Staples: It’s been a record-breaking year for Texas’ oil and natural gas industry

Texas Oil and Natural Gas Industry paid a record-breaking $27.3 billion in state and local taxes and state royalties during FY 2024

Staples: Texas’ oil and natural gas industry has achieved a record-breaking performance across every sector

The Texas oil and natural gas industry paid $27.3 billion in state and local taxes and state royalties in fiscal year (FY) 2024–the highest total in Texas history–shattering last year’s record by almost a billion dollars, according to data released in early January by the Texas Oil & Gas Association (TXOGA).

Todd Staples, TXOGA President shared the Association’s annual Energy & Economic Impact Report and provided an update on the industry’s global energy leadership, environmental progress, and its policy priorities for the 89th Texas Legislature.

Staples said 2024 surpassed expectations.

“Remarkably, 2024 was yet another record-breaking year as the Texas oil and natural gas industry does its part to help reach Governor Abbott’s goal for our state’s economy to surpass France as the 7th largest economy in the world,” Staples said. “From tax revenues and production to pipelines, storage, processing, refining, and exports, Texas’ oil and natural gas industry has achieved record-breaking performance across every sector.”

He added that this success is shared by every Texan.

“The oil and natural gas industry’s success in delivering for the Lone Star State–a success shared by every Texan–is the direct result of policy, partnerships and perseverance,” Staples said. “Texas leaders embrace policies that recognize oil and natural gas as an asset, not a liability. They view businesses as a partner, not an adversary. For its part, the industry has persevered through hostile federal policies of the outgoing Administration, global unrest and market volatility–including negative prices for natural gas–to shatter its own records, all while protecting and improving the environment.” 

Texas State Governor Greg Abbott said Texans know the importance of the oil and gas industry in Texas.

“The men and women of the oil and gas industry are the lifeblood of Texas’ booming economy. Texas has been a champion of oil and gas since the oil boom—supplying the world with the energy needed to fuel homes and businesses, spur economies, and power innovation,” Abbott said. “TXOGA’s report highlights the strength and vitality of Texas’ oil and gas sector that continues to shatter economic records. As we look towards the future, Texas will continue to protect this critical industry and the hundreds of thousands of good-paying jobs it creates for Texans across our great state.”

Staples noted that $27.3 billion in state and local tax revenue and state royalties from the Texas oil and natural gas industry translates to an extraordinary $74.8 million every day that pays for Texas’ public schools, universities, roads, first responders and other essential services. He added that $27.3 billion is greater than 34 states’ entire tax revenues.

Public education received a major infusion of funds from oil and natural gas royalties in FY 2024 where 99% of the funds went into the Permanent School Fund and the Permanent University Fund with them receiving $1.5 billion and $1.9 billion, respectively. The Texas Permanent School Fund is larger than Harvard’s endowment and is the largest education endowment in the nation. The oil and natural gas industry is the only significant contributor of fresh investment capital to these critical Texas education funds.

Texas’ Rainy Day Fund, or Economic Stabilization Fund, has received over $33.9 billion dollars from oil and natural gas production taxes since its inception in 1987.

Texas Land Commissioner Dawn Buckingham said this was positive news.

“As Land Commissioner and the steward of 13 million acres of state land, I am proud to help lead the way in funding public education in Texas. This year, the Texas General Land Office deposited more than one billion dollars in oil and natural gas revenues into the Permanent School Fund,” she said. “Every cent of this critical support for Texas schoolchildren was made possible by our state’s fierce commitment to defending the oil and gas industry from potentially disastrous federal policies and over-stepping. I will continue to fight and advocate for our schoolchildren while protecting the interests of Texas families, businesses and the prosperity of our great State of Texas.”

In FY 2024, Texas school districts received $2.92 billion dollars in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties received an additional $1.03 billion dollars in these property taxes. 

Since 2007, when TXOGA first started compiling this data, the Texas oil and natural gas industry has paid more than $257.6 billion in state and local taxes and state royalties, a figure that does not include the hundreds of billions of dollars in payroll for some of the highest paying jobs in the state, taxes paid on office buildings and personal property, and the enormous economic ripple effect that benefits other sectors of the economy.

In 2024, the industry employed more than 492,000 Texans who earned an average of $128,255 a year–76% more than the average paid by the rest of Texas’ private sector. Conservatively, these jobs generate approximately two more jobs, with nearly 1.4 million total jobs supported across the Texas economy. Some economic analyses suggest that when all indirect and induced jobs are considered, the employment multiplier for the oil and natural gas industry could approach three additional jobs per direct job, bringing the total to over 2 million jobs supported by the industry across Texas.

