Last Updated: July 18, 2024

Overview

Texas leads the nation in energy production, providing about one-fourth of the country's domestically produced primary energy.¹ Second only to Alaska in total land area, Texas occupies 7% of the nation's total area and stretches about 800 miles at its widest points, east to west and north to south.² Crude oil and natural gas fields are present across much of that expanse. Coal is found in bands that cut across the eastern Texas coastal plain and in other areas in the north-central and southwestern parts of the state.³ Additionally, Texas has abundant renewable energy resources and is first in the nation in wind-generated electricity.⁴ With a significant number of sunny days across vast distances, Texas is among the leading states in solar energy potential and generation.^5,6 Geothermal resources suitable for power generation also are found in eastern and southern Texas.⁷ Uranium—the fuel for nuclear reactors—was mined from sandstone deposits in the Texas coastal plain as early as 1961, and significant resources remain.^8,9 More recently, a project that will mine rare earth elements and other critical minerals is in development in southwest Texas. These minerals are used in many energy-related technologies and are deemed essential to U.S. economic and national security.^10,11

Texas ranks second in the nation, after California, in both population and the size of its economy.^12,13 Texas is the largest energy-consuming state, accounting for about one-seventh of the nation's total energy use, and it is sixth among the states in per capita energy consumption.^14,15 However, because Texas produces much more energy than it consumes, it is the nation's largest net energy supplier.¹⁶ The Texas industrial sector, which includes the energy-intensive chemical manufacturing, crude oil and natural gas extraction, and petroleum refining industries, is the state's largest energy consumer.^17,18,19 It accounts for more than half of the state's total energy consumption and 24% of the nation's total industrial sector energy use. The transportation sector is the second-largest end-use energy user in Texas and accounts for about one-fourth of the state's energy consumption.²⁰

The Texas climate varies significantly from east to west. Warm, moist air from the Gulf of Mexico sweeps westward across the state, losing moisture as it goes. The result is a climate that ranges from humid and subtropical along the coast, where much of the state's population resides, to semi-arid on the high plains of central and western Texas and arid in the state's mountainous west. Frequent freezing temperatures occur in winter in the lightly populated high plains, and summer temperatures average above 90°F in the most densely populated parts of Texas, where energy use for cooling is high.^21,22,23 Even so, the residential sector accounts for just one-eighth of the state's total energy consumption. However, in part because of the state's large population, Texas leads the nation in total residential energy use, even though it ranks among the lowest 10 states in per capita residential energy consumption. The commercial sector accounts for almost as much energy use as the residential sector.^24,25

Petroleum

Texas produces more crude oil than any other state and accounted for more than two-fifths (43%) of the nation's production from both onshore and offshore areas in 2023.²⁶ Texas has led all states in crude oil production in every year but one (1988) since at least 1960.^27,28 The state also accounts for more than two-fifths of the nation's crude oil proved reserves and has more than one-fourth of the nation's 100 largest oil fields as measured by reserves. Many of those fields are in the Permian Basin of West Texas and in the Eagle Ford Shale of South Texas.^29,30 The discovery of the Spindletop oil field in East Texas started the state's first major oil boom in 1901.³¹ Later discoveries led to increased state crude oil production until 1972, when Texas's annual crude oil production previously peaked at slightly more than 1.26 billion barrels. Output fell in subsequent years, and by 2007 production was only about one-fourth of the 1972 peak.³² However, because hydraulically fractured horizontal wells drilled in both the Permian Basin and the Eagle Ford shale led to increased crude oil production, a surge in production began around 2010 after more than 25 years of gradual decline.^33,34 In 2017, Texas oil production exceeded the state's 1972 peak, and in 2023 annual output reached a new record high, surpassing 2 billion barrels for the first time.³⁵ Texas crude oil is used as a national standard. West Texas Intermediate (WTI), a light (low density), sweet (low sulfur content) crude oil produced in Texas and elsewhere, is the benchmark for crude oil pricing in North America in both the physical and futures markets. WTI is a standard in part because of its ample supply and because of its proximity to a major market trading hub at Cushing, Oklahoma.³⁶

