The Lone Star state has often been ranked as the second best (in pretty much any given category) in the U.S. But recent developments and investments across industries and bountiful economic and demographic growth mean Texas is poised to become an official superpower in its own right. But what gives a country—or state—power? Is it how much land a country owns? What natural riches it has to exploit? The wealth of the people? The size of its military? The last one might seem like a natural response to many, but the current war between Russia and Ukraine might be the exception to the rule. Even if power is a combination of all these factors and many more, how do you even measure it? Scholars tend to need tangible, easy-to-measure, and objective points of reference if they’re to be able to pit countries and territories against each other and come up with a definitive power ranking list. However, the actual result of what is being measured is usually messy. And Texas is the perfect example. Take the country’s basic statistics: land area, population, and GDP (gross domestic product) per capita. Ever since Alaska became a member of the federation, Texas has been sitting idly in second place in terms of total land area. But this is a fact that’s relatively unlikely to change in the future unless anyone has a war of reclamation from Mexico on their 2024 bingo card.
However, what did change relatively recently is Texas’s ability to support population over its area. According to the most recent estimates by the U.S. census data, Texas has around 30.5 million people. This puts it squarely in second place behind California, at 39 million residents. But to get the true picture of why population matters, we have to go back in time. Fortunately, we don’t have to go back far. The censuses of 2010 and 2020 show how the balance of power has been slowly shifting in Texas’s favor. Let’s run the numbers. In 2010, California had 37 million residents. Texas had 25 million at the time. It doesn’t take advanced math to see that in the past 13 years, California gained only 2 million residents, but Texas managed to grow its population by about 5.5 million. Even more impressive, Texas’s population increase over those 13 years amounts to over a 21% increase, which is much more than California’s 4.8% or even the country’s total 8.4% population increase over the period. So it’s quite clear that Texas is gaining on California in terms of population size. But that’s not all. Texas has started growing quicker in the past three years. By contrast, the population of California was actually higher in 2020 than its current estimates. For the first time since it became a state, California has started to lose more people than it gained each year. And that gives Texas, the next contender, a clear shot at overtaking it. The increase in population directly benefits Texas’s heightened political importance in the U.S. In 2021, Texas gained two more seats in the House of Representatives. It also gave Texas two more electoral votes, from 38 to 40, throughout the 2020s. While California still leads with 54 votes, it squarely puts Texas on the map as a big contender for presidential elections in this decade.
The cause for California’s demographic downfall and Texas’s gain was multi-fold. By far, the most straightforward reason behind it, was the Covid-19 pandemic that hit the U.S. in February 2020. It caused a cascading effect of people leaving the country and an increased death rate. The latter is relatively simple to explain. The former is understandable only if you take a look at the states’ relative costs of living. In 2020, the average house in Austin, Texas—by far the priciest part of the state—cost $343,000, and houses in the Dallas-Fort Worth area cost $251,000. By comparison, a house in Los Angeles would set you back $675,000. During the pandemic, workers had more freedom to move across the country as more jobs became remote. The five biggest cities in Texas—Houston, San Antonio, Austin, Dallas, and Fort Worth—now house nearly 20 million of the state’s 30 million residents. The cities are interconnected by a series of highways and function as a megaregion referred to as the Texas Triangle. Apart from housing the majority of the state’s population, the Texas Triangle has become a lucrative region for corporations. Due to the lower real estate costs and a booming economy, Fortune 500 companies have been moving their headquarters to Texas or opening large operational and production centers in the state. This resulted in 54 Fortune 500 companies operating out of Texas, a number unmatched by any other state.
