2014 Texas oil and gas taxes and royalties hit $15.7 billion
Thu, March 05, 2015
Safe and responsible oil and gas production is unmistakably helping the state meet the needs of Texans.
The state’s rainy-day fund, money socked away almost exclusively from oil and gas severance taxes, has been used to support public schools, children’s health insurance, economic development initiatives and more.
Last year, voters approved a constitutional amendment to direct billions of dollars in oil and natural gas tax revenue toward Texas highways.
Just before that, Texans approved using $2 billion from the rainy-day fund to support the state’s water plan.
Oil and gas royalties and leases contribute to the Permanent School Fund, which supports Texas public schools. The PSF, worth $37.7 billion, recently became the largest education endowment in the nation.
Even with decreased oil prices, Texas is and will remain an oil and gas state whose economy depends on robust oil and gas activity. The Texas oil and gas industry has contributed mightily to this state in other times when oil prices were below $100 a barrel.
In 2012, when oil production in Texas was a million barrels a day less than it is today, the oil and gas industry paid a hefty $12.1 billion in state and local taxes and royalties.
When Texas produced half of the oil we are producing today, the oil and gas industry paid $9.3 billion in state and local taxes and royalties.
Even in years when oil and gas tax revenue doesn’t make history, it always makes a tremendous impact for Texas schools, public services and the crucial infrastructure our growing state needs.
The oil and gas industry supports fully 41 percent of the Texas economy. The industry creates an economic ripple effect, with every direct oil and gas job creating additional jobs in supporting industries.
Because the industry invests in goods like pipe and machinery, and services such as construction and engineering, the economic multiplier associated with oil and gas production is tremendous.
A typical job in petroleum refining, for example, drives another 26 jobs in other sectors across the Texas economy.
In 2014, the oil and natural gas industry directly employed 418,000 Texans, with indirect economic gains resulting in another 1.8 million Texas jobs in supporting industries and sectors.
Thus, more than 2.2 million Texans have a job that’s a result of oil and gas activity in our state.
The surge in oil and gas production in Texas is made possible by hydraulic fracturing or fracking, a 60-year-old technique that frees oil and natural gas trapped in tight shale rock formations.
Notably, as production has increased dramatically, methane emissions from oil and gas operations have decreased significantly, according to data from the U.S. Environmental Protection Agency.
What’s more, fracking has helped to revive the Texas manufacturing industry, and by 2025 it’s estimated that shale energy production will support 1 million manufacturing jobs in the U.S.
Fracking and drilling innovations have allowed us to produce our own natural resources, which bolsters our nation’s energy security, keeps energy prices down and clearly benefits all Texans.
That’s something everyone in our state can be proud of. Sensible and predictable regulation will help keep us on the right path toward prosperity that includes a safe environment and a healthy economy.