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Originally published at The Daily Economy. US Energy Secretary Chris Wright recently summed up the new federal approach: “We are unabashedly pursuing a policy of more American energy production and infrastructure, not less.” That’s a welcome shift after four years of Washington micromanaging energy markets, imposing costly regulations, and forcing unreliable sources into the grid. But as someone who lives near Austin, Texas, I’ve seen firsthand that avoiding federal overreach is only part of the solution. States must also resist the temptation to control energy markets — something Texas is starting to get wrong. Texas and California are the two largest US states by population and economic output. Their energy policies have produced starkly different outcomes. See endnote for chart references.
But being more “green” doesn’t necessarily mean better. California’s grid is fragile and prone to blackouts, overreliant on intermittent sources. Texans benefit from lower prices and higher output, but Texas now leads the nation in wind generation — a title earned through decades of subsidies, not pure market forces. That chart tells the story: Texas still delivers more energy for less money, but the policy gap is closing — in the wrong direction. Texas is in danger of losing its competitive edge by repeating California’s mistakes. Texas Risks Becoming California The Texas blackout during 2021’s Winter Storm Uri was a wake-up call. As energy economist Rob Bradley, policy expert Bill Peacock, and others have reported, frozen wind turbines and iced-over solar panels were unable to meet demand. Natural gas plants underperformed due to poor weatherization, and the state’s overreliance on intermittent sources magnified the crisis. Texas’s electricity market is not as “free” as many believe. While Texans can choose their electricity providers in a competitive retail market under the Electric Reliability Council of Texas (ERCOT), the generation side is riddled with subsidies and political interference. For years, Texas’s Chapter 313 property tax abatement program was heavily favored by wind and solar projects, distorting investment decisions. But that program expired in December 2022. In 2023, the legislature passed another version of property tax abatements in Chapter 403, and voters approved a new constitutionally dedicated Texas Energy Fund, with $5 billion in low-interest, taxpayer-funded loans for new natural gas plants. This year, the legislature passed another $5 billion in subsidized loans and could soon subsidize nuclear power. This is still political favoritism — only the fuel source changes, leaving a flawed policy intact. Subsidies Distort Energy Markets Subsidies heavily distort Texas’s power generation market. Federal production tax credits and Inflation Reduction Act subsidies for wind and solar drive massive overbuilding, even when those sources couldn’t meet demand during peak stress. Now, Texas is repeating its errors with dispatchable generation — bolstering natural gas with state-backed loans rather than allowing higher market prices to attract private investment. As AIER research has shown, markets allocate resources more efficiently when prices reflect actual costs and risks. When the government guarantees a return, investors chase subsidies rather than consumer demand. Gabriella Hoffman, director of the Center for Energy and Conservation at the Independent Women’s Forum and a recent guest on my “Let People Prosper” show, makes this point clearly: conservation and market-based energy policy can coexist, but only if the government stops trying to pick winners. Europe’s energy crisis serves as a warning about what happens when political goals take precedence over reliability and affordability. Energy Freedom Drives ProsperityEnergy is a foundational component of economic growth. It powers manufacturing, health care, technology, and every part of modern life. Energy policy must be grounded in cost-benefit analysis and market principles — not central planning and political favors. Secretary Wright is correct to warn that Europe’s “net zero” strategy has made energy more expensive and less reliable. The US should not follow suit, and neither should Texas. Instead, lawmakers should remove barriers to pipelines, LNG terminals, and power plants, while eliminating taxes and fees on oil and natural gas production that fund unnecessary government growth. Living near Austin, I see every day how energy costs shape business decisions and family budgets. People continue to move here from California for lower costs and greater opportunities. But if Texas continues to copy California’s interventionist approach, that advantage will erode. Power for the Future Texas’s energy sector still outproduces California’s, delivering lower prices and greater reliability. But government meddling — whether for wind, solar, gas, or nuclear — threatens to undo many of these benefits. The path forward is clear:
If Texas allows people in the market to navigate freely, the state can remain the energy leader that California isn’t. This would also ensure families and businesses continue to move here for the freedom and prosperity they can’t find elsewhere. If not, Texas could find itself with California’s prices, reliability problems, and dependence on politics to keep the lights on. Chart references:
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Economist Julian Simon said, “Energy is the master resource, because energy enables us to convert one material into another. As natural scientists continue to learn more about the transformation of materials from one form to another with the aid of energy, energy will be even more important.”
