The Texas oil and natural gas industry contributed to state and local tax coffers in the fiscal year 2020, Todd Staples, president, Texas Oil and Gas Association stated. This revenue from oil and natural gas production, pipelines, refineries and LNG facilities translates into about $38 million each day to fund schools, universities, roads, first responders and essential services.
A summary of the 2020 economic impact of this industry and what it means for Texas state, schools, roads, and more are listed in the provided link.
“Even in an extremely difficult year, the Texas oil and natural gas industry continue to contribute tremendously to state and local tax coffers, while fortifying our energy security and leading the way in innovation and investment that is advancing environmental progress,” said Staples. “The ongoing recovery of the oil and natural gas industry is essential to the state’s continuing economic improvement.”
Staples noted that the pandemic reinforced the fact that oil and natural gas are essential and irreplaceable.
“While oil prices plummeted in the wake of the pandemic, the need for products made from oil and natural gas skyrocketed. Nearly every in-demand product we need to be safe, to save lives, and to power our economy – from face shields and hand sanitizers to high-speed internet connections and computers – is made possible by oil and natural gas,” he said.
Staples detailed how oil and natural gas tax and royalty revenue is used to support education, transportation, healthcare, and infrastructure through the Economic Stabilization Fund (commonly known as the Rainy Day Fund), the Permanent School Fund (PSF), and the Permanent University Fund (PUF) – all of which are funded almost exclusively with taxes and state royalties paid by the oil and natural gas industry.
In 2020, 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. The PUF received $771 million and the PSF received $942 million. The Rainy Day Fund received $1.657 billion from oil and natural gas taxes.
In 2020, Texas school districts received more than $2 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties received $688.4 million in these property taxes.
In closing, Staples detailed a three-part policy Roadmap to Recovery “to drive greater investment in all aspects of the oil and natural gas industry that will power Texas’ economic recovery and provide critical state and local tax revenue every Texan needs.”
First, TXOGA is urging lawmakers to ensure continued, responsible development of the essential energy infrastructure that is needed to meet the demands of our booming population. “Every Texan relies on electric transmission lines, roads, high-speed internet, drainage, and flood control and pipelines for water, oil, natural gas and transportation fuels, and the expansion of this infrastructure is essential to the state’s continued growth and success,” Staples said.
Staples said the Legislature should also embrace smart tax policy such as renewing the economic development program known as Chapter 313, which attracts investments and jobs to Texas, and resisting calls to increase severance taxes on an industry that pays 6.3 times more in taxes on a per-job basis than the average of the rest of the private sector.
Finally, TXOGA is urging lawmakers to maintain their commitment to science-based policy and rational discussions related to environmental issues, with the leading oil and natural gas innovators at the table.
“Smart policies will encourage investment in and innovation by the oil and natural gas industry and will power us toward the cleaner, stronger, and better future every Texan deserves,” he said.
