By Mark Gongloff / Bloomberg Opinion
Texas is one of the nation’s leading providers of welfare for the fossil-fuel industry. The trade-off is rising physical risk and economic hardship for all the rest of us; especially Texans.
By now we know a changing climate played at least a small role in the devastating July 4 floods in central Texas that killed at least 119 people. We also know that burning fossil fuels is the primary source of the greenhouse gases cooking the climate and making such disasters more likely and destructive. And we know Texas leads the nation in producing those fossil fuels.
What’s maybe not as well known is that the Lone Star State keeps that industry well fed with big helpings of taxpayer cash. Along with billions of dollars in explicit and implicit federal subsidies, the industry also receives at least 20 different tax and regulatory breaks and direct handouts from the state, according to a report last year by the nonprofit National Resources Defense Council. The dollar amounts are difficult to pin down, but just three of those tax breaks give the industry at least $1 billion a year alone, according to the NRDC. Subsidies for liquefied natural gas exporters amount to billions more, according to a Sierra Club report in December.
To its credit, Texas has also subsidized renewables such as wind and solar, fostering a nation-leading renewable-energy boom. But state politicians have made it their business to undermine these fossil-fuel competitors at every turn by kicking away their supports while further coddling oil and gas in what my colleague Liam Denning has described as a form of socialism.
Lost tax revenue is just the start of the harm being done to Texans. If somebody asked you to guess the U.S. state most vulnerable to climate change, you might pick hurricane-prone Florida or wildfire-prone California. But because of its size and location on the planet, Texas outdoes them both, being prone not only to hurricanes and wildfires but also floods, droughts, deep freezes, heat waves, hellish convection storms and more.
Between 1980 and 2024, Texas suffered from 190 separate weather events that each caused at least $1 billion in damage, according to the National Oceanic and Atmospheric Administration, for total losses of up to $440 billion, adjusted for inflation, more than any other state. These events have increased in frequency and destructiveness in recent decades, as Bloomberg News has documented, with many happening concurrently to compound the misery. A heat wave after Hurricane Beryl knocked out power in Houston last year and led to packed emergency rooms. In the case of the July 4 floods, a drought parched the earth, making it less porous and making flash flooding from a climate-charged deluge more likely.
NOAA has stopped tracking billion-dollar disasters because ignoring problems obviously makes them go away. But Texas has been hit with at least two such catastrophes this year, according to private forecaster AccuWeather. A freak winter storm on the coast of the Gulf of Mexico in January inflicted up to $17 billion in economic damage from Texas to the East Coast. And the forecaster’s preliminary estimate of the cost of the July 4 floods tops out at $22 billion.
AccuWeather says its tallies are broader than those of NOAA, which measured only the immediate damage of disasters. AccuWeather tries to take into account the economic disruption and productivity loss caused by these events, including the almost incalculable value of the many lives and future potential lost.
These risks will keep rising as the climate grows more dangerous and Texas grows more crowded. Even before the latest tragedy, Texas led the nation in flooding fatalities, according to a 2021 study by scientists for the University of Texas at San Antonio.
Most of those deaths, like those on July 4, occurred in the stretch known as “Flash Flood Alley,” a crescent that partly parallels the Interstate 35 corridor between Dallas and San Antonio. That also happens to be one of the fastest-growing regions in the country, with a population of more than 12 million, which is expected to double by 2050. Despite being prone to flash floods, this region is also at risk of running out of groundwater. And it’s subject to longer heat-wave seasons. Oh, and its cities are sinking faster than others in the country, probably because of the pumping of oil and gas. Wrestling with this hydra of problems will add up to more costs to taxpayers.
At the same time, thanks largely to the surge in costly disasters, the average Texas home-insurance premium rose 55 percent between 2019 and 2024, the 10th-fastest pace in the country, according to LendingTree. Texas now has the country’s fourth-highest average premium, at $5,180 a year. That’s nearly 85 percent higher than the national average of $2,801.
High and rising insurance rates could hurt home values, as they have in Florida. That in turn threatens the property taxes local governments need to invest in resilience, much less maintain regular services. Perhaps the biggest lesson from the July 4 floods is that our preparedness for such catastrophes is spotty at best, with some people getting timely, life-saving flood warnings and others not. Under President Trump and the Republican Congress, the federal government is taking money away from state and local governments for such investment (while giving even more money to oil and gas), deepening the dilemma.
Texas still has a chance to save itself. For starters, it can keep supporting its renewables industry, which produces almost twice as much wind and solar power as California. Better yet, it can repurpose the welfare it gives to fossil fuels toward strengthening infrastructure and saving lives. Those billions in oil and gas handouts would buy an awful lot of flood-warning systems.
Mark Gongloff is a Bloomberg Opinion editor and columnist covering climate change. He previously worked for Fortune.com, the Huffington Post and the Wall Street Journal.
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