Texas is home to two of the nation's four U.S. Strategic Petroleum Reserve (SPR) crude oil storage sites. The SPR was created by Congress in the mid-1970s to offset the impacts of supply disruptions. The Reserve, managed by the U.S. Department of Energy (DOE), can hold a combined total of up to 714 million barrels of crude oil in 60 huge underground salt caverns. The Texas sites have a combined storage capacity of about 417 million barrels and are located in salt caverns in the state's Gulf Coast region.³⁷ In 2021, SPR sold millions of barrels of crude oil to counter market disruptions caused, in part, by the COVID-19 pandemic.³⁸ In 2022, SPR released more crude oil to ensure an adequate supply of petroleum in response to Russia's invasion of Ukraine.^39,40 However, in May 2023, DOE announced that it would begin purchasing millions of barrels of crude oil to put back into the reserve at the Big Hill site in Texas.^41,42

Texas has one-fourth of the nation's operable crude oil refineries and about one-third of the total U.S. refining capacity. The state's 34 petroleum refineries can process a combined total of nearly 6.3 million barrels of crude oil per calendar day.^43,44 The majority of the Texas refineries are clustered near ports along the Gulf Coast, giving that region the largest concentration of oil refineries in the United States. The largest U.S. refinery is in Galveston Bay, Texas, and it alone can process about 631,000 barrels of crude oil per calendar day.⁴⁵ Many of the Texas refineries are complex facilities that can process a wide variety of crude oil types into high-value products, such as motor gasoline and diesel fuel, and into feedstocks for the chemical industry.^46,47,48 Texas petroleum products are sent from the state's refineries by interstate pipeline, barge, and tanker to U.S. markets, primarily in the eastern and central states, and some are shipped to foreign markets.^49,50 Texas refinery infrastructure is vulnerable to shutdowns during hurricane season and extreme winter weather.^51,52

Texas consumes more petroleum than any other state, and ranks third by volume in per capita petroleum use, after Louisiana and Alaska.⁵³ Unlike all other states, except for Louisiana, Texas's industrial sector, where hydrocarbon gas liquids (HGLs) are used as feedstocks for the petrochemical industry, is the largest petroleum consumer. The industrial sector accounts for more than three-fifths of the state's petroleum use.⁵⁴ Texas is the nation's largest consumer of HGLs, using more than all other states combined. Texas is also the largest consumer of motor gasoline, distillate fuel oil, including diesel fuel for highway use, and residual fuel oil.^55,56,57 The transportation sector accounts for nearly two-fifths of the petroleum consumed in the state. The commercial and residential sectors together make up about 1% of Texas petroleum use. The commercial sector consumes about twice as much petroleum as the residential sector, where 3% of households use petroleum products, primarily propane, for space heating.^58,59

Much of Texas can sell conventional motor gasoline without ethanol, but the eastern half of the state and El Paso County at the state's extreme western tip require various motor gasoline blends to meet diverse clean air-quality requirements. The metropolitan areas of Greater Houston and Dallas-Fort Worth require reformulated motor gasoline blended with ethanol.⁶⁰ Texas has three fuel ethanol plants that can produce a combined total of about 380 million gallons of ethanol annually.⁶¹ However, the state's ethanol production in 2022 was 354 million gallons.⁶² Texans consume four times more fuel ethanol as the state's plants can produce, and additional supplies come from out of state.⁶³

Natural gas

One-fourth of U.S. proved natural gas reserves and about 30 of the nation's 100 largest natural gas fields are located, in whole or in part, in Texas.^64,65 In 2023, the state accounted for more than one-fourth (27%) of the nation's natural gas gross withdrawals. Texas's gross withdrawals of natural gas reached an all-time high of nearly 12.4 trillion cubic feet that year.^66,67 Most of the past decade's increase in Texas natural gas production came from the Eagle Ford shale and the Permian Basin, where advances in horizontal drilling and hydraulic fracturing technologies improved production from shales and other low permeability formations.^68,69

Texas has 17,000 miles of interstate natural gas pipelines within its borders.⁷⁰ Those pipelines transport natural gas from Texas across the nation and into Mexico. Large volumes of natural gas enter the state, primarily through Oklahoma and New Mexico. However, more than four times more natural gas left Texas than entered the state in 2022. More than half of that natural gas went to other states, primarily Louisiana. Most of the rest continued on to Mexico.⁷¹

