And unlike other states that have tightened restrictions on fossil fuel development, Texas presents a particularly difficult challenge.
There may be no comparable destination for companies looking to relocate.
Colorado’s Energy Policies Offer a Warning
Stewart believes Texas lawmakers should examine what happened in Colorado before considering significant changes to the state’s oil and gas regulations.
In 2019, Colorado adopted Senate Bill 181, legislation that fundamentally changed how state regulators oversee energy development.
Rather than emphasizing the encouragement of oil and gas production, the law placed greater priority on protecting public health, safety, and the environment.
Energy companies subsequently faced a more demanding regulatory environment.
The industry also experienced a substantial decline in drilling activity, although market conditions, commodity prices, and other factors contributed to the downturn.
Stewart argues that Colorado’s experience demonstrates the potential consequences of aggressive government intervention.
“When we saw that clean sweep of Democratic elections take place in Colorado in 2019, we’ve seen a 25 to 40% reduction in production,” Stewart told Fox Business.
The industry’s concern extends beyond individual drilling permits.
Oil companies make investment decisions years in advance, often committing enormous amounts of capital before a single barrel reaches the market.
When businesses believe regulatory requirements could become increasingly restrictive, they may reconsider where to invest.
For Texas, the economic stakes are especially high.
Texas Holds an Extraordinary Position in American Energy
Texas is not simply another oil-producing state.
It is the central pillar of the American petroleum industry, accounting for approximately 43% of domestic crude oil production in 2025, according to figures cited by industry advocates.
That represents roughly 5.8 million barrels per day.
The state’s energy sector also supports an extensive network of workers, contractors, equipment manufacturers, transportation businesses, and local communities.
Industry estimates cited in the debate place direct and related employment at approximately 1.4 million jobs, with broader economic activity supporting millions more.
Many of these positions offer compensation substantially above typical statewide wages.
Energy development also provides billions of dollars in public revenue through taxes and royalties.
Those funds help finance essential services and public programs throughout Texas.
Stewart has emphasized that elected officials cannot afford to overlook the industry’s economic contribution.
But the consequences of a major production decline would not necessarily stop at the Texas border.
A prolonged reduction in domestic supply could affect national energy markets, particularly if production elsewhere failed to compensate for the losses.
For consumers already concerned about household expenses, that possibility deserves attention.
The Industry’s Biggest Fear: Texas Following California
Perhaps Stewart’s most striking warning concerns the possibility that Texas could gradually adopt policies resembling those in California.
“My big fear, and I’ve said this to my Texas friends, is what happens if Texas becomes Californicated,” he said.
California has experienced a long-term decline in oil production while imposing increasingly stringent environmental and operational requirements on the petroleum industry.
The state’s energy landscape has also been shaped by declining output from mature oilfields, changing market conditions, and broader shifts in energy demand.
Nevertheless, industry representatives frequently point to California as an example of how regulatory uncertainty can discourage future investment.
For years, Texas has offered energy companies a comparatively favorable business environment.
Its extensive petroleum reserves, existing infrastructure, experienced workforce, and established production network have made it attractive to companies seeking expansion opportunities.
But those same characteristics make the state difficult to replace.
Stewart explained the distinction.
“If you’re a business in California, you don’t like being regulated, you pick up and you move to Texas.”
That option becomes considerably less practical if Texas itself adopts restrictions that energy producers consider excessive.
“We have to go where the actual resource is. We don’t have any other place to go,” he said.
Oil reserves cannot simply be transported across state lines.
Neither can the enormous infrastructure built around extracting and processing them.
That reality makes the future direction of Texas energy policy a matter of national significance.
Hinojosa Faces an Early Test on Energy Policy
Despite the industry’s concerns, Hinojosa’s campaign reportedly focused heavily on electricity affordability, data centers, and the growing demands placed on Texas’s power grid.
Those issues are closely connected to the state’s broader energy economy.
Rapid electricity demand growth has created difficult questions about generation capacity, infrastructure investment, and consumer costs.
However, a Democratic governor taking office does not automatically mean Texas will adopt California-style restrictions on oil production.
Any significant policy change would depend on specific proposals, existing statutory authority, legislative cooperation, and the regulatory process.
Stewart has expressed hope that Hinojosa recognizes the economic importance of maintaining a competitive energy sector.
“I think she fully understands that $27 billion contribution to the economy and 1.4 million jobs is important,” he said.
That acknowledgment suggests the industry may seek cooperation with the incoming administration rather than immediately assume a confrontation is inevitable.
Still, energy executives will likely watch the governor’s appointments, regulatory priorities, and legislative agenda for indications of where the administration intends to go.
For businesses contemplating multibillion-dollar investments, even the perception of political instability can influence decisions.
Energy Industry Watches Austin for Its Next Move
Stewart described the industry’s reaction to the election as deeply concerned, saying “alarm bells were going off” as the results became clear.
He also credited outgoing Republican Gov. Greg Abbott with supporting a broad energy strategy that recognized the importance of conventional fuels alongside other sources of power.
The coming debate could determine whether Texas maintains that approach or moves toward a different regulatory philosophy.
Supporters of stronger environmental rules argue that oil and gas development must be balanced against pollution, public health, and environmental protection.
Industry advocates counter that unnecessarily burdensome restrictions can jeopardize jobs, reduce investment, and undermine American energy security.
The critical question is not whether Texas should have environmental safeguards.
It is whether future regulations will preserve the state’s ability to produce the energy on which much of the country depends.
Texas has spent generations building an oil and gas economy of extraordinary scale.
Its production supports American manufacturing, transportation, employment, and public revenue.
Any administration considering major changes to that system will face difficult economic tradeoffs.
For now, the industry is waiting to see whether the incoming governor pursues cooperation or confrontation.
And Stewart’s warning makes one thing unmistakably clear: what happens to Texas energy policy could have consequences far beyond Austin.
