HoustonTiger43

🚨How Will @GinaHinojosaTX Impact Texas's #Oil and #Gas Industry? When thinking about this it is key to keep the following facts about Texas’s governmental system in mind: ◾️Texas has a weak governor by design. Hinojosa will be able to do her best to influence policy makers, but the real power is in the legislature and the array of commissions which regulate various aspects of the economy. ◾️The Lt. Governor’s office is more powerful since that office presides over the Senate. That office will be held by another Democrat - Vikki Goodwin - but will still sport a near-2/3rds majority Republican Senate. That majority will be the ONLY lever of statewide power the Republicans now hold, God help us. ◾️The Texas Railroad Commission will still sport a 2-1 GOP majority, at least for the coming two years. So, excessive regulation from that body is unlikely to be a problem. ◾️It is also important to note that Democrats also swept every seat on the state’s Supreme Court and Court of Criminal Appeals, all of which had previously been held by Republicans. This makes it far more likely that big litigation/lawfare could be used by Democrat/leftwing interests to slow the industry’s progress. Given all that, here are some key points on ways Hinojosa will have to impact the state's thriving energy sector: ◾️Again, the governor’s office is weak by design. Under Texas’s plural executive, the governor doesn’t run the Railroad Commission, can’t write severance tax law and doesn’t set gasoline prices. The real levers are the veto, appointments, special sessions and the bully pulpit. ◾️Republicans still hold the Railroad Commission 2-1. Democrat Jon Rosenthal beat Bo French for the open seat after Jim Wright lost the GOP runoff, making him the first Democrat on the commission since 1990. Christi Craddick and Wayne Christian keep the majority, though it is important to note that these two have frequently diverged on specific hearings and cases. ◾️Hinojosa’s one real lever there is vacancies. If a commissioner resigns or dies, the governor fills the seat until the next election under the state’s vacancy laws, and a Hinojosa appointee to the RRC could flip the majority. At that point, a Democrat majority could theoretically wreak havoc on the industry. ◾️Her oil and gas record while in the legislature is about methane. In 2025 she filed HB 1174, which would have required a gas capture plan with every drilling permit, and HB 1190, which targeted flaring on Permanent University Fund land. Both died in committee. That is permitting strings rather than a drilling ban, and I found nothing showing her proposing a ban on drilling or fracking. ◾️Her signature campaign promise is on power bills. She says she’ll direct the PUC to freeze residential electricity rates until data centers and other big users “pay for themselves.” Most Texans buy from competitive retailers whose prices the state doesn’t set, so how a freeze would work is unclear. ◾️She will be able appoint all five PUC commissioners and the TCEQ commissioners when their terms expire, which shapes ERCOT market design and air permitting over time. ◾️She wants more wind and solar on the grid but is skeptical of the 765-kV lines proposed by ERCOT and the PUC to move renewable generated power to market centers. Her platform wants “better ways to get wind, solar, and other clean and affordable energy onto the grid” while opposing “trampling” property owners to build 765-kV transmission in record time. ◾️Wanting more renewables while slow-walking the wires that carry them is energy absurdity in a nutshell. On the other hand, anything that slows down further overloading the @ERCOT grid with unreliable, weather-reliant generation is a net positive. ◾️She ran against data centers and Abbott’s moratorium, even though Abbott’s freeze invoked the same “data centers must bring their own power gen” requirement she favors. Go figure. ◾️She accused Abbott of letting data centers multiply, and he answered in a political panic with his “temporary” moratorium. Had Abbott won, the moratorium would have quickly ended. Hinojosa’s win could allow her to keep extending it for a variety of justifications. ◾️The Legislature boxes her in, but less so than it might have before Tuesday. Republicans kept the Senate at either 19-12 or 18-13, while Democrats flipped the House for the first time since 2003 and Goodwin beat Patrick. The GOP Senate writes the rules that give the lieutenant governor her power, and it can block any anti-industry bill. ◾️The money collected by the state from oil and gas is hard to touch because it is so critical to funding the state government. In FY2025, oil and gas production taxes brought in $7.86 billion (about 9% of state tax collections), royalties added $2.92 billion, and the Rainy Day Fund sits at a record $24.8 billion. Severance tax rates are set in statute, so changing them takes both chambers, including that Republican Senate. ◾️All in all, the outcomes of those judicial elections could prove much more damaging to the state’s industry than Hinojosa’s win over Abbott. Bottom line: We need to take a real-world view that Hinojosa’s a committed leftwing ideologue and her election is a net negative for sure. But the real potential damage coming to the Texas oil and gas industry is far more likely to come from the courts than the Governor’s mansion. That is all.