April 19, 2010

ONCE AND FUTURE INDEPENDENT:

Lone Star: Why Texas is doing so much better economically than the rest of the nation. (Daniel Gross, April 19, 2010, Slate)

The state has its own electricity grid, which is not connected to neighboring states. That has allowed it to move swiftly and decisively in deregulating power markets, building new transmission lines, and pursuing alternative sources. "We can build transmission lines without federal jurisdiction and without consulting other states," said Paul Sadler, executive director of the Austin-based Wind Coalition. Ramping up wind power nationally would require connecting energy fields—the windswept, sparsely populated plains—to population centers on the coasts and in the Midwest. Texas' grid already connects the plains of West Texas with consumers in Dallas, Austin, San Antonio, and Houston. Texas recently surpassed 10,000 megawatts of capacity, the most by far of any state and enough to power 3 million homes, Sadler says. Wind energy is also powering employment—creating more than 10,000 jobs so far. And it and has attracted foreign companies, including Danish turbine maker Vestas, Spanish renewable-energy giant Iberdrola, and Shell.

Texas today is more suburban engineer than urban cowboy, more Michael Dell than J.R. Ewing. Austin, home to the University of Texas, the state government, and Dell Computer, has a 7 percent unemployment rate. Yes, ExxonMobil and Chevron are based in Houston. But the state's energy complex is increasingly focused more on services and technology than on intuition and wildcatting. And it is selling those services into the global oil patch. Russian, Persian Gulf, and African oil developers now come to Houston for equipment, engineering, and software.

While its political leaders may occasionally flirt with secession, Texas thrives on connection. It surpassed California several years ago as the nation's largest exporting state. Manufactured goods like electronics, chemicals, and machinery account for a bigger chunk of Texas' exports than petroleum does. In the first two months of 2010, exports of stuff made in Texas rose 24.3 percent, to $29 billion, from 2009. That's about 10 percent of the nation's total exports. There are more than 700,000 Texan jobs geared to manufacturing goods for export, according to Patrick Jankowski, vice president of research at the Greater Houston Partnership. "A lot of it is capital goods that the Asian, Latin American, and African [countries] are using to build their economies."

Thanks to that embrace of globalization, the Texas turnaround may help lead the nation in its economic turnaround. Texans have always had the ability to think big. Now that their state has become a player in the global economy, we can expect a new kind of swagger.


Posted by Orrin Judd at April 19, 2010 2:08 PM
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