Bloomberg: The University of Texas, which made its fortune from oil, aims to profit in the fields of Crypto and AI

Author: Janet Lauren

Assembled

Cheerful currency data center in the town of Bayt, Texas, located on a rented land from the University of Texas

Dozens of long wind turbines stand under the sky of the desert, each of which is high like a 50 -storey building. A total of 800,000 solar panels cover a piece of Scrubland approximately the size of the London Heathrow Airport. In the cooling currency data warehouse, rows of computer servers are emitted from a loud hump, running an area equivalent to two blocks in the city in New York City. The Texas University system runs under all these new projects, generating revenues for hundreds of thousands of students.

For a long time, the University of Texas regime relied on leasing rights for its huge underground resources in the podium to generate income: extracting oil and gas from the richest deposits in North America. Under the air mills and solar farms, the pipelines that extend for miles that transport “liquid gold” remain a key to their wealth. Thanks to the years of production of fossil fuels and investment returns, the University of Texas is boasting of a rudeness of $ 47.5 billion, as it ranked second in the higher education sector, behind Harvard University.

However, the Texas University system (which also runs the territory of the University of Texas A and M.) is increasingly seeking to generate more income from the land itself. In addition to land development projects that started decades ago: rental rights for roads and energy lines and building pipelines, as well as the rights to use lands to graze. The university now has new initiatives: rental of renewable energy lands, battery storage, and cryptocurrency data centers, which creates revenue flows that were barely present five years ago.

Wind farm in Ranken, Texas

In the year ending last August, these land projects achieved nearly $ 130 million in revenue. This is the highest amount ever, about five times 15 years ago. These revenues exceed half the amount of funding for scholarships and scholarships to the University of Texas in Austin (the leading campus in the state) for that year.

Revenue from the university’s lands (for the years ending on August 31)

In May of this year, the University of Texas reached an initial agreement to rent 200,000 acres (10 % of land holdings) to clean Abix energy in Virginia to generate solar energy. The company’s customers include Meta, the parent company for Facebook, and the American Army. Although financial details are not disclosed, this will be the largest deal for the Earth project concluded by the University of Texas so far.

If these types of projects succeed, the University of Texas expects to add tens of millions of dollars in revenue annually in the coming decades. The university is looking for sites for large artificial intelligence data centers, companies that help facilities and other entities prevent carbon emissions from entering the atmosphere and natural gas power stations.

William Murphy Junior, CEO of the University’s lands (Texas -owned real estate department) is trying to diversify the regime’s revenues. Some of the executives of oil companies recently stated that production in the podium has reached or approached its peak. “Our mission is to create a permanent income for the institution. We have a long -term vision, from 30 to 50 years,” we see this as a marathon, and we are in the start line. “

William Murphy Junior, CEO of the university company, at his office in Houston

The University of Texas strategy comes at a time when renewable energy faces criticism in Washington, DC, to reflect the support of the Biden Renewable Energy Administration, and fossil fuel advocates, including President Donald Trump, have criticized wind turbines harshly, describing them unreliable. He said in January: “The huge ugly mills – they destroy your community.”

Texas’s mixed feelings about renewable energy may pose challenges for the University of Texas plans. The state is the largest wind energy producer in the United States, ranked second in the second place, behind California. “We believe in the Energy Development Approach to” all pregnancy, “Republican Governor Greg Abbott said in December.

To support this strategy in the podium, the Texas Public Utilities Committee agreed to a $ 10.1 billion plan in April to build three transport lines to help meet the requirements of oil drilling, new data centers, cryptocurrency mining sites, and hydrogen plants. “Without these new transport lines, no one will want to expand the scope of solar supplies and solar energy in West Texas,” said Ed Herz, an economist at Houston University.

However, after a destroyed winter storm in 2021 led to a large scale power, Texas blamed the network’s dependence on wind and solar energy. Research has found that failure in natural gas factories was the main cause of power outages. However, the Republican -controlled Legislative Commission is still studying some bills that make it difficult to build solar energy and wind projects.

