State Senate takes up Texas Energy Independence Act

By Bethany Blankley | The Center Square

The state Senate is now taking up the Texas Energy Independence Act, designed to stop what proponents say is overreach by the federal government in the wake of executive orders President Joe Biden has issued impacting the oil and gas industry.

Filed by Rep. Brooks Landgraf, R-Odessa, HB 1683 passed by a vote of 110-33 on May 11 and was referred to the Senate Natural Resources & Economic Development Committee on Thursday.

“I filed HB 1683 to protect the livelihood of my fellow West Texans, the hardest working men, and women on the face of the earth,” Landgraf said. “But, as is often the case, what is good for the Permian Basin is good for the state as a whole. The Texas Energy Independence Act ensures taxpayer dollars collected on the state level will not be expended to enforce unnecessary federal oil and gas regulations.”

House Bill 1683 would prohibit state agencies and officials from contracting with or providing assistance to any federal agency or official regarding the enforcement of a federal statute, order, rule, or regulation concerning oil and gas operations if the regulation does not already exist by state statute.

Texas has already sued the Biden administration over what it argues is federal overreach negatively impacting the oil and gas industry, and the legislation would add another aspect of protection to the state’s lifeblood, Landgraf argues.

The industry paid roughly $38 million in taxes a day to fuel Texas’ economy last year, despite major setbacks during the state’s lockdown, and a total of $13.9 billion in state and local taxes and state royalties for fiscal 2020.

Nearly all of the state’s oil and gas royalties, 99%, went toward the Permanent School Fund and the Permanent University Fund, which support Texas public education. Texas school districts received more than $2 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities.

Counties received $688.4 million from these property taxes. The state’s Rainy Day Fund also received $1.657 billion from state and local taxes paid by the oil and gas industry.

“Oil and natural gas will continue to play an essential role in environmental progress and the energy and economic strength of Texas, providing power, products, high-paying jobs and billions in government revenues for decades to come,” Todd Staples, president of the Texas Oil & Gas Association, said. “Positive trends in the oil and natural gas industry benefit every Texan, whether you live near the oil patch or not.”

On April 23, Texas joined a 10-state coalition to sue the Biden administration over an executive order issued to establish a “working group” of federal bureaucrats charged with calculating the “social costs” of certain emissions.

Texas also joined a lawsuit filed by Louisiana Attorney General Jeff Landry on March 24, suing Biden over another executive order issued to halt new oil and natural gas leases on federal property.

On March 17, Texas and Montana led a multistate complaint against the Biden administration for revoking the 2019 Presidential Permit for the Keystone XL pipeline.

“Our way of life is under attack,” Landgraf said. “But those who wish to stifle production fail to recognize the micro and macro importance of what we do out here. So many things that are necessary to daily life, including everything from baby diapers and children’s toys to car tires and cell phones, are a direct result of the hydrocarbons we pull from the ground. HB 1683 protects Texas jobs and American freedoms. It really is as simple as that.”

The Carbon Neutral Coalition praised the House for passing the bill, arguing it is “key to creating the framework to incentivize Carbon Capture Underground Storage (CCUS), which will preserve the fossil fuel industry and launch new economic opportunities.”

The coalition seeks to establish an infrastructure to incentivize the energy industry to cut their carbon emissions by utilizing CCUS. The CNC says it is working with existing oil and gas and energy stakeholders to advocate that Texas create a regulatory framework to establish this infrastructure.

“As the energy industry seeks to reduce its carbon emissions, Texas must preserve the fossil fuel industry, which directly employs hundreds of thousands of Texans,” CNC’s founder Corbin Robertson Jr. said. “In order to do this, the state needs to create the regulatory framework that will preserve this industry by incentivizing green fossil fuels.

Landgraf’s bill, CNC argues, is a first step toward enabling Texas to develop “a regulatory structure conducive to the goal of carbon neutrality.”