| News |

Economides: Texas Lost $7.7 Billion By Not Using Natural Gas To Keep Lights On

Keep Dallas Observer Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Dallas and help keep the future of Dallas Observer free.

Dr. Michael Economides, author, CNBC regular and University of Houston professor of chemical and biomolecular engineering, says Texas lost out on some $7.7 billion between 2005 and 2011 primarily because we didn't use natural gas for electricity.

Economides, it should be noted, is a vocal industry supporter and testified before Congress last year, criticizing the EPA's approach to its sweeping (and pending) study of hydraulic fracturing in America. So his position in the report released this morning isn't all that surprising. But it's still pretty interesting.

We know that the natural gas industry is in a slump, due in no small part to the fact that it glutted the market, a victim of its own success. As a result, big players like Chesapeake have diverted rigs in the Barnett Shale to pursue oil. According to this report, if power plants were using natural gas, we wouldn't miss out on the dough paid for the exploration, drilling, production, treatment and transportation of it in Texas. Nor would we lose royalties, severance taxes, sales taxes and local property taxes that accompany natural gas production. Economides also cites "leasehold improvements (such as roads)," but we wonder how much that's offset by the utter pulverization of county roads by, say, saltwater trucks ferrying production water?

The report says natural gas use for power generation has remained flat and even fallen off a little, while nationally its use is characterized by an upward trend. If we'd kept pace, Economides reasons, we would have burned through an additional trillion cubic feet of Texas-produced natural gas. And that, he says, would be money in our pockets.

Instead, power generators have continued to lean on coal, to their detriment. Coal-fired plants in Texas, money machines during the days of high natural gas prices, have become much less profitable. The amount of coal we buy out of state has increased 10 percent in the last six years, along with coal prices and the cost of transport. The total loss to the Texas economy from decreasing natural gas use was $2.5 billion in 2011 alone, Economides estimates, some $530 million of that in lost wages. "Most importantly, 8,600 long-term Texas jobs in the natural gas industry have been forfeited to coal imported from out of state," the report says.

What it doesn't mention, however, is the cost to the state in higher electricity prices. It's been said that the fastest way to inflate the price of natural gas is for power plants to use it as a fuel source. The further proliferation of gas-fired plants is, of course, on the industry's wish list, and Chesapeake has partnered with the American Lung Association in a public awareness campaign to fight air pollution ... emitted mostly by coal-fired power plants.

To be sure, there's much to recommend natural gas over coal. Combined-cycle natural gas-fired plants emit almost no sulfur dioxide and fine particulates, and about a tenth of the nitrogen oxide of coal-fired plants using current pollution control technology. And in these dry times, they use about half as much water.

But questions still remain regarding fugitive emissions of methane -- a potent greenhouse gas -- from production on down the line to transmission. As we noted earlier, the Government Accountability Office found that there is almost no oversight of natural gas gathering pipelines. Simply put, we have no idea how much methane is escaping into the atmosphere. We're only beginning to understand its effect on local air quality, and the mechanisms by which hydraulic fracturing may contaminate groundwater.

Yet coal isn't Economides only target. He goes after wind power, too. Texas leads the nation in wind-generated capacity, and in March set an all-time record when it supplied 22 percent of the electricity in the grid. But the report worries about the condemnation of hundreds of miles through the Hill Country for high-voltage lines to carry wind-generated electricity, including the impact on property tax valuations.

Sure, there's no denying that the natural gas industry has made it rain cash in Texas. I was just in Parker County, a place completely transformed by all that money. The problem is, as the locals will tell you, it hasn't always been for the better, and for every lost dollar lamented by Economides, there have to be at least a few on the other end that, so far, remain unaccounted for.

Keep the Dallas Observer Free... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Dallas with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the Observer community and help support independent local journalism in Dallas.


Join the Observer community and help support independent local journalism in Dallas.