.The Texas Energy Report

In our April Short-Term Energy Outlook, we forecast U.S. annual natural gas production from the Eagle Ford region in southwest Texas will grow from 6.8 billion cubic feet per day (Bcf/d) in 2024 to 7.0 Bcf/d in 2026. The increase in natural gas production comes as natural gas prices rise and demand for liquefied natural gas exports grows. Oil production in the Eagle Ford, on the other hand, has hovered around 1.1 million barrels per day (b/d) since 2020, and we forecast it will remain about the same through 2026.

This increase in natural gas production with stable oil production in the Eagle Ford region is a result of increasing gas-oil ratios. As more oil and natural gas are produced, pressure within the reservoir declines, allowing more natural gas relative to oil to be produced.

The Eagle Ford region contains many plays, the largest of which are the Eagle Ford play and the Austin…
 

Electrical grids are vulnerable to climate change, which amplifies intense heat and drought in the summer and intensifies storms in the winter. Nowhere is the problem more pronounced than in Texas, as recent history has shown.

Texas has the added challenge of running its own power grid that doesn’t cross state lines and connect extensively to neighboring regional grids—by design, thus enabling the state to evade regulation by the Federal Energy Regulatory Commission.

So it’s been hard for Texas in times of extreme heat or intense storms to come up with the power it needs at times of peak demand when, in the age of climate change, having adequate, reliable power can prevent people from freezing or sweltering to death in their homes.

“Broadening your interconnection reduces your risks and increases your reliability,” said Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis, a nonprofit energy policy research group, who noted the need for building interregional transmission lines. The lines are expensive to build, he said, but interconnection could lower energy costs once the transmission lines are built.

Now, freshman U.S. Rep. Greg Casar, a former a labor organizer, Austin City Council standout and rising progressive star in Texas, has introduced legislation that would establish power connections across state borders that he said would prevent climate-related blackouts as well as aid the transition to clean energy and cut electricity bills.

He also wants $11 billion from a federal Department…
 

Update: The bill passed the Senate last month has now moved to the House State Affairs committee

On March 24, 2025, the Texas Senate passed S.B. 388, a bill establishing a mandatory program for “dispatchable” power credits. The proposed program generally resembles programs established in other states to incent the construction of renewable and, in a few cases, nuclear resources. The stated intention of the program is to ensure that 50% of new capacity installed from 2026 onwards is “dispatchable.” Dispatchable is defined in contrast to “non-dispatchable” which is defined as being controlled primarily by forces outside of human control. However, battery storage, which is generally considered a dispatchable power resource, is expressly excluded from the credit program. S.B. 388 passed in an 18-13 vote, largely along party lines. The bill now heads to the Texas House of Representatives for consideration.

Technically speaking, the program is not entirely new—it repurposes an existing program that was never implemented. S.B. 388 is an amendment to Section 39.9044 of Texas’ Utilities Code, which was adopted as part of Texas’ restructuring of the electricity markets to encourage competition. Section 39.9044 created a natural gas energy credit trading program with the goal of encouraging 50% of megawatt generating capacity installed after 2000 to use natural gas. The goal was to incent the construction of competitive and efficient gas-fired generation over the nuclear and coal fired generation that dominated the industry at the time. However, the natural gas credit program never went into effect.

S.B. 388 amends Section 39.9044 to ensure that 50% of the megawatts of generation capacity installed in the Energy Reliability Council of Texas (“ERCOT”) region after January 1, 2026, be sourced from “dispatchable” generation other than battery energy storage. Specifically, S.B. 388 requires the Public Utilities Commission of Texas (“PUCT”) to activate a dispatchable …
 

Update: The House Land & Resource Management committee approved a committee substitute bill as of April 17th

April 3, 2025 — A bill to expedite the approval process for home energy storage and solar applications was quickly approved by the Senate Business and Commerce Committee in late March, was quickly passed by the Texas Senate and is now in the queue for attention by the state House.

After representatives from the Texas Solar and Storage Association joined Tesla and the Texas Advanced Energy Business Alliance in testifying in favor of the bill, the committee unanimously sent SB 1202 off to the full Senate.

