Texas is a wonderful, yet bizarre state.
Undoubtedly, it boasts some of the best Mexican food in the country. I love that whole Texas pride thing, too. It’s kind of charming, actually. Watching folks take so much pride in the state in which they live.
And the people of Texas are just magnificent. Some of the friendliest, most outgoing people I’ve ever known call Texas home.
Austin and San Antonio are two of my favorite US cities, and who couldn’t love the state that provided the set for one of the greatest horror films of all time: The Texas Chainsaw Massacre.
Truth is, I’ve got nothing but love for the good people of Texas.
But damn, I wish their politicians would stop eschewing progress for the sake of nonsensical ideology.
Particularly when it comes to renewable energy and electric vehicles.
The Lone Star State boasts some of the strongest and most abundant renewable energy resources in the country. In fact, it’s number one in wind power, and its solar industry is one of the fastest growing in the nation.
One could also argue that this rapid proliferation of renewable energy is the result of a sort of “hands off” approach that the state of Texas has long had when it comes to building out its energy economy. Something every free market advocate can support.
But recently, there’s been pushback against the continued integration of renewable energy by policy makers who seem to have lost their way when it comes to favoring free markets over government intervention.
As reported in the Washington Post, some of the state’s most anti-regulatory lawmakers are pushing new and onerous rules and permitting requirements for solar and wind, while backing measures that would require taxpayers to foot the bill to bolster and expand the state’s natural gas market.
Some have justified these moves by arguing that renewable energy is inherently unreliable and that more fossil fuels are needed to avoid another electricity blackout crisis — even though most of the loss of generating capacity during the 2021 outage came from gas power plants.
While it would be foolish to deny the benefits of having easily dispatchable resources, such as natural gas, the need to limit renewable energy growth in an effort to strengthen the natural gas industry is absurd. It’s also absurd to assume that natural gas is the best option for easily dispatchable electricity, anyway.
Thanks to the rapid development of battery storage technology over the past few years, we’re now seeing evidence that utility-scale battery storage can be about 30% cheaper than new natural gas plants.
Seems to me that the folks making these decisions should at least be familiar with the latest in dispatchable electricity technology and storage before making decisions that will cost taxpayers billions of dollars.
Yes, I said billions.
Word is, some policy makers in Texas are pushing to have taxpayers pony up $10 billion to support this effort, while putting a mandatory cap on renewable energy development.
This is not the free market flavor of policy that Texas claims makes it such a great place to do business. Quite the opposite, actually.
This is an effort to actively pursue a command economy approach to the state’s energy economy, and it’s being justified by political ideology. The state that claims to be a bastion of free market economics is essentially being infiltrated by socialist ideology.
We can see this with electric vehicles, too.
Last week, Governor Greg Abbott signed a law that requires electric vehicle owners to pay $400 after registering their vehicle, and then pay an extra $200 per year to help cover the taxes that are typically paid when you fill your vehicle with gas or diesel.
Those taxes are used to fund road and transportation projects.
So certainly, if electric vehicle owners are using public roads, it’s only fair that they chip in to cover their share.
While I loathe taxation in any form, I’d be wrong to suggest that electric vehicle owners should be able to drive on public roads without pitching in, too.
But Abbott’s new law isn’t particularly “fair” because it actually penalizes electric vehicle owners.
You see, the gas tax in Texas is $0.20 per gallon. And based on data from the U.S. Energy Information Administration, the average Texas driver pays about $88 a year in gas taxes.
So why would an electric vehicle driver have to pay as much as 354% more than the driver of a conventional internal combustion vehicle?
It’s because too many Texas politicians absolutely hate the idea of anything interfering with the oil and gas industry. And while they cannot stop people from buying electric cars, they can still make it difficult.
Fortunately, even with excessive taxation, electric vehicle adoption rates will continue to climb throughout the country. And this includes Texas, too.
Today, there are about 190,000 registered electric vehicles in Texas. By 2030, that number could exceed 2.8 million, representing a CAGR of 46.9%.
Certainly this will continue to benefit the companies that are producing the most popular electric vehicles in Texas, including Tesla (NASDAQ: TSLA), Ford (NYSE: F), GM (NYSE: GM), and Hyundai (OTCBB: HYMTF).
It’s worth noting that Tesla does have a commanding lead, and that lead will likely stay intact as long as the company continues to pump out quality electric cars in a state where politicians love his money, but hate his product.
Indeed, bureaucratic buffoonery at its finest.