Why Texas Might Have An Energy Problem

A typical natural gas compressor station. Compressors pressurize natural gas to enable it to flow through pipeline systems.

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If there’s one industry that has become synonymous with the identity of Texas, it’s energy. Texas has long been the driving force of U.S. energy dominance with Houston often referred to as the Energy Capital of the World. Over the past decade, oil and gas production in the state has generated billions in revenue, created thousands of jobs, and built critical infrastructure, all while helping the U.S. and its allies meet growing global energy demand.

Energy Drives The Texas Economy

In 2024 alone, the Texas oil and natural gas industry paid a record $27.3 billion in state, local taxes and real state royalties. These funds directly support the funding of public schools, roads and infrastructure, first responders and more for the state.

That demand is only increasing. Geopolitical tensions, particularly the Russia-Ukraine conflict, have forced many countries to move away from Russian natural gas and turn to U.S. producers for reliable and affordable alternatives. Domestically, a growing population and the rapid rise in energy-intensive data centers are also pushing U.S. energy demand to historic highs, especially in states like Texas, now among the top states with emerging data center markets.

Texas producers have more than met this challenge, thanks in large part to the vast natural gas reserves found in the Permian Basin in West Texas, one of the most prolific energy regions in the country. Natural gas, praised for being cleaner than other sources of energy and safe to transport, has emerged as a key part of the global energy mix.

But producing natural gas is only half the equation. Moving it to where it is needed requires a network of critical infrastructure, including pipelines and compressor stations. These building blocks of critical infrastructure are essential for the safe and efficient transportation of natural gas. Pipelines move natural gas from the source to the end user and are considered the safest mode of transportation for this commodity. Compressor stations are a key part of this system. They pressurize the gas to keep it moving through the pipeline network.

These facilities are not new. In fact, there are an estimated 1,200 to 1,400 compressor stations operating across the country today, including around 93 in Texas. But even with modern engineering and technology, projects like these are not approved overnight. In Texas, companies must go through an extensive permitting process that involves review by local, state, and federal agencies, including environmental studies and public input. In reality, many pipeline projects take years to complete.

Resistance From An Unlikely Part Of Texas

And yet, in the heart of Texas, a group of residents from a newly developed gated community in the City of Conroe, Montgomery County, are pushing back against the development of a compressor station that is critical for the continued development of a fully permitted pipeline project.

The facility in question is a compressor station for the Blackfin pipeline, operated by Austin-based Whitewater Midstream, which is part of a pipeline network that would move natural gas produced in West Texas. The station is located in an already industrially zoned area, permitted fully by the Texas Council on Environmental Quality, and complies with all applicable safety and environmental regulations. Despite these facts, the compressor station is now facing resistance by a number of Conroe’s local officials and residents from the community after the city council unanimously voted to support a lawsuit opposing it.

Surprisingly, this is all happening in a heavily Republican part of the state. A significant majority of residents from Conroe voted for candidate Donald Trump last November, as the Republican carried Montgomery County with 72 percent of the vote in 2024. And with the Trump energy agenda being highly focused on American jobs and American Energy, it is unusual to see the Conroe City Council attempt to halt a critical infrastructure project already approved and permitted.

This isolated instance of local resistance resembles the anti-industry sentiment often seen in states like California, where essential energy projects are frequently blocked or delayed by local governments, NGOs, and “Not In My Backyard” (NIMBY) campaigns. In some cases, these opposition campaigns are privately funded by NGOs with clear anti-industry agendas.

These efforts are often driven by misinformed narratives that ignore the industry’s strong safety track record. Natural gas pipelines deliver product without incident 99.99 percent of the time, thanks to the advanced engineering behind these systems. Delays like this can cost billions in lost investment, stall job creation, infrastructural development and threaten U.S. energy security. They also jeopardize much-needed tax revenue that supports schools, roads, and public services in small communities.

A Potentially Dangerous Precedent For Texas

Local communities should always have a voice when industrial projects seek to be sited within their jurisdiction. But what is happening in Conroe could have serious consequences for the future growth of the state and its economy if it should grow into a statewide phenomenon.

As noted above, Texas is ideally situated to become a national leader in hosting AI datacenters as that industry continues its rapid growth. The state has everything that industry needs in terms of geography, critical infrastructure, abundant energy resources, workforce, and higher education assets. The state’s system of laws and regulations has always made it a positive, welcoming place for new industries as well.

But here’s the thing: Those huge datacenters consume massive amounts of electricity that must be generated 24 hours a day, 7 days a week. As I’ve detailed here over the past 12 months, the current industry trend is for natural gas generation to supply a big part of those needs, especially over the next 10-15 years. If Texas becomes a place where properly permitted, safely situated critical infrastructure integral to moving natural gas around the state can’t be completed due to opposition by local governments in heavily Republican counties, it will quickly lose its attractiveness to those big companies for whom time is of the essence.

Right now, this situation in Conroe is about a single compressor station. But if it becomes a statewide trend, then it will put into question the ability for Texas to continue doing what it does best, producing safe, cost efficient and reliable energy for all Texans, for the rest of America and the world.