This chapter discusses a variety of policies and how those policies impact Texas’s politics, identity, infrastructure, and economy.

Since the turn of the 20th century, Texas has been a national leader in energy production, and the industry has been integral to the Texas economy, even if no longer dominant. The recent discoveries of natural gas deposits and the use of fracking to extract them have created new opportunities for traditional sources of energy in Texas. The exploration and development of fossil fuels raises the question of environmental protection, as risks of contamination of water and air exist, but the level of the danger is an open debate. Texas has cleaner air than in recent decades but emits the most carbon dioxide of any state. Texas has a history of favoring business over strict environmental regulation--a facet of a state with a vibrant energy industry and frontier political culture. Alternative energy provides the opportunity to make that state more environmentally conscious, and Texas has shown growth in this field as it now leads the nation in the production of wind power. The availability of water is likely to be an issue that moves to the forefront of the political agenda in the future.

Transportation policy in Texas, specifically road building and maintenance, has gone through a transformation. Elected officials have been steadfast in keeping transportation taxes low, so the state has had to find other sources of funding to meet increasing demands. Loans and fees now fund state highways, and public–private partnerships have been responsible for several of Texas’s new highways. Taxes now help pay the interest on such loans.

The Texas economy is large; larger than some countries, such as South Korea and Russia. It is considered one of the largest export states in the country. Trade policy in Texas has been and continues to be largely shaped by the North American Free Trade Area (NAFTA).