Apr 15 2009

The (Oil and Gas) Republic of Texas

April 15, 2009

It appears Texas is about to join states such as Oklahoma, Indiana, and South Dakota in the 10th Amendment craze that is sweeping the nation. These states and others are introducing, and in some cases now passing, Resolutions of Sovereignty. The 10th Amendment to the Constitution is quite simple, and declares: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. In populist terms, these declarations are currently expressions of public disgust at Washington’s behavior in the wake of the financial crisis. While this may seem quaint, these declarations are legal platforms for future secession from the Union.

republic-of-texas-currency-2

Given that Texas, starting with Cortez in 1519, has functioned under six flags already I thought it might behoove to take a quick look at how Texas might fare under a seventh. Specifically, with respect to the supply of Oil and Gas. Would an independent Texas be able to produce enough oil and gas to serve its own population, with some left over for export ? Indeed it would. In fact, Texas produces more oil than any other state and accounts for 19.7% of total US output. Texas also produces more than 30% of US natural gas supply. Texas does consume a goodly portion of its own oil output, about 75% of what it produces. But, it only consumes half of its own natural gas production. For secessionists, these numbers look good.

Today I tweeted that perhaps taking early citizenship in Texas might be a wise idea. While an actual Texas secession from the union would no doubt be a spectacular, historic event–replete with enormous legal problems over property rights–I must say it’s not impossible. And with respect to Oil and Gas production, I see no reason why a resurrected Texas Republic could not revolve oil and gas royalties currently paid to the federal government back to itself. And thus, preserve private company property rights for all current drilling and lease operations, as they are.

While the days of price setting by the Texas Railroad Commission are long since over, the RRC is still very much alive and operable in its regulatory and information gathering capacity. Frankly, although the EIA in Washington produces state by state oil and gas production data, it’s kinda fun to look over the RRC statistics and know that Texas is in charge of its own.

No doubt some of my readers will find this all very premature. I believe the late December article in the Wall Street Journal, featuring a Russian analyst’s forecast of a US breakup, was also met with a maximum smirk. See: In Moscow, Igor Panarin’s Forecasts Are All the Rage; America ‘Disintegrates’ in 2010. Fair enough. But I suspect that before 2009 is through, some mainstream journalists will spend time in the Lone Star State, taking a more serious gauge of the public’s mood towards Sovereignty and the 10th Amendment movement. Until then, do watch Texas Governor Rick Perry’s recent press conference on the Sovereignty Resolution.

-Gregor

Photo: Texas Republic Three Dollar Bill c. 1839

• Comments
Author: Gregor Macdonald   Posted in: Oil  Policy  politics   Tagged:          
  • StatingFacts
    There is no real substantiation to the opinion above. Collective opinions of this type will stem from a mixture of socialized ignorance and personal paranoia. These opinions will most always be too radical in nature to ever be taken seriously in any court of law - or even by most in their own state as is evident. Generally, it is easy for the rest of us to identify that these opinions are spawned by the minority of isolated, personally malcontent people living amongst us.

    The legal right to secession of any state ratified into the union upon an Act of Congress (such as Texas), has been made clear in the Constitution and Supreme Court decisions over time. However, the cases in point (10th Amendment and declarations of sovereignty) aren't being used here to honor our forefathers and the principles by which they founded our country and wrote into contract law. The 10th Amendment is being leveraged as a political ploy for the G.O.P. who has lost ground politically. Simply put, the fragmented secessionist opinion has nothing to do with the latest G.O.P. rhetoric.

    Additionally, the opinion uses no factual substantiation to tangential thoughts on Texas as an "energy empire" nor about "Cortez". The Texas legislature, in a cooperative effort with the Energy Information Administration, gathers and produces data on oil and natural gas production and consumption annually. Texas has historically and current consumes more energy in btu than it produces. Texas is no longer the oil empire it once was in the '70's. As a nation we are much less reliant on Texas then some are willing to admit. Additionally, there is no real evidence Cortez was ever even actually physically in the Spanish territory that is now Texas in 1519.

