under construction in the Permian Basin. The UT researchers also looked into the possibility of a massive shift to hydrogen fuels. In that scenario, the Texas hydrocarbon industry essentially “becomes the hydrogen-and-carbon industry,” thereby saving jobs while creating new ones, said Michael Webber, professor of energy resources in the Walker Department of Mechanical Engineering and coauthor of the report.
“This doesn’t have to mean the decimation of the oil and gas industries,” Webber said. For example, their analysis finds that keeping some natural gas in the power sector’s fuel mix provides valuable dispatchability when other resources are not available.
The authors stress that no particular approach is best — each has benefits and drawbacks — but their results show that Texas has a variety of options for eliminating its contribution to global climate change.
The report was funded by the Cynthia and George Mitchell Foundation, the Energy Foundation, The Meadows Foundation and Catena Foundation. Authors are from UT Austin, Colorado-based Vibrant Clean Energy, and the University of Colorado, Boulder.
Accompanying the report is a new online tool, the Texas Energy Policy Simulator (TX-EPS), with which anyone can test their ideas about decarbonizing the state. TX-EPS was developed by climate/energy think tank Energy Innovation.
The report is bullish on Texas’ carbon-cutting potential in part because of the state’s entrepreneurial spirit, the researchers said. When Texans do something, they can do it bigger than just about anyone – a spirit best exemplified by the side-by-side booms of natural gas, production of which quintupled in the Permian Basin during the past decade, and solar power, which doubled between 2019 and 2020, and nearly did again the following year.
“The thing Texas does is deploy at scale. That’s our superpower,” Webber said. “We can do things at a globally relevant scale in a matter of decades or even years.”
Four Scenarios and a Surprise
Over three years ago, when the team began its net-zero research, they were not looking to create a single, all-encompassing plan for Texas to achieve net-zero emissions. The idea was just to test whether any of the numerous plausible approaches could work by 2050 — and if Texas could reach that goal without kneecapping its economy.
The researchers began by crafting four scenarios:
- One focuses on replacing appliances and machines that run on fossil fuels with ones powered by electricity. For instance, swapping a gas stove with an electric one. Or switching to an electric hot-water heater. Or buying an all-electric car (which is not the tricky proposition it was even a few years ago, because battery improvements have given all-electric vehicles about the same “range factor” as their gasoline-fueled counterparts).
Under this scenario, a significant portion of the Texas economy goes all-electric by 2050, including portions of heavy industry. The remaining emissions are cleaned through limited use of the carbon scrubbing technologies. This scenario assumes that the electricity used to power cars, home appliances and buildings comes from net-zero carbon sources.
- A second assumes the same timeline for electrification as the first except that, under this scenario, the Texas electric grid becomes fully zero-emission – carbon pollution is not just offset or scrubbed from the air, it is eliminated – by 2035.
This approach would meet federal standards now under consideration. It includes still-nascent technology such as small-scale nuclear reactors and enhanced geothermal energy production.
- A third envisions Texas not only electrifying but also shifting a significant portion of its energy mix to hydrogen. That would mean large-scale deployment of technology that splits water into hydrogen and oxygen. This approach particularly helps with decarbonizing the petrochemical industry, which the researchers conclude is the most difficult part of the economy to get to net-zero emissions.
- The fourth assumes Texas continues what it is already doing—that is, burning a lot of oil and gas—but supplements it with a sizeable investment in the facilities that capture carbon dioxide at smokestacks or remove it directly out of the air, then sequester it.
All four scenarios were based on the same assumptions about population growth and consumer habits; the only changes were efficiency standards and the adoption rates for new technologies or fuel sources. The researchers also crafted a fifth, “business as usual” scenario, to use for comparison purposes. That scenario assumes that long-term plans and government policies already on the books hold true for the coming three decades in Texas. Each approach was designed to minimize government intervention and disruptions to the economic and labor markets.
To analyze each of the scenarios (the four carbon-neutral ones and business as usual), the researchers ran calculations through three computer models. One determined electric demand and the emissions leftover after policy interventions. Another calculated the cheapest carbon-neutral way to meet that electric demand and deployed carbon management technologies to get Texas to fully net-zero by 2050. And a third used data from both to produce regional economic forecasts. Once the computers finished digesting the data, the researchers compared the findings of each net-zero approach to the “business as usual” projection.
To their surprise, all four decarbonization approaches were better for the Texas economy.
The electrification approach created an annual GDP 1.6% higher than business as usual in 2050, with slightly higher overall job growth.
The more aggressive electrification scenario also produced an annual GDP 1.6% higher, again with slightly higher overall job growth.