Energy powers our homes, fuels our industries, and drives the innovations that secure our future. However, when Washington attempts to micromanage the energy sector through regulations, subsidies, and political agendas, it distorts the market and drives up costs. But it doesn’t have to be this way. When markets are free to work, America thrives. We’ve seen that energy abundance, competition, and innovation emerge naturally when government steps back and entrepreneurs step forward. The path to a stronger economy and a more reliable grid isn’t more government planning—it’s less! In This Week’s Economy episode, I discuss how we got here, what’s at stake, and the four steps we must take to unleash America’s full energy potential. From ending regulations and subsidies, to rejecting ESG mandates, to fueling innovation, the blueprint is clear: trust markets, not bureaucrats, to power America’s future. You can catch the full episode on YouTube, Apple Podcast, or Spotify. Visit: VanceGinn.com Subscribe: VanceGinn.Substack.com Energy Abundance, Not Energy Alarmism with Gabriella Hoffman | Let People Prosper Show Ep. 1608/7/2025 We hear it all the time: the planet is doomed unless we regulate energy into the ground. But what if the real path forward is the opposite—more energy, fewer mandates, and stronger markets?
In this week’s Let People Prosper Show, I’m joined by Gabriella Hoffman, Director of the Center for Energy and Conservation at the Independent Women’s Forum and one of the most insightful voices in energy policy today. Gabriella brings a refreshing take to the conversation—rooted in liberty, informed by experience, and focused on prosperity through abundance. We discuss her journey, from the daughter of Lithuanian immigrants to a leading advocate for market-based energy and conservation. We delve into the energy crisis in Europe, explore how over-regulation backfires, and discuss why America must resist the urge to centralize energy decisions in Washington, D.C. For more insights, visit vanceginn.com. You can also get even greater value by subscribing to my Substack newsletter at vanceginn.substack.com. Please share with your friends, family, and broader social media network. (0:00) – Introduction to Energy and Conservation Policy (4:56) – Gabriella Hoffman’s Journey into Energy Policy (10:02) – The Role of the Independent Women’s Forum (14:45) – Personal Stories and Perspectives on Energy (19:51) – The State of Energy Policy in Europe (24:59) – The Impact of Deregulation on Energy Markets (29:53) – The Future of Energy in America (34:48) – The All-of-the-Above Energy Strategy (39:54) – The Next Generation of Leaders in the Liberty Movement Originally published to Substack. How resilient is the diesel market when the government keeps distorting prices? My latest peer-reviewed, co-authored research, published in Oil, Gas & Energy Quarterly, delves deeply into this critical question. In this post, I break down what the data show, how the market adjusts (or doesn't), and what policymakers need to stop doing if they want to help working families and truckers, rather than hurting them. Back to Basics: Supply, Demand, and Diesel Diesel isn’t just another fuel—it’s the backbone of freight, farming, construction, and everyday logistics in America. When diesel prices spike or remain artificially volatile, the costs ripple across the economy, crushing families and small businesses. In my newly published paper, “Structural Breaks and Longrun Adjustment in the Diesel Fuel Market” (with co-authors Chris Douglas, Mark Tuttle, and Don Bumpass), we investigate how diesel fuel prices respond to long-term disruptions and whether markets eventually return to their previous trends.
Key Finding: Yes, diesel markets adjust over time—but not always smoothly. We find evidence of multiple structural breaks, points at which the usual relationships between variables (such as crude oil prices, supply shocks, and regulations) shift permanently. That means policy shocks, such as regulatory mandates, price interventions, or geopolitical disruptions, don’t just cause temporary price spikes. They can change the market's behavior altogether. Why This Matters Now: The government has an annoying habit of thinking markets are machines to be fine-tuned. But markets adapt—and sometimes they break. Diesel is a textbook example.