    Again, this person must be a moron. Now let's all follow her/him, and the other American Taliban, into a devolved third-world war-torn collection of tribes.
  • gregor.us
    Well, I wouldn't get too overwrought about what was, and remains, a rather fun-spirited post that was topical in the week that Texas shook the secessionist rattle. Additionally, this is a 500 word post. Not a White Paper or dissertation on whether Cortez himself ever laid foot in what is now known as modern Texas. The Financial Times of London found this post amusing, and reprinted part of it in the spirit it was originally intended.

    Yes, it's true, in power generation Texas is a net importer. That does not, however, counter my quick take here which is that Texas is a significant exporter of oil and gas--with quite a bit of natural gas resource left to extract. An independent Texas would not, in fact, find it difficult to send the total BTU supply-demand balance in its favor, were it to make such a decision.

    Anyway, the contours of this blog are pretty clear. This is an energy blog. Not a poltical blog. Who would argue that the 10th amendment craze at the moment is anything but a cynical exploitation of base emotions, and ignorance? That said, I see all this from a much greater distance and my reading of history suggests that such political occurrences are not merely quaint.

    The larger picture remains that the debasement of the USD which has gone on for a century, combined with global oil depletion, is the recipe for a collision globally. Not just in the US. And stirrings of the kind we see in Texas are but a part of this larger phenomenon.

    Why don't you take a tour through the rest of the blog to get a sense of the broader view expressed here. I'm approaching all of these problems from a very, very non-political perspective. Or at least I try to.

    Regards,

    G
  • StatingFacts
    You are a complete moron
  • TommyD
    I would love to see Texas try and leave the Union. Then we can point out that such talk and acts are as unpatriotic as voting Democrat. Also, if y'all decide to leave, we will force you back in with the ability to flatten Dallas in the process. Bring em' on.
  • JoE
    Man so many opions out there and i do mean "OPINIONS" we all have them. ITs great to see my fellow TEXANS stand up for there beliefs and its jelousy that cause the Yankees to act frantic and only respond with jelouse rage and insults that are no better than those heard on the grade school playground.

    TEXAS is a great state and Has great History i think "Sam" would be proud of well, oh whats the word YA'LL!

    oh yeah 78% of the United States MArine Corp is from were oh T E X A S

    semper fi.
  • Paul
    Before you get angry, please know I voted for Obama ok. I have read alot of posts but this Rick Perry stuff is serious. I know alot of people saying let texas go they will fail etc... Hypothetically if Texas did leave the union, as illegal as it it, but just for the sake of argument, say they did. Other states would in fact follow. Due to political ideology, most nuclear nuke resources (BOMB PLANTS and radio active waste) are in conservative states, as is fort Knox's gold, and most oil refineries, and Strategic Petroleum Reserve. If Texas were to "hypothetically leave," and take a number of red states with them, these states will not just hand over this stuff without MAJOR concessions. According to my reasearch, and it can be wrong may I add, but 70% of our volunteer military members are from red states... they will not just turn a weapon on their homes. Again, I am not making their argument, nor am I supporting this in any way, I am just making what I feel is a wise observation. With that said, the U.S. has alot of enemies, and just as France backed the radical separatist american colonials just to tick the UK off, I am confident countries like Saudi Arabia, Hugo in Venezuela, France, China, and Russia, would love to help/fund ANY soviergn republic like this in the U.S., and would Immediately sign treaties with them to protect them and immediately give them a seat in the UN. This would then significatly lower the U.S.'s credit with the world, China would cash in all those trillions in bonds ASAP, the U.S. would go bankrupt and therefore completely incapable of doing anything significant to the new "Republic of Texas," I know, I, know we have nukes, but could not use them because so would Texas, and have protection from Russia and China. I am of the opinion that such a movement, even as a hypothetic, would in the long run... crush the U.S. So my friends that will probably say horrible things to me... WE DO NEED TEXAS to stay in the union, and the faster we admit we all need each other and start acting like united Americans instead of Liberals vs. NeoCons the better. This kind of talk is serious, scarey, real, and we better get our act togather quick and stop insulting each other just because we disagree. Insults can lead to fighting words, and just because the law says one cannot leave the union CANNOT stop them. The law says we cannot kill, but we do, and the law says drive the speed limit, and yet thousands of tickets are issued daily. Just because it's on paper means nothing. I say stop all the trash talk now because it's getting real hot.
  • veepal
    "When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation."

