“Post-truth” was declared the word of the year by Oxford Dictionaries in 2016 after a bruising presidential election campaign season in the United States. Post-truth is an adjective related to circumstances in which objective facts are less influential in shaping public opinion than emotional appeals.
In the middle of the worst snow-storm in the history of the state and sub-freezing temperatures that have left Texans battling cold without electricity and heat, there has been a post-truth explanation of power outages by some politicians and community leaders in the state. Wind turbines, some of which stopped working because of ice on their blades, were said to be entirely responsible for the misery that the people are going through.
The fact is that roughly 24 percent of Texas’s electricity is produced by wind turbines, per ERCOT. Of those, nearly half stopped working, which means around 12 percent of power supply was hindered. It was the coal and natural-gas powered plants, a third of which shut down, that caused power blackouts in large swaths of the state. Before this winter storm, Texas had been a proud show-case for wind power and accounted for nearly 30,000 MW of production, which is more than that of Iowa, Oklahoma, Kansas, and California combined. Therefore it beggars belief that Texas would be so critical of an industry that is growing and adding well-paying jobs to the state.
As Texans suffer because of the failure of fossil-fuel power plants, wind energy has been made the whipping boy of the energy industry by some politicians. These coal and natural-gas-based power plants did not winterize their equipment because the likelihood of a cold snap was considered low, and it costs money to winterize equipment. If cold weather were to blame for loss of wind energy, then Iowa, Kansas, and the Dakotas where winters are routinely frigid, would not continue to grow in that sector with per capita generation of wind energy far outstripping that of Texas.
This picture from Texarkana is very illustrative of how the cold snap has led to a natural disaster. On one side of the road is Texas where the roads are not ploughed and on the other side is Arkansas that hasn’t descended into chaos. Although this has nothing to do with the power supply, it shows how resources are allocated in the two states. Arkansas is on the federally regulated eastern grid and can get more power if they need while Texas is an isolated deregulated grid. While that may ideologically make Texans feel “independent”, it also creates greater risk of power failure and shutdowns for businesses and residents.
What does this mean for businesses that are looking to move to Texas for lower cost and zero corporate state taxes?
They need to consider the vulnerability of the power grid that is independent of the federal government regulation. If a data center or mission critical functions are being considered in Texas then the company may need to factor in the risk that this kind of vulnerability poses to them.
What does it mean for the state of Texas that has been wildly successful in attracting businesses to locate and relocate to their state?
A chink in the Texas armor has been exposed. This will bring the impact of climate change on the state into sharp focus. It is not just the power grid, but also changing rain patterns, flooding, and extreme temperatures that will be studied by business prospects. The state of Texas must not only reassure business prospects that they will prepare better for similar future emergencies, but also take concrete steps in that direction. Vilifying a growing sector of green energy just because it competes with the domestic oil and gas industry is going to turn away some businesses that have committed to a green future; that includes much of the technology sector and the burgeoning electrical vehicle sub-sector in manufacturing.
In the end, if policies don’t create jobs, don’t improve the lives of people, and don’t attract talent from outside the state, then they are harmful. However, before we even talk about policy, there is growing hunger for truth and facts in this post-truth world. Potentially relocating business leaders and future migrating talent are watching.
Your move, Texas.
Author: Rajeev Thakur is the head of growth and strategy at BeyondHQ | rajeev@beyondhq.co
