The energy industry is pumping record oil and natural gas severance tax revenues into state coffers and Texas Comptroller of Public Accounts Glenn Hegar says that is likely to continue.
Having mightily contributed to the $33-billion surplus that the Texas Legislature is enjoying this spring in Austin, the industry will continue playing a big role in financing state operations, Hegar told the Odessa American.
Fueled by oilfield activity, the state sales tax has sent $24 million to the City of Odessa and $28 million to Midland along with $3.5 million to Andrews and $1.8 million to Monahans so far this calendar year, he said.
“Severance tax revenues were down a little in March from March 2022, but they were still very strong at $700 million-plus,” Hegar said. “Obviously, we always pay attention to the energy industry because it is extremely important to the state and local governments.
“We’ve taken record revenues into the state treasury from oil and gas production.”
Hegar was given the Texas Independent Producers & Royalty Owners Association’s “Hats Off Award” during its recent 77th annual convention in Austin “for his dedicated support of policies that have protected and promoted the long-term growth of the state economy and fueled the prosperity of the Texas oil and gas industry.”
The comptroller was impressed in March to see Texas’ drilling rig count grow to more than 50 percent of the rigs working in the United States with 377.
A former state representative and senator from Katy, west of Houston, who took office as the state’s chief financial officer in 2015, Hegar said the upstream and midstream sectors of the energy industry have gained almost 20,000 jobs in the past year.
“There has been a lot more focus on trying to export liquefied natural gas,” he said.
Noting that gas prices have been in a slump, he said, “We need oil and gas to balance out, but I don’t see the prices drastically rising or decreasing.
“We’re taking a cautious approach, but oil production looks pretty good for the rest of this year.”
With some of big banks and financial institutions in the Northeast cooling on the industry in favor of the “green” projects favored by the federal government, Hegar said, an ongoing worry is for oil and gas companies “to get the financing they need to continue to engage in activity.
“The majors are being more disciplined because of the shortage of labor and supply chain issues and I continue to have concerns about the industry’s ability to expand production,” he said.
Hegar said it was very beneficial to put $3.64 billion each into the State Highway Fund and Rainy Day Fund last year and he hopes those revenues hold up. “The oil and gas industry is the icing on the cake,” he said.
“I don’t know about most people, but I like to eat my cake with icing. It sure makes it taste better.”