    "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

    I missed the part that says "Progressive politicians and bureaucrats (starting with every president since Teddy Roosevelt, excepting only Reagan, R and D alike) are charged with thinking for all of us simpletons who could never understand the nuances of government."

    Quit voting for political parties, and start looking at the character of the people running for office. If you find an honest (wo)man, or at least one you can forgive, vote for them! Long live the Republic, and down with fascists! *


    * fas·cism (from Merriam-Webster)
    Pronunciation: \ˈfa-ˌshi-zəm also ˈfa-ˌsi-\
    Function: noun
    Etymology: Italian fascismo, from fascio bundle, fasces, group, from Latin fascis bundle & fasces fasces
    Date: 1921
    1. often capitalized : a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition
    2: a tendency toward or actual exercise of strong autocratic or dictatorial control
  • texas
    Please seccede i will die for the great state of texas.
  • Texasborn
    I think all this talk about secession is crazy and stupid. I was born and raised in the great state of Texas and even I know that we wouldn't be having this conversation if McCain had won. This makes no sense at all. All the trash Bush done in office no one ever talked about leaving the Union. Bush cheated us (The Middle Class) out of money, lied about weapons of mass destruction, cheated people and countries out of oil rights, and the list goes on, but yet Texas (Republicans) backed him in his endeavors. I will be glad when the next election comes, so that Governor Perry will be voted out.
  • Jordyn
    I do not agree with your opinion that "we wouldn't be having this conversation if McCain had won." I believe that Americans would be angry with ANY administration that has done the things that this administration has done and is threatening to do. At this point many Americans are beyond partisan politics and are almost as angry with Bush as they are with Obama. Over the past several years government has gotten out of control and people are just now realizing it. I think the reason it has come to a head now is because the Obama administration makes it so obvious that they are leading us down a Socialist-Fascist path. We can no longer hide our heads in the sand about what is going on around us because is it on the table for all to see. Yes, many in Texas may have backed Bush, but that doesn't mean that we should continue to make the same mistakes just because a man of a different party has been elected as President. That said, I love my state and I also love my country. I do not like the thought of seceding from the Union and leaving the other states behind to suffer under such an oppressive government. In my opinion, the best thing that could happen is for all states to unite against this situation and return the USA to what it was meant to be as stated in our Constitution. I for one do not want to live in nor raise my family in a Socialist nation as those are not my values. If things do continue to fall apart in the US, I think that Texas, as well as other states, should do what is best for her people even if that does mean secession. I would also be in support of any states that would like to join us in doing so. No government should dare to trample on the God-given or "natural" rights of its people!
  • Ron
    Well, here's an inequality.

    All Texans would have a right to US citizenship but not vice versa. So in other words, if Texans decided to continue to register the birth of their kids at the US consulate, then there be many generations of dual citizens. But vice versa, if those American citizens, who didn't decide to re-locate to TX, before the granting of independence, would need to go through the green card process.
  • MaxWeiss
    What a load of crap. The only secession talk was a few years ago when Howrad Dean (yeah, that one) was holding town hall meetings in Vermont about secession.