Even international companies have decided to move in, with a Chinese billionaire buying over 130,000 acres of land to open a wind farm. The South Korean microchip magnate Samsung has allocated $17 billion in investments to open a new production plant inside the state. But what caused such a shift? The answer is rather straightforward: transportation and energy. If you take a look at the map of the continental U.S., the Texas Triangle sits roughly in the middle section of the country, almost equidistance from the country’s east and west coast while also still being within reach from other international transport centers. The Triangle’s favorable location resulted in the Dallas-Fort Worth International Airport becoming arguably the second busiest airport in the world (behind Hartsfield-Jackson in Atlanta). The state’s access to the Mexican Gulf also provides the Texas Triangle with an easy way to transport goods across the water and minimize transportation costs. The latter boils down to Texas’s bounty of natural energy resources, primarily oil and natural gas. The state’s rich oil history began in 1901 with the famous Spindletop gusher near Beaumont, leading to the Texas oil boom. The oil production in Texas waxed and waned between 1901 and 2007. Despite the U.S. becoming a net importer of oil in the 20th century, mainly due to rapid modernization and extreme reliance on fuel-inefficient methods of transportation to connect the East with the West, the country still was the biggest producer of oil in the world, largely due to the rich oil fields in Texas and surrounding states. The state’s industry primarily revolved, and still revolves, around oil extraction and refining, even managing to survive past the 1973 oil crisis. In fact, the surging oil prices during the crisis only benefited Texas more, as the state’s largest cities grew rapidly due to the state’s new wealth. It was effectively the second wave of growth after the initial oil boom, as the state could provide its own oil and would enrich itself by shipping it across the oil-starved country. However, the easy-to-access oil in Texas was starting to run out by the end of the 1900s. The U.S. looked like it was doomed to become eternally dependent on importing oil, and the rich oil fields in Texas—primarily the Permian Basin in the west—halved their overall production from before the crisis. That would change at the turn of the century. By combining the techniques of hydraulic fracking and horizontal digging, the oil industry could achieve something that was previously considered impossible. While traditional methods could extract oil directly from underground pools, much of the oil reserves lie in the surrounding porous rocks. Fracking breaks down the rock and allows oil to flow naturally and be extracted, and horizontal drilling allows a single well to reach a much higher surface area of rock to crush. Suddenly, the oil companies could extract more oil from the shale rock that was plentiful in and around Texan sedimentary rock. And just like the 1901 Texas boom, it has reinvigorated the state’s progress in becoming the most important state of the federation. With the fracking revolution in full swing, Texas now accounts for 27% and 42% of the country’s oil and natural gas production, respectively. It also produces a total of 12% of the country’s net electricity. If it were independent, Texas would be the world’s fourth-largest crude oil producer, behind Saudi Arabia, Russia, and the rest of the U.S. It also produces more natural gas than China and Qatar, which are currently the 4th and 5th global producers. As such, it would also be the fourth-largest natural oil producer behind Russia, the rest of the U.S., and Iran. But perhaps even more importantly, Texas has a geographical advantage when it comes to oil and natural gas extraction. The oil-rich land in the Arabian peninsula, home to the largest shale oil reserve in the world, is surrounded by a barren desert and has a nearly inhospitable climate. The Siberian oil reserves are also sequestered away in Russia’s largely inaccessible center region. These oil fields are much more difficult to set up and repair for large-scale oil extraction. Perhaps even more importantly, their remoteness and hostile climate make it difficult to build infrastructure to service these scarcely populated areas. Without an easy way to bring crude or processed oil into the world market, oil transport becomes much more expensive, and these countries have a steeper price to pay if they wish to remain on the top spots for crude oil production. By contrast, the shale rock oil deposits in Texas turned out to be either overlaying the Permian, which already houses a robust oil extraction and transport infrastructure, or surrounding the well-connected Texas Triangle. The relative proximity of oil extraction basins to the residential areas and major transport centers in the Gulf of Mexico artificially drives down transport prices. Furthermore, the Arabian oil needs to be transported through major chokepoints like the Strait of Hormuz, the Suez, and the Bab El-Mandeb Strait. The geopolitical tension that surrounds the peninsula puts even more pressure on South Arabia’s and Iraq’s oil exports. For example, the revolution in Iran in 1979 was a major turning point for the country’s political stance and cut off many importers from the Arabian oil reserves. While the situation there remains relatively stable, there’s no telling how it will unravel, especially due to the U.S. heavy interest in the area already, which is covered in our other videos. Conversely, Texan ports have much fewer chances to be