Exxon Mobil: More Pain Ahead, With The
Oil Game Likely Over (Rating Upgrade)
25 June
2023
By J. David Goodman
![](images/images_06_26_2023/pic5.png)
Solar panels in Kaufman, Texas. So far this
year, about 7 percent of the state’s electricity supply has
been solar-generated, and 31 percent wind-generated.© Nitashia
Johnson for The New York Times
Strafed by
powerful storms and superheated by a dome of hot air, Texas has been
enduring a dangerous early heat wave this week that has broken
temperature records and strained the state’s independent power grid.
But the lights and air conditioning have stayed on across the state,
in large part because of an unlikely new reality in the nation’s
premier oil and gas state: Texas is fast becoming a leader in solar
power.
The amount of solar energy generated in Texas has doubled since the
start of last year. And it is set to roughly double again by the end
of next year, according to data from the Electric Reliability Council
of Texas. Already, the state rivals California in how much power it
gets from commercial solar farms, which are sprouting across Texas at
a rapid pace, from the baked-dry ranches of West Texas to the booming
suburbs southwest of Houston.
![](images/images_06_26_2023/pic6.png)
Amid the heat wave, strong storms have
knocked out power for more than 100,000 customers in Texas and spawned
at least two deadly tornadoes, including one that killed at least four
on Wednesday in the central Texas town of Matador.
© Annie Rice/Lubbock Avalanche-Journal, via Associated Press
“Solar is
producing 15 percent of total energy right now,” Joshua Rhodes, a
research scientist at the University of Texas at Austin, said on a
sweltering day in the state capital last week, when a
larger-than-usual share of power was coming from the sun.
![](images/images_06_26_2023/pic7.png)
The state has endured a dangerous early
heat wave that has broken temperature records and strained the state’s
independent power grid.
© Go Nakamura for The New York Times
So
far this year, about 7 percent of the electric power used in Texas has
come from solar, and 31 percent from wind.
The state’s increasing reliance on renewable energy has caused some
Texas lawmakers, mindful of the reliable production and revenues from
oil and gas, to worry. “It’s definitely ruffling some feathers,” Dr.
Rhodes said.
Several bills passed by the Republican-dominated State Senate in the
spring contained provisions that would add new costs and regulations
to the solar and wind industries and severely limit the number of new
projects in the state, energy experts said. The bills failed to pass
before the legislative session ended last month, but the desire among
many Republicans in the state to take similar action, and their
skepticism about renewable power, remains strong.
“Wind power was the biggest infrastructure mistake in TX history,”
State Representative Jared Patterson, a conservative Dallas-area
Republican, said on Twitter Wednesday. “It’s hot and will get hotter,”
he wrote in an earlier tweet. “Solar is helping, but make no mistake,
the 9th largest economy in the world runs on natural gas.”
![](images/images_06_26_2023/pic8.png)
Lt. Gov. Dan Patrick at the Texas State
Capitol in Austin this week. “We don’t have enough dispatchable
energy,” he said last month, referring to energy sources that can be
quickly turned on in an emergency.© Jay Janner/Austin
American-Statesman, via Associated Press
The politics around electricity generation in
Texas have undergone a rapid shift in recent years, punctuated by the
failure of the power grid during a deadly winter storm in February
2021. The immediate response of many Republicans, including Gov. Greg
Abbott, was to blame frozen wind turbines, though subsequent reviews
found that the persistent cold caused widespread outages at power
plants fueled by natural gas.
The June heat wave has renewed debate over the grid as temperatures
climb to dangerous levels. The border town of Del Rio reached 113
degrees on Tuesday, the highest temperature since records began over a
century ago, according to the National Weather Service. Then, on
Wednesday, it was 115 degrees.
It was not an isolated event. The heat dome perched over Texas
followed one that broke records in Puerto Rico at the beginning of the
month, and another one that dried out central Canada, sparking
disastrous wildfires. Scientists have warned that the steady warming
of the planet is leading to an increase in the intensity and duration
of heat waves.
Many Texans have become expert at following the ebb and flow of the
state’s energy market, whose curves of supply and demand are posted in
close to real time by the Electric Reliability Council of Texas, or
ERCOT. If demand for energy threatens to exceed supply, rolling
blackouts could be a last resort.
State leaders have taken few steps to address surging demand in the
fast-growing state. On Sunday, Mr. Abbott vetoed a bill aimed at
increasing the energy efficiency of new Texas homes, saying the
measure was “not as important as cutting property taxes.”
The supply and demand curves briefly approached each other earlier in
the week, prompting a call from ERCOT for customers to voluntarily use
less electricity.