“The Texas oil and natural gas industry’s unmatched, repeat economic performance and its associated impact do not happen by accident,” Staples said. “Non-stop industry innovation, investment and operational efficiencies shattered another string of records in 2024.”

Texas crude oil production set new records in six of the past 12 months, producing as much as 5.86 million barrels per day of crude oil in October 2024–the highest total ever–and 44% of the nation’s total. 

Most of that growth is coming out of the Permian Basin, where innovation and efficiency are driving record production. EIA estimates that new production per rig-month increased by 21% year-over-year as of October 2024.

New record-highs in natural gas marketed production occurred in six of the past 12 months, accounting for nearly 30% of U.S. production. Production exceeded last year’s record-breaking single-month high of 1.0 trillion cubic feet six times in 2024. 

Texas also broke records for in-state crude oil supply, crude oil and condensate exports, and multiple refining outcomes. To transport these record oil and natural gas flows, Texas pipeline infrastructure expanded to 465,025 miles–up 13,000 miles from 2022-2023, according to the Railroad Commission.

“Texas-produced oil and natural gas, robust pipeline networks, export infrastructure and world-class refining reduce our dependence on other nations and help to keep prices down and our supply stable at home,” Staples added.

Staples said the United States is not only the world’s number one producer of oil and natural gas–with Texas at the front–but the nation also leads the world in emissions reductions.

“No one produces, transports, and refines oil and natural gas with the same commitment to safety and protecting the environment as American operators,” he said. “Industry-led initiatives like the Texas Methane & Flaring Coalition and The Environmental Partnership are dramatically reducing flaring and emissions and achieving environmental gains unseen anywhere else in the world.” 

Between 2015 and 2022, methane emissions dropped 42% in key production regions across the U.S., according to the EPA. According to a new analysis from S&P Global Commodity Insights, methane emissions from oil and natural gas production operations in the Permian Basin in 2023 decreased 26% from the previous year, equal to the total amount of carbon emissions avoided by every electric vehicle on the road in the U.S. that year. 

In Texas, the flaring rate has dropped by 60% since June 2019 with a flaring rate of less than 0.94% in August, meaning more than 99% of natural gas produced in Texas was being beneficially used. Operators are working to eliminate routine flaring entirely by 2030, with many companies ahead of schedule. 

Staples said investments in electrification of assets and carbon capture and storage opportunities will further reduce and manage emissions across the Lone Star State.

“Thanks to abundant natural resources, generational know-how and bold leadership, the Texas oil and natural gas industry plays a pivotal role in providing economic and energy security for our nation and stability for our allies around the globe,” he said. “We can never take that for granted. Policy, crafted in partnership with our state’s leaders, is key to continued success in Texas because we know policy can promote prosperity or hinder it.” 

Texas Railroad Commission Chairman Christi Craddick said the oil and gas industry is key to the economy.

“The oil and gas industry in Texas has once again proven its critical role in keeping our economy thriving with its record-setting contribution in state and local taxes this past fiscal year,” Craddick said. “I appreciate TXOGA’s efforts to highlight the immense impact this industry continues to make, and the major benefits it provides to Texas families and their communities.”

With an eye toward the 89th Texas Legislature that began on January 14, Staples outlined the following policy priorities for the session: 

·       Infrastructure: “To maintain our energy leadership in Texas, we need more infrastructure of all kinds–broadband, roads, pipelines, processing plants, LNG facilities, carbon capture and storage facilities–to send a signal that Texas is indeed open for business.”

·       Water: “We need to build upon the industry’s initiative and innovation in water recycling and reuse, with science-based, consensus-built policies and regulations related to produced water, more testing of technologies’ scalability and more infrastructure to safely move produced water.” 

·       Electricity: “We are eager to see the positive impact of the voter-approved Texas Energy Fund and the Permian Basin Reliability Plan–bold initiatives designed to fortify the electricity grid, encourage investment in new dispatchable generation, and build transmission where Texans need it most.”  

·       Taxes: “Like all Texans, the oil and natural gas industry recognizes the impact of rising property values, and the taxes levied on them, and we support Texas’ lawmakers and state leadership in their efforts to drive down property taxes for everyone. Broad-based relief is the most effective and beneficial to the economy.”

Staples said he was looking forward to working with lawmakers to “advance policy that promotes continued prosperity, security and progress for every Texan.”

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