By Todd Staples
The Texas oil and natural gas industry continues to play an extraordinary role in our state’s economy, security, and stability. In fiscal year 2022, the Texas oil and natural gas industry paid a history-making $24.7 billion in state and local taxes and state royalties—shattering the previous record of just over $16 billion set in 2019 by 54%. This revenue from oil and natural gas production, pipelines, refineries, and liquified natural gas (LNG) facilities translates to roughly $67 million a day that pay for our schools, universities, roads, first responders and essential services.
Production taxes and royalties to state funds more than doubled over fiscal year 2021. Production taxes grew by 116% and royalties to state funds increased by 102%. Oil and natural gas production taxes exceeded $10 billion for the first time in Texas history. Texas independent school districts and county governments in Texas received $1.65 billion and $608.6 million, respectively, in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities.
In 2022, 99% of the state’s oil and natural gas royalties were deposited into the Permanent School Fund and the Permanent University Fund, which support Texas public education. Each fund received $2.1 billion—more than double the amounts from last year. The Economic Stabilization Fund (commonly known as the Rainy Day Fund) received $1.5 billion from oil and natural gas production taxes. Expanded oil and natural investment and job-creating activity are the primary reasons behind the $34 billion surplus that Texas has available, money that will go to work for the people of Texas.
In 2022, 443,000 Texans had a job in the oil and natural gas industry, earning an average salary of $115,300 — roughly 60% higher than the average pay in other private sectors. And for every direct job in the industry, conservative estimates indicate that an additional 2.2 indirect jobs are created. In total, 1.4 million Texans’ jobs ultimately derive from the state’s oil and natural gas industry.
Growth like this is not guaranteed, and policy can promote prosperity, or hinder it. And as much of Western Europe can attest, energy security is national security, and both are directly tied to policy decisions. Our nation and our allies depend on Texas’ oil and natural gas producers, pipelines, refiners and exporters to deliver energy stability, even in times of continued global unrest. To continue meeting our nation and the world’s energy needs, we need bold energy policy leadership at every level that treats oil and natural gas as an asset, not a liability.
As the Legislature takes up the business of Texans, we will be keeping a close eye on several policy priorities, because we know a bright future is Texas’ to lose. We can continue to outpace other states and countries in economic opportunity, job growth and capital investment or we can forfeit the game by sitting some of our best players on the sidelines.
Economic development policy to keep Texas competitive, for example, is a must. We also need a policy framework that allows Texas to lead in carbon capture and sequestration, electricity market redesign policy that keeps our grid reliable and rates affordable, policies to fund our key regulatory agencies and protection against policy that would adversely impact this industry’s ability to deliver what the world needs.
We look forward to working with our lawmakers and key stakeholders to develop policy that promotes continued growth, energy freedom, global stability, and environmental progress. All four will allow the oil and natural gas industry to continue building a cleaner, stronger, better future for Texas.
Todd Staples is president of the Texas Oil & Gas Association and former Texas Agriculture Commissioner.