Paul Rasbury, who owns a flower shop outside Fort Worth, said he had
already made a practice of reducing his energy use. “We’re running our
temperatures up, putting foil on the windows, closing up certain rooms
and praying,” he said. “Lots of prayers.”
The heat has been punishing across the state, even for those
accustomed to high temperatures. “It’s the humidity that gets me,”
said Kristen Triplett, standing in the sun in the Dallas suburbs on a
day when the dense air felt like 114 degrees. “It’s like breathing in
water.”
Amid the heat wave, strong storms have knocked out power for more than
100,000 customers in Texas and spawned at least two deadly tornadoes,
killing three last week in Perryton, in the northern Panhandle, and at
least four on Wednesday in the central Texas town of Matador.
But for much of the last week, the same beating-down sun that
endangered the lives of Texans also helped to power the state.
“Renewables are definitely saving the grid and saving our wallets,”
said Alison Silverstein, an independent energy consultant based in
Austin, referring to the impact on electricity prices.
Another test is set to come early next week, when more excessive heat
is expected to push energy demand beyond previous record levels.
For many years, the state’s Republican leadership embraced renewable
power. Former Gov. Rick Perry helped establish Texas as the leading
state for wind power, backing a multibillion-dollar effort in 2005 to
create transmission lines to bring power from the windy western part
of the state to the major population centers.
And the competitive Texas energy market, long supported by state
leaders, has allowed renewable energy to develop faster than in many
other states, first with wind farms and now, as the cost of solar
technology has declined, with vast fields of solar arrays.
“As a state, we welcomed this, we worked hard to make it happen,”
State Senator Nathan Johnson, a Democrat from Dallas, said in his
office at the Texas Capitol. “Now, renewable energy has become a
convenient scapegoat for the lack of reliability in our energy grid.”
Republican lawmakers have increasingly questioned the dependability of
wind and solar power — with some referring to renewables as
“unreliables” — as well as the level of subsidies offered to wind and
solar projects.
“It just seems like there’s a really unlevel playing field in the
market,” State Senator Phil King said in a hearing this year. “If we
level up that playing field, are people going to start going out and
building gas plants?”
The concern about reliability has been echoed by Lt. Gov. Dan Patrick,
who worried that Texas did not have sufficient available capacity in
reserve to make up for a situation in which wind and solar
underperform on a given day.
“We don’t have enough dispatchable energy,” Mr. Patrick said last
month, referring to energy sources that can be quickly turned on in an
emergency. Those sources can be batteries, but their capacity is still
small. Usually, utilities turn to natural gas-fueled power plants.
Last month, the Texas Legislature passed a new $10 billion program
mostly to incentivize the construction of new natural gas power
plants. The sum includes $1.8 billion for local hospitals and other
critical services to purchase backup power generators, a provision
originally proposed by Mr. Johnson.
Republicans also advanced legislation that would have increased costs
and regulation for renewable energy producers, including new fees for
transmission and ancillary services as well as new permitting
requirements and rules about where projects could be located.
The legislation failed — but only at the last minute, and not before
raising concerns within the industry.
“It’s a huge irony,” said John Berger, the chief executive of Sunnova
Energy, a residential solar power and battery company based in
Houston. “The growth of wind and solar is because Texas is more
capitalistic than many other states,” he said, “so the response from
the so-called capitalists in Austin was socialism — having the state
invest $10 billion” in natural gas.
“It’s blatant protectionism and it’s not what made Texas great,” he
added.
Texas still trails California in the amount of solar power on the
roofs of homes. But in the growth of solar farms, it has been rapidly
outstripping the Golden State.
Outside Houston, in Fort Bend County, there are now six large solar
farms, up from one in 2020.
“It’s being commissioned as we speak,” Joaquin Castillo, the chief
executive of Acciona Energy North America, said of the company’s new
1,500-acre solar farm in Fort Bend, which is set to switch on this
summer. “Texas historically has shown a strong commitment to a free
market,” Mr. Castillo said. “And it’s a fast-growing market in terms
of demand.”
The change has been rapid and notable, particularly in rural West
Texas, where voters are often conservative, usually supportive of oil
and gas development — and increasingly benefiting from the spread of
solar power.
“We’re better off financially for it,” said Joe Shuster, the
Democratic county judge in Pecos County, north of Big Bend National
Park. “I don’t know what the megawatts we put out are, but it’s a
bunch.”
He said the sprawling county has long had oil and gas development.
Then came wind. Now solar. Mr. Shuster said he invited President Biden
to visit the county and see how fossil fuel and renewable energy
sources can be developed in tandem.
“Everybody throws these stones at green energy,” Mr. Shuster said.
“They can coexist together. I’m a firm believer in that.”
The president never did respond to his invitation.
Mary Beth Gahan contributed reporting from Dalla
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