Cynthia and George Mitchell Foundation

When it comes to the cost of the looming water crisis in Texas, the State Water Development Board is ready with some helpful numbers.They are generally big ones.

If the state does nothing to cope with its booming population and dwindling water supply, Texas businesses will lose $116 billion dollars over the next 50 years. The state as a whole will lose over 1 million jobs.

$53 Billion dollars is the price tag of the plan that the Board thinks will avert those losses and assure water security into this century. But the state has never funded the plan.

Now, in the aftermath of the worst single year drought in Texas history, water issues are getting more attention than they have in years. And lawmakers preparing for the upcoming legislative session are debating ways to fund the plan. But with many of those same lawmakers committed to cutting budgets and not raising taxes, their options are few and far between.

That leaves them trying to figure out what, if anything, they may be able to do in 2013.

“You don’t have to solve the whole problem today,” Republican State Senator Glenn Hegar told StateImpact Texas at a recent conference on state water issues hosted by the Texas Tribune.

He sits on the Senate’s Natural Resources Committee. He believes it could be sufficient to fund a fraction of the total cost of the plan next year by dipping into the state’s rainy day fund. Even a relatively modest initial investment, he says, could kick-start local water projects and pay large dividends down the road.

“Invest [the funds] with an incentive. An incentive to not tell those local people what are the best projects for them, but to work in cooperation because they can also put dollars into the pot,” Hegar said.

It wouldn’t be the first time the state has written a one-time-only check for the water plan.  Last session lawmakers appropriated about $100 million dollars to state water projects. It barely put a dent in the projected need and came a far cry from funding the plan in the long run. That has other lawmakers looking at other, longer-term funding strategies.

“Everything is on the table,” Republican State Representative Allan Ritter told StateImpact Texas.

Ritter chairs the Natural Resources Committee in the Texas House.  Last session he floated the idea of initiating a fee for connecting homes and businesses to the water system. He said the so-called “tap fee” would provide that steady stream of funding for the water plan.

“You know it’d be somewhere between the range of $3.50 to $5.00 range for a house every year,” he said.

In 2011 that sounded too much like a new tax to get any traction with Texas lawmakers. Though Ritter thinks this year continued water shortages may force lawmakers to re-think their attitudes about funding.

“We’ve gotta step up in that state of Texas and meet this demand because we’re short,” he said.

But, according to others, the water plan wouldn’t secure the state’s water future even if it was fully funded. An opinion that makes the partial funding being debated by lawmakers sound a lot like fiddling around the edges of a larger problem.

The plan is “necessary but not sufficient to really address the critical water issues we had before last year’s drought,” Marilu Hastings, Environment Program Director of the Cynthia and George Mitchell Foundation, told StateImpact Texas.

To truly tackle Texas water challenges, she says lawmakers should take a more strategic approach towards what projects get funded. For example, the 2012 plan doesn’t prioritize projects (some of the projects even appear to contradict each other) so even if money is found for the plan, it’s not clear if it would be used to great effect.

The plan could be better organized “so that your reservoir building, your conservation is more integrated,” she told StateImpact Texas.

Hastings and others also want the state to change how it governs surface and groundwater rights, and reconsider its estimates for future water supplies as the region gets drier.

But with lawmakers struggling to fund the plan already on the books, it’s unclear what other initiatives they will have the time or inclination to tackle when the legislative session begins in January.

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The United States is a country that has received many blessings, and once upon a time you could assume that Americans would come together to take advantage of them. But you can no longer make that assumption. The country is more divided and more clogged by special interests. Now we groan to absorb even the most wondrous gifts.

A few years ago, a business genius named George P. Mitchell helped offer such a gift. As Daniel Yergin writes in “The Quest,” his gripping history of energy innovation, Mitchell fought through waves of skepticism and opposition to extract natural gas from shale. The method he and his team used to release the trapped gas, called fracking, has paid off in the most immense way. In 2000, shale gas represented just 1 percent of American natural gas supplies. Today, it is 30 percent and rising.

John Rowe, the chief executive of the utility Exelon, which derives almost all its power from nuclear plants, says that shale gas is one of the most important energy revolutions of his lifetime. It’s a cliché word, Yergin told me, but the fracking innovation is game-changing. It transforms the energy marketplace.

The U.S. now seems to possess a 100-year supply of natural gas, which is the cleanest of the fossil fuels. This cleaner, cheaper energy source is already replacing dirtier coal-fired plants. It could serve as the ideal bridge, Amy Jaffe of Rice University says, until renewable sources like wind and solar mature.

Already shale gas has produced more than half a million new jobs, not only in traditional areas like Texas but also in economically wounded places like western Pennsylvania and, soon, Ohio. If current trends continue, there are hundreds of thousands of new jobs to come.

Chemical companies rely heavily on natural gas, and the abundance of this new source has induced companies like Dow Chemical to invest in the U.S. rather than abroad. The French company Vallourec is building a $650 million plant in Youngstown, Ohio, to make steel tubes for the wells. States like Pennsylvania, Ohio and New York will reap billions in additional revenue. Consumers also benefit. Today, natural gas prices are less than half of what they were three years ago, lowering electricity prices. Meanwhile, America is less reliant on foreign suppliers.

All of this is tremendously good news, but, of course, nothing is that simple. The U.S. is polarized between “drill, baby, drill” conservatives, who seem suspicious of most regulation, and some environmentalists, who seem to regard fossil fuels as morally corrupt and imagine we can switch to wind and solar overnight.

The shale gas revolution challenges the coal industry, renders new nuclear plants uneconomic and changes the economics for the renewable energy companies, which are now much further from viability. So forces have gathered against shale gas, with predictable results.

The clashes between the industry and the environmentalists are now becoming brutal and totalistic, dehumanizing each side. Not-in-my-backyard activists are organizing to prevent exploration. Environmentalists and their publicists wax apocalyptic.

Like every energy source, fracking has its dangers. The process involves injecting large amounts of water and chemicals deep underground. If done right, this should not contaminate freshwater supplies, but rogue companies have screwed up and there have been instances of contamination.

The wells, which are sometimes beneath residential areas, are serviced by big trucks that damage the roads and alter the atmosphere in neighborhoods. A few sloppy companies could discredit the whole sector.

These problems are real, but not insurmountable. An exhaustive study from the Massachusetts Institute of Technology concluded, “With 20,000 shale wells drilled in the last 10 years, the environmental record of shale-gas development is for the most part a good one.” In other words, the inherent risks can be managed if there is a reasonable regulatory regime, and if the general public has a balanced and realistic sense of the costs and benefits.

This kind of balance is exactly what our political system doesn’t deliver. So far, the Obama administration has done a good job of trying to promote fracking while investigating the downsides. But the general public seems to be largely uninterested in the breakthrough (even though it could have a major impact on the 21st-century economy). The discussion is dominated by vested interests and the extremes. It’s becoming another weapon in the political wars, with Republicans swinging behind fracking and Democrats being pressured to come out against. Especially in the Northeast, the gas companies are demonized as Satan in corporate form.

A few weeks ago, I sat around with John Rowe, one of the most trusted people in the energy business, and listened to him talk enthusiastically about this windfall. He has no vested interest in this; indeed, his company might be hurt. But he knows how much shale gas could mean to America. It would be a crime if we squandered this blessing.