Media Type: Article

By KBH Energy Center Lecturer, Jon R. Rotzien, Ph.D., for AAPG

Fortune India Article Written By Michael Webber, KBH Energy Center Academic Director

Research by Alissa Ferguson, Edna Rodriguez Calzado, Mariam Arzumanyan, Ning Lin, and Shipra Mishra highlights the importance of pairing energy innovation with geologic risk assessment to support a more reliable energy future.

Houston Chronicle Article by KBH Energy Center Academic Director Michael E. Webber

By Jordan E. Bailey, KBH Energy Center Graduate Fellow

Will Senate Bill 75 adequately address the looming and dangerous risks facing the power grid? Not completely. With bipartisan support, SB 75 became effective in June 2025. The bill created the Texas Grid Security Commission, a group tasked with identifying natural and manmade threats to the grid and critical infrastructure. The Commission mitigates these vulnerabilities by developing resiliency standards and conducting biennial attack simulations. The passage of SB 75 marks an important first step in securing Texas’ power supply, but time will tell if the bill is able to produce results.

As demonstrated by the 2011 and 2021 Texas Power Outages, grid failures cause death, disruption of essential services, and significant monetary losses. Fortunately, Texas is uniquely positioned to be a leader in grid resilience as it is the only state with the majority of its electric grid within its jurisdiction.

SB 75 proponents argue that grid security will entice more businesses to Texas, foster public confidence, and support essential services. However, current market incentives and regulations do not adequately ensure that electric utilities prioritize grid resilience and security. So, the bill successfully centralizes public and private actors to identify risks, create solutions, and test the resiliency of the Texas grid.

In December 2026, the Commission will release its first reports on specific threats and hazards facing the Texas grid and critical infrastructure. Presuming Texas’ grid is exposed to similar threats as the rest of the nation, SB 75 provides a foundation for protecting the grid from attacks, extreme weather, and increasing electricity demand.

Why is this important? The Texas grid is undergoing significant transformation as energy demand increases at unprecedented rates. Compared to other U.S. grids, ERCOT experienced the fastest demand growth in 2024 and 2025. While changes to the grid are necessary, transformation makes the grid more complex, creates a larger attack surface for hackers and likely leads to more costly effects.

Technological advancements, including AI, have made cyberattacks more sophisticated. Hackers utilize deepfakes and malware, leaving energy systems vulnerable. Technology such as drones and other remotely controlled devices pose physical risks to grids. Physical attacks can cause outages and replacement delays, especially when materials face supply chain constraints or long lead times.

The bill requires the Texas Public Utilities Commission (PUC) and other ERCOT certified independent organizations to perform certain simulations to “mitigate and prepare” for attacks. These tabletop exercises identify roles and responsibilities for several stakeholders, including law enforcement, power generators, and transmission and distribution service providers, in the event of an attack. Additionally, the presiding officer of the Commission may consult cybersecurity experts. Importantly, the Texas National Guard will be trained as first responders, equipped to assist in the aftermath of future cyber threats and attacks.

Moreover, the bill thoughtfully carves out an information security working group, preserving the delicate balance between transparency and confidentiality. The working group determines what information obtained is confidential, who has access to what information, and who should apply for federal security clearances. Equipped with security clearances, individuals may be briefed on specific security threats facing the grid.

While skeptics voice that the bill simply creates another regulatory board, or that it does not have any real bite, it is a diagnostic that will supplement future action. In order to take meaningful steps forward and prepare for disastrous outages, the Commission needs to understand the risks, their respective likelihoods, and the feasibility of solutions. Once equipped with a report on the imminent and costly threats facing the grid, the Texas legislature should rapidly delegate implementations and allocate the costs of securing our power supply.

By Michael Webber, KBH Energy Center Academic Director for the Houston Chronicle.

By Arushi Sharma Frank, KBH Energy Center Executive Council member, for The Center for Strategic and International Studies

By Jonathan Rotzien, KBH Energy Center McCombs School of Business Lecturer, for American Association of Petroleum Geologists (AAPG).

Houston Chronicle, By Dr. Michael Webber

By Jack Balagia, KBH Energy Center Executive Director.