    Two things to note: Vermont actually used the word secession. This was under the regime of the hated fascist Chimpy McBushitler, so of course it was OK for lefties to promote that garbage.
  • Brisck
    This is for Northern Pride;
    To think that a bunch of liberals would be able to go to Texas and “put them down” is totally ludicrous! The reason that 400,000 Nazi’s were taken prisoner in one day shows that when you are fighting only for an ideology you will turn and run when the rubber hits the road every time. But when you are fighting for “Life, Liberty and the pursuit of happiness”, I dare say every Texas would fight to the absolute death. I have yet to see one liberal actually physically fight for anything. There mode of operation strictly resided in the court system. I’m sure Obama would sue if Texas did secede, for him to order a military act would create a civil war between two types of people, one who has something to fight and die for and the other who sit in la, la land trying to push there self-serving Godless agendas.

    I don't even live in Texas, but support the right and their right.
  • Baron22
    Um, and who exactly won the civil war?
  • Texan 1st, American 2nd
    Amen,

    They sure do talk alot but when going gets rough... they are like roaches. when the light comes on, they scatter
  • NorthernPride
    Go ahead. Commit treason and rebel against the United States of America. We are fighting two wars against foreign enemies, and its no surprise that the sons of rebels would choose this time to rebel against the USA again.

    Those of us who are loyal to this country will be happy to put you down like the traitorous dogs you are.
  • Paul
    Before you get angry, please know I voted for Obama ok. I have read alot of posts but this Rick Perry stuff is serious. I know alot of people saying let texas go they will fail etc... Hypothetically if Texas did leave the union, as illegal as it it, but just for the sake of argument, say they did. Other states would in fact follow. Due to political ideology, most nuclear nuke resources (BOMB PLANTS and radio active waste) are in conservative states, as is fort Knox's gold, and most oil refineries, and Strategic Petroleum Reserve. If Texas were to "hypothetically leave," and take a number of red states with them, these states will not just hand over this stuff without MAJOR concessions. According to my reasearch, and it can be wrong may I add, but 70% of our volunteer military members are from red states... they will not just turn a weapon on their homes. Again, I am not making their argument, nor am I supporting this in any way, I am just making what I feel is a wise observation. With that said, the U.S. has alot of enemies, and just as France backed the radical separatist american colonials just to tick the UK off, I am confident countries like Saudi Arabia, Hugo in Venezuela, France, China, and Russia, would love to help/fund ANY soviergn republic like this in the U.S., and would Immediately sign treaties with them to protect them and immediately give them a seat in the UN. This would then significatly lower the U.S.'s credit with the world, China would cash in all those trillions in bonds ASAP, the U.S. would go bankrupt and therefore completely incapable of doing anything significant to the new "Republic of Texas," I know, I, know we have nukes, but could not use them because so would Texas, and have protection from Russia and China. I am of the opinion that such a movement, even as a hypothetic, would in the long run... crush the U.S. So my friends that will probably say horrible things to me... WE DO NEED TEXAS to stay in the union, and the faster we admit we all need each other and start acting like united Americans instead of Liberals vs. NeoCons the better. This kind of talk is serious, scarey, real, and we better get our act togather quick and stop insulting each other just because we disagree. Insults can lead to fighting words, and just because the law says one cannot leave the union CANNOT stop them. The law says we cannot kill, but we do, and the law says drive the speed limit, and yet thousands of tickets are issued daily. Just because it's on paper means nothing. I say stop all the trash talk now because it's getting real hot.
  • Conroe, TX
    the GREAT state of tx has over 125,000 active soldiers in the TX National guard, Airforce and Army. That's excluding what is currently in the US military, which the majority would gladly come home to defend our state. Go ahead and try it! Also, calling us traitors for follow our TEXAS Constitution? Funny, seems we have every right to change our government as we see fit. The federal government has trampled on the US Constitution and it is our duty to standup.

    http://www.constitution.legis.state.tx.us/

    THE TEXAS CONSTITUTION

    ARTICLE 1. BILL OF RIGHTS

    Sec. 1. FREEDOM AND SOVEREIGNTY OF STATE. Texas is a free and independent State, subject only to the Constitution of the United States, and the maintenance of our free institutions and the perpetuity of the Union depend upon the preservation of the right of local self-government, unimpaired to all the States.

