Exxon Mobil: More Pain Ahead, With The Oil Game Likely Over (Rating Upgrade)

25 June 2023
By J. David Goodman

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.

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.

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.”

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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