Policy Implications: We need less tinkering, more trust in price signals, and a better understanding that policy mistakes can leave lasting damage. Markets can adjust, but only if left free to do so. As our research shows, diesel prices don’t return to trend automatically, especially not when heavy-handed policy keeps shifting the goalposts. My Take: This paper is another reason why the government shouldn’t try to micromanage energy markets. Structural breaks don’t just happen—they’re often caused by policy itself. Politicians and central bankers would be wise to stop piling on distortions and let competition, innovation, and supply chains do what they do best. Want prosperity? Let markets price energy. Stop the regulatory chokeholds. Scrap distortive tariffs. Shrink the Fed’s role in distorting credit and commodity prices. Final Thought: I’m proud to share this new research with both my academic and policy audiences. Diesel may not make headlines every day, but understanding it is crucial to grasping prices, supply chains, and how government failure can lead to market failure. If we get diesel right, we can get a lot else right, too. Let’s keep pushing for policies that allow people—not bureaucrats—to prosper. Originally posted to The Washington Examiner.
Solar stocks plunged on Tuesday after the Senate released its version of what President Donald Trump has called the “big, beautiful bill.” While some anti-growth carveouts remain, one of its strongest reforms is how it begins to unwind former President Joe Biden’s green energy subsidies. This shift marks a long-overdue correction, ending an era where Washington picks winners and losers in the energy economy. The market’s reaction was revealing. Overinflated by years of preferential treatment, many renewable companies are now adjusting to reality — one where their products compete on merit, not mandates. That’s a good thing. Under Biden, energy policy was driven by top-down planning and heavy-handed regulation. The results? Higher prices, constrained supply, and a fragile grid. But under Trump, we’re seeing a reorientation: more energy abundance and a return to common-sense competition. We don’t need Washington trying to engineer our energy future; we need it to get out of the way. Stripping tax favoritism, streamlining environmental permitting, and unleashing domestic production will lower prices and improve reliability. People in markets, not bureaucrats, should decide where capital flows. This fact extends beyond energy. The Trump administration has wisely begun dismantling financial regulations that have weaponized the government against innovation and consumer choice. One key win: the executive order halting any advance on a Federal Reserve–issued central bank digital currency, which would have been a surveillance tool masquerading as modernization. In another victory for freedom and innovation, the Securities and Exchange Commission dropped its lawsuit against Binance, signaling the end of an era in which cryptocurrency was treated more like a threat than a technology. The Biden administration’s hostility toward decentralized finance stifled innovation. Trump is helping reverse that trend, encouraging financial innovation and clarity. Then there’s the Consumer Financial Protection Bureau’s dropped case against Zelle — a legally flimsy attempt to hold banks liable for fraud committed by third parties. Peer-to-peer payments aren’t inherently risky; bad actors are. The right approach is strengthening consumer education and fraud prevention, not punishing tech-enabled payment tools. The Biden Department of Justice’s lawsuit against Visa’s debit card business was another case of political antitrust, targeting a company not for consumer harm but for being too successful. The sin? Having a 60% market share in a highly competitive industry with no hint of predatory behavior and no shortage of payment choices for consumers and businesses. Thankfully, a shift is underway. Assistant Attorney General Gail Slater has emphasized a return to data-driven enforcement and sound economic reasoning in antitrust. That’s a necessary course correction from the ideologically driven activism of recent years. Still, regulatory bloat remains. Trump should go further by reversing the Biden-era expansion of the Community Reinvestment Act, which pressures banks to prioritize geography and politics over creditworthiness. That’s distortion, not inclusion. When credit is misallocated for political goals, financial stability and the people it’s supposed to help suffer. Energy permitting is another frontier. Under current laws, such as the National Environmental Policy Act, critical infrastructure is delayed for years. We must accelerate approvals for pipelines, liquefied natural gas terminals, and power plants if we want a resilient energy grid and lower prices. Energy abundance should not be held hostage to outdated processes and red tape. What ties all this together is a single, clear principle: Government should not control economic outcomes — it should set the rules of the game and then get out of the way. America doesn’t need a new round of industrial policy or neopopulist planning. We need a recommitment to classical liberalism, grounded in free-market economics, limited government, and individual freedom. Industrial policy, whether from the left or right, assumes Washington knows better than markets. It doesn’t. The history of failed subsidies, protectionist trade wars, and crony corporatism proves it. If we want more innovation, investment, and opportunity, the best policy is humility: Let people prosper. That starts by ending the “winners and losers” economy. No more special favors, mandates, or market manipulation. Just a level playing field where success is earned, not granted. Originally published at AIER's The Daily Economy.
