AUSTIN – The economic benefits Texas receives from having abundant, affordable, and reliable energy will be threatened if policy makers continue to interfere with marketplace decisions, according to a report published today by the Texas Public Policy Foundation.

“This study demonstrates that the entrepreneurial culture made possible by the relatively free marketplace in energy was an essential driver of the Texas economy over the last 10 years,” said the Foundation’s Kathleen Hartnett White. “Texas has been blessed with enormous natural resource bounty, and our policymakers have had the wisdom to avoid tampering with the free-market, dynamic use of these resources, leading to both economic prosperity and environmental success.”

The report, “Texas Energy and the Energy of Texas,” was prepared for the Foundation by Steven F. Hayward, Ph.D., and Kenneth P. Green, Ph.D. of the American Enterprise Institute. The report takes a comprehensive look at the central role that energy plays in Texas’ economic success, as well as the potential threats posed by ill-considered policies.

“The affordability of energy is a key component in the economic competitiveness of Texas,” Dr. Hayward said. “States that have attempted to intervene in energy markets are saddled with the nation’s highest energy prices, and find key industries are no longer competitive.”

The report points out that while Texas is responsible for more than half of U.S. oil and gas production, it is also the nation’s top coal consumer and ranks eighth in coal production. Because of Texas’ high concentration of energy-intense manufacturing industries, Texas is America’s top industrial state, using more energy for industry than the next three states combined.

“Texas is the largest energy producing and consuming state in America,” Dr. Hayward said. “Energy use is a central factor in the state’s prosperity.”

The report concluded that the best energy strategy is to develop energy resilience through a diversified portfolio that emphasizes abundance, affordability, and reliability. The best policy for achieving such resilience is an open, adaptable marketplace for competing energy supplies and technologies, rather than mandates and patchwork subsidies that introduce artificial distortions and constraints in energy markets.

“The goal of policy should be to make the entire ‘energy pie’ bigger, not to try to force favored parts of the energy pie to grow or shrink,” Dr. Hayward said. “The best advice for Texas policy makers can fit on a bumper sticker: ‘Don’t Mess with Texas Energy.'”

The report, “Texas Energy and the Energy of Texas,” is available for free download on the Foundation’s website,

Kathleen Hartnett White is Distinguished Fellow-in-Residence and Director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation. She served six years as Chairman and Commissioner of the Texas Commission on Environmental Quality.

Steven F. Hayward, Ph.D. is the F.K. Weyerhaeuser Fellow in Law and Economics at the American Enterprise Institute in Washington, D.C. and Senior Fellow at the Pacific Research Institute for Public Policy in San Francisco. He widely publishes on a variety of topics, including energy, environmentalism, law, economics, and public policy.

The Texas Public Policy Foundation is a non-profit free-market research institute based in Austin.

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