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Texas Energy Sector: Past and Future

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Texas Energy Sector: Past and Future Texas Energy Sector: Past and Future Jolanda Prozzi Ashley Dumais Mike Cline Lisa Loftus-Otway Eleanor Seaborne CTR Technical Report: 0-6513-1B Report Date: December 2011 Project: 0-6513 Project Title: Impacts of Energy Developments on the Texas Transportation System Sponsoring Agency: Texas Department of Transportation Performing Agency: Center for Transportation Research at The University of Texas at Austin Project performed in cooperation with the Texas Department of Transportation and the Federal Highway Administration. Center for Transportation Research The University of Texas at Austin 1616 Guadalupe St, Suite 4.202 Austin, TX 78701 www.utexas.edu/research/ctr Copyright (c) 2011 Center for Transportation Research The University of Texas at Austin All rights reserved Printed in the United States of America Disclaimers Author's Disclaimer: The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the data presented herein. The contents do not necessarily reflect the official view or policies of the Federal Highway Administration or the Texas Department of Transportation (TxDOT). This report does not constitute a standard, specification, or regulation. Patent Disclaimer: There was no invention or discovery conceived or first actually reduced to practice in the course of or under this contract, including any art, method, process, machine manufacture, design or composition of matter, or any new useful improvement thereof, or any variety of plant, which is or may be patentable under the patent laws of the United States of America or any foreign country. Engineering Disclaimer NOT INTENDED FOR CONSTRUCTION, BIDDING, OR PERMIT PURPOSES. v Acknowledgments The authors wish to th ank the members of the Project Managem ent Committee and Project Director Dr. Duncan Stewart. vi Table of Contents Chapter 1. Introduction................................................................................................................ 1 1.1 Report Structure .....................................................................................................................2 Chapter 2. Texas’s Energy Sector ............................................................................................... 3 2.1 Energy Production in Texas ...................................................................................................3 2.2 Energy Consumption in Texas .............................................................................................11 2.3 Energy Production and Consumption ..................................................................................17 2.4 Energy Efficiency ................................................................................................................26 2.5 Concluding Remarks ............................................................................................................27 Chapter 3. Enabling Energy Infrastructure ............................................................................. 29 3.1 Current State of Texas’s Electricity Transmission Infrastructure .......................................29 3.2 Competitive Renewable Energy Zones (CREZ) ..................................................................30 3.3 The Future of Electricity Transmission ...............................................................................32 3.4 Concluding Remarks ............................................................................................................34 Chapter 4. Advancements in Energy Technology .................................................................... 35 4.1 Natural Gas Extraction Technology ....................................................................................35 4.2 Oil Extraction Technology ...................................................................................................38 4.3 Coal Energy Technology .....................................................................................................42 4.4 Wind Energy Technologies .................................................................................................44 4.5 Solar Energy Technology ....................................................................................................47 4.6 Bio-fuel Technology ............................................................................................................49 4.7 Nuclear Technology .............................................................................................................51 4.8 Concluding Remarks ............................................................................................................52 Chapter 5. Energy Price Trends ................................................................................................ 53 5.1 Historic Energy Price Trends ...............................................................................................53 5.2 Anticipated Energy Price Trends .........................................................................................58 5.3 Concluding Remarks ............................................................................................................62 Chapter 6. Socio-Economic Impacts of the Energy Sector ..................................................... 63 6.1 Framework for Understanding Socio-economic Impacts from Energy Development ........63 6.2 Socio-Economic Impacts of Oil and Gas Drilling ...............................................................64 6.3 Socio-economic Impacts of Wind Farm Development ........................................................78 6.4 Concluding Remarks ............................................................................................................87 Chapter 7. Environmental Regulations .................................................................................... 89 7.1 Regulations for Energy Production Facilities ......................................................................89 7.2 Regulatory Developments: Air ............................................................................................90 7.3 Regulatory Developments: Waste .......................................................................................92 7.4 Regulatory Developments: Water ........................................................................................93 7.5 Commentary: Air, Energy, and Waste .................................................................................93 7.6 Concluding Remarks ............................................................................................................99 Chapter 8. Tax and Other Incentives ...................................................................................... 101 vii 8.1 Federal and State Incentives ..............................................................................................102 8.2 Concluding Remarks ..........................................................................................................102 Chapter 9. Texas’s Potential Energy Futures ........................................................................ 109 9.1 Scenario Development .......................................................................................................109 9.2 Scenario 1—Fossil Fuels Future ........................................................................................111 9.3 Scenario 2—Renewable Future (Market Driven) ..............................................................112 9.4 Scenario 3—Carbon Future ...............................................................................................113 9.5 Scenario 4—Renewable Future (Regulatory Driven) ........................................................114 9.6 Concluding Remarks ..........................................................................................................115 Chapter 10. Concluding Remarks ........................................................................................... 117 10.1 Energy Drivers .................................................................................................................117 10.2 Energy Futures .................................................................................................................123 10.3 Energy Indicators .............................................................................................................124 10.4 Concluding Remarks ........................................................................................................125 References .................................................................................................................................. 127 Appendix A: Regulations for Energy Production Facilities (2010–2011) ............................ 139 Appendix B: Air Quality Rules since 2010 ............................................................................. 181 Appendix C: Federal and State Incentives for Eligible Technologies .................................. 195 Appendix D: Explanation of the Incentives ............................................................................ 204 viii List of Figures Figure 2.1: The Energy Sector ........................................................................................................ 3 Figure 2.2: Energy Production and Consumption in Texas ............................................................ 4 Figure 2.3: Dry Natural Gas Production ........................................................................................
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