California leads the nation in more ways than one — taxes, regulations, and, once again, gas prices. As of mid-May 2025, the average gasoline price in California is $4.85 per gallon, far above the national average of $3.26, according to GasBuddy and AAA. And it’s getting worse. A March 2025 study by USC Professor Michael Mische forecasts California’s fuel prices could spike 75 percent to over $8 per gallon within the next year. That’s not hyperbole — that’s the trajectory unless policymakers reverse course. The culprit? It’s not oil companies or global demand. It’s decades of state-level tax hikes, regulatory overreach, and misguided climate mandates that have warped the gasoline market in California. This is a man-made problem — a case study in government failure, not market failure. What Really Drives Gas PricesAccording to the US Energy Information Administration (EIA), gasoline prices are generally shaped by five components: crude oil prices, refining costs, distribution and marketing, taxes, and regulations. In California, taxes and regulatory costs alone account for more than $1.30 per gallon — nearly double the national average. California has the highest gas tax in the country, at $0.678 per gallon, not including additional fees and environmental surcharges. Add in the Cap-and-Trade program, the Low Carbon Fuel Standard (LCFS), and boutique fuel blends that are required only in California, and it becomes clear why Californians pay more. And things are deteriorating further. The Mische study warns that with refinery closures due to hostile permitting processes and low expected returns under California’s climate mandates, fuel supply in the state could drop by 20 percent by 2026, even as demand stays relatively stable. Fewer refineries and rigid fuel standards will mean tighter supply and higher prices. Texas vs. California: A Tale of Two Fuel MarketsTo see how bad California’s policies are, look no further than Texas. As of May 2025, Texas drivers pay about $3.00 per gallon, nearly two dollars less than Californians. Texas levies a combined state gasoline tax of just $0.20 per gallon, and its regulatory structure is streamlined and energy-friendly. Texas refineries aren’t subject to California’s carbon credit system or forced to produce costly special-blend fuels. And because it allows for a more competitive and open fuel market, the state benefits from both lower wholesale prices and more efficient distribution. The difference is stark — and instructive. The Fallacy of “Green” Fuel MandatesSupporters of California’s approach claim high prices are a necessary cost for fighting climate change. But what if those policies aren’t actually working? California’s greenhouse gas emissions have declined, but much of the reduction has come from cleaner electricity generation, not gasoline policies. Meanwhile, low-income and working-class Californians are being punished at the pump while driving older, less fuel-efficient vehicles. This amounts to a regressive tax that hurts the very people politicians claim to protect. Worse, these rules don’t reduce global emissions — they just push energy production and refining out of the state and overseas, often to countries with weaker environmental standards. The Economic Cost of Fragmented Fuel Policies In my academic work, including a peer-reviewed paper and subsequent research (SSRN profile), I’ve documented how state-level fragmentation of fuel markets — through taxes, environmental programs, and infrastructure restrictions — creates costly inefficiencies that drive up prices. These policies discourage new investment in refining and fuel transportation. They create artificial shortages. And they increase transaction costs that ultimately fall on consumers. In short, California’s model is a textbook case of how overregulation and government micromanagement destroy affordability without delivering proportional benefits. What Should Be Done Instead?The answer isn’t new subsidies or “green” credits. It’s not banning gas-powered cars or rationing vehicle miles. The solution is to embrace free-market capitalism and the principles Milton Friedman championed: let prices reflect market conditions, not bureaucratic preferences. That means:
Conclusion: A Crisis of Policy, Not PriceCalifornia’s high gas prices aren’t the product of global volatility or greedy corporations. They’re the result of a long series of deliberate policy choices that make fuel harder to produce, harder to transport, and harder to afford. When government picks winners and losers in energy markets, consumers lose. And when politicians mistake control for competence, they create systems that serve ideology rather than reality. It’s time to abandon the myth that high gas prices are the price of progress. California has created a man-made fuel crisis — and only free-market reforms can solve it. Why is the electricity market so broken—and what can we do to fix it?
