Testimony Before the Texas House Ways and Means Committee on House Joint Resolution 138 Regarding a Constitutional Amendment Prohibiting the Imposition of a Carbon Tax

Heartland Impact

March 24, 2024

Chairman Meyer, and Members of the Committee:

Thank you for holding this hearing on Senate Bill 677, legislation that would create a constitutional amendment prohibiting the imposition of a carbon tax to be submitted to the Texas voters.

My name is Samantha Vick, and I am the Senior Manager for State Government Relations at Heartland Impact. Heartland Impact is the advocacy and outreach arm of The Heartland Institute. Both are independent, national, nonprofit organizations working to discover, develop, and promote free-market solutions to social and economic problems. Heartland Impact specializes in providing state lawmakers the policy and advocacy resources to advance free-market policies towards broad-based economic prosperity.

Prohibiting the imposition of a carbon tax would provide paramount protection for all Texans from tax policy that would ultimately cost consumers more by picking government favorites among the various energy industries in Texas.

The impact of a carbon tax would raise the price of coal, natural gas, and gasoline enough to make them more expensive than their industry counterparts that would not be subject to any possible carbon tax – wind, solar, and electric vehicles powered by wind and solar.

When this happens, Texas consumers will have two options. First, they can begin utilizing wind and solar at greater rates, however, these forms of energy are intrinsically much more expensive than what Texans currently pay for coal, natural gas, and gasoline. Or secondly, they can continue to utilize coal, natural gas, and gasoline, at more expensive rates than ever before as energy producers and companies would inevitably pass down their new tax burdens into the costs for consumers.

Ultimately, consumers will be forced to spend substantially more money on energy and energy-related bills. Meanwhile, energy prices in Texas have increased 20 percent over the last five years according to data from the U.S. Energy Information Administration. Texas ranks third in the nation for the average electricity bill, only led by Hawaii and Connecticut in costs based on the average electricity bill as of December 2024.

The prohibition of a carbon tax is just as paramount for all of the 422,000 Texans employed in the oil and gas production industry. If carbon taxes are successful in their most theoretical state and incentivize consumers to turn away from fossil fuels altogether, there is a massive associated threat to the job security of Texas oilfield workers, coal miners, and coal or natural gas power plant operators. Not only would these hard-working Texans be disproportionally affected by a carbon tax, but they’d still have to pay higher-than-before prices for their energy bills.

Moreover, this comes at a time when energy and grid reliability are more important than ever. According to the U.S. Energy Information Administration, electricity demand is expected to grow by 15 percent in the next five years. This rapid growth is expected primarily due to the growth of data centers and the power demands of artificial intelligence.

Energy experts warn that rolling brownouts and blackouts are already an imminent threat, and the strain is only getting worse. Indeed, in August 2023, Texas hit all-time peak energy demand recorded on the Texas grid.

Proponents of green energy initiatives claim that solutions such as new solar and wind power projects can and will fill the demand gap by turning away from oil, natural gas, and coal, which would happen under a Texas carbon tax. However, they are dangerously mistaken. Even in sunny Texas, solar power facilities provide power at 24.6 percent of solar PV capacity factors—less than 25 percent of their rated capacity according to the U.S. Energy Information Administration.

This means that most of the time, baseload sources of energy such as oil, natural gas, nuclear, and coal power plants will be required to keep the lights on, the air conditioners running, and critical infrastructure functioning. After all, with the absence of the sun at night, when clouds obscure the sun, or when the wind isn’t blowing, we need to fill in where the energy comes from when Texas consumers flip their light switch.

Ultimately, utilizing the domestic sources of energy Texas is blessed with, without a cumbersome and counterintuitive carbon tax is the path to ensuring more reliable and affordable energy for Texans, while promoting a Texas-first economic and energy policy.

Thank you for your time and consideration today.