The grid runs on magnets. Rare earths are Texas’ next frontier.
How the geopolitics of electrification are creating a new role for Texas in American energy security.
Texas added more utility scale battery storage last year than most countries will install this decade. ERCOT entered 2026 with nearly 14 gigawatts of commercially operational battery capacity, almost double what it had at the start of 2025. Already the state leads the nation in wind and energy utility scale solar power, and data centers are coming online at a rate straining the interconnection queue. All of that infrastructure has one thing in common. It remains heavily dependent on supply chains dominated by Beijing.
China mines over 60 percent and processes over 80 percent of the world’s rare earths, and produces around 90 percent of the world’s high performance rare earth magnets. Those magnets sit at the center of modern energy infrastructure. They are used in wind turbine generators, electric vehicle motors, battery systems, industrial robotics, defense technologies, and increasingly the cooling systems and power equipment supporting AI data centers.
While certainly not new, that dependence has become harder to ignore in 2026. Despite the high profile Trump-Xi summit in Beijing this May, little progress was made on China’s restrictions on heavy rare earth exports. Chinese licensing requirements remain in place for critical materials such as dysprosium, terbium, and yttrium, among others. Business leaders say certain materials are becoming nearly unobtainable with U.S, company purchase orders going unfulfilled. For an industry that has spent the last decade building energy infrastructure predicated on reliable access to these materials, that concentration poses a significant problem. And it is the opening that Texas has been preparing for.