In this episode of the Let People Prosper Show, I interview Glen Lyons, a Texas-based energy expert and advocate for Consumer Regulated Electricity (CRE). Glen shares his journey from advertising to energy policy, offering unique insights on ERCOT’s dysfunction, the original sin of electricity monopolies, and how free markets—not central planning—can finally unleash innovation, reliability, and cost savings for consumers. We also explore the growing demands of data centers, the role of AI in energy usage, and why Texas has a golden opportunity to lead the way with CRE. For more insights, visit vanceginn.com. You can also get even greater value by subscribing to my Substack newsletter at vanceginn.substack.com. (0:00) – Introduction and Background of Glen Lyons (2:41) – Glen’s Career and Economic Philosophy (9:11) – Why Electricity Markets Are Unique—and Flawed (14:24) – What’s Broken in ERCOT (20:08) – Government’s Role in Energy Policy (22:56) – How Price Caps Distort Electricity Signals (25:00) – Consumer Regulated Electricity: A Bold Proposal (30:01) – Texas: The Ideal Testbed for Energy Innovation (33:55) – Economic Freedom and Real Market Solutions (37:59) – AI, Data Centers, and the Future of Power Originally published to RealClear Policy.
President Donald Trump made explicit promises: reshore jobs, unleash American innovation, and secure the country’s lead in artificial intelligence. That vision took shape early in his second term with the bold announcement of Stargate—a $500 billion commitment to build out an AI-driven data infrastructure across the U.S., starting in Texas. This project isn’t just a tech upgrade. It’s a national strategy to fuel the next wave of prosperity, ensure U.S. dominance in AI, and protect American security from authoritarian competitors like China. However, a misguided bill in the Texas Legislature threatens to wreck this once-in-a-generation opportunity. Senate Bill 6 (SB 6) would weaponize energy regulation against data centers—jeopardizing Trump’s innovation agenda, Texas’s economic leadership, and America’s digital infrastructure. SB 6 would let the grid operator, ERCOT, discriminate against large energy users like data centers. Under the bill, these facilities would be saddled with higher transmission costs and required to build redundant on-site generation. Even worse, ERCOT could shut them down remotely during emergencies. That’s right—Texas is proposing a kill switch for the digital backbone of modern life. Texas lawmakers are right to care about energy reliability. ERCOT projects that electricity demand will rise from 85 to 150 gigawatts by 2050 due to a growing population and booming tech sector. But SB 6 solves the wrong problem in the worst way—by punishing one of the state’s most promising industries. Data centers aren’t causing grid instability. They’re a potential part of the solution. Many are exploring advanced, zero-carbon power sources—like small modular nuclear reactors (SMRs)—to power their operations. Not only would this take pressure off the grid, but these facilities could also supply electricity back to the grid during periods of scarcity. Imagine that: rather than shutting down data centers, they could be stabilizing the grid and helping keep homes powered. SB 6 ignores this innovation entirely. Texas has attracted more than 150 data centers due to its low taxes, business-friendly climate, and abundant energy. These facilities power everything from AI systems and cloud computing to hospital networks and financial transactions. Without them, modern life doesn’t function. They’re also central to America’s security, housing sensitive government data and communications infrastructure. Yet, SB 6 fails to classify data centers as “critical infrastructure,” leaving them vulnerable to being cut off during grid emergencies. That’s not just short-sighted—it’s reckless. Imagine another deep freeze like Winter Storm Uri in 2021. ERCOT could decide to power down data centers to protect residential heating. But that would shut down 911 systems, cripple hospitals, and paralyze emergency services. The consequences would be severe. An elderly person could suffer a medical emergency and be unable to call for help. Even if help arrived, hospital records might be inaccessible. And all of this would happen because a state regulator made a split-second