Texas should stick to free market principles to set an example

Vance Ginn
| Austin American Statesman

Texas remains a magnet for people and businesses, attracting more newcomers than most states. To keep that influx going and support a growing economy, the state must strengthen the infrastructure needed to meet Texas’ growing energy needs.

The Electric Reliability Council of Texas (ERCOT) projects that Texas’ energy demand will nearly double by 2030, increasing from 85 to 150 gigawatts in just six years. That finding has raised concerns among state policymakers and industry leaders.

The expansion of cryptocurrency mining, data centers, and the emerging artificial intelligence industry are driving much of this anticipated growth. Often viewed with skepticism, these sectors are integral to the modern economy and poised to drive the next economic revolution.

With the right free market policies, Texas can maintain its leadership in technological advancement and provide Texans with abundant energy. By removing the barriers that hinder energy production and discourage business from investing in Texas, the state can look forward to a bright future.

Even former skeptics recognize the importance of these industries, as seen in President Trump’s recent insistence on Truth Social: “We want all remaining Bitcoins to be MADE IN THE USA!!! This will help us achieve ENERGY DOMINANCE!!!”

Texas has the potential to lead in this arena. The state’s abundant land and natural resources support the growth of the technology sector. But that growth requires a reliable, abundant supply of energy, a potential that Texas is well-positioned to meet.

Texas is already a national leader in renewable energy production, with significant contributions from wind and solar. But reliable natural gas remains the cornerstone of the state’s energy supply, providing power regardless of weather conditions. In addition, Texas has a clear path forward with the potential to expand nuclear power, ensuring a solid energy mix through market forces rather than government planning.

Texas must use free-market incentives to create an environment conducive to building new power plants, including nuclear plants. Policymakers should send a signal that Texas is open for business and ready to efficiently meet growing energy demands.

Discouraging capital investment in energy generation through increased government intervention or supporting some generation at the expense of others is counterproductive. Instead of picking winners and losers, Texas should allow market competition to drive the delivery of abundant, reliable energy.

By embracing free-market policies, Texas is setting a powerful example for other states. When states experiment with different approaches, the best ideas can emerge, fostering a competitive environment that drives progress and prosperity.

For starters, Texas needs to show free-market leadership by resisting burdensome federal regulations that stifle energy industry growth. The state should free itself from the thrall of the Biden administration’s flawed green energy agenda, the Inflation Reduction Act. That can be done by rejecting federal funding, tax breaks and other measures while pressing Congress to end IRAs.

The Biden administration’s industrial policies are distorting the market. Texas should not fall into the trap of choosing a different industrial policy, but instead ensure a level playing field where all forms of energy can compete.

Texas has a bright future, likely leading the nation in economic and technological development. By embracing free market principles, reducing unnecessary spending, taxes and regulations, and fostering a competitive energy market, Texas can continue to attract people to start businesses, work, and raise families.

Vance Ginn, Ph.D., is the former chief economist of the White House Office of Management and Budget under President Trump and is currently president of Ginn Economic Consulting, based in Round Rock.