Texas Oil and Natural Gas Industry Paid $13.8 Billion in Taxes and Royalties in 2015, Second Most in Texas History

Staples: ‘Falling price of oil reminds us that this state and local revenue isn’t guaranteed’

Texas’ commitment to free market principles and science-based, predictable regulations will help keep industry on track

AUSTIN – According to just-released data from the Texas Oil & Gas Association (TXOGA), the Texas oil and natural gas industry paid $13.8 billion in state and local taxes and state royalties in fiscal year 2015, the second highest such collection from the oil and natural gas industry in Texas history.

“In spite of global economic challenges, all Texans continue to benefit from tax and royalty revenue paid by the oil and natural gas industry,” said Todd Staples, president of TXOGA.  “State and local revenue from the oil and natural gas industry directly funds our schools, roads, first responders and essential public services,” he said.

“The oil and natural gas industry contributes more than a half billion dollars annually to the state’s Permanent School Fund, which supports Texas K-12 public schools. And, the state’s Rainy Day Fund is funded almost exclusively by oil and natural gas severance taxes,” he said.  The Texas Permanent School Fund, worth $34.5 billion, is the second largest education endowment in the United States.

Texas independent school districts (ISDs) received $1.9 billion in oil and natural gas mineral property tax revenue in fiscal year 2015. Counties received $632 million in oil and natural gas mineral property tax revenue.

“All Texans benefit from oil and natural gas tax revenue, whether they live in an energy-producing area or not,” said Staples, citing examples such as the state’s recent multi-billion dollar investments in water and transportation infrastructure projects, funded with oil and natural gas tax revenue.

“Yet the falling price of oil reminds us that this state and local revenue isn’t guaranteed.  Texas has fostered a robust oil and natural gas industry by embracing sensible and predictable regulations that are protecting the environment and encouraging investment in our state.  Staying the course with sound, science-based policy will ensure investment dollars and jobs continue to come to Texas,” he said.

Staples also shared good news coming from various sectors of the oil and natural gas industry, which includes exploration, production, pipeline transportation and refining.  “Even with the low price of oil and natural gas, several sectors of oil and natural gas industry are going strong. Texas is not only the nation’s #1 oil and natural gas producer, but Texas also has the largest pipeline infrastructure[1] in the nation,” he said.

“Thanks in large part to pipeline infrastructure, by mid-2017, the U.S. is expected to be a net exporter of natural gas for the first time since 1955.[2]  And Texas refineries account for 29% of total U.S. refining capacity[3] with the nation’s two largest refineries[4] located here,” he said.

Staples noted that Texas petrochemical manufacturers are creating jobs and expanding thanks to the low price of natural gas – the raw material used to make products like plastics and chemicals.  “Every facet of the oil and natural gas industry has a significant presence here, and that benefits all Texans,” he said.

No matter the price of oil, Staples said, “Texas is doing the right thing by letting free markets work and by continuing to embrace science-based, predictable regulations. Now is the time to stay the course to be well-positioned to get Texans back to work and attract investment as oil market conditions improve.”

TAXES AND ROYALTIES PAID BY OIL AND NATURAL GAS INDUSTRY (FY 2015) Amount in Millions
Property * $                           4,826
