book
with a friend from Venezuela. I explained to him
that a big chunk of Texas’s prosperity owes to two
simple things: low taxes and few regulations (the
very same factors Chief Executive magazine most
consistently cites in its rankings). “What about all
your oil?” my friend challenged. “Your state must
get a lot of wealth from its oil revenues.” His
assumption reflected an understandable confusion,
given where he grew up. Venezuela, like many other
countries around the world, has nationalized its oil
industry to finance its government, to the enormous
detriment of the private oil companies that had
developed the infrastructure and technology for
extracting all that oil. We Texans wouldn’t do any-
thing like that, I explained, because from the
beginning we’ve recognized the primacy of private
mineral rights. Texas will prosper only by working
together with oil companies and individual property
owners to mutual benefit. Judging from Venezuela’s
present-day economic and social problems, nation-
alization, if anything, has failed the very people it
claimed to benefit.
Indeed, that’s something that sets Texans apart: a
sense that private energy development goes hand in
hand with every other kind of development. I
recently attended an environmental conference
hosted by the Aspen Institute. At one of the forums a
young woman from California received an award for
leading a successful effort to shut down a gas-to-
liquid processing plant—essential for converting nat-
ural gas into clean-burning fuel for combustion
engines—that was slated to be built near her home in
Santa Monica. How can this be? I thought. The City of
Santa Monica proudly advertises that its buses run on
liquid gas instead of diesel. And yet one of the city’s
residents was being rewarded for kicking out the very
source of that clean fuel—to say nothing of the jobs
the plant would have attracted to her town. It was the
NIMBY (“Not in My Back Yard”) mentality taken to
the extreme—a principle some have appropriately
called BANANA (Build Absolutely Nothing Any-
where Near Anyone). That kind of knee-jerk
response to energy development doesn’t go over too
well in Texas.
Texans are business-minded, first and foremost,
but that doesn’t mean we’re not progress-minded.
As an investor in and an employee of Green Moun-
tain Energy, the Austin-based renewable-power
utility, I’ve learned a lot about striking the balance
between the two. Before my time at Green Moun-
tain, I didn’t realize how expensive the technology
for solar- and wind-energy development is. Turbines
used to capture energy from wind and panels used
to collect energy from the sun create significantly
fewer units of energy for every unit of infrastructure
when compared with fossil fuels like oil and coal,
which contain a very large concentration of BTUs in
a very compact volume. When Texas launched its
groundbreaking private electricity market in the
early 2000s, Green Mountain saw a chance to make
clean energy not just available but profitable, by
combining natural-gas operations with wind-energy
projects to deliver electricity at a price that could
compete with that of coal-powered sources.
Back in 2004, a lot of my L.A. friends thought it
was strange that I’d want to move to Texas from Cali-
fornia. Eight years later, a few of them are probably
wishing they’d done the same. Today the California
economy is stalling, its population growth is flatlin-
ing, and its political clout is waning. Residents of the
Golden State are fleeing to Texas in ever-greaterv
numbers, as are Northeasterners and Midwesterners.
And once here, they’re staying put. In my mind,
Texas today is a lot like Paris in the 1920s. Back then,
the most innovative and creative writers and artist
were breaking the staid confines of Prohibition-era
America to taste the freedom of Paris when it was the
artistic and literary capital of the world. Today, the
best and brightest are flocking to Texas. Like Paris a
century or so ago, Texas is having its own golden age.
But unlike Paris’s, ours is built to last.
TEXAS GOT IT RIGHT!