Murphy stated that if Texas officials move away from renewable energy, the University of Texas can change its strategy. For example, the university can support the projects driven by natural gas. “If these incentives change, the scene may change in West Texas,” we are not a political entity, and we will not pay anything. “

Murphy’s office in Houston decorated with black and white with early oil drilling platforms, located near the headquarters of Conocophillips and the main Shell Institute of the United States. The old oil pump wheel in the office occupies a prominent place in the office, twice in the height of Murphy, indicating that the University of Texas still puts a great value to earn money from fossil fuels. “We are planning to maintain oil and gas for a long time,” said 47 -year -old Murphy, who is from Texas V, who was once a lawyer for oil and gas and runs one of the largest livestock farms in the state.

In houses, Texas, the operator burns excessive natural gas in a well on the lands run by the University of Texas

The University of Texas oversees 3300 square miles of land in the pump, an area equivalent to nearly the joint size of Dillauer and Rod Island, which extends to 19 provinces with the famous town of Midland in its center. In the nineteenth century, the state constitution was granted the rights to extract minerals and surface to the University of Texas for these lands. At that time, the arid land was almost valuable with the exception of grazing. But in 1923, Drillers discovered oil, bringing wealth to higher education in Texas.

Texas University does not explore itself for oil or gas, and does not develop any projects on state -owned lands. It rents this land and accuses royalties based on oil and gas production. Over the past fifteen years, the rented lands of oil and gas companies have achieved $ 15.8 billion of revenue. With high prices and production, royalties rose recently, causing more than two billion dollars annually.

Renewable energy and energy storage projects on the lands run by the University of Texas

All this financing flows into a box that supports two main general universities in Texas. Two -thirds go to the University of Texas, and a third of the University of Texas A and M., which has a stop of $ 20 billion. Together, these two systems educate about 350,000 students. It also runs hospitals, including the MD Anderson Cancer Center at the University of Texas at Houston.

The state constitution clarifies oil and gas revenues that must be used in capital expenditures, such as building classes, hospitals, laboratories, and not for daily operations. This wealth contributed to a boom in construction, with recent allocations of $ 50 million to a new cancer and surgery center at the University of Texas Rio Grande Valley, $ 60 million to finance a “smart hospital” equipped with virtual reality laboratories at the University of Texas at Arlington, and $ 54 million to support the construction of a new site for the Mays Prison School in Texas A ‘Campus.

New terrestrial project revenues can be used for categories such as “academic excellence” and support for special programs. Although it is still small compared to fossil fuel revenues, non -oil and gas income amounted to $ 1.2 billion over the past fifteen years and has risen sharply. Last November, the University of Texas announced that it will give up tuition fees for university students from families worth $ 100,000 or less in all nine universities, while taking advantage of their gifts, non -daily fuel boxes, and other sources.

Today, such funding is of special value for universities, because it provides flexibility in an unfavorable environment for higher education. The Trump administration was at odds with the elite universities, and has reduced federal funding in the areas it likes, including anything seen as related to diversity, fairness and inclusion. Republican law seeks to impose taxes of up to 21 % on investment income from the largest private university endowments. As the public school system, the University of Texas is not among the goals of these attacks, and in any case, the endowment for each student (a measure of wealth by the government) is very low, by about 230,000 dollars, while Harvard exceeds two million dollars.

Looking at the increasing population and increasing enrollment in higher education, Texas still yearns for more resources. Through partnership with companies such as Nextera Energy (Renewable Energy Resources in Juno Beach, Florida), the University of Texas has signed five wind agreements and five solar rental agreements. It also has four encoded currency mining agreements and 14 batteries storage agreements, either operating or under construction. Of the $ 127 million of non -oil revenues in the past fiscal year, only $ 7 million of renewable energy came.

Cheerful currency data center in houses, Texas, located on a rented land of the University of Texas

A greater benefit from renting land for large data centers may come, which sparked controversy due to its massive energy consumption. Technology companies have pledged to spend hundreds of billions of dollars to build them to meet computing requirements for artificial intelligence. “Texas receives attention from everyone,” said Brant Bernett, Senior Vice President of the CBRE group, which helps companies find land centers.

Murphy makes these deals with caution, because he does not want to occupy a lot of land while giving up more profitable opportunities. He said: “We need to increase the returns to the maximum, but we cannot rush, and we understand the future, and we also understand its potential.”