Texas’ oil and natural gas industry paid $13.9 billion in taxes and state royalties in Fiscal Year 2020, the Texas Oil and Gas Association (TXOGA) reported Monday.
The fiscal 2020 figure represents a nearly 15-percent decrease year-on-year in industry-generated funds that support Texas schools, teachers, roads, infrastructure and various services. By comparison, TXOGA reported last January that the industry paid a record-setting $16.3 billion in taxes and royalties in 2019.
“Even in an extremely difficult year, the Texas oil and natural gas industry continues 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,” remarked TXOGA President Todd Staples in a written statement emailed to Rigzone. “The ongoing recovery of the oil and natural gas industry is essential to the state’s continuing economic improvement.”
Staples also pointed out the COVID-19 pandemic has underscored the irreplaceability of oil and gas.
“While oil prices plummeted in the wake of the pandemic, the need for products made from oil and natural gas skyrocketed,” he continued. “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.”
TXOGA noted that public education – via the state’s Permanent School Fund (PSF) and Permanent University Fund (PUF) – received 99 percent of Texas’ oil and gas royalties in 2020. The PSF and PUF received $942 million and $771 million, respectively, the organization added. Moreover, TXOGA stated that local school districts garnered more than $2 billion last year from property taxes from mineral properties producing oil and natural gas, pipelines and gas utilities.
Additionally, TXOGA pointed out that Texas counties collected $688.4 million from oil and gas property taxes last year and the state’s Economic Stabilization Fund – also known as the “Rainy Day Fund” – received $1.657 billion from taxes on the industry.
Staples also called on the 87th Texas Legislature, which convened Tuesday, to embrace TXOGA’s three-part “Roadmap to Recovery” that he said will drive greater oil and gas industry investment, support the state’s economic recovery and provide state and local tax revenues. The plan urges lawmakers:
- to “ensure continued, responsible development” of essential energy infrastructure to meet growing population demands
- to renew the “Chapter 313” economic development program and resist calls to raise severance taxes on the oil and gas industry
- to remain committed to “science-based policy and rational discussions” tied to environmental issues, also involving “leading oil and natural gas innovators” in such matters.
“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,” Staples concluded.