Texas Democratic Senate nominee James Talarico now claims he is a friend to his state's oil and gas interests, recently stating that he owes "a lot to that industry." But, as a far-left state representative, Talarico—who at the time was pushing a Texas version of the "Green New Deal"—advocated in favor of eliminating a key tax exemption that saves the industry and, by extension, consumers about $1 billion every year.
In 2019, Talarico told the Austin Chronicle, a liberal alternative weekly, that he opposed the so-called high cost natural gas exemption, calling it an "outdated and inefficient" loophole, according to an interview unearthed by the Washington Free Beacon. The exemption, which the Texas state government created in 1989, reduces the tax companies have to pay on natural gas drilled from more expensive wells.
"It was put in place in the 1980s when it was more expensive to drill for natural gas," Talarico said at the time. "Technology has advanced and it's no longer as difficult, but because of special interests that exemption is still in place in our tax code."
According to state statute, however, wells that qualify for the exemption are selected based on a current statewide benchmark of the median cost to drill. The more expensive a well is to drill relative to that benchmark, the larger the potential tax exemption a company can earn.
In addition, to be classified as high-cost gas, it must be drilled from a depth of more than 15,000 feet underground, produced from certain geological structures, and produced from tight formations, the Texas Comptroller's Office states.
The exemption has saved the Texas oil and gas industry about $1 billion per year since 2023. According to a 2023 state report to the governor and legislature, the value of the exemption is projected to remain steady through 2028, signaling that the industry continues to rely on it to drill for natural gas in non-traditional gas fields that may otherwise not be cost-effective places to drill.
Talarico has increasingly presented himself as a supporter of the state's oil and gas industry amid a tight Senate race against Texas attorney general Ken Paxton (R.).
In a campaign ad released this month, Talarico promised to "fight for the good-paying oil and gas jobs that power our economy."
"I've had family members who have worked in the oil and gas industry here in our state. I went to public schools here in Texas that were funded by the oil and gas industry. That's how we fund public education in the state," Talarico said during a recent CNN town hall. "So, I owe a lot to that industry, as most Texans do. And so I'm campaigning on an all-of-the-above energy strategy that includes oil and gas."
Like the industry writ large, the high-cost natural gas exemption has led to economic growth, jobs, and increased funding for local schools, police, and hospitals, Craig Clayton, a prominent San Antonio-based oil and gas industry accountant, wrote in a 2012 column after advocates called for legislators to eliminate it. "Why raise taxes on an industry that is the growing bright spot for our local and regional economy?" he wrote.
Mike Palicz, the vice president of federal affairs at the right-leaning Americans for Tax Reform, agreed and said Talarico's opposition to the exemption represents a pattern of supporting policies targeting the oil and gas industry in Texas.
"Talarico can't run from his record," Palicz told the Free Beacon.
"As a lawmaker he supported tax hikes and sweeping new regulations on American energy producers that would've hammered Texans with higher energy bills and rising gas prices," he said. "Talarico sided with the Green New Deal Democrats over Texas workers and families—he'll do it again in Washington if given the chance."
In addition to opposing the high cost natural gas exemption, as state representative, Talarico has supported a number of far-left climate policies.
Talarico, for example, introduced a March 2021 bill to "ensure every public school student in Texas has a strong science-based understanding of human-caused climate change and its consequences," as he described it, something he said would "inspire a new generation of climate activists." That same month, he introduced the Texas Climate Action Act, which would have required the state to cut its carbon emissions in half by 2030 and by 90 percent by 2050, figures that are nearly identical to Rep. Alexandria Ocasio-Cortez's (D., N.Y.) Green New Deal. A year and a half earlier, in September 2019, Talarico marched in a "Youth Climate Strike" in which Texas students walked out of class to march to the Texas State Capitol as part of far-left Swedish climate activist Greta Thunberg's "Fridays For Future" movement, the Free Beacon reported.
"So proud to stand with our young people during their Youth Climate Strike at the Texas Capitol," Talarico wrote at the time in a Facebook post that showed him posing with two young girls. "Students around the world are walking out of school to save our planet. It's time for the grown-ups to follow their lead. #ClimateStrike."
In an email, a spokesman for the Talarico campaign referred the Free Beacon back to Talarico's statements defending the oil and gas industry during the recent CNN town hall. "What I don't want to see is politicians, frankly, in both parties playing politics with Texas energy," he said.
Overall, Texas is the nation's largest energy producer, according to a federal analysis. It also boasts the highest share of economic contributions by the oil and gas industry, which generates more than $400 billion toward the state's gross domestic product, including more than $250 billion in total labor income, according to the American Petroleum Institute. Roughly 620,000 Texans work in the oil and gas industry.