Gasoline prices are seen at a Chevron gas station in Houston, Texas, on March 16, 2026. Oil prices retreated and equities rose Monday as investors remained focused on the Strait of Hormuz, with US allies pushing back against President Donald Trump’s demands to help reopen the key waterway to oil and natural gas tankers. (Photo by RONALDO SCHEMIDT / AFP via Getty Images)

Following his trip to Venezuela earlier this month, Interior Secretary Doug Burgum seemed to imply some reprieve from the Iran War’s impact on world energy supplies when he called the South American country “a strategic ally with the largest reserves with no threat of the chokehold like we have in the Strait of Hormuz.” In the same March 8 interview with Fox News, Burgum added that “Venezuelan oil can flow to America freely and is starting to flow, will continue to flow, and these are the kinds of things that are going to bring gas prices down in America.”

The secretary undoubtedly chose his words carefully. He did not say that Venezuelan oil would cushion the current crisis in the Middle East, and for good reason. It won’t.

Chevron and other companies are moving toward expanded production agreements in Venezuela, and Energy Secretary Chris Wright told CNBC that production has increased 20% in three months. But any significant increase in production will happen far in the future.

Venezuela’s output recently hovered at less than 1 million barrels per day, far below its peak of 3 million in the late 1990s and early 2000s. Decades of mismanagement and corruption within the country’s oil company, PDVSA, under Hugo Chávez and his successor, Nicolás Maduro, combined with international sanctions and the deliberate exclusion of Western investment, have severely damaged the country’s energy industry. Having the world’s largest oil reserves means nothing without the infrastructure to tap and export production.

Since Maduro’s capture on January 3, the Trump administration has moved quickly to establish a legal framework for oil companies to move back, relaxing sanctions on PDVSA, issuing a series of general licenses from the Treasury to market Venezuelan crude, sell diluent (a product used to allow Venezuela’s thick crude to flow through pipelines) and open pathways for upstream contract negotiations. Under a U.S.-supervised oil marketing arrangement, Venezuela transported more than 280,000 barrels a day to the United States in February, with proceeds flowing into a U.S.-controlled account rather than to the Venezuelan government directly.

However, it is one thing to license and sell existing production — it is quite another to attract the capital investment required to bring Venezuela’s output up to a level that can move the global market.

Fixing Venezuela’s oil and gas industry will be a massive job. President Donald Trump has called for at least $100 billion to rebuild it, and MarketWatch reportsthat number could reach almost $200 billion. To put that in perspective, ExxonMobil, Chevron and ConocoPhillips combined report spending only less than $50 billion a year on all their projects worldwide — and those figures reflect an intense capital discipline the companies have maintained since the pandemic. There are much safer places in the world to invest their shareholders’ money than Venezuela.

Then there are the legal hurdles. FTI Consulting, advocating for a Venezuela settlement commission to resolve outstanding claims against the country and PDVSA, estimates that unsatisfied liabilities from external arbitration awards of at least $150 billion. ConocoPhillips alone holds $10 billion in outstanding arbitration claims stemming from the 2007 nationalization — the largest financial grievance of any U.S. oil company against Venezuela.

Venezuela has taken steps by passing a new hydrocarbon law seeking to open its oil sector to foreign investment, and certainly the easing of U.S. restrictions on Venezuelan exports is an important step. But those changes mean little without credible protections against a government with a history of seizing assets. And uncertain policies in Venezuela are not the only problem, as U.S. government views toward fossil fuel development continue to ping-pong under each new administration. Until industry players are satisfied that invested capital is genuinely secure, and that legal and regulatory regimes in both countries can be trusted, the gap between the Trump Administration’s ambitions and boardroom reality is likely to persist.

Venezuela’s ability to return to its peak early-2000s production levels would have a meaningful impact on global oil supply — but it isn’t happening now. And now is when Americans are facing $100-a-barrel oil. The opening in Venezuela creates a real opportunity, but converting that opportunity into barrels will take years of work, hundreds of billions in capital investment, the resolution of outstanding legal claims and governance reforms that have yet to take hold. Until then, the world’s largest oil reserves will remain underground and will not resolve a market strained by a crisis in the Strait of Hormuz.

Jack Balagia is adjunct professor and executive director at the Kay Bailey Hutchison Energy Center at the University of Texas at Austin and is the former vice president and general counsel at Exxon Mobil Corp.