July 24, 2025 • 10 mins
With more than $50 billion under management, Harvard has the largest college endowment in the United States. But the University of Texas is not far behind.
On today’s Big Take podcast, Bloomberg’s Janet Lorin joins host David Gura to discuss how the University of Texas harnessed land and oil to build the second-largest endowment in higher education and why it’s now adding new kinds of energy — and new ventures — to its portfolio.
Read more: Oil-Rich University of Texas Wants to Cash In on AI, Crypto and Power
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio News.
Speaker 2 (00:07):
In recent months, as the Trump administration has gone after
Harvard University, we've heard a lot about the size of
that school's endowment. Some lawmakers have said they want to
do away with its tax exempt status. Bloomberg puts the
value of Harvard's endowment at fifty three billion dollars, which
makes it the largest in the US, But the University
(00:29):
of Texas is not far behind. Everything, of course is
bigger in Texas. How big is the University of Texas's endowment.
Speaker 1 (00:37):
Well, if you're going to round it, it's almost fifty
billion dollars, a little more exact, forty seven billion and
a half.
Speaker 2 (00:45):
So this is now the number two endowment.
Speaker 1 (00:48):
Yes, it surpassed Yale a couple of years ago.
Speaker 2 (00:52):
Janet Lauren covers finance in higher Education for Bloomberg, and
she says that unlike Harvard's and Yale's endowments, which largely
come from donations and investment returns, the University of Texas
has a resource that sets.
Speaker 1 (01:04):
It apart, oil and gas.
Speaker 2 (01:11):
I'm David Gura, and this is the big take from
Bloomberg News today on the show, how the University of
Texas harnessed land and oil to power higher ed and
why it's now shifting to new kinds of energy. Lots
of universities have fossil fuel investments in their portfolios. In fact,
some have even divested from those industries in recent years.
(01:34):
But Bloomberg's Janet Lauren says the way the University of
Texas profits from oil and gas is very different.
Speaker 1 (01:40):
Nobody has anything like this unless you're a handful of
schools in Texas and Oklahoma. You know, everybody in Texas
and Oklahoma knows don't ever sell your mineral rights. But
most schools don't have anything remotely like this.
Speaker 2 (01:55):
Janet says the roots of UT's oil wealth date back
to the eighteen hundreds.
Speaker 1 (02:00):
State of Texas set aside land to benefit higher education.
And the land is in West Texas. And in the
eighteen hundreds, West Texas was just this arid land, and
it was assumed that it probably wouldn't generate a ton
of money. You could get some money for things like
cattle grazing, and then the idea was at some point
(02:22):
it probably would have been sold. And then something happened
in nineteen twenty three, one hundred years ago.
Speaker 2 (02:28):
It feels like out of the Beverly Hill Billies. But
the practically it is they struck.
Speaker 1 (02:33):
They struck oil, and that changed not only higher education
financing forever, but it changed West Texas.
Speaker 2 (02:40):
Could you just describe this tract? And I'm just curious
how big it is. Is there kind of a point of
comparison that would illustrate how much land the university is
drawing from.
Speaker 1 (02:49):
So in our story we describe it as thirty three
hundred square miles. I love the number two point one
million acres because it just seems so big and vast.
It's about the size of Rhode Island and Delaware put together.
And when I went out to Midland and we drove around,
you know, it's quite arid.
Speaker 2 (03:09):
So historically, what have they done with this land from
the nineteen twenties until a few years ago, what was
this land predominantly used for?
Speaker 1 (03:18):
So oil and gas is the main driver of revenue.
Speaker 2 (03:22):
Today, more than twenty thousand wells have been drilled across
lands belonging to the University of Texas, which are dotted
with drilling rigs, frack ponds, and pumpjacks. UT doesn't own
these operations, It just leases its land to private companies
and gets a cut of the oil and gas they produce.
The revenue gets divvied up between the UT system and
(03:43):
the Texas A and M system.
