Industry Information

Reliable and affordable energy is the factor that, more than any other, lifted Texas to prominence in the world economy.

For much of the twentieth century, Texas’ economy was driven by the oil and gas industry. At the height of the oil boom of the early 1980s, the industry accounted for more than a quarter of the gross state product and of state government revenues. Though the state’s economy has diversified over the last 30 years, the industry is still important to our welfare, and has seen a recent resurgence due to rising oil and gas prices.

Today, the energy landscape is changing. Fortunately, Texas has an abundance of alternative fuel sources — and the human capital needed to tap them. Thanks to its history as a leading energy producer, Texas is blessed with an abundance of technical, legal, financial and research expertise that can be deployed to meet the challenges of providing energy for a growing population and economy.

The state is the nation’s largest producer of energy and in 2006, the Texas energy industry employed more than 375,000 people, who earned $35 billion in wages

•Clean tech is the fastest growing industry in history, a $7 trillion global opportunity

•Texas ranks in the top five states in the clean tech industry

•Texas has the most wind generation capacity among states, at 27 percent of the national total

•Texas also is the nation’s largest producer of “biodiesel.” According to the National Biodiesel Board, Texas has a production capacity of 464 million gallons annually, about 17 percent of the national total

Texas has considerable solar resource potential. It receives significant direct solar radiation, providing energy that can be harnessed by photovoltaic (PV) cells and turned directly into electricity or that can be used by solar-thermal plants to produce steam and drive electricity producing turbines. West Texas has more than double the direct solar radiation of East Texas, so it is an excellent location for PV or for utility scale concentrating solar power (CSP) technologies, which use large mirrors to focus the sun’s power.

The solar power industry is growing at a staggering rate, and much of that growth will take place in Texas. The Energy Information Administration projects that solar energy produced in the U.S. will grow significantly over the next 25 years. In 2005, the Texas Legislature set a goal of installing 10,000 megawatts of renewable energy by 2025, 500 MW of which must come from non-wind sources.

This all bodes well for those hoping to build a solar power career in Texas. For example, CSP plants create five times more long-term jobs and 10 times more construction jobs than a comparable natural gas plant, according to the National Renewable Energy Laboratory. There will be tremendous demand for employees in all areas of Texas’ solar industry in the coming decades.

Texas currently produces more wind power than any other state. As of 2009, it had almost 8000 megawatts of installed capacity, about 2.5 times the capacity of the second-place state, Iowa, according to the American Wind Energy Association.

The wind potential in Texas is so great that the State Legislature included a 500 megawatt non-wind goal within the renewable portfolio standard of 10,000 megawatts of renewable energy by 2025, predicting that otherwise wind would fulfill the entire goal. As the state works toward that goal and national policies develop further in support of renewable energy, the Texas wind industry will continue to grow.

Geothermal power uses steam generated by the heat of the Earth to produce electricity. Significant potential exists for geothermal development in Texas. Parts of both East and West Texas have sufficiently hot underground water resources to allow for direct use geothermal, which uses geothermal reservoirs to heat homes and businesses and facilitate industrial processes. In addition, old oil and gas wells can provide access to high-temperature resources previously thought inaccessible. The Geothermal Laboratory at Southern Methodist University estimates that Texas could have 2,000 to 10,000 megawatts of geothermal generating capacity within 10 years by taking advantage of these wells. Texas will most likely intensify its use of this clean and renewable resource in the coming years.

Hydroelectric power, generated by damming a river and forcing it to flow through a turbine that produces electricity, constitutes less than 1% of Texas’ power generation. Existing and potential hydropower projects are mostly confined to Central and Eastern Texas. The state has 23 hydroelectric dams with a total generating capacity of only 673 megawatts, and it is unlikely that it will see a significant expansion of hydropower in the future. However, the industry will maintain a healthy need for employees to maintain and administer existing facilities and to develop more efficient hydroelectric technologies.

Biomass is energy produced from wood, food crops, grasses, agricultural residue, manure and methane from landfills. Texas has significant forest and agriculture sectors, which means an abundance of biomass resources, primarily in East Texas and the Panhandle. Texas is home to several ethanol plants, and is the largest producer of biodiesel in the U.S. Biomass is also different from other renewable energy sources in that in addition to being used as an electricity source, about 10 percent of biomass is used for transportation fuels, although this number is slightly lower in Texas. In the state, the majority of biomass is used by the industries that create it—paper, chemical and food processing—to generate heat, electricity and steam used onsite.

Texas is taking the lead in biogas, having opened the nation’s first cellulose biogas plant in the U.S., in Leon County in East Texas in 2009. Four new plants will begin construction in Central Texas in 2010, and 50 plants are expected to be running within the next eight years, according to the U.S. Department of Agriculture. Texas’ extensive refining capacity and distribution infrastructure also means that as biofuels are developed nationally, the state is likely to become the center for refining and distributing those fuels.

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