New Record: Oil and Gas Industry Paid $15.7 Billion in Taxes and Royalties to the State of Texas in 2014
The Texas oil and natural gas industry paid a record $15.7 billion in state and local taxes and royalties in 2014, the highest such collection from the oil and gas industry in Texas history, according to new economic data released by the Texas Oil & Gas Association (TXOGA) The oil and gas industry supports fully 41 percent of the Texas economy, up from 33 percent in the previous year.
“As production in Texas has skyrocketed, local taxes and royalties paid by the Texas oil and natural gas industry reached a record $15.7 billion in 2014, more than double the total in 2010,” said Todd Staples, president of TXOGA. “Taxes and royalties paid by the oil and gas industry directly fund our roads, schools, first responders, essential public services, and more. We are proud to see safe and responsible oil and gas production contributing so significantly to help the state meet the needs of Texans.”
The positive impact of oil and gas tax revenue takes many forms. The state’s Rainy Day Fund, funded almost exclusively by oil and gas severance taxes, has been used to support public schools, children’s health insurance, economic development initiatives, and more. Last year, voters approved a constitutional amendment to direct billions of dollars in oil and natural gas tax revenue toward Texas highways. Just before that, Texans approved using $2 billion from the Rainy Day Fund to fund the state’s water plan. Oil and gas royalties and leases also fund the Permanent School Fund, which supports Texas public schools. The Fund, worth $37.7 billion, recently became the largest education endowment in the nation.
In 2014, the oil and natural gas industry directly employed 418,000 Texans, 3 with indirect economic gains resulting in another 1.8 million Texas jobs in supporting industries and sectors.4 “More than 2.2 million Texans have a job that’s a result of oil and gas activity in our state,” said Staples.
The surge in oil and gas production in Texas is made possible by hydraulic fracturing or fracking, a 60-year old technique that frees oil and natural gas trapped in tight shale rock formations.