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Good morning. We look at Texas’ big economic strengths — and a threat to its future.
You can make a case that the U.S. state with the brightest long-term economic future is Texas.
It’s a more affordable place to live than much of the Northeast or West Coast and still has powerful ways to draw new residents, including a thriving cultural scene, a diverse population and top research universities. Its elementary schools and middle schools perform well above average in reading and math (and notably ahead of California’s), according to the Urban Institute.
These strengths have helped the population of Texas to surge by more than 15 percent, or about four million people, over the past decade. In the past few months, two high-profile technology companies — Oracle and Hewlett-Packard Enterprise — have announced they are moving their headquarters to the state, and Tesla may soon follow. As California was in the 20th century, Texas today looks like a state that can embody and shape the country’s future.
But Texas also has a big problem, as the world has just witnessed. A useful way to think of it is the fossil fuel problem.
‘This’ll happen again’
Even with its growing tech and health care industries, the Texas economy revolves around oil and gas. And those fossil fuels have created two threats to the state’s economic future.
The first is climate change, which is making Texas a less pleasant place to live. The number of 95-degree days has spiked, and severe hurricanes have become more common, including Harvey, which brutalized Houston and the Gulf Coast in 2017. Paradoxically, climate change may also be weakening the jet stream, making bouts of frigid weather more common.
On the national level, Texas politicians have played a central role in preventing action to slow climate change. On the local level, leaders have failed to prepare for the new era of extreme weather — including leaving the electricity grid vulnerable to last week’s cold spell, which in turn left millions of Texans without power and water.
Many residents feel abandoned. In Copperas Cove, a city in central Texas, Daniel Peterson told my colleague Jack Healy on Saturday that he was utterly exasperated with the officials who had failed to restore power six days after it went out. He is planning to install a wood-burning stove, because, as he said, “This’ll happen again.”
In Dallas, Tumaini Criss spent the weekend worried that she would not be able to afford a new home for her and her three sons after a leaky pipe caved in her ceiling and destroyed appliances and furniture. “I don’t know where that leaves me,” she said.
In San Antonio, Juan Flores, a 73-year-old Navy veteran, told my colleague Giulia McDonnell Nieto del Rio that he was frustrated by the lack of communication from local officials. When Giulia interviewed Flores, he had not showered in days (and graciously warned her to stand back while interviewing him, saying, “I stink”). To get enough water to flush his toilet, he had walked to a bar. To heat his apartment, he was boiling water on his stove.
The next energy industry
The second threat is related to climate change but different. It comes from the possibility that alternative energy sources like wind and solar power are becoming cheap enough to shrink Texas’ oil and gas industry.
“The cost advantage of solar and wind has become decisive, and promises to become vaster still,” Noah Smith, an economist and Texas native, wrote in his Substack newsletter. “I don’t want to see my home state become an economic backwater, shackled to the corpse of a dying fossil fuel age.”
Instead of investing adequately in new energy forms, though, many Texas politicians have tried to protect fossil fuels. Last week, Gov. Greg Abbott went so far as to blame wind and solar energy — falsely — for causing the blackouts. The main culprit was the failure of natural gas, as these charts by my colleague Veronica Penney show.
As Smith explains, the best hope for Texas’ energy industry is probably to embrace wind and solar power, not to scapegoat them. The state, after all, gets plenty of wind and sun. “Texas can be the future, instead of fighting the future,” Smith wrote.
The future isn’t the past
The larger economic story here is a common one. Companies — and places — that have succeeded for decades with one technology rarely welcome change. Kodak didn’t encourage digital photography, and neither The New York Times nor The Wall Street Journal created Craigslist.
Texas’ political and business leaders have made a lot of successful moves in recent decades. They have avoided some of the political sclerosis that has held back parts of the Northeast and California, like zoning restrictions that benefit aging homeowners at the expense of young families.
But Texas’ leaders are sacrificing the future for the present in a different way. They have helped their fossil fuel companies maximize short-term profits at the expense of the state’s long-term well-being. They have resisted regulation and investments that could have made their power grid more resilient to severe weather (as this Times story documents), and have tried to wish away climate change even as it forces Texans to endure more miserable weather.
In those ways, Texas is offering a different — and more worrisome — glimpse into the future.
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