Speaker 1 (03:45):
There's a formula. Two thirds goes to the UT system,
one third goes to Texas A and M systems, and
that benefits you know, something like three hundred and fifty
thousand students total, So it really helps a lot of people.
Speaker 2 (03:57):
The state constitution restricts how that oil and gas money
can be spent. It can only be used on capital expenses.
Speaker 1 (04:05):
So if hospitals need new buildings, a business school that
helps build buildings, it's not going for operating money.
Speaker 2 (04:13):
Revenue from the land's surface, like leasing rights for roads,
power lines, pipelines, and cattle grazing has different rules.
Speaker 1 (04:21):
That goes into a different front. It's valuable because it's
cash that could be spent.
Speaker 2 (04:25):
Right away, and that surface income has historically been dwarfed
by all the oil and gas money. But Janet says,
the managers of the University of Texas's landholdings, no, they
can't count on oil and gas forever that one day
the resources of the Premium basin aren't going to be
as plentiful may not be as valuable as they are now,
(04:46):
so the university is expanding into renewables. That's next. The
University of Texas has managed to make a lot of
money from land that seemed to have little value back
in the nineteenth century. For much of the last one
(05:09):
hundred years, the value has come from the oil and
gas deep underground. Bloomberg's Janet Lawn says the university is
diversifying thinking long term, and that means figuring out how
to better use the land for its above ground resources.
Speaker 1 (05:24):
They're looking for thirty fifty years, maybe the next century,
and at some point the Permium basin will not be
generating the same kind of oil once it's drilled, it's
not being replaced. But with wind in solar, it's an
asset that could be generating for years.
Speaker 2 (05:42):
In addition to wind and solar, Janet says, UT has
also started renting land for battery storage and data centers
for crypto, creating an income stream that barely existed five
years ago. You described seeing this tract of land for
the first time. You've gone back now to report on
what they're doing now and what they hope to do
in the future. How different does it look? What are
(06:03):
the landmarks now that are there that wouldn't have been
there the first time you visited.
Speaker 1 (06:06):
Well, when I was there a few years ago, we
mostly focused on seeing what the oil production looks like.
In this time we went to see wind and solar.
Speaker 2 (06:14):
Are we talking about huge solar arrays? A lot of windmills?
Just physically? What does it look like now that they're
opening it up to more investment in that?
Speaker 1 (06:21):
Well, they now have five wind and solar sites each.
And you know, they started signing these contracts several years ago,
and it takes a long time to build these, so
you're really starting to see this revenue come in finally.
But they're quite big. You know, one section of solar,
you know, I describe it as something like eight hundred
thousand panels. It's a lot.
Speaker 2 (06:43):
What does that look like? I mean, did you see that?
Speaker 1 (06:44):
Yes, you look one way and the other way and
the other way, and it's quite vast.
Speaker 2 (06:51):
All told, these surface oriented ventures generated almost one hundred
and thirty million dollars in the year that ended last August.
That's the largest amount ever and about five times as
much as they produced fifteen years ago. It's still a
small fraction of the income the school generates from fossil fuels,
but it's an especially valuable fraction because unlike the fossil
(07:13):
fuel funds, which the state's constitution restricts for capital projects,
the surface oriented funds come with more flexibility. It's all
managed through an entity called University Lands. You have looked
at some of the deals that University Lands has signed recently.
What can you tell us just about sort of what
they're looking at. Who's coming to them hoping to lease land.
Speaker 1 (07:33):
Well, they've gotten a flood of request and that's something
that they had to do was evaluate what is coming
in because you know, it was everything from Uncle Charlie
wants to flip this land versus large companies. And they
have a preliminary agreement with a company for about two
hundred thousand acres, which is pretty significant, and that the
(07:53):
idea is that they would generate wind and solar for electricity.
Speaker 2 (07:57):
Are we in early days yet or is it possible
to say sort of how well this is working out
for them? Are they making a substantial amount of money
by getting into these new types.
Speaker 1 (08:06):
Of Entergriyes, well, they're sort of you know, dipping their
toe as the CEO of University Lands described. You know,
they were initially looking for some singles and now you
know they're looking for home runs, which is multi uses
on one site.
