Friday, May 8, 2026

A Texas Sized ESG Land Grab

Why are Texans Being Asked to Sacrifice Land, and Fund Thousands of Miles of Massive 765 kV Power Lines?

If you haven't been following energy news in Texas, you’ve probably missed the headlines: plans for up to 4,000 miles of new 765 kV transmission lines, the highest-voltage backbone the state has ever built, to pump energy into one of the most energy rich regions on earth. Landowners are concerned about property impacts, costs are in the billions, and critics aren't convinced it’s all necessary. So what’s really going on?

Diving into the ERCOT studies, utility filings, and industry reports paints a clear picture of what’s driving this massive project—and what would change if key pieces didn’t happen, or if we just said "no".

The Big Picture: Permian Power Hunger

The core of the story is the Permian Basin in West Texas. Oil and gas activity is booming, and operators are rapidly switching from on-site diesel and gas generators to grid electricity. This “electrification” is creating explosive demand growth, beyond local capacity.

ERCOT’s Permian Basin Reliability Plan forecasts the region’s peak load could hit ~23.7 GW by 2030 (with oil & gas alone using ~11.96 GW) and approach ~26 GW by 2038 (oil & gas eating up ~14.7 GW). That’s a huge jump from the ~3.4–4.2 GW on-grid baseline around 2022.

The proposed 765 kV lines (think superhighways for electricity) are designed as import paths to bring reliable power into the Permian from the rest of Texas. These extra-high-voltage lines carry far more power with less loss than the existing 345 kV system—often 2–3x the capacity per circuit—making them the most efficient long-term solution according to ERCOT’s analysis. The plan includes roughly 2,400–3,400+ miles of new right-of-way (plus upgrades), with specific segments like AEP’s ~370-mile Howard-Solstice project and Oncor/LCRA’s 214–244-mile Schleicher-to-Bell County line. The Public Utility Commission of Texas (PUCT) approved key elements of the initial 765 kV backbone in 2024–2025.

Why Are Oil & Gas Companies Ditching Gas and Diesel Generators?

This is the single biggest driver in the Permian. Here’s why the shift makes sense for operators:

  • Profits: Grid power is often cheaper than hauling diesel or burning on-site gas. Many operators report savings of roughly $1 per barrel of oil produced. It also avoids the logistics of fuel delivery to remote sites and reduces maintenance on scattered generators.
  • Emissions & ESG Pressure: Publicly traded companies (e.g., ExxonMobil, BP, Chevron) have net-zero or major GHG reduction commitments by 2030. Electrification directly cuts Scope 1 and 2 emissions from combustion equipment, reduces flaring of associated gas, and helps meet investor, lender, and regulatory expectations. Investor demands, lender requirements, and public relations drive this—oil majors align operations with global climate goals while maintaining production growth
  • Reliability & Operations: Grid power is more consistent, scalable, and supports higher drilling intensity, automation, water handling, and data-driven operations. On-site generators face fuel supply risks, higher downtime, and noise issues.

Without this shift, Permian oil & gas grid demand would be ~7–9 GW lower in the early 2030s. Operators would continue relying heavily on behind-the-meter gas-fired or diesel generation, self-provisioned microgrids, or temporary solutions instead of grid imports. That incremental ~8 GW (from the ~4.2 GW 2022 baseline to ~12 GW projected) is the bulk of what these transmission lines are built to serve.

But What About Data Centers and Crypto?

Statewide, hyperscale data centers (AI/cloud) and crypto mining together dominate large-load interconnection queues and are the primary drivers of Texas’s overall explosive energy demand growth. Though it doesn't dominate, it's a major driver in the Permian-specific forecasts being used to justify the 765 kV projects:

  • Original separate breakdown of additional non-oil & gas load (~11.7 GW by 2030): 
    • – Crypto: ~59% 
    • – Green hydrogen: ~22% 
    • – Commercial/industrial: ~13% 
    • – Data centers: ~6%
  • Combined computing load (Crypto + Data Centers): ~65% of the additional non-oil & gas load — roughly 7.6 GW of the ~11.7 GW by 2030.