The bill, sponsored by Republican Senator Bill King, would streamline the approval process in allowing licensed engineers and other third parties to conduct required home inspections and review applicable regulatory documents, which frees up the process of installation by no longer requiring regulatory agencies to inspect and review paperwork.

The bill passed the Texas Senate on March 31st and was received by the House on April 1st, where it’s awaiting action.

Following submission to the regulatory agency within 15 days by engineers or outside inspectors, then a decision by the regulatory agency would be…
 

There are many ways to make hydrogen — a carbon-free energy source and petrochemical ingredient. But no matter the method, all hydrogen production requires a lot of water.

In a recent study, researchers from The University of Texas at Austin examined just how much water the growing Texas hydrogen economy might need. They found that by 2050 new hydrogen production facilities could account for 2–6.8% of water demand in the state.

In comparison to big water draws, such as irrigation or municipal use, hydrogen’s demand is relatively small, said the study’s lead author Ning Lin, an energy economist at UT’s Bureau of Economic Geology. But it has the potential to disproportionately affect communities that face future water issues.

This includes the Gulf Coast, where most current hydrogen infrastructure is built and where most new hydrogen infrastructure is planned. The State Water Plan projects this region to face large annual shortages of fresh groundwater by 2040.

See the House version of this bill, HB 16, by clicking here

See the Senate version of this bill, SB 7, by clicking here

March 20, 2025 — A new bill has been introduced in the Texas Legislature, with a goal for the overall improvement of state water management. Texas House Bill 16 would extend the “powers and responsibilities” of the Texas Water Development Board. District 8 State Rep. Cody Harris (R), has sponsored a bill to broaden the role of the board members. The board manages several responsibilities pertaining to the state water supply such as, collecting and distributing relevant data, assisting with planning, budget, wastewater treatment, flood oversight and agricultural conservation operations.

“Last session, we took a major step forward by creating the Texas Water Fund—approved by 78% of voters. But our work isn’t done. HB 16 expands funding eligibility, prioritizes critical infrastructure repairs, and ensures every dollar is spent wisely,” Harris said. “HJR 7 takes it further by proposing a constitutional amendment to dedicate up to $2 billion in sales tax revenue over the biennium to secure Texas’ water future.”

Should HB 16 pass the board would have more flexibility to carry out their duties for instance:

The bill will be subject to voter approval during the regular session and if it passes, it will take effect on Jan. 1, 2026. — KTEK/MSN

From the Greater Houston Partnership:

Texas lawmakers are moving forward with securing the state’s long-term water future with sweeping new legislation aimed at increasing water availability and funding critical infrastructure improvements. Senate Bill 7 (SB 7) lays out a comprehensive framework to address these challenges, reinforcing the state’s commitment to sustainable water solutions.

The Partnership joins Texas 2036, a leading voice in the statewide coalition, in supporting this critical initiative. Filed by Sen. Charles Perry in early March, SB 7 represents one of the most anticipated policy measures of the legislative session.

Here’s a look at the proposed legislation in both chambers.

What’s in the Bill?

Sen. Perry was emphatic about the need for Texas to deliver a solution. “Water scarcity is no longer a distant threat,” the senator said in his Thursday press release announcing the bill’s filing. “It’s here, and it’s already disrupting the lives of Texans across the state. From West and South Texas, where agriculture is being strangled, to communities struggling to keep up with economic and industrial growth, the lack of water has become the biggest limiting factor for our state’s future.”

For decades, Sen. Perry has been a leading voice on this issue. SB 7 is the culmination of decades of work that saw its first taste of victory in 2023 with the creation of the Texas Water Fund. In SB 7, the plan includes three key components: expanded authority for the Texas Water Development Board to deliver funding for water projects, enhanced legislative oversight through the restructured Texas Water Fund Advisory Committee, and improved reporting and accountability measures.

What are ‘Sweeping Changes’?

