AUSTIN, Texas - The original purpose of a state tax break that has been in place since 1989 was to encourage innovation and risk-taking by a struggling natural gas industry. Business boomed after new drilling techniques such as "fracking" became commonplace, tapping massive reserves of shale gas.

Still, the tax incentive remains, and it's depriving state coffers of more than $1 billion a year in revenues, according to state data analyzed by Dick Lavine, senior fiscal analyst with the Center for Public Policy Priorities.

"It's obviously no longer an incentive, but it has reduced the state's revenue from the natural gas tax by half. Nearly three-quarters of all natural gas in Texas gets some kind of tax break."

Thanks to the exemption, he says, about one-third of the state's wells pumped out zero tax dollars in the past few years. While the official tax rate is 7.5 percent of the value of a well's output, the true contribution averages less than 2 percent statewide, according to the Legislative Budget Board.

The Harris County director of the Texas Organizing Project, Christopher Young, says lost revenues from 2010 and 2011 were approximately the amount needed to keep up with public-school enrollment growth.

"We want to support new technologies, but these companies are now making monstrous profits. At a time when schools and state services are being cut, and working people seem to be paying more and more, there's just no reason to justify a giveaway to energy companies like this."

Lawmakers last year slashed education aid by $5 billion, while rejecting a measure to suspend the gas-tax exemption. Initially, the legislature had to renew the subsidy every few years, but it was quietly made permanent a decade ago, Lavine notes.

"It's a classic example of why it's important for the legislature to go through the tax code periodically and 'sunset' it. The natural gas operators, they need to chip in with everybody else to keep the state going."

A growing number of lawmakers from both parties agree the tax breaks are no longer necessary. Even some operators have said it might make more sense to allow market conditions to trigger incentives.





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Virginia's General Assembly will consider budget amendments to reenter the Regional Greenhouse Gas Initiative, known as RGGI.

Gov. Glenn Youngkin pulled the state out of RGGI at the end of 2023, and now experts said the holes in the budget left by RGGI funding going away are not being filled. Money from the program was used to fund climate mitigation work.

Jay Ford, Virginia policy manager for the Chesapeake Bay Foundation, said the state saw many benefits when it was part of RGGI.

"We were reducing fossil fuel emissions that were being created here in Virginia," Ford pointed out. "There were some clear reductions as a result of our participation. So, we're improving air quality and we are helping expedite that transition to a clean economy."

Virginia residents mostly favored staying in RGGI, but Youngkin has said the reason for pulling out was in his view, it was a "hidden tax" for ratepayers. Ford estimated homeowners paid around $2 a month from their electric bills for RGGI and argued the trade-offs were worth it.

Between 2021 and 2023, RGGI revenue generated around $828 million for Virginia. Ford thinks not rejoining the initiative could slow down Virginia's ability to reach the Clean Economy Act's climate goals, and warned other effects could be costly to communities.

"On the ground in communities around the state, if we don't get back into RGGI, there's a real potential that the work to prepare the Commonwealth, and prepare our communities for climate impacts, could grind to a halt," Ford contended.

Virginia used RGGI money to help towns and cities fund their climate resilience plans. The state used 25-million RGGI dollars to establish a Climate Resilience Fund. There have been 107 "billion-dollar disasters" since 1980 in Virginia, with long-term costs totaling between $20 billion and $50 billion.

Despite different outcomes - New York's first offshore wind farm came online and New Jersey had one canceled - both states are benefiting from offshore wind. Job creation and economic growth are predicted, as New Jersey's decarbonization efforts could create 20,000 jobs.

The New Jersey Wind Port being developed in Salem County is expected to create up to 1,500 jobs.

Caren Fitzpatrick, former Atlantic County Commissioner, said it's time the area had a viable industry again.

"They used to be known for growing asparagus and harvesting oysters. And due to blight and overfishing, those industries went away. They're starting to come back now, but they're not big enough to support the families that live in this area," Fitzpatrick argued.

After Ocean Wind's cancellation, the New Jersey Board of Public Utilities is moving on. This year, it has approved two projects that would power close to 2 million homes, create 27,000 jobs and provide a $3 billion boost to the state's economy.

Beyond job growth and economic development, New Jersey Assemblymember Carol Murphy, D-Cinnaminson, contended public health will also improve as the state shifts to cleaner energy sources.

"The transition from fossil fuel to clean energy power will improve air quality, water quality, reduces cases of medical illness such as asthma, heart disease and cancer, and this will save billions of dollars in healthcare costs," she explained.

Offshore wind projects have faced tough odds to get this far. Misinformation has made the public skeptical. But lawmakers in both states have signed letters voicing their commitment to these projects.

New York Assemblymember Angelo Santabarbara, D-Schenectady, said it's only the beginning.

"Let's continue to push forward for a brighter, cleaner future for all here in New York, but for the entire country as we move forward. Together, we can harness the power of offshore wind to build a better tomorrow, and in Schenectady we're doing it one turbine at a time," Santabarbara said.

With the South Fork Wind Farm online, attention is turning to other projects like Empire Wind 1, the first offshore wind project connected to New York City's grid. In March, the developer's agreement was approved by the Federal Energy Regulatory Commission.

Later this month, Indigenous leaders will speak before a United Nations panel about their ongoing concerns with a controversial oil pipeline in the Great Lakes region.

Enbridge Energy's Line 5 operation is likely to come up when the Permanent Forum on Indigenous Issues convenes in New York.

Back in the Midwest, organizations such as Earthjustice represent the Bad River Band of Lake Superior Chippewa.

The tribe has been contesting Line 5 in Wisconsin as Enbridge seeks to re-route the pipeline.

Earthjustice Senior Attorney Stefanie Tsosie said the proposal isn't an improvement in minimizing the effect on tribal lands.

"The Bad River Band is already at a risk of an oil spill because the pipeline is going directly through their reservation," said Tsosie, "and the re-route, if you look at the map, it's basically hugging the reservation boundaries."

She said her team is preparing for litigation if permits for the re-route are issued.

The tribe has previously filed lawsuits against Line 5 in an effort to shut it down, prompting the latest route plans. Similar cases have been active in Michigan.

Enbridge argues the pipeline is a key source of energy and rejects claims and legal decisions that it's trespassing on tribal lands.

On the Michigan side, opponents say they're worried about Enbridge's latest Line 5 plans to construct an oil tunnel beneath the Straits of Mackinac, a connecting waterway.

The company says it would be safer than the existing pipeline section, but Native American Rights Fund Senior Staff Attorney Wes Furlong said there's real concern about a worst-case scenario.

"If a leak happened within that tunnel, it would cause a catastrophic failure," said Furlong, "pumping crude oil into the Straits and into the Great Lakes."

He said pushing back against Line 5 aligns with calls to reduce the use of fossil fuels, citing their connection to climate change and the impact on treaty-reserved resources Midwest tribes rely on.

First built in 1953, the pipeline can transport up to 23 million gallons of oil and natural gas liquids per day.




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