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Will Elon Musk Bring The Future To Texas?

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Elon Musk, the PayPal founder who parlayed his late 90s success in facilitating e-commerce into a science fiction-as-business-model empire that would make Tony Stark nod his head in approval, is considering bringing two of his futuristic enterprises to Texas.

Both his space exploration program, SpaceX, and his electric car company, Tesla Motors, are considering moving part of their operations to Texas. SpaceX has been considering a location near Boca Chica Beach in South Texas for some time, and recent acquisitions of land nearby in Cameron County have done little to quell speculation. Now, it seems, much of what stands in the way of SpaceX’s mission to send people from the Brownsville area to Mars is an FAA environmental impact study, as The Monitor explains

The EIS draft released in April 2013 reviewed 11 resource areas for potential environmental impacts created by the proposed construction and operations there. The FAA looked at compatible land use; properties; noise; visual resources and light emissions; historical, architectural, archaeological and cultural resources; air quality; water resources; biological resources including fish, wildlife and plants; hazardous materials; socioeconomics; natural resources; and secondary impacts.

Although the FAA draft report found “no impacts would occur” that would result in the FAA denying a permit, it did provide a summary of potential environmental impact from the proposed action by SpaceX.

Now, new information about the status of the proposed rocket site is scarce, and local officials and residents continue to wait for the project’s final environmental impact study to be released by the FAA, which will determine how the construction of a launch pad near Boca Chica Beach might affect the area environmentally.

 Folks waiting for the news about whether or not South Texas will be the next Cape Canaveral will keep waiting, at least for now, which leaves the economically-depressed region twisting in the wind a bit. 

Meanwhile, people who want a little bit of Musk’s magic to reach them elsewhere in Texas have a more timely hope: Namely, the hope that he’ll choose their city as the site of a new battery factory for Tesla Motors’ electric cars. 

That’s a competition that Musk has manufactured between four states—Texas, New Mexico, Arizona, and Nevada—as each bids for the right to house a plant that’s expected to create as many as 6,500 jobs. As the Dallas Morning News reports

“This would rank as the most attractive industrial project out there,” said Dennis Cuneo, president of DC Strategic Advisors LLC and a former Toyota Motor Corp. executive who helped that carmaker select manufacturing sites.

Tesla has dubbed the project the “gigafactory,” and it would make Musk a force in both U.S. manufacturing and electric power. The plant he envisions would have more capacity than any other to make lithium-ion batteries.

“This has a huge impact beyond Tesla,” said Harley Shaiken, a labor economist at the University of California, Berkeley. “It gives enormous legitimacy to battery production and the future of the electric car because that lies in the battery. It’s high stakes, high technology.”

Tesla plans an investment of $4 billion to $5 billion by 2020 and will fund about $2 billion of the total, the Palo Alto, California-based company said in a presentation on its website. The convertible bond offering could grow to $1.84 billion, according to a separate statement.

As the states in question would very much like Tesla’s $5 billion plant, Tesla will be setting the terms for the bidding war. But Texas, with its 26 million people—20 million more than Arizona, the next most-populous competitor—has a lot to offer. One of Musk’s main wishes when it comes to Texas is that the state change its laws regarding whether manufacturers are able to sell their cars to consumers directly, rather than through a dealership. 

At the moment, Texans who want to buy a Tesla can do so from the company’s website, or they can fly to a state in which it’s legal for the company to sell directly to customers and then drive the car home. (Tesla operates showrooms in Texas, but employees are forbidden from discussing pricing, and customers can only buy the cars at the locations by using the company’s website.) MySA.com writes that

Elon Musk, the owner of the Silicon Valley electric carmaker, appeared in the halls of the State Capitol to lobby lawmakers to sell his products in the second-largest market for new cars last year, but to no avail. The Texas Automobile Dealers Association opposed Tesla’s proposal and the lawmakers sided with the group.

If Musk can dangle the possibility of 6,500 jobs and a breathtaking $5 billion manufacturing plant in front of lawmakers, perhaps Texas legislators will reconsider Musk’s request. 26,000,000 potential Tesla buyers is probably something that would get Musk’s attention. While we wouldn’t say that it makes Texas the favorite to land the plant, it certainly makes the bidding process interesting. 

In any case, jobs that involve manufacturing billions of dollars worth of high-tech batteries and launching spacecraft to Mars are jobs that any state would like to have. Elon Musk is certainly at the fore of a lot of industries that will be important in years to come, and Texas’s flirtation with the eccentric billionaire holds a lot of potential. 

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