Wed, Jan 12, 2022 7:46 AM
By Bethany Blankley | The Center Square contributor, The Center Square
(The Center Square) – The Texas oil and natural gas industry paid a record $15.8 billion in state and local taxes and state royalties in fiscal 2021, funds that directly support Texas schools, teachers, roads, infrastructure and a range of essential services.
The industry’s contribution of $15.8 billion is equivalent to over $43 million paid to the state in taxes every day.
The industry also paid 20% more in state royalties and production taxes compared to the previous fiscal year, and production taxes exceeded $5 billion for only the third time in Texas history.
The record contribution to the state is detailed in a newly released Annual Energy & Economic Impact report published by the Texas Oil and Gas Association.
“As our nation continues its rebound from the lingering impact of the pandemic, this data confirms reliable, affordable energy, fuels and products made by the oil and natural gas industry are central to continued economic and environmental progress,” TXOGA President Todd Staples said.
In fiscal 2021, 98% of the oil and natural gas royalty and tax revenue was directly deposited into three state funds: the Economic Stabilization Fund, or Rainy Day Fund, and the Permanent School Fund and Permanent University Fund, which support public education. All three funds are nearly exclusively financed by the industry’s tax and royalty revenue.
The industry paid $1.134 billion into the state’s Rainy Day Fund, $1.099 billion into the PSF and $979 million into the PUF in FY21.
Texas school districts and counties also received funding through property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. School districts received $1.84 billion; counties received $640 million.
Midland ISD received the most of all ISDs of $134.9 million; Reeves County received the most of all counties of $47.4 million.
More than $178.7 billion in state and local taxes and state royalties have been paid to the state since 2017, when the TXOGA began compiling the data. The direct contributions exclude the hundreds of billions of dollars the industry paid through payroll for some of the highest paying jobs in the state, as well as taxes paid on office buildings and personal property. They also exclude the economic impact the industry’s had on other sectors of the economy.
In fiscal 2021, the industry employed 422,122 Texans, who on average earned an annual salary of $109,000, nearly double the average pay of other private sector employees in the state. For every direct job in the industry, conservative estimates indicate an additional 2.2 indirect jobs are created.
The TXOGA estimates that at least 1.37 million jobs in Texas come from or through the industry.
The report also describes how Texas companies have positioned themselves as the global leader in energy and environmental progress.
“Methane emissions are down dramatically, even as oil and natural gas production increases,” Staples said. “Flaring rates in Texas are at record lows and Texas-produced LNG is an environmental game-changer for nations around the world.”
The statewide flaring rate in Texas fell to a record low of 0.2% last October, one of the lowest flaring rates for the largest oil and gas producing state in the country, the Railroad Commission of Texas reported.