By March 2, 2015 Read More →

$15.7 billion paid by Texas oil and gas to state taxes, royalties

Surge in Texas oil and gas production made possible by hydraulic fracturing

$15.7 billion in state and local taxes and royalties was paid by the Texas oil and natural gas industry in 2014, according to the Texas Oil & Gas Association.

Texas oil

Todd Staples, president of the Texas Oil & Gas Association. Photo: Handout.

Todd Staples, president of Association, says the amount is a record for the state and double the total in 2010. New economic data shows the oil and gas industry supports 41 percent of the Texas economy, up from 33 percent the previous year.

“Taxes and royalties paid by the oil and gas industry directly fund our roads, schools, first responders, essential public services, and more. We are proud to see safe and responsible oil and gas production contributing so significantly to help the state meet the needs of Texans.”

In 2012 when daily oil production was a million barrels a day less than now, the oil and gas industry paid $12.1 billion in state and local taxes and royalties. And in 2009 when the price of oil was around $60, the industry paid $8.5 billion in taxes and royalties.

“Even in years when oil and gas tax revenue doesn’t make history, state and local tax revenue from the oil and gas
industry always makes a tremendous impact for the people of Texas,” said Staples.

The state’s Rainy Day Fund, funded almost exclusively by 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.

Texas oil

Christi Craddick, chairman of the Railroad Commission of Texas.

“This report proves the industry remains a strong and vibrant part of the Texas economy. Through effective regulation and responsible operation, we will continue to work together to create opportunities for Texans,” said Christi Craddick, chairman of the Railroad Commission of Texas.

Oil and gas royalties and leases also fund the Permanent School Fund, which supports Texas public schools. The Fund, worth $37.7 billion, recently became the largest education endowment in the nation.

The report also demonstrated how important the oil and gas sector is to the Texas economy, as measured by Gross State Product.

“The oil and gas industry creates an economic ripple effect, with every direct oil and gas job creating additional jobs in supporting industries,” said Staples. “Because the oil and gas 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, according to the Association.

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.

“This report makes clear how important responsible production of oil and gas is to every single Texan,” said RRC Commissioner Ryan Sitton. “The fact that the oil and gas industry supports 41 per cent of the Texas economy demonstrates how critical it is that the Railroad Commission makes sound, science-based decisions providing stability and predictability.”

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.

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