Oil and gas impact on Texas economy is extraordinary

Riding high oil and natural gas prices not seen in at least eight years, oil and gas producers in Texas enjoyed a banner year in 2022 and in return contributed records not only to the state treasury but to the region and schools.

“I continue to be amazed at the role that oil and natural gas play in our economy and the state,” said Todd Staples, president of the Texas Oil and Gas Association in discussing the annual Energy and Economic Impact Report.

Some of the takeaways from the report:

  • The Texas oil and natural gas industry paid $24.7 billion in state and local taxes and federal taxes in Fiscal Year 2022, breaking the previous record of just over $16 billion paid in 2019 by 54%.
  • This $24.7 billion translates to about $67 million every day that supports public schools, universities, roads, first responders and other services.
  • Permian Basin schools and counties benefited the most from the revenue paid by the state’s oil and gas industry, with counties receiving $320.4 million in property taxes and school districts receiving $867.2 million. Reeves County led the state with $44.9 million, 58.4% of its tax base. Midland County was second with $31.9 million, 30.3% of its tax base. Midland Independent School District led the state with $113.3 million, 32.2% of its tax base, followed by Pecos-Barstow-Toyah with $108.8 million, 65.1% of its tax base. Grady ISD had the highest percentage of the tax base for oil and gas property taxes at 92.4%, receiving $36.7 million.
  • Oil and natural gas taxes exceeded $10 billion for the first time in Texas history, increasing by $5.8 billion or 116% while state revenue increased by $2.2 billion or 102%.
  • In FY 2022, the oil and gas industry employs 443,000 Texans earning an average of $115,300 each. For every direct oil and gas job, another 2.2 indirect jobs are created by direct labor. In total, 1.4 million Texans’ jobs were ultimately found in the state’s oil and gas industry.
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Staples emphasized that Texas and its oil and gas industry have a bright future, but that bright future is not guaranteed.

At the state level, he urged lawmakers now meeting in Austin to consider:

  • Economic development policies that make Texas competitive for major projects are necessary.
  • Create a framework for carbon capture and storage projects so Texas can be a leader in this emerging industry
  • Redesigning the state’s electricity market to keep the grid reliable and prices affordable for consumers while encouraging the construction of new transmission lines.
  • Adequately fund key regulatory agencies – the Railroad Commission, the Texas Commission on Environmental Quality and the TexNet seismic monitoring system.
  • Protect business from policies that stifle growth
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