closed off to the outside world. The main risk is Cuba being under the control of a hostile government. While this is certainly possible and has happened, the current positive relations with Cuba allow oil exports to travel unimpeded from the Gulf of Mexico to the Atlantic and where they need to get. Access to oil and natural gas is also pivotal in the U.S.’s ability to influence the ongoing Russia-Ukraine conflict. The EU has traditionally relied on the oil and gas pipelines coming from Russia and the Middle East and was one of the largest net importers of those resources in the world. In the wake of the 2022 conflict, the EU’s import of natural gas would directly contribute to funding Russia in the war. The U.S. quickly ramped up natural gas and oil exports to the EU, becoming the largest oil exporter to the EU and shutting off Russia’s budget that way. The U.S. also supplies nearly half of the EU’s liquefied natural gas needs, up from around 40% before the war. And the EU’s reduced dependence on Russia would not be possible without Texas. If the state hadn’t bounced back in oil production at the turn of the century, the U.S. would be the largest importer of oil in the world. This would both make it impossible for the country to export oil to the EU and would essentially be competing with the rest of the world for the limited resources found in Russia and Saudi Arabia. It would heavily increase the price Europe would need to pay to cut itself off from Russia’s supply. But with the abundant oil and natural gas production in Texas, the country can actually export these resources to the EU, allowing it to influence global geopolitics without military intervention. It has directly removed Russia’s ability to pressure Europe into funding its war efforts through natural gas and oil access. This makes Texas pivotal in America’s ability to influence geopolitics on a global scale. Even if the natural gas reserves were to run dry in Texas and coal got banned, the state still has a few aces up its sleeve. If you were to overlay the map of the highest potential for wind energy production across the U.S., it would run down the Great Plains from North Dakota to the northern part of Texas. With the state’s infrastructure already set up to transport oil and natural gas, the wind power section is similarly booming. There are already over 150 wind farms in the state, providing 16% of the state’s total energy generation. The total output of Texas wind farms outperforms the rest of the U.S. combined, and the subsequent growth of the industry has led to thousands of new job openings to service it. Additionally, the state also contains some of the best solar-potential lands in the country. This solar power generation has rapidly grown, with ten large solar farms making Texas the runner-up in solar energy production in the country, behind California. The combination of wind and solar power accessibility makes Texas a U.S. pioneer in renewable energy production, which aligns well with the global push towards lowering fossil fuel use. Solar, nuclear, and wind power account for around a third of the state’s energy production, and their potential only stands to grow in the coming year as a result. The growing renewable energy production industry provides more investments in the state and creates more job openings, especially for highly lucrative STEM fields with six-figure incomes. With ample energy sources such as oil, natural gas, wind, nuclear, and solar, the state also enjoys a much lower energy price than the national average. This all ties in nicely with why companies are so insistent on moving to Texas. The lower energy prices mean lower operational costs, the relatively inexpensive housing means more opportunity for workers to move here, and Texas’s large land area means real estate is still reasonably cheap to obtain and build up. After that, Texas’s relative accessibility to the world market through the Gulf of Mexico and busy international airports that serve the Texas Triangle make shipping the finished product more convenient and less expensive. Additionally, an export route from the U.S. is usually more politically stable than if production were to be carried out in China due to less tension in the country’s immediate surroundings. Furthermore, the state’s geopolitical stance on corporations is more lenient. The state is one of the few in the U.S. to have zero income taxes. The state does have a slightly steeper sales tax, but the lack of income tax is particularly lucrative to Fortune 500 companies that have set up shop there. In one overview, the tax rate effectively decreases as earnings increase, placing much of the burden on the working class rather than the corporations. While the efficacy of the lopsided tax burden is up for debate, and the few efforts to relieve property tax from the workers are yielding minimal results, the state is poised to remain friendly to big corporations and continue chugging along as an industrial powerhouse. And what is the ultimate effect of corporations moving into Texas at a rapid pace? Texas is steadily rising in both overall GDP and GDP per capita. While California still remains the top dog with a GPD of $4 trillion, Texas is second with $2.5 trillion. Even if the difference might seem insurmountable, you have to remember that growth is also vital. Texas’s GDP is growing at a much faster rate than the rest of the country. According to the Bureau of Economic Analytics (BEA), the state’s real GDP grew by 7.7% in the last year alone, which is miles ahead of the national average of 2.6%. California’s GDP grew by only 4.8% in the same period. Texas’s