The Impact of Elections in Texas on the Oil and Gas Industry

As the oil and gas industry continues to set jaw-dropping production numbers, it is easy to stay focused on the job of producing energy and servicing clients. Everyone tends to have tunnel vision during boom times, but we should not forget to look at all the outside factors that may impact the oil and gas business. The list is daunting: commodity pricing, bottlenecks in the delivery and international affairs can all impact our business. But one thing we really need to focus on is elections.

Introduction :

On May 22, the die was cast for all upcoming Elections in Texas on Nov. 6. As always, the Texas primaries contain some of the most fascinating campaigns to watch on both sides of the aisle. Let’s look at some basics.

Turnout Numbers from the Primary Election

Texas Republicans and Democrats held their initial primaries March 6 in the primary election. If a candidate did not receive more than 50 percent of the vote, then the top two candidates met in a run-off Elections in Texas that concluded May 22. This decided the respective candidate for each party on the November ballot. The Elections in Texas will set the stage for one of the most interesting state legislative sessions Texas has seen in a long time, which begins Jan. 8, 2019.

Before we look at the competitive races, let’s start with some of the turnout numbers from the primary election. Turnout numbers are strong indicators of voter enthusiasm. First, it should be noted that Texas Democrats have not won a statewide race since 1994.

In the 2016 presidential election, President Trump defeated Hillary Clinton 52 percent to 43 percent. That is considered a high-water mark for recent Democratic turnout (roughly 3.9 million voted for Clinton, 4.7 million voted for Trump). While those numbers are important, it should be noted that non-presidential election year elections see significant decline in turnout from both parties. The primaries this year yielded totaling 1.54 million Republican votes, with Democrats receiving 1.02 million. If these numbers were to hold statewide, it would equate to a 60 percent Republican and 40 percent Democrat split.

Looking at the federal level, sitting Senator Ted Cruz (R) will be facing Congressman Beto O’Rourke (D – El Paso) for Texas’ Senate seat. Congressman O’Rourke will have to work to solidify his base and then win significant crossover from Independents and Republicans to win this election. This may prove to be somewhat challenging, given Congressman O’Rourke’s lackluster performance against two insignificant primary challengers. O’Rourke only managed to win 63 percent of the vote.

In the U.S. House of Representatives, Republicans hold 25 of 36 U.S. House seats in Texas — Democrats hold 11. Of the 25 Republican seats, Democrats are targeting three to flip. The Republican incumbents will likely have a well-funded defense.

One of the most competitive seats is Congressional District 23, which stretches from San Antonio to El Paso. Congressman Will Hurd (R) will field a tough Democratic challenger in Gina Ortiz Jones. She is a former Director of Investment at the Office of the U.S. Trade Representative and a U.S. Air Force Veteran who served as an Intelligence Officer in Iraq. However, Congressman Hurd is a former CIA Undercover Officer serving in the Middle East and South Asia and is a rising star in the Republican Party. He has already won close elections in 2014 and 2016 and has a seasoned political team behind him.

Other Congressional races in Texas to watch are U.S. Representative Pete Sessions (R) from Congressional District 32 in Dallas and U.S. Representative John Culberson (R) representing Congressional District 7 in Houston. Both will have to defend their seats in increasingly challenging districts.

Elections in Texas : The Texas Statewide Ballot

Statewide in Texas, Governor Greg Abbott will face off with Dallas County Sheriff Lupe Valdez. Governor Abbott is the overwhelming favorite in this race. He will go into this Elections in Texas with a significant war chest, strong name identification and a booming Texas economy. Sheriff Valdez, who just went through a grueling primary and run-off election, has an uphill battle to unite her party. Governor Abbott will no doubt create coattails for the other statewide elected officials.

On the Texas Statewide ballot, we also have the Lt. Governor, Attorney General, Comptroller, Land Commissioner and Agriculture Commissioner.

Elections in Texas : The Railroad Commission Race

Important to the oil and gas industry, the Railroad Commission race will be between current Chairman Christi Craddick (R) and Roman McAllen (D), a former City Planner for the City of Brownsville. Chairman Craddick will be entering the November general election in a strong position, having high name identification and a fine-tuned campaign team.

The Texas Senate Seat Race

In the Texas Senate, we are likely to see only a few competitive races. One seat to highlight is the Fort Worth Senate seat (SD 10) held by Senator Konni Burton. She is a businesswoman from Colleyville in northeast Tarrant County. She was elected in 2014 when Wendy Davis vacated the seat for her failed attempt at run for Governor. Senator Burton will be facing off against Beverly Powell (D), a local business and community volunteer. This seat will be highly contested because of its history of flipping from party to party.

The U.S. House of Representatives Race

What should we conclude from all of this? First, it is important to note the U.S. House will remain in Republican control. In the Texas House of Representatives, the Republicans hold 95 seats, and the Democrats hold 55. The current Speaker has announced he will not run again, leaving an exciting and interesting Speaker’s race that will unfold after the general election. The speaker in the Texas House holds great power, appointing chairmen and committee members, as well as controlling the flow of legislation.

When we look the Texas House of Representatives general election chances, it is important to analyze the primary and run-off elections in both parties. The Democrats in the House faced little turnover in their primaries; only five incumbents were defeated. Their challenges to incumbent Republican competitive seats are serious, and the sitting Republicans are treating them as such.

Republicans produced a very strong slate of pro-business candidates, fighting back the Tea Party element of the overall party. This put the Republicans in a stronger position than most anticipated, making the general election fights that much more brutal.

Ground zero in the battle for the Texas House races will be Dallas County. Six of the top 10 Republican districts Hillary Clinton won in 2016 are in that county. It should be noted that even though Hillary Clinton won those districts two years ago, the Republicans managed to hang onto their seats.

It seems obvious, but turnout will be key. Six months ago, it appeared as if the Democrats had the wind at their back. President Trump’s approval numbers were low, and the generic ballot showed a wide gulf favoring Democrats over Republicans. Now things seem to be changing. The generic ballot gap is closing, and President Trump’s numbers are rising. The economy is growing and strong, which should be no surprise to readers of this publication. However, national trends impact Texas, and it will always be exciting to watch.

Chris Hosek is a principal of Texas Star Alliance, specializing in direct lobbying and state agency relations. He has experience with a broad range of legislative issues and policy initiatives including a specific expertise in the energy sector. Chris served as the Chief of Staff for five years to the Chair of the Railroad Commission of Texas.