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As it turned out, Jimmy Carter was one of the best friends the Texas Republican Party could have ever asked for. Between 1977 and 1980, Carter, quite unintentionally of course, not only provided the Texas GOP with the context and ammunition it needed to finally achieve viable second-party status, but also helped lay the groundwork for the Lone Star State’s future status as a bedrock of national conservative Republicanism. The viability of a Reagan presidency grew during these years, especially when sharply contrasted with the growing perceptions of Carter’s weakness and inability to handle the mounting tally of foreign and domestic crises that seemed to threaten America’s place in the global sun. This contrast also personified and magnified a related perception in Texas—that the Democratic Party had tied itself to the unattractive and failed visions of modern liberalism. These perceptions, fueled by a mix of national images and real policy debates—including debates over oil, energy, and foreign policy—formed a powerful catalyst for partisan realignment, at least so far as national and statewide campaigns were concerned. By the late 1970s, this storm of activity had brought with it the state’s first Republican governor since Reconstruction and permanently altered most Texans’ association between political ideology and partisanship. Energy Despite the 1978 debut of Dallas, CBS’s hit television drama that popularly linked that city throughout the coming decade with Texas oil wealth, it was actually Houston that served as the capital of Texas’s oil and gas industry in the late 1970s. Built largely on Houston’s back, Texas became the nation’s undisputed energy hub during the same time. It was a good time to be a Texas oil baron. Oil prices soared in 1978, thanks primarily to the international shock stemming from the shah’s ousting in Iran. Subsequent price hikes arising from supply shortages contributed to a boom in the Texas The Gathering Storm Chapter 7 Republican Momentum and the Albatross of Jimmy Carter 182 Republican Momentum and the Albatross of Jimmy Carter 183 economy, though the oil industry had been expanding for several years prior to 1978. Texas’s business-friendly climate attracted industry giants like Exxon, Shell, and Gulf, each of which moved their headquarters to Texas during the 1970s, bringing with them employees from across the nation. At the same time, thousands of Texas companies found niche markets by producing drilling, piping, and mechanical production equipment, parts, and accessories. While oil shocks in 1973 and 1978 contributed to the nation’s recession-riddled economy, in Texas oil was truly black gold.1 Texas’s surging economy stood in stark contrast to the tremors felt in the national economy. After a year and a half of poor presidential relations with Congress and accelerating inflation, interest, and unemployment rates, Carter’s national approval rating had fallen fast. Despite Texas’s booming economic climate, Carter’s popularity in that state slid just as it did in the rest of the nation. In the summer of 1978, with his approval rating in Texas below 40 percent, Carter chose Texas, and Houston specifically , as the launching pad for his renewed discussion on the national energy crisis.2 It was a risky decision. Because the energy crisis contributed to the proliferation of Texas wealth, potential changes wrought by Carter on the industry worried most oil-vested Houstonians more than inflation or unemployment.3 Two specific measures were of particular concern. First, energyconscious Texans adamantly opposed Carter’s support for a Windfall Profits Tax. That tax would have coincided with welcomed price control deregulation, but also would have imposed heavy taxes on profits reaped by production companies above predetermined base prices. Texas oil leaders believed the answer to national energy woes lay not with such excise taxes, but with the increased domestic production they believed would result from deregulation. This had been the Republican position on the issue—and Reagan’s position in 1976. Instead, however, Carter stressed conservation and increased importation.4 In a study commissioned by the Texas Energy and National Resources Advisory Council, the Interstate Oil Compact Commission concluded that, in Texas, the Windfall Profits Tax would cost state producers an estimated 69.16 million barrels of unproduced oil. The study further projected that the Windfall Profits Tax would cost the state upwards of $2.4 billion in crude oil revenue lost from the closure of a projected 3,385 marginal wells. The potency of this finding was widespread as marginal wells...

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