SB 7 is targeting the following initiatives to bring new water resources across the Lone Star State:

• Creates the Texas Water Fund Advisory Committee to provide oversight of all Texas Water Fund activities
• Requires the Texas Water Development Board (TWBD) to submit a biennial progress report to the Legislature regarding projects financed with Texas Water Fund money
• Creates the Office of Water Supply Conveyance Coordination to optimize water supply infrastructure construction for regional and statewide interconnection and interoperability
• Protects non-saline groundwater reserves in the state’s rapidly depleting freshwater aquifers
• Preserves local control over surface water rights
• Authorizes TWDB’s state water bank program to purchase out-of-state water for importation to meet the needs of Texans across the state
• Expands both project eligibility for financing from the New Water Supply for Texas Fund and the available methods of financing
• Prioritizes wastewater treatment projects in rural communities and small cities for financial assistance
• Adds the Flood Infrastructure Fund to the Texas Water Fund structure, allowing flood projects to be financed using the funding stream constitutionally dedicated by Senate Joint Resolution 66.

Click here to download the one-pager outlining the goals for SB 7 and Senate Joint Resolution 66.

What is in the House Bill?

There are many similarities between SB 7 and House Bill 16  (HB 16) by Representative Cody Harris. The latter is broader in scope, with differences in approach to water infrastructure development, financial allocations, legislative oversight, and reporting measures. Here are several highlights from HB 16:

• Expands funding for produced water treatment projects, excluding those identified for oil and gas exploration
• Emphasizes prioritization of rural populations (less than 150,000) and projects with significant progress on state/federal permitting
• Allows funding transfers for the economically distressed areas program account and ensures funding for public water awareness, water conservation, and water loss mitigation
• Slightly modifies the makeup of Texas Water Fund Advisory Committee—including a seat for Texas Department of Emergency Management
• Expands the duties of the committee to conduct regular reviews of historically underutilized businesses participation, annual reports on statewide supply expansion, and direct oversight of state water project funding
• Requires regular reports to the legislature with updates on project delivery, completed infrastructure repairs and economic benefits of funded projects

What’s Next?

HB 16 has already been referred to the House Committee on Natural Resources. SB 7 will likely be referred to the Senate Committee on Water, Agriculture, and Rural Affairs, which Sen. Perry chairs.
 

See the introduced version of HB 14 by clicking here

See the introduced version of the similar bill in the Texas Senate, SB 2967, by clicking here

March 20, 2025 — From the Texas Public Policy Foundation: “Authored by Representative Cody Harris, HB 14 proposes a framework to support the development and deployment of advanced nuclear reactors in Texas for the purpose of bolstering energy security and economic growth through strategic collaboration, investment, and enhanced regulatory programs.

“The Electric Reliability Council of Texas (ERCOT) forecasts that Texas’ total annual load will double from 2023 to 2029 (ERCOT, 2024a, p. 4). While that amount of growth will not be realized in this decade, even realizing a portion of that growth demands more reliable and scalable electricity generation capacity in the ERCOT region. Nuclear energy will be essential in meeting this growing demand over the next decades. As the federal government reduces regulations and expands opportunities for nuclear development, Texas has the capability to lead the nation in the deployment of advanced nuclear reactors.” See the entire statement by clicking here

From Public Citizen: Re: HB 14, Nuclear Energy – Public Citizen testimony in opposition 

Dear Chairman King and Members of the Committee: 

On behalf of 30,000 members and supporters in Texas, Public Citizen appreciates the opportunity to testify against HB 14, relating to funding mechanisms within the Office of the Governor and Texas Public Utility Commission to support the deployment of advanced nuclear reactors in this state. We must oppose this bill because we do not think taxpayer dollars should support unproven nuclear technologies and we do not believe the bill will lead to more affordable energy on the ERCOT grid within a reasonable time. 

Tier 1 and 2 payments are available before a project generates any electricity. 

HB 14’s tiered payment system provides grant funding for projects at three separate tiers of completion, as follows. 

1. Tier 1 is for initial development costs.
2. Tier 2 is for costs associated with construction, with 30% of a grant awarded while the nuclear commission is considering the application and 70% awarded after the final investment decision is made by the company building the project. Tier 2 funds can even be given for costs incurred before a project enrolls in the Texas Advanced Nuclear Deployment program.
3. Tier 3 is for projects that are activated and operating and are awarded on a per megawatt basis.  