growth in the past three years is a vastly more substantial 31% compared to California’s 19%. On the GDP per capita front, the situation is a bit more nuanced. California experienced a much lower growth of GDP per capita than Texas in the past year. However, you have to keep in mind the previously mentioned population trends in the states. While California is actively losing its population, Texas is gaining quickly. And if more Californians switch to Texans in the next few years, the economy will start shifting even more in favor of Texas. If more investments and corporations look to Texas, we might see it approaching or eclipsing California in economic importance to the nation as a whole. This was highlighted by the North American Development Bank in 2023. The summits noted that 17,000 companies so far moved away from California and New York (the nation’s other biggest loser in population), with a good portion of them relocating specifically to Texas. The summit also pointed out the rapidly growing trade between Texas and Mexico. In 2022, the total goods trade between Mexico and Texas rose by 24%. This is considerably more than the growth in trade between California and Mexico. And the current geopolitical climate only stands to benefit the territories connected to Mexico more. Texas, New Mexico, and Arizona are more connected to each other and have vastly more trade opportunities with Mexico than California. Toss in the evolving U.S.-China trade relations, and the global supply chain disruption due to the COVID-19 pandemic, and there is growing interest in nearshoring between America’s Gulf states and Mexico. When you take into account that Texas is already gaining quickly in population and job outlook due to the exodus that is taking place on the nation’s east and west coast, it stands to reason that it will be the biggest winner among the three states. This also ties back into Texas’s land availability and sea access. Due to shipping becoming increasingly important to international trade and more developed as a relatively inexpensive method to move cargo from one place to another, the states in the Gulf of Mexico need more international ports to satisfy the increasing demand. Since Texas already had a decent number of traditional harbors and plenty of available land to work with, it was relatively cheap and logistically maneuverable to create multiple large seaports to import and export goods across the Gulf and into the world market. Due to Texas’s economy and industry still being reliant on oil extraction and refining, vast amounts of land are needed. All of these could be used to repurpose existing areas into staging fields and create the correct infrastructure to make Texas into an export magnate of the nation. The state’s long coast has also provided ample growth opportunities for the energy industry. The expansion is both headed inward towards the rest of the U.S. as a result of plentiful resources and road infrastructure and outward due to the sheer ability to adapt and create ports to propel those resources to the global market. This leads to an unparalleled combination of land availability, natural resources, and geographical location that makes transport much easier. It also allows Texas to reduce its reliance on oil and natural gas, which are the only major industries in the state. It has uniquely put Texas at the forefront of economic growth in a world that is trying to balance between the industrial necessities of fossil fuels and the forward-looking perspective that favors sustainability and the service sector. As the world still struggles to adapt due to rapidly changing geopolitics and access to resources, it seems that Texas has managed to utilize its unique position on the world stage to propel the U.S. further into superpower status and keep it going. Texas’s future is often called uncertain, as there’s always a single lingering question in everyone’s minds: The secession. Texas nationalists, however few of them might be in the state due to the changing demographics of recent years, continue to push the vote for secession as a possible reality. This has grown in recent years as Texas conservatives aren’t happy with a Democrat leading the country from the White House. However, the question of a Texan secession has been firmly put to rest by the Civil War and a court ruling that secession is illegal under the current constitution. In fact, the ruling only implies that Texas can split into more states due to it being sufficiently large in size and population. But this is unlikely to happen since the infrastructure heavily favors a unified Texas, and the Triangle is interconnected to the point of being a singular city. As such, Texas is going to remain firmly within the United States of America. However, its status as a second-rate state, at least by economic standards, total wealth, and population, seems likely to change as the energy boom propels its progress. The growth of Texas’s energy industry is pushing all other industries to grow and adapt to the new economic climate and push more national and international investments into further developing Texas as the backbone of America’s industrial and oil-refining future. With that comes the potential for Texas to truly become a superpower of the U.S. that has a vast geopolitical impact on the country as a whole. What do you think about Texas’s industrial, economic, and geopolitical growth within the federation? Do you think that the trend of Texas’s population growing will continue and result in it becoming the most populous state? Comment below!
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