Texas exports natural gas by pipelines and by ships loaded at the state's two liquefied natural gas (LNG) terminals along the Texas Gulf Coast at Freeport and Corpus Christi. The Corpus Christi LNG export facility began operating in 2019.⁷² The Freeport LNG import terminal converted into an export terminal and began export operations in 2019.⁷³ Several other LNG export facilities are under construction in the state, including the Golden Pass terminal at Sabine Pass, the Rio Grande terminal in Brownsville, and the Sempra terminal in Port Arthur.^{74,75,76,77,78} In 2023, the United States was the world's largest LNG exporter and Texas's two existing LNG export terminals handled almost one-third of all U.S. LNG exports.^79,80

Texas produces and imports more natural gas than it consumes or sends out of state, so some natural gas is placed in underground storage.^81,82,83 The state has 860 billion cubic feet of underground natural gas storage capacity, which is almost one-tenth of the U.S. total.⁸⁴ About half of the 36 active storage reservoirs in Texas—around 69% of the state's natural gas working gas storage capacity—are in depleted oil and gas fields converted for storage use. The rest are in salt caverns.⁸⁵

Texas is the nation's largest natural gas consumer and accounts for about 15% of U.S. total natural gas use.⁸⁶ The Texas industrial sector typically accounts for between one-fifth and one-fourth of the nation's total industrial sector natural gas consumption.⁸⁷ The amount of natural gas used for electricity generation in Texas is greater than in any other state and accounts for about one-seventh of the U.S. electric power sector's total.⁸⁸ In 2023, the industrial sector accounted for 46% of the natural gas delivered to consumers in Texas, and the electric power sector made up 45% of state natural gas deliveries.⁸⁹ The residential and commercial sectors, together, accounted for 9% of the natural gas delivered to Texas consumers. Texas uses about twice as much natural gas in the production, processing, and distribution of natural gas as is consumed in the state's commercial and residential end-use sectors combined.⁹⁰ About one-third of Texas households rely on natural gas as their primary fuel for space heating.⁹¹

Coal

Texas has about 9 billion tons of estimated recoverable coal reserves, almost 4% of the nation's total.⁹² The state is the second-largest lignite producer in the United States, after North Dakota, and one of five lignite-producing states.⁹³ Lignite is the type of coal with the lowest heat content. It is used almost exclusively for power generation, usually at power plants near producing lignite mines.⁹⁴ Substantial lignite deposits are found in a broad band in the Texas Gulf Coast region from the Rio Grande to the Arkansas border.⁹⁵ Although underground mines produced most of the coal in Texas before the mid-1950s, those mines closed decades ago, and now four surface mines produce all of the state's coal.^96,97

Texas is the nation's largest coal consumer, and almost all the coal is used to fuel the state's power plants.^98,99 On a tonnage basis, Texas lignite accounts for three-tenths of the state's total coal consumption, with nearly all the rest of the state's needs met by coal brought from Wyoming by rail. Industrial facilities in the state receive small amounts of coal from Colorado.^100,101

Electricity

Texas produces more electricity than any other state, generating more than twice as much power as second-place Florida. In 2023, Texas accounted for 13% of the nation's total electricity net generation. Natural gas-fired power plants supplied more than half of the electricity generated in Texas. Natural gas fuels more electricity generation in Texas than in any other state and accounts for 15% of all U.S. natural gas-fired generation.^102,103 Wind is the second-largest source of in-state generation in Texas. In 2023, wind supplied 22% of Texas's total in-state utility-scale (1 megawatt or larger) and small-scale (less than 1 megawatt) generation, and it provided more in-state power than coal for the fourth year in a row.¹⁰⁴ Because of the increase in wind power and the retirement of 7,400 megawatts of coal-fired generating capacity in Texas over the past decade, coal-fired power plants supplied 13% of the state's total generation in 2023, down from a 34% share in 2013.^105,106 The state's two operating nuclear power plants provided about 7% of the state's electricity net generation in 2023. Most of the rest of the state's total generation came from solar energy.^107,108

Unlike other states, most of Texas is not connected to the nation's regional power grids.¹⁰⁹ The Electricity Reliability Council of Texas (ERCOT) operates the state's main power grid. The ERCOT grid operates completely within Texas and serves about 75% of the state's land area, 90% of the electric load, and 26 million customers.^110,111 The ERCOT service area does not extend across the state's borders, so ERCOT is not subject to federal oversight. It is, for the most part, dependent on its own resources to meet the state's electricity needs because of the limited number of connections the ERCOT grid has with the nation's larger interconnected grids.¹¹² In February 2021, a major winter weather system spread across much of the central United States and disrupted energy systems, particularly in Texas. The cold weather increased energy demand and affected energy supply. Electricity deliveries were disrupted in the parts of Texas served by ERCOT leaving millions of people without power during the severe cold.¹¹³

