A federal court ruling threatens to jeopardize Texas’ clean energy future

Texas has long been known as an energy powerhouse based on oil and natural gas. In recent years, however, Texas has become a leader in renewable energy. Unfortunately, the future of Texas’ energy supply – from all sources – is threatened by an incorrect court decision earlier this year.

In August, the U.S. Court of Appeals for the District of Columbia issued a ruling in City of Port Isabel v. FERC (Federal Energy Regulatory Commission), which took the unprecedented step of revoking federal permits for two liquefied natural gas plants in South Texas – the Rio Grande LNG Terminal and Texas LNG valued at $18.4 billion – more than a year after they were issued. But the implications of this decision go far beyond LNG. If it stands, the ruling would set a precedent that could derail future development of all forms of energy, and Texas could lose its position as a clean energy leader.

According to the Electric Reliability Council of Texas, wind farms in Texas generated nearly 108 terawatts of electricity in 2023, accounting for more than 25% of total wind energy production in the United States. If Texas were its own country, it would be the fourth largest wind producer in the world. Texas also recently passed California as the nation’s top solar power generating state, thanks in large part to the Lone Star State, which more than tripled its annual rate of solar installations between 2020 and 2023.

But energy is only as reliable as the infrastructure that supports it. Building any type of energy infrastructure requires navigating a complex regulatory process that can take years, even if the process goes smoothly and the projects do not encounter significant obstacles. The D.C. Circuit’s revocation of approvals already granted creates even more uncertainty in this process.

One of the biggest challenges to expanding clean energy in the coming decades is building transmission lines to transport electricity from where it is generated to where it is needed most. For example, shifting power from wind farms in West Texas and solar farms in South Texas to metropolitan areas in Houston and Dallas requires investing billions of dollars in a grid that has not seen significant investment since the 1970s. ERCOT plans to spend $13.6 billion on transmission projects between 2024 and 2026. However, this investment, combined with additional planned transmission line upgrades, is still expected to fall short of the development needed to meet the state’s energy needs in 2030.

The same goes for other clean energy technologies like carbon capture and storage. Texas, with its vast oil and gas infrastructure and geologic storage potential, is an ideal location for this development, which is why the U.S. Department of Energy has committed billions of dollars to carbon capture and storage projects along the Gulf Coast. These projects require pipelines to transport the captured carbon dioxide to storage locations. However, additional approval uncertainty would delay the construction of this necessary infrastructure. And that’s on top of the significant delays these projects are already facing due to slow approvals for carbon storage wells from the Environmental Protection Agency.

While some see the delay in LNG plant development as a “win” for clean energy, the D.C. Circuit Court’s ruling actually threatens the future of all energy projects, including renewable energy, in Texas. If construction on a project had to be suddenly stopped more than a year after it began – just because some dedicated opponents kept filing frivolous lawsuits – who would even take care of building the infrastructure? Who would risk so much capital on something so uncertain?

Approvals have no weight when they can be so easily tossed aside.

By reducing regulatory uncertainty, Texas has become a global energy leader. This incentivized developers to take the initiative and expand infrastructure, moving us toward energy independence. The DC Circuit Court decision, if it stands, takes us in the opposite direction.

Matt Welch is state director of Conservative Texans for Energy Innovation, a group that advocates for energy innovation and clean energy policies based on the conservative principle of common sense and market-based solutions.

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