For the hydrogen fuel-based approach, the annual GDP was 7.9% higher. That approach also produced significantly more jobs than business as usual.
And for the scenario in which carbon is pulled from the air, annual GDP growth was 4.6% higher, with significantly more jobs created than business as usual.
“It’s not like we had four other scenarios that we just threw away,” Webber said. “We did four scenarios and they all look good.”
The Cost of Inaction
Many energy debates in Texas are framed as a choice between tangible profits and hard-to-quantify, feel-good environmental benefits. But the question now, according to the report, is how Texas should respond to changes in consumer preferences.
There are signs that Texas’ carbon-intensive ways are already costing it business. For instance, in early 2021, the Port of Cork, in Ireland, declined to renew a contract with a Texas liquified natural gas exporter. The port cited aversion among its citizens to hydraulic fracturing. Concerns over the environmental impact of hydraulic fracturing also led France to cancel a $7 billion contract with a Texas natural gas exporter in 2020. Meanwhile, Texas competitors such as China, the United Kingdom, and several Scandinavian countries are developing low-carbon industrial centers. Almost half the world’s GDP is now generated in regions with net-zero commitments.
These changes will inevitably affect Texas, the researchers say. About half the state’s economy — which would be the world’s 12th largest, were Texas its own country — is comprised of energy, manufacturing and exports.
“If these sectors maintain their current energy and emissions status quo, they could struggle to compete in a global economy that prefers low-carbon alternatives,” the UT report states. “It is in the interest of industry and state policymakers to prepare for and acknowledge this reality.”
Portions of both the public and private sector have acknowledged the reality. Behemoth companies ConocoPhillips, AT&T, American Airlines, Southwest Airlines and Baker Hughes are among the many Texas-based businesses that have made net-zero pledges. Even under business as usual, the Texas power industry will cut its carbon emissions by about 70 percent by 2050, according to the researchers’ projections. That is mainly because most generating companies plan to stop using coal by 2035. They can do so thanks largely to the state’s abundant supply of cheap wind and solar power.
Contrary to longstanding belief, “renewables are actually cheaper now” than fossil fuels, Webber said. “Decarbonizing is not some arduous, expensive moral chore.”
Tradeoffs
There is no single solution to reaching net zero, however, said Gee, the report’s lead author. Ideally, policymakers and industry leaders will blend elements of all four approaches. The researchers view the report less like a road map and more like a menu.
For a simple example of the tradeoffs, consider all-electric vehicles. They are a cornerstone of the widespread electrification strategy. Historically, governments have enticed people to buy electric cars and trucks by cutting the taxes on them. But such inducements have mainly benefitted the wealthy, while largely failing to reach the poor.
The carbon-scrubbing facilities are a slightly more complicated example of the tradeoffs. At first blush, the facilities could seem like the ideal solution. They could render coal or natural-gas plants essentially carbon-neutral, thereby neutralizing a key criticism of that industry. Proficiency with the technology could also mean profits for Texans who get paid to remove emissions on behalf of others.
But the tech is new. It is promising but has not been deployed on a wide scale, and it would require significant amounts of land: for the facilities (on the surface); the captured carbon (buried underground); and wind farms, which are most obvious source of power for the facilities. As the report notes, capturing and burying carbon — which would have to then be monitored — is also less environmentally friendly than not emitting carbon at all.
Likewise, hydrogen fuel is not a silver bullet.
Industrial-scale hydrogen creation via electrolysis is new. To fuel jets and ships, as the researchers envision, hydrogen would probably have to be combined with other chemicals in processes that are still relatively immature. And the process of creating hydrogen requires significant amounts of water — an increasingly precious resource in drought-prone, fast-growing Texas.
Still, there is a lot to like about a switch to hydrogen, Webber said. Texas is already one of the world’s largest producers of hydrogen. The operators of many chemical plants have experience handling it. Pipelines that now transport oil and gas could be converted to handle hydrogen. Because of the level of investment and accompanying job creation, the hydrogen-centric scenario creates by far the highest economic bang for the buck in the UT report.
The report concludes that the worst tradeoffs emerge from assuming that business can continue as usual for Texas. That assumption could leave the state behind its competitors. Worse, it would allow glaring social inequities to continue festering. The UT report accounts for some the social costs created by the fossil fuel industry. Those costs include environmental cleanup and higher medical spending to treat conditions linked to air pollution, such as asthma. The scientific consensus is that pollution’s consequences already fall hardest on poor and minority communities — and that the disparity will grow worse if climate change continues unabated.
Ultimately, Gee said, a decarbonized economy would make Texas a more just place.
