The nonprofit publication Capital & Main produced this article. It is co-published with permission.
Stretching for miles along the Texas Gulf Coast, the Houston petrochemical complex lights up the night sky. Oil and gas facilities emit flickering flaresletting off a distant glow that can be seen from nearby communities and passing highways.
Texas has been this way for decades — a giant in the global oil and gas industry. The state produced 43% of the crude oil in the United States in 2025, about 5.8 million barrels a day. From the western Panhandle to the edge of Louisiana, energy costs are constantly the subject of conversation, especially now as a key issue in the November midterm elections.
State Rep. James Talarico and Attorney General Ken Paxton are neck-and-neck for one of the state’s two U.S. Senate seats. For months, the two candidates have toured Texas, campaigning on issues such as immigration, health care and public safety. And while the candidates have vastly different stands on nearly every issuethey are both asking the same pressing question, one on every Texan’s mind: What are we going to do about energy prices?
Energy costs are on the rise. In the last five years, prices across the U.S. and in Texas have increased by more than 30%, according to data collected by Electric Choice. A national rise in data centers, volatile fossil fuel prices and foreign policy decisions are pushing demand to the edgeleaving consumers struggling to fill their gas tanks or pay monthly electric bills.
In response, both campaigns are leaning heavily on pocketbook and cost-of-living issues, according to Daniel Cohan, professor of civil and environmental engineering at Rice University in Houston.
“The ways they are campaigning about energy are remarkably similar, which is surprising given how different their records have been,” said Cohan. “They are both trying to claim the mantle of the one who’s going to lower energy costs.”
Issues in energy demand
One of the biggest issues shaping the energy debate today is the construction and use of data centers for artificial intelligence.
There are nearly 400 data centers operating, planned or under construction in Texas, requiring nearly 17 terawatt-hours of electricity annually, according to Electric Choice. That is the equivalent of powering 1.6 million homes for a year. This, along with high water usage to cool the facilities’ supercomputers, has led to growing discontent from Texans on data center development, with more than 50% opposed to the construction of a center in their community.
With such strong opposition to data centers, both candidates have addressed concerns on the campaign trail.
In August, Paxton unveiled a plan to ban Chinese technology from U.S. data centers and hold companies liable if their data centers power AI chatbots that harm child safety. He also pledged to co-sponsor the DATA Act — a bill proposed by Sen. Tom Cotton, R-Arkansas, which would exempt off-grid power systems with high energy loads, including data centers, from most federal electricity regulations.
Additionally, Paxton supports Texas Gov. Greg Abbott’s plan to require data centers to fund their own electricity infrastructure, repeal sales tax exemptions and reduce impacts in local communities.
Critics say Paxton’s stand is contradictory: In 2013, he voted as a Texas state senator for data centers to receive the same sales tax exemptions he is now proposing to repeal. The exemption has cost Texas billions of dollars in sales tax revenue and will continue to do so unless the exemptions are reversed.
“Ken Paxton gave data center companies billions of tax handouts that created the problem we have today,” said JT Ennis, communications director and campaign spokesperson for the Talarico campaign, in a statement to Capital & Main. “Texans can’t afford a senator who’s bought by big data center companies. Texans can’t afford Ken Paxton’s corruption.”
Talarico has also called for the repeal of the tax exemptions and for requiring data centers to fund their own infrastructure improvements to ensure the Texas grid can keep up with demand. Talarico has also pushed for local communities and governments to have a say on whether to permit construction of a data center, rather than the state — something that Paxton has not moved on as attorney general.
Talarico has reminded voters about the recently resolved fraud case in which Paxton was charged in 2015 with persuading investors to buy at least $100,000 worth of stock at a data center tech startup — Servergy — without disclosing that he would be compensated.
The Paxton campaign did not immediately respond to requests for comment on his energy positions.
Issues in affordability and climate
As gas prices have spiked significantly over the past two years, candidates running in the upcoming election have focused on how to make the situation manageable for everyday residents.
Nationally, average prices have jumped more than a dollar since last year, forcing drivers to pay around $4.30 to $4.40 per gallon of gasoline.
This year, both Talarico and Paxton have called for the end of the federal gas tax. The ban would be temporary under Talarico and permanent under Paxton. As of 2026, the gas tax is 18.4 cents per gallon for gasoline.
In his campaign, Talarico has also specifically addressed the Low-Income Home Energy Assistance Program, also called LIHEAP. The bipartisan program helps families with their utility bills, though few residents actually receive the aid they need. In 2025, more than 38 million households were eligible for LIHEAP assistance across the country. Only 15% received anything, according to the Edison Electric Institute.
Texas and California have the most LIHEAP-eligible households that receive no funding.
Talarico has called for funding and eligibility to be expanded with structural changes so that hot climate states, such as Texas, will receive equitable funds for families. Paxton has no direct proposed policies addressing LIHEAP.
But the campaign trail is only one piece of the puzzle, said Cohan. Historically, the two candidates have been starkly different on climate.
Paxton has repeatedly sued the U.S. Environmental Protection Agency to block federal air, water and emission regulations, including the methane tax through the Biden administration’s Inflation Reduction Act, interstate smog control plan, ozone/sulfur dioxide standards and the EPA’s stricter air quality standards.
“I will always use every available avenue to block Biden’s extremist climate agenda, especially when federal policy undermines Texas industry and destroys Texas jobs,” Paxton said in 2024, commenting on the EPA’s stricter air quality standards.
In the past, Talarico has backed legislation to reduce greenhouse gas emissions. In 2021, the state representative authored a Texas House bill aimed at cutting emissions by 2050 to 90% below the level in 1990. He also introduced legislation to add climate change topics to K-12 school curricula.
Talarico has also touted an “all-of-the-above” energy approach that balances supporting the oil and gas industry and investing in renewable energy — recently commenting that “we have to protect good-paying oil and gas jobs” while “creating new jobs in cutting-edge technologies like geothermal and hydrogen-fueled energy.”
Cohan predicts that the outcome of this race will influence U.S. energy policy for the next several years.
“It’s likely that whoever wins the Senate race is going to be the 51st to vote for the majority in the Senate in the next session of Congress,” Cohan said. “This is one of the deciding races that can tilt the ballot in the Senate and totally shape what sort of legislation can move forward.”
Disclosure: Rice University has been a financial supporter of The Texas Tribune within the past five years. The Texas Tribune is a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in our journalism. Find a complete list of them and more information about our financial and disclosure policies here.
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