As the global economy moves through early 2025, Texas remains a pillar of energy progress.
The Texas Oil & Gas Association's (TXOGA) annual 2024 Energy & Economic Impact Report highlights the unparalleled contributions of the O&G industry over the past year. From record-breaking tax revenues and production, refining, transportation and exports to groundbreaking environmental achievements, Texas is at the forefront of energy leadership. However, escalating trade policies and the unprecedented strength of the U.S. dollar could temper this momentum.
Record-breaking contributions
The 2024 report shows a banner year, with the industry contributing $27.3 billion in state and local taxes and royalties — $1 billion over the prior record. These funds exceeded the total tax revenues of 34 states, equating to $74.8 million per day directly funding schools, universities, roads and first responders. Since 2007, the industry has generated over $257.6 billion for public services. With more than 492,000 Texans directly employed in O&G, earning an average salary of $128,255 — which is 76% higher than the private-sector average — the industry's impact extends beyond the oil patch. Including direct and indirect contributions, the industry supported $719 billion in activity, or 30.6% of Texas' private sector GDP, in fiscal year 2024. Natural gas production also set records six times last year, accounting for nearly 30% of U.S. marketed production.
Production and exports at new highs
Texas broke production and export records in 2024. Crude oil production rose to 5.9 mb/d in October — over 44% of U.S. production — with the Permian Basin leading growth. Advances in horizontal drilling and real-time analytics drove new-rig productivity up 21% year-over-year, enabling operators to optimize output while reducing costs. Texas led globally in refined petroleum product exports, averaging 4.5 mb/d, supported by its expanded 465,025-mile pipeline infrastructure — almost enough to reach the moon and back. These achievements position Texas as a critical energy supplier for domestic and global markets, with the EIA projecting global oil demand to reach 104.9 mb/d by 2026.
Environmental progress — A global benchmark
Even as production grows, Texas leads in environmental progress. Initiatives like the Texas Methane & Flaring Coalition and The Environmental Partnership have driven emissions reductions. Between 2015 and 2022, methane emissions in key production regions fell 42%, and in 2023 alone, Permian methane emissions dropped 26% — equal to the carbon savings of every U.S. electric vehicle. Flaring rates in Texas have fallen 60% since 2019, with operators working to eliminate routine flaring by 2030. Investments in CCS and asset electrification are driving further reductions, ensuring Texas remains a leader in sustainable energy production.
Prospective challenges
Despite this progress, looming challenges could hurt Texas' momentum. The U.S. dollar recently hit a multi-decade high, with the Federal Reserve's Broad Dollar Index up 8.0% year-over-year in early 2025. A strong dollar makes U.S. energy exports more expensive globally, reducing competitiveness. This is particularly concerning for Texas, which exported over $190 billion in energy products in the first 10 months of 2024. Discussions of proposed federal tariffs on BRICS nations (Brazil, Russia, India, China and South Africa) add further uncertainty. While intended to protect domestic industries and defend the dollar's reserve status, there is concern about how they could impact a state like Texas. As the U.S. energy leader, Texas' economy relies on international trade, particularly with Mexico, and supply chain disruptions could affect Texas' competitiveness in energy, plastics and chemicals.
A call for strategic policy
Texas must navigate these challenges carefully. Policies aimed at protecting domestic industries must also preserve the energy competitiveness that underpins Texas' economic resilience and global influence. Collaboration between policy-makers and industry is essential to ensure Texas thrives as the energy capital of the world. Looking ahead, the message is clear: Texas thrives when it leads. With unmatched productivity, environmental stewardship and innovation, the Lone Star State can continue to power progress — for Texas, the nation and the world.
For more information, visit txoga.org.
