Texas Trounces California in Energy Production—But the Policy Gap Is Closing

AI generated summary

Texas has long outperformed California in energy production, providing lower prices and greater reliability. However, recent government interventions threaten to undermine these advantages. While the federal government is shifting towards promoting more American energy production, Texas is beginning to mirror California's mistakes by introducing policies that distort the energy market, such as subsidies for various energy sources. This shift is concerning as it risks closing the gap that has allowed Texas to maintain its competitive edge in energy production.

The 2021 Winter Storm Uri highlighted vulnerabilities in Texas's energy infrastructure, revealing overreliance on intermittent energy sources like wind and solar. Despite a competitive retail market, the generation side is influenced by political favoritism and subsidies, which distort investment decisions. To maintain its status as an energy leader, Texas must eliminate these subsidies, allow market forces to dictate energy prices, and prioritize infrastructure development without taxpayer guarantees. If Texas continues down the path of interventionist policies, it risks facing the same challenges as California, including high prices and unreliable energy supply.