This means that projects can be awarded Tier 1 and 2 funds without generating any electricity at all. The bill does includes a provision that Tier 1 and 2 agreements may include a requirement to repay funds if no operating license is obtained. If this bill moves forward, we recommend a deadline for generating electricity be set, with any project not meeting that deadline required to return funds. See the entire statement by clicking here

March 20, 2025 — The U.S. Department of the Interior Office of the Inspector General has released an audit report showing the Railroad Commission of Texas successfully used federal grant funding for orphaned well plugging and complied with all related laws and regulations.

The RRC utilized its 40 years of well plugging expertise to expend a $25 million Initial Grant from the Infrastructure Investment and Jobs Act (IIJA) passed by Congress. The agency plugged more than 760 orphaned wells through the Initial Grant.

The Inspector General concluded that “We found that the State of Texas properly expended IIJA orphaned well initial grant funds and fulfilled program goals in accordance with applicable laws, Federal regulations, and grant terms…We make no recommendations as there are not reportable findings.” The audit also noted that the RRC “performs enhanced monitoring on all the contractual work performed on the well-plugging using IIJA funds” submitting daily reports on all completed work and costs as well as performing three levels of review to ensure invoice accuracy.

  

The majority of oil and gas wells that are no longer producing are plugged by the responsible operators. If an operator is non-compliant or goes out of business the well is considered orphaned, and the Railroad Commission administers a program to plug the wells.  The IIJA grants supplement state funds that are used annually to plug orphaned wells across the state.

The RRC is now utilizing the first phase of IIJA Formula Grants to plug wells. However, the formula grants include administrative hurdles that are not specified in the IIJA, such as reviews of Endangered Species Act compliance and compliance with the National Historic Preservation Act, that significantly delay plugging projects. In fact, in the first 12 months of the IIJA Formula Grant, the RRC plugged 45 percent fewer wells using federal funds than were plugged during the first 12 months of the IIJA Initial Grant due to the reviews.

“We are proud to remain a leader in well plugging efforts nationwide and look forward to working with the new Secretary of the Interior to expeditiously plug wells in Texas,” said RRC Executive Director Wei Wang. “According to a recent Interstate Oil and Gas Compact Commission…
 

By Kevin A. Schug & Alexander Kaplitz, University of Texas at Arlington, from The Conversation

March 20, 2025 — Because plastic is so commonly used, finding new ways to manage and recycle plastic waste is becoming ever more important. Plastic waste pyrolysis is one technology that could help address this issue.

This is a relatively new technique, so researchers still have only a limited knowledge of the pyrolysis process. As analytical chemists, we strive to understand the composition of complex mixtures, especially new creations from sources such as plastic waste pyrolysis.

What is plastic pyrolysis?

Plastic pyrolysis is a chemical process that involves chemically breaking down plastics into other molecules by heating the plastics to extremely high temperatures in the absence of oxygen.

Unlike traditional plastic recycling, pyrolysis theoretically isn’t limited to specific types of plastic. It could be made to accommodate many of them, although current technology is limited to a few types – polyethylene and polypropylene, used in food containers and bottles – at an industrial scale.

So, plastic pyrolysis could help handle the waste from consumer products such as plastic bags, bottles, milk jugs, packaging materials, wet wipes and even discarded children’s toys. Pyrolysis can also handle more complex plastic waste such as tires and discarded electronics, although solid waste handlers and recyclers avoid certain plastic types in pyrolysis, such as polyvinyl chloride – or PVC, which is found in pipes and roofing products – and polystyrene, used in packaging, as these can create harmful byproducts.

During pyrolysis, the plastic polymers are broken down into smaller molecules, resulting in the production of liquid oil, fuel source gases such as methane, propane and butane, and char.

Char is the solid residue left at the end of the pyrolysis process. It can be used as a carbon-rich material for various applications, including adding it to soil to make it healthier for farming, as it increases soil moisture and pH, benefiting nutrient absorption. Char also has the ability to absorb harmful carbon gases from the air, which can help prevent climate change.

The main downside of char is if it’s used too much it can increase soil alkalinity, which may hinder plant growth.

How pyrolosis works

The plastic pyrolysis process typically involves several key steps.

In the first step of pyrolysis, community recyclers collect the plastic waste and clean it to remove any contaminants. The plastic then gets shredded into smaller…