decision without input from families or the private sector. These are not theoretical risks. In 2024, a botched software update impacted 8.5 million Windows devices, grounding flights and disrupting global operations for hours. That was just one company. Now, imagine the chaos if multiple data centers were forcibly shut off during a crisis. Beyond the physical risks, SB 6 opens a national security hole. While exemptions could be made to account for data centers that hold classified data, that exemption becomes a neon sign for America’s enemies. Policymakers must consider the geopolitical risks of treating strategic infrastructure as expendable. Let’s not forget the economic costs. AI and technology are not just conveniences but pillars of the modern economy. AI applications in logistics, medicine, defense, and manufacturing are already saving time, cutting costs, and boosting productivity. These gains are compounding fast. The companies building and deploying these innovations rely on robust, uninterrupted access to data centers. Undermining them out of fear risks throwing away the enormous prosperity and job creation they bring. This boils down to a failure to keep up with innovation. Policymakers are stuck in yesterday’s thinking while the world races forward. Data centers are critical infrastructure now. Treating them like a liability instead of a strategic asset is a mistake Texas cannot afford. There’s a better path. Texas should embrace energy innovation, not stifle it. SMRs and battery storage can strengthen grid resilience. Regulatory flexibility can attract billions more in investment. Recognizing data centers as vital infrastructure can ensure national security and economic progress. Texas can lead the AI revolution or regulate it into oblivion. SB 6, as written, risks dismantling years of economic growth, forfeiting high-tech jobs, and threatening national security. Most of all, it would derail President Trump’s boldest economic initiative before it begins. Texas lawmakers must act wisely. The freedom to innovate and the opportunity to prosper are on the line. In this episode of Let People Prosper, Vance Ginn dives deep into the complexities of energy markets with Josh T. Smith, energy policy lead at the Abundance Institute and author of the Substack newsletter . We explore the barriers and opportunities in energy policy, the role of permitting reforms, and the importance of innovation in achieving energy abundance. Josh shares how the Abundance Institute is paving the way for new energy technologies and why collaboration and market-based solutions are key to a prosperous energy future.
(0:00) - Introduction to Energy Markets and MotivationJosh shares his passion for influencing energy policy and the challenges he sees in the current landscape. (6:04) - The Abundance Institute and Its MissionThe institute’s focus on creating pathways for new energy technologies and fostering innovation through policy and networking. (11:56) - Federal Energy Policy ChallengesDiscussion on the barriers created by subsidies and the importance of addressing permitting reform to facilitate energy development. (17:56) - Future of Energy Production and InterconnectionExploring the complexities of the interconnection process and the potential of modular nuclear reactors. (24:41) - Reliability and System-Level Attributes in EnergyWhy reliability is crucial for energy systems and how market-driven solutions can improve it. (31:43) - Innovations in Energy: Nuclear and BeyondThe role of cutting-edge technologies and behind-the-meter innovations in shaping the future of energy production. This week’s episode tackles some of the most pressing economic issues before the upcoming election. We dive into both presidential candidates' economic proposals and how policies like tariffs, price controls, and intervention in the Federal Reserve are creating concern among economists. We also explore policymakers’ attempts to control prices and quantities of goods, the ongoing debate over school choice, and how the Nobel Prize in Economics brings new perspectives on prosperity and immigration. Watch the episode on YouTube below, listen to it on Apple Podcast or Spotify, visit my website for more information, and get show notes at www.vanceginn.substack.com. |
Vance Ginn, Ph.D.
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