Lone Star Storage: Texas Gains Control

Texas officially takes the lead on carbon permits, ending federal delays and signaling a new era for American energy infrastructure

29 Mar 2026

The Environmental Protection Agency has granted Texas the authority to issue and oversee Class VI underground injection permits. This transfer of power makes the Railroad Commission of Texas the primary regulator for carbon dioxide storage wells. The decision ends a long period of reliance on federal review cycles that often delayed project approvals for several years.

Texas now joins a small group of states, including Louisiana and North Dakota, that hold this permitting authority. Before this change, developers in Texas faced a duplicative process that required both state and federal authorizations. The EPA has historically struggled with a significant backlog, issuing only 11 permits nationally since 2011 while more than 250 applications remained pending.

The Railroad Commission has prepared for this role by reviewing applications alongside federal officials since 2021. It currently manages 18 active applications and expects to issue 25 permits within the next two years. State-level control has already shown results in other regions. In Wyoming, for instance, permit processing often takes less than 12 months, whereas federal reviews frequently exceed two years.

This regulatory transition coincides with expanded federal support for the industry. The One Big Beautiful Bill Act of 2025 maintained the Section 45Q tax credit. It also created parity between permanent geologic storage and carbon used for enhanced oil recovery. New guidance from the Treasury and the IRS has further clarified compliance rules for companies seeking these credits.

However, the shift has drawn attention from environmental observers. Some critics question if the Railroad Commission can maintain rigorous oversight given its historical relationship with the energy industry. There are specific concerns regarding the safety of injection projects in the Permian Basin, where oil and gas activity is already concentrated.

The commission now faces the task of proving its technical capabilities. Its initial decisions will likely determine if Texas can successfully position itself as the principal hub for carbon sequestration in the United States. Future federal oversight will depend on the state’s ability to balance rapid industrial growth with environmental safeguards.