Speaker 2 (08:19):
Tell us about CEO William Murphy, you sat down with him.
What's his background, what's his perspective on what the future
looks like for these lands.
Speaker 1 (08:27):
Well, he's sort of looking across a chessboard and you know,
some things maybe ready to be signed now, and again
these things take years to build, but he's thinking about
you know, a long time ways. His early career was
as an oil and gas attorney, and then he oversaw
a place called King Ranch, which is one of the
(08:48):
largest cattle ranches, if not the largest cattle ranch in
the state of Texas. I think it's over eight hundred
thousand acres. So it's sort of uniquely qualified to do this.
And part of his strategy with oil and gas us
to increase production. So that spectacular year in twenty twenty
two when they head over two billion dollars in oil
revenue was partly because of price, but also production.
Speaker 2 (09:11):
We've talked about wind power and solar power. I know
that there's this push to build huge data centers on
open land like this. Are they embracing that as well?
Are companies coming to them hoping to build large data centers?
Speaker 1 (09:23):
Yes. The Public Utility Commission of Texas in April announced
a pretty big project ten billion dollars for three transmission
lines in West Texas.
Speaker 2 (09:32):
Explain why that's so important, so they can lease all
of this land. Companies can have these aspirations of putting
in data centers or finding new ways to get solar
energy or wind energy, but they need this infrastructure.
Speaker 1 (09:43):
They need transmission lines because you need to get the
energy from East Texas to go back and forth from
East to West Texas. So if you have wind in solar,
you have to get the energy it's producing to go
through some sort of transmission line.
Speaker 2 (10:00):
If someone's listening to this and wonders if Texas is
giving up on oil and natural gas, what would you
say to them?
Speaker 1 (10:08):
Not a chance. They are not even remotely thinking of that.
This is adding to their income and they're very clear
about that. They see oil and gas in their future
for a very long time.
Speaker 2 (10:21):
This is the Big Take from Bloomberg News. I'm David Gura.
To get more from the Big Take and unlimited access
to all of Bloomberg dot Com. Subscribe today at Bloomberg
dot com Slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow
Bloomberg Audio Studios, podcasts, radio News.
Speaker 2 (00:07):
In recent months, as the Trump administration has gone after
Harvard University, we've heard a lot about the size of
that school's endowment. Some lawmakers have said they want to
do away with its tax exempt status. Bloomberg puts the
value of Harvard's endowment at fifty three billion dollars, which
makes it the largest in the US, But the University
(00:29):
of Texas is not far behind. Everything, of course is
bigger in Texas. How big is the University of Texas's endowment.
Speaker 1 (00:37):
Well, if you're going to round it, it's almost fifty
billion dollars, a little more exact, forty seven billion and
a half.
Speaker 2 (00:45):
So this is now the number two endowment.
Speaker 1 (00:48):
Yes, it surpassed Yale a couple of years ago.
Speaker 2 (00:52):
Janet Lauren covers finance in higher Education for Bloomberg, and
she says that unlike Harvard's and Yale's endowments, which largely
come from donations and investment returns, the University of Texas
has a resource that sets.
Speaker 1 (01:04):
It apart, oil and gas.
Speaker 2 (01:11):
I'm David Gura, and this is the big take from
Bloomberg News today on the show, how the University of
Texas harnessed land and oil to power higher ed and
why it's now shifting to new kinds of energy. Lots
of universities have fossil fuel investments in their portfolios. In fact,
some have even divested from those industries in recent years.
(01:34):
But Bloomberg's Janet Lauren says the way the University of
Texas profits from oil and gas is very different.
Speaker 1 (01:40):
Nobody has anything like this unless you're a handful of
schools in Texas and Oklahoma. You know, everybody in Texas
and Oklahoma knows don't ever sell your mineral rights. But
most schools don't have anything remotely like this.
Speaker 2 (01:55):
Janet says the roots of UT's oil wealth date back
to the eighteen hundreds.
