Staples: Falling Oil Prices a Reminder that Revenue is Not Guaranteed – AAS

Appeared first in the Austin American-Statesman on Feb. 17, 2016

It is undoubtedly a tumultuous time in the global energy marketplace, and the Texas oil and natural gas industry continues to anchor our economy in terms of jobs, economic activity and state and local tax revenue — even in a challenging price environment.

For example, in fiscal year 2015, Texas’ oil and natural gas industry paid $13.8 billion in state and local taxes and state royalties — the second highest such collection from the oil and natural gas industry in Texas history.

In addition to state revenue, Texas independent school districts and counties benefit from property tax revenue from oil and natural gas producing properties. In fiscal year 2015, Texas public school districts received $1.9 billion in oil and natural gas mineral property taxes. Counties received $632 million in oil and natural gas mineral property taxes.

All Texans benefit from oil and natural gas tax and royalty revenue, whether they live in an energy-producing area or not.

Each year, oil and natural gas companies contribute billions of dollars in taxes and royalties that directly fund our roads, schools, first responders and essential public services. Every year. Not just during record-breaking years.

Using tax revenue from the oil and natural gas industry, Texas has been able to invest billions of dollars in infrastructure like water projects and our State Highway Fund, as well as local investments in school construction.

Texans see the effect of these investments every day.

Our Permanent School Fund, which supports Texas K-12 public schools, receives more than a half-billion dollars annually from oil and natural gas royalties and leases. That fund, worth $34.5 billion, is the second-largest education endowment in the nation.

The falling price of oil reminds us that this revenue isn’t guaranteed. In fact, in the current fiscal year, we’re seeing significantly less money available for state and local tax coffers.

Now is the time to stay the course with sensible and predictable regulations that are protecting the environment and encouraging investment in our state. When it is time to put money back to work in drilling and production, sound, science-based policy will ensure that those dollars and jobs come to Texas.

And there is good news. The oil and natural gas industry is comprised of 10 industry sectors including drilling, production, pipeline transportation and refining. Even with the downturn, several sectors of oil and natural gas industry remain steady and our nation’s dependence on imported petroleum is at a 30-year low.

In 2014, net imports of crude oil and petroleum products consumed in the United States fell to 27 percent, the lowest level since 1985.

Texas is indeed the nation’s No. 1 producer of oil and natural gas, but our No. 1 rankings don’t stop there. Texas also has the largest pipeline infrastructure in the nation, with more than 425,939 miles of pipeline

Thanks in large part to pipeline infrastructure, the U.S. has expanded its natural gas exports. In January, the U.S. Energy Information Administration predicted by the summer of 2017 the U.S. would be a net exporter of natural gas – which hasn’t happened since 1955

What’s more, Texas refineries account for 29 percent of total U.S. refining capacity with the nation’s two largest refineries located here. Texas ports are shipping LNG, crude oil and refined products all over the world and bringing those dollars to Texas.

All of these “best of” oil and natural gas accolades spell opportunity and jobs for Texans. Today’s market conditions remind us we can’t take the economic contribution of the Texas oil and natural gas industry for granted.

With sensible and predictable regulations in place in Texas, all 10 sectors of the oil and natural gas industry can continue to anchor our economy, protect our environment and provide for Texas families well into the future.

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