Texas has long been a leader in the nation's energy industry. According to the U.S. Department of Energy, Texas is the largest petroleum refiner in the U.S., and produces more than three times the natural gas than any other state. The Comptroller's Office reports tax revenues from energy production and use, particularly oil and gas, have long contributed a significant share of state revenues; at their peak in the early 1980s, tax revenues from oil and gas alone accounted for more than a quarter of all state revenue.
Oil and gas dominated the Texas economy for most of the 20th century. The industry still holds considerable sway over policy and business decisions, but Texas has diversified its economy in the wake of oil busts in the 1980s.
Surprisingly, given its history with the oil and gasoline industries, Texas also boasts the second largest number of alternative fuel vehicles on the road today. Texas is the nation’s leader in installed wind capacity, though wind still generates less than three percent of the state’s electricity. A major hurdle in using alternative energy is transporting it -- Texas lacks the transmission lines necessary to get the electricity produced by its West Texas wind farms to the urban areas that could use it.