Oil & gas electrification remains the dominant near-term driver overall in the Permian (~11.96 GW projected by 2030 versus the ~7.6 GW computing load), but it's clear that there are two industries driving the transmission demand.

The Trade-Offs, the Controversy, and the Crony Capitalism

Proponents say the 765 kV backbone is critical for reliability, will support all energy resources (not just renewables or fossils), and is cheaper long-term than repeated lower-voltage upgrades. ERCOT analysis showed the 765 kV option costs only ~4% more upfront but delivers major efficiency, lower losses, and flexibility benefits. Texas lawmakers accelerated the process with House Bill 5066 (2023), which directed ERCOT and the PUCT to develop a specific Permian Basin transmission plan to support oil/gas growth and faster interconnections.

Critics, however, raise sharp concerns about costs, process, and fairness—often pointing out elements of the project as crony capitalism:

  • Guaranteed Profits for Regulated Monopolies: Transmission is built and owned primarily by incumbent utilities like Oncor, AEP Texas, and LCRA. These companies earn a regulated rate of return (Oncor’s authorized ROE is currently around 9.75%) on every dollar of capital invested, recovered from all ERCOT ratepayers via transmission charges on electric bills. Oncor alone has announced massive capital plans—$36 billion for 2025–2029, then upgraded to $47.5 billion for 2026–2030—driven in large part by transmission growth. Critics point out this creates a built-in incentive for larger, more expensive projects: bigger rate base equals higher guaranteed profits for shareholders, while costs are socialized across every Texas electric customer. Some estimates suggest the full buildout (including financing and maintenance) could eventually approach $80 billion in ratepayer impact, adding $100–$200+ annually to the typical household bill.
  • Right of First Refusal (ROFR) Laws Protect Incumbents: Texas law gives existing transmission owners priority to build new lines connected to their systems. Opponents (including competitive developers, the U.S. Department of Justice in past litigation, and free-market groups) call this textbook cronyism—it blocks competitive bidding that studies show can reduce costs by 15–40%. The Texas ROFR statute has faced constitutional challenges for discriminating against out-of-state competitors.
  • Special Legislation and Regulatory Overreach: HB 5066 was originally pushed by oil & gas interests to fix Permian reliability. But critics—including the Texas Public Policy Foundation (TPPF), Texas Scorecard, and landowner groups like American Stewards of Liberty—argue it was expanded by PUCT and ERCOT into a much broader statewide 765 kV “superhighway” without sufficient legislative oversight or public input. The compressed approval timeline has been called a fast-track that sidelines ratepayers and landowners. Meanwhile, oil & gas majors get cheaper grid access for their ESG goals, combined computing loads (crypto + data centers) benefit indirectly, and utilities lock in decades of returns—all while residential customers and rural landowners foot the bill through eminent domain and higher rates.
  • Landowner and Ratepayer Impacts: Projects require eminent domain across private land, with critics estimating landowners could lose at least $8.2 billion in property value and use. Compensation is often far below perceived losses.

In short, while the reliability is a valid concern, the structure—government-mandated planning + protected incumbent carriers + fully socialized costs + liberal exercise of eminent domain—demonstrates a classic crony capitalist setup: concentrated benefits for politically connected industries and utilities, and the cost burden for average Texans.

Bottom Line

Why is Texas embarking upon a gargantuan project, taking thousands of miles of private property, and taking on billions in expenses, to pump energy into one of the most energy rich regions on the planet?

It's difficult to see this as a smart infrastructure build when it's clear that the Permian Oil & Gas industry is currently operational with off-grid or behind the meter solutions, and Big Data has no constraints forcing it to operate in the Permian at all. The 765 kV debate is a proxy for serious, urgent, questions—how do we constrain government to balance business interests, costs, landowner rights, and market principles, in the fastest-growing Energy and Data state in the country—and for the most serious urgent question—amidst all of the high-power, crony corporate wheeling and dealing, who represents the Texans left with the bill, or the loss of their land, or both?

Sources and Attribution

(Direct links to primary documents and studies used for all facts and figures above)

All figures are drawn directly from the cited ERCOT, PUCT, utility, and independent analyses as of the latest available reports (2024–early 2026). Forecasts and costs can evolve with new data, routing decisions, and legal outcomes.

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