Although Texas is the nation's largest electricity consumer, its per capita electricity consumption is less than in 11 other states. In 2023, the industrial sector and the residential sector each accounted for 34% Texas's electricity use. Texas leads the nation in residential sector total electricity consumption, but its residential sector's per capita consumption is less than in 14 states.^114,115 Electricity demand in Texas peaks during the hot summer months with the increased use of electricity for air conditioning.¹¹⁶ About six in ten Texas households use electricity as their primary source for home heating and almost all homes have air conditioning.^117,118 The commercial sector made up 32% of the state's electricity consumption, and a very small amount of power is used in the state's transportation sector for public railroads.¹¹⁹ In 2022, Texas ranked third among the states, after California and Florida, with the most electric vehicles (EVs). The state had about 129,000 registered battery electric vehicles.¹²⁰ As of (insert time period), Texas has nearly 3,200 EV public charging locations, the fourth highest among the states.¹²¹

Renewable energy

Renewable sources provided almost three-tenths of total state electricity net generation in Texas in 2023. The state accounted for about 16% of the nation's total electricity generation from renewable sources.¹²² In 2023, Texas led the nation in utility-scale wind-powered electricity generation, producing nearly three-tenths of the U.S. total.^123,124 By the end of 2023, wind net summer generating capacity in Texas was nearly 41,000 megawatts, which was one-fourth of the state's total electric net summer generating capacity and about two-thirds of its total renewable summer capacity, including from small-scale (less than 1 megawatt) solar installations.¹²⁵

In 2023, Texas was the country's second-largest producer of solar power, after California. Total solar net summer generating capacity at the state's large- and small-scale facilities rose to almost 18,500 megawatts at the end of 2023. Solar energy accounted for about 6% of the state's total electricity generation in 2023. Small-scale, customer-sited solar facilities provided about one-seventh of the solar total.^126,127 Power plant developers are planning to add almost 24,000 megawatts of utility-scale solar generating capacity in the state during 2024 and 2025.¹²⁸

Biomass fueled 0.2% of Texas's total in-state electricity generation in 2023, about three-fourths of it from wood or wood-derived fuels. There are also several generating facilities in the state that run on methane produced from landfill gas.^129,130 Texas's biomass resources also provide feedstock for the state's one wood pellet manufacturing plant, which can process wood waste into about 507,000 tons of wood pellets per year.¹³¹ The state has several biogas facilities that recycle organic waste into renewable energy. Most are at wastewater treatment centers and landfills. Two anaerobic digesters, located in the state's panhandle, process manure and agricultural waste into methane that can fuel power generation.^132,133 Texas also has 3 fuel ethanol manufacturers that can produce about 380 million gallons of fuel ethanol per year.¹³⁴ The state's 4 biodiesel plants can produce about 175 million gallons of biodiesel each year.¹³⁵ A new refinery in Newton County, Texas, will process one million tons of wood waste into a variety of transportation biofuels, including sustainable aviation fuel and renewable diesel.^136,137

Although there are a large number of non-powered dams in Texas, there is limited potential for hydroelectric generation development.¹³⁸ Fewer than 20 operating utility-scale hydroelectric power plants contributed 0.2% to Texas's in-state electricity generation in 2023.^139,140 Texas does not have any geothermal power plants.¹⁴¹ However, thousands of crude oil and natural gas wells in Texas produce billions of barrels of non-potable water annually as a byproduct of crude oil and natural gas production. That water, as hot as 200°C, is a potential geothermal resource that could be used to generate electricity. Direct-use applications, such as ground-source heat pumps, use low-temperature geothermal resources at locations around the state.^142,143

In 1999, the Texas Public Utility Commission adopted rules for a state renewable generation requirement. The rules required electricity providers to install a total of 10,000 megawatts of renewable electricity generating capacity in the state by 2025. Texas exceeded the 2025 goal in 2009, mostly because of the state's many wind farms.¹⁴⁴ At the end of 2023, Texas had more than 57,000 megawatts of utility-scale generating capacity fueled from all renewable sources. When small-scale solar was included, the state had just over 60,000 megawatts of total renewable net summer generating capacity.¹⁴⁵ Texas does not require net metering that allows electricity users to sell or receive credit for their surplus generated electricity put on the grid, most of which comes from rooftop solar panel systems. However, many municipal utilities, electric cooperatives, and investor-owned utilities offer net metering programs to their customers.^146,147,148