Speaker 1 (02:00):
State of Texas set aside land to benefit higher education.
And the land is in West Texas. And in the
eighteen hundreds, West Texas was just this arid land, and
it was assumed that it probably wouldn't generate a ton
of money. You could get some money for things like
cattle grazing, and then the idea was at some point
(02:22):
it probably would have been sold. And then something happened
in nineteen twenty three, one hundred years ago.
Speaker 2 (02:28):
It feels like out of the Beverly Hill Billies. But
the practically it is they struck.
Speaker 1 (02:33):
They struck oil, and that changed not only higher education
financing forever, but it changed West Texas.
Speaker 2 (02:40):
Could you just describe this tract? And I'm just curious
how big it is. Is there kind of a point of
comparison that would illustrate how much land the university is
drawing from.
Speaker 1 (02:49):
So in our story we describe it as thirty three
hundred square miles. I love the number two point one
million acres because it just seems so big and vast.
It's about the size of Rhode Island and Delaware put together.
And when I went out to Midland and we drove around,
you know, it's quite arid.
Speaker 2 (03:09):
So historically, what have they done with this land from
the nineteen twenties until a few years ago, what was
this land predominantly used for?
Speaker 1 (03:18):
So oil and gas is the main driver of revenue.
Speaker 2 (03:22):
Today, more than twenty thousand wells have been drilled across
lands belonging to the University of Texas, which are dotted
with drilling rigs, frack ponds, and pumpjacks. UT doesn't own
these operations, It just leases its land to private companies
and gets a cut of the oil and gas they produce.
The revenue gets divvied up between the UT system and
(03:43):
the Texas A and M system.
Speaker 1 (03:45):
There's a formula. Two thirds goes to the UT system,
one third goes to Texas A and M systems, and
that benefits you know, something like three hundred and fifty
thousand students total, So it really helps a lot of people.
Speaker 2 (03:57):
The state constitution restricts how that oil and gas money
can be spent. It can only be used on capital expenses.
Speaker 1 (04:05):
So if hospitals need new buildings, a business school that
helps build buildings, it's not going for operating money.
Speaker 2 (04:13):
Revenue from the land's surface, like leasing rights for roads,
power lines, pipelines, and cattle grazing has different rules.
Speaker 1 (04:21):
That goes into a different front. It's valuable because it's
cash that could be spent.
Speaker 2 (04:25):
Right away, and that surface income has historically been dwarfed
by all the oil and gas money. But Janet says,
the managers of the University of Texas's landholdings, no, they
can't count on oil and gas forever that one day
the resources of the Premium basin aren't going to be
as plentiful may not be as valuable as they are now,
(04:46):
so the university is expanding into renewables. That's next. The
University of Texas has managed to make a lot of
money from land that seemed to have little value back
in the nineteenth century. For much of the last one
(05:09):
hundred years, the value has come from the oil and
gas deep underground. Bloomberg's Janet Lawn says the university is
diversifying thinking long term, and that means figuring out how
to better use the land for its above ground resources.
Speaker 1 (05:24):
They're looking for thirty fifty years, maybe the next century,
and at some point the Permium basin will not be
generating the same kind of oil once it's drilled, it's
not being replaced. But with wind in solar, it's an
asset that could be generating for years.
Speaker 2 (05:42):
In addition to wind and solar, Janet says, UT has
also started renting land for battery storage and data centers
for crypto, creating an income stream that barely existed five
years ago. You described seeing this tract of land for
the first time. You've gone back now to report on
what they're doing now and what they hope to do
in the future. How different does it look? What are
(06:03):
the landmarks now that are there that wouldn't have been
there the first time you visited.
Speaker 1 (06:06):
Well, when I was there a few years ago, we
mostly focused on seeing what the oil production looks like.
In this time we went to see wind and solar.
Speaker 2 (06:14):
Are we talking about huge solar arrays? A lot of windmills?
Just physically? What does it look like now that they're
opening it up to more investment in that?
Speaker 1 (06:21):
Well, they now have five wind and solar sites each.
And you know, they started signing these contracts several years ago,
and it takes a long time to build these, so
you're really starting to see this revenue come in finally.
But they're quite big. You know, one section of solar,
you know, I describe it as something like eight hundred
thousand panels. It's a lot.
Speaker 2 (06:43):
What does that look like? I mean, did you see that?
Speaker 1 (06:44):
Yes, you look one way and the other way and
the other way, and it's quite vast.
Speaker 2 (06:51):
All told, these surface oriented ventures generated almost one hundred
and thirty million dollars in the year that ended last August.
That's the largest amount ever and about five times as
much as they produced fifteen years ago. It's still a
small fraction of the income the school generates from fossil fuels,
but it's an especially valuable fraction because unlike the fossil
(07:13):
fuel funds, which the state's constitution restricts for capital projects,
the surface oriented funds come with more flexibility. It's all
managed through an entity called University Lands. You have looked
at some of the deals that University Lands has signed recently.
What can you tell us just about sort of what
they're looking at. Who's coming to them hoping to lease land.
Speaker 1 (07:33):
Well, they've gotten a flood of request and that's something
that they had to do was evaluate what is coming
in because you know, it was everything from Uncle Charlie
wants to flip this land versus large companies. And they
have a preliminary agreement with a company for about two
hundred thousand acres, which is pretty significant, and that the
(07:53):
idea is that they would generate wind and solar for electricity.
Speaker 2 (07:57):
Are we in early days yet or is it possible
to say sort of how well this is working out
for them? Are they making a substantial amount of money
by getting into these new types.
Speaker 1 (08:06):
Of Entergriyes, well, they're sort of you know, dipping their
toe as the CEO of University Lands described. You know,
they were initially looking for some singles and now you
know they're looking for home runs, which is multi uses
on one site.
Speaker 2 (08:19):
Tell us about CEO William Murphy, you sat down with him.
What's his background, what's his perspective on what the future
looks like for these lands.
Speaker 1 (08:27):
Well, he's sort of looking across a chessboard and you know,
some things maybe ready to be signed now, and again
these things take years to build, but he's thinking about
you know, a long time ways. His early career was
as an oil and gas attorney, and then he oversaw
a place called King Ranch, which is one of the
(08:48):
largest cattle ranches, if not the largest cattle ranch in
the state of Texas. I think it's over eight hundred
thousand acres. So it's sort of uniquely qualified to do this.
And part of his strategy with oil and gas us
to increase production. So that spectacular year in twenty twenty
two when they head over two billion dollars in oil
revenue was partly because of price, but also production.
Speaker 2 (09:11):
We've talked about wind power and solar power. I know
that there's this push to build huge data centers on
open land like this. Are they embracing that as well?
Are companies coming to them hoping to build large data centers?
Speaker 1 (09:23):
Yes. The Public Utility Commission of Texas in April announced
a pretty big project ten billion dollars for three transmission
lines in West Texas.
Speaker 2 (09:32):
Explain why that's so important, so they can lease all
of this land. Companies can have these aspirations of putting
in data centers or finding new ways to get solar
energy or wind energy, but they need this infrastructure.
Speaker 1 (09:43):
They need transmission lines because you need to get the
energy from East Texas to go back and forth from
East to West Texas. So if you have wind in solar,
you have to get the energy it's producing to go
through some sort of transmission line.
Speaker 2 (10:00):
If someone's listening to this and wonders if Texas is
giving up on oil and natural gas, what would you
say to them?
Speaker 1 (10:08):
Not a chance. They are not even remotely thinking of that.
This is adding to their income and they're very clear
about that. They see oil and gas in their future
for a very long time.
Speaker 2 (10:21):
This is the Big Take from Bloomberg News. I'm David Gura.
To get more from the Big Take and unlimited access
to all of Bloomberg dot Com. Subscribe today at Bloomberg
dot com Slash podcast offer. If you liked this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back tomorrow
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