If Texas wants to continue to be a leader in oil, the Permian Basin needs more energy.
That’s the warning influential trade groups representing oil companies have been telling state lawmakers and regulators for years.
A dearth of power plants and transmission lines connecting the region to the rest of the state’s grid means there isn’t enough electricity to power field operations, such as compressors and oil pumps.
In 2023, lawmakers offered a solution
that spelled out a dramatic expansion of electricity transmission infrastructure in the Permian Basin, the state’s biggest oil field.
“Texas’ thriving production is driving the state’s success,” the Texas Oil and Gas Association, a statewide trade group whose membership makes up roughly 90% of the state’s crude oil and natural gas market, wrote to regulators charged with designing that plan. “And a reliable electricity supply is crucial to sustaining this industry.”
The industry’s advocacy has been successful. Costing upward of $13 billion, the Permian Basin Reliability Plan is now at the final stages of administrative review and public input before construction can begin, which could be as soon as next year, some observers say.
But the most recent blueprints of the plan — which include building the state’s biggest transmission line through the Texas Hill Country — have spurred opposition from a coalition of landowner and conservative groups and a handful of lawmakers who are asking regulators to pump the brakes.
Groups opposing the state’s plan worry that construction along beloved landscapes and rivers will damage the environment and usher in higher costs for ratepayers. A solution, they said, would be for regulators to revisit their plans.
“We understand the Permian Basin needs reliability,” said Jada Jo Smith, president of the Hill Country Preservation Coalition, a group composed of landowners and conservationists. “We’re not saying we don’t understand it needs to happen, we’re just saying do it the right way. The process needs to be carefully thought out.”
Industry leaders said oil companies can’t afford to wait. Oil and gas production has skyrocketed in Texas, a milestone that industry leaders said has also become a bottleneck. The West Texas oil fields lack adequate infrastructure to import large volumes of electricity to maintain momentum.
“To be very blunt, in order for Texas to continue to be the beacon for economic growth it must develop these projects in a timely fashion,” said Ben Shepperd, president of the Permian Basin Petroleum Association. “And the greatest risk of failure for the Permian Basin Reliability Plan is for these necessary projects to falter under any sort of delay.”
In 2024, the Texas Oil and Gas Association said its members had a blockbuster year, a milestone accompanied by a looming risk: electricity.
The available infrastructure was, the Petroleum Association told the Public Utility Commission in a letter, “years behind the electrical needs of the industry.”
Over the next two years, the utility commission, the Electric Reliability Council of Texas, the state’s main grid manager, and the oil and gas industry debated whether construction should be split into two phases or built all at once.
Fulfilling the wishes of the oil and gas industry and the industrial sector, the utility commission partially approved ERCOT’s proposal to build or improve 260 transmission lines across Texas by 2038. That plan includes three major transmission lines, otherwise called import paths, one of which would transport electricity from east to west. These lines, called 765 kV lines, can carry more electricity than any other line that currently exists in Texas. It will cost nearly $14 billion, a cost that ratepayers are expected to cover.
“One thing our members have recognized is the need for these transmission projects to move without delay,” said Shepherd, the Petroleum Association’s president. “For years, the demand for this infrastructure has far outpaced construction and while we have long said we are agnostic about the voltage, routes, or other considerations, we are deeply concerned about delays, given that these projects have been needed for the better part of the last decade.”
State Rep. Charlie Geren, the Fort Worth Republican who wrote the bill, agreed, telling the utility commission in a 2024 letter not to phase out the project.
“I want to make it clear that it is my legislative intent that HB 5066 be fully implemented and should not be held up or delayed by the discussion of higher voltage lines for the state,” Geren wrote.
Geren did not respond to an interview request.
Regulators at the utility commission have greenlit most of the 260 proposed projects. But the utility commission has yet to fully approve 33 of the biggest, most controversial proposals of the expansion package. The six companies that proposed the projects still require the final stamp of approval, which includes public input.
Multiple groups — conservative policy analysts and grassroots movements — have already begun urging the utility commission to reconsider a proposed path through the Devil’s River in the Texas Hill Country. And now they’re getting a boost from state lawmakers.
The groups argue that the project is moving too fast and costs too much, and hope their advocacy will result in proposals for other routes and additional studies.
Brent Bennett, a policy director at the Texas Public Policy Foundation, a conservative think tank, said another factor driving up the demand is data centers. He said the evidence of that demand comes from studies relying on speculation, as many of the projects have not been built or connected to the state’s grid, but rather state they intend to.
“I think eventually, if the demand comes, we’re going to need them,” Bennett said of the transmission lines. “But how soon do we have to build them? And can we do this in a more phased, less disruptive manner?”
Residents have already begun organizing to try to stop the project in the Hill Country, where a network of rivers cuts through rolling hills and grassland in Central Texas. The region has a storied camping culture spanning generations. Now it’s the site of gatherings in protests and town halls. The project, residents of the area argue, could devastate the landscape.
“We just started thinking, ‘Gosh, this is going to be devastating for these areas that they’re proposing,’” said Smith, of the conservation group whose coalition consists of 48,000 people, including 17 other organizations. “All of these areas, their livelihood depends on rivers in the summer and hunting in the winter, and these proposed routes really threaten that.”
Some lawmakers — including those who previously supported the legislation — agree. At least five of them, whose districts are in areas where the transmission line would pass through, wrote a letter to the utility commission in January, asking regulators to reevaluate their plans. Two of them — state Reps. West Virdell, R-Kerrville, and Don McLaughlin, R-Laredo — had not been elected when the bill was passed. State Rep. Eddie Morales, D-Eagle Pass, and Sens. Roland Gutierrez, D-San Antonio, and Pete Flores, R-Llano, voted for the bill.
“We have each heard from hundreds of constituents, along with business organizations, local officials, and conservation groups, expressing significant concerns about the potential impacts of this project,” the letter said. “Given the magnitude of this project, we believe additional time is necessary to fully evaluate the most responsible path and consider new transmission route links that will avoid pristine river basins, minimize land fragmentation, reduce ecological harm, protect sensitive water resources, and ensure meaningful public engagement.”
In a statement to The Texas Tribune, Morales said at the time, new transmission lines were vital for lawmakers to address. Morales represents the Devils River State Natural Area located in Val Verde County.
“This line will be built, and Texas will benefit from it,” he said. “However, I am urging the PUC to recognize the importance of preserving this pristine landscape and reject the possibility of a proposed line to cut through this region.”
The other lawmakers did not respond to an interview request.
The Public Utility Commission of Texas told the Tribune it has received four applications for 765 kV projects. Additional details on those projects and applications are available on the agency’s website. Residents can protest the projects or apply to intervene in the proceedings. The utility commission has 180 days from the date the applications are filed to approve, modify, or deny them. The process involves legal proceedings before the State Office of Administrative Hearings.
“The PUCT’s Office of Public Engagement has attended public meetings, conducted informational briefings with state legislators to inform the public of these proceedings, and fielded over 135 calls from consumers,” a spokesperson for the utility commission said. “The (transmission service providers) responsible for each project conduct the majority of public outreach and have been hosting multiple open houses for each project in their service areas.”
___
Disclosure: Ben Shepperd, Permian Basin Petroleum Association, Texas Oil & Gas Association and Texas Public Policy Foundation have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
___
This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.