Endnotes

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² Texas State Historical Association, Texas Almanac, Texas' Natural Environment, accessed June 15, 2024.
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⁴ U.S. EIA, Electricity Data Browser, Net generation for all sectors, All states, Wind, Annual, 2023.
⁵ Roberts, Billy J., Direct Normal Solar Irradiance, National Renewable Energy Laboratory (February 22, 2018).
⁶ U.S. EIA, Electricity Data Browser, Net generation for all sectors, All states, All Solar, Annual, 2023.
⁷ Roberts, Billy J., Geothermal Resources of the United States, Map, National Renewable Energy Laboratory (February 22, 2018).
⁸ Texas Bureau of Economic Geology, Uranium, accessed June 15, 2024.
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¹⁸ U.S. EIA, Use of Energy Explained, Energy Use in Industry, updated July 13, 2023.
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⁶³ U.S. EIA, State Energy Data System, Table F25, Fuel ethanol consumption estimates, 2022.
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⁹¹ U.S. Census Bureau, Texas, Table B25040, House Heating Fuel, 2022 American Community Survey 1-Year Estimates.
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⁹⁶ Garner, L. Edwin, Mineral Resources and Mining, Coal, Lignite, Texas State Historical Association, Handbook of Texas, updated January 19, 2019.
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¹⁰³ U.S. EIA, Electric Power Monthly (February 2024), Table 1.7.B.
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¹⁰⁷ U.S. Nuclear Regulatory Commission, Texas, Operating Nuclear Power Reactors, updated March 9, 2021.
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¹²⁰ U.S. EIA, State Energy Data System, Table F39, Electric light-duty vehicles overview, 2022.
¹²¹ U.S. EIA, Monthly Energy Review (June 25, 2024), Appendix F monthly state file, Public ports only, Public & private ports.
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¹²³ U.S. EIA, Electricity Data Browser, Net generation for all sectors, United States, Texas, All fuels, Conventional hydroelectric, Wind, Small-scale solar photovoltaic, Annual, 2021-23.
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¹²⁵ U.S. EIA, Electric Power Monthly (February 2024), Tables 6.2.A, 6.2.B.
¹²⁶ U.S. EIA, Electric Power Monthly (February 2024), Tables 1.17.B, 6.2.B.
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¹³⁰ U.S. EIA, Electricity, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Operating Generators as of May 2024.
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¹³³ U.S. Environmental Protection Agency, AgSTAR, Livestock Anaerobic Digester Database, accessed June 20, 2024.
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¹³⁵ U.S. EIA, U.S. Biodiesel Plant Production Capacity, Detailed annual production capacity by plant is available in XLSX.
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¹³⁷ Stewart, Steve, "USA BioEnergy and Southwest Airlines enter 20 year fuel agreement," KJAS (November 10, 2023).
¹³⁸ Hadjerioua, Boualem and Yaxing Wei, An Assessment of Energy Potential at Non-Powered Dams in the United States, U.S. Department of Energy, Energy Efficiency and Renewable Energy (April 2012), p. 8.
¹³⁹ U.S. EIA, Electricity, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Operating Generators as of May 2024.
¹⁴⁰ U.S. EIA, Electricity Data Browser, Net generation for all sectors, Texas, All fuels, Annual, 2001-23.
¹⁴¹ U.S. EIA, Electricity, Preliminary Monthly Electric Generator Inventory (based on Form EIA-860M as a supplement to Form EIA-860), Inventory of Operating Generators as of May 2024.
¹⁴² U.S. Department of Energy, Energy Efficiency and Renewable Energy, Geothermal Technologies Program, Texas, DOE/GO-102006-2213 (April 2006).
¹⁴³ The University of Texas at Austin, The Future of Geothermal in Texas, Executive Summary, (January 2023), p. 4, 8.
¹⁴⁴ NC Clean Energy Technology Center, DSIRE, Texas, Renewable Generation Requirement, updated December 5, 2023.
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¹⁴⁸ Pressler, Mary, "Texas Net Metering and Solar Buyback Programs," Quick Electricity.com (May 20, 2024).