    Sec. 2. INHERENT POLITICAL POWER; REPUBLICAN FORM OF GOVERNMENT. All political power is inherent in the people, and all free governments are founded on their authority, and instituted for their benefit. The faith of the people of Texas stands pledged to the preservation of a republican form of government, and, subject to this limitation only, they have at all times the inalienable right to alter, reform or abolish their government in such manner as they may think expedient.
  • Mike
    Despite the fact that we're the only state with a budget surplus, I would seriously considering moving from North Dakota to be part of an independent Texas. Just not where it's hot. And humid.
  • Texxon
    Temper your words carefully - at this time 33 other states are sounding noises about the 10th amendment carefully - Mass and Vermont and NH among them. You may live there.
  • akguy
    Gregor, you should consider Alaska instead (Palin will be gone soon!)I believe we have more oil & gas, minerals and less people. Also lots of guns to defned ourselves!!
  • Carol
    How exciting! Since I was born in Laredo, surely I qualify for citizenship automatically. Always have had the romantic notion that I would end my days back around the Pecos River, on that open breezy grassland, center of the whole wide world, knowing every mesquite and pebble by heart. Aver que pasa.
  • Gregor - Love your stuff and am an avid follower on Twitter and such. Enough with the sucking up :-)

    We are proud of what we have in the O&G industry here in Texas. I am third generation wildcatter (meaning I still risk shit, I don't just spend what the previous generations made). There is still a very strong independent streak here but also a realization that too many eggs in one basket can spell disaster. I still remember the mid-80s and watching neighbors leave home in their cars in the morning and come back in the evening with a UHaul to get everything they could out before it was all taken by the banks.

    I am glad that Texas, and Houston (my hometown) in particular, has expanded into many other industries. Our state now has strengths in Telecom, Biotech, IT Hardware/Software and Silicon, etc. so we don't solely depend on our energy to see us through.

    That said, Governor Good Hair does have a point and we definitely have the wherewithal to go it alone although it is all blather and his way of testing the waters for both a contentious campaign for re-election against Kay Bailey Hutchinson (currently US Senator) and, wait for it, a potential run for President in 2012. One would think the US electorate would not warm to another of us in the Oval Office, but never say never.

    So, "Don't Mess With Texas" :-) and come on down to Austin (my adopted hometown) one of these days and we'll introduce you to some good Tex-Mex and take you to see the Santa Rita #1 well that started the major endowment for the University of Texas system.
  • gregor.us
    I still dream of wood-smoked Texas BBQ that I've had in my two trips to Texas. The hill country around New Braunfels is some of the prettiest landscape I can ever remember. I lived in Houston once for a summer, and then returned to North and West Texas many years later on a TV commercial production shoot for beer (I think it was Coors). I really have a soft spot for Texas. But it's not a surprise because I grew up in New England, and I love any place that's very different.

    How would I do living in Austin for the following favorite activities of mine:

    1. Backyard vegetable gardening.
    2. Riding a bicycle ( a road bike not a mountain bike).

    TIA

    G
  • Gardening is fantastic down here. We have great resources for it. A couple of links for you to peruse below.

    http://www.naturalgardeneraustin.com

    http://www.gonursery.com/

    http://www.klru.org/ctg/

    Bike riding is a normal thing around Austin. Sometimes folks venture onto roads they shouldn't (narrow with no shoulder, etc.) but you can do 20 - 200 mile rides with relative ease.

    http://www.trails.com/activity.aspx?area=10607

    the Jeff Garvey Favorite Hill Country is one of my friend's favorite rides. Jeff is one of the co-founders of the Lance Armstrong Foundation which is based here.
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