Oil and gas production revenue jumps by almost $2B across state
The oil and gas industry paid Texas almost $2 billion more in taxes and royalties last year than in the previous coronavirus-stricken year, according to a new report from the Texas Oil and Gas Association.
The trade group found that payments last year increased 14 percent to $15.8 billion from $13.9 billion in 2020, reflecting the industry’s recovery from the pandemic-driven oil bust. The state’s revenue from the oil and gas industry had peaked at $16.3 billion in 2019, before the start of the global pandemic.
“Despite an incredibly difficult two years, the Texas oil and natural gas industry contributed tremendously to state and local tax coffers,” TXOGA President Todd Staples said in a conference call with reporters Tuesday. “This revenue from oil and natural gas production, pipelines, refineries and liquefied natural gas facilities translates to well over $43 million each and every day that pay for our schools, universities, roads, first responders and essential services.”
Although Texas’ budget isn’t as reliant on royalties as neighboring New Mexico, they are an important source of K-12 and higher education funding. Last year, 98 percent of the royalties were deposited into the state’s permanent school and university funds.
The permanent school fund supporting public K-12 schools received $1.1 billion last year, compared with $942 million in 2020. The permanent university fund supporting state universities received $979 million last year, compared with $771 million in 2020.
In addition, Texas’ so-called rainy day fund received $1.1 billion from oil and gas production taxes last year. The oil and gas industry in Texas has paid more than $178.7 billion in local and state taxes and royalties since 2007, when TXOGA began tracking the industry’s economic impact.
Texas is the nation’s top oil and gas-producing state. If Texas were a country, it would be the world’s fourth largest oil producer after the U.S., Russia and Saudi Arabia.
Texas in October produced 4.9 million barrels of crude per day, 43 percent of the nation’s average daily production of 11.5 million barrels. The state produced 29.9 billion cubic feet of natural gas per day, 26 percent of the nation’s average daily production of 116 billion cubic feet.
The Energy Department on Tuesday said it expects U.S. crude production will average 12.4 million barrels per day in 2023. Natural gas production is forecast to top 98 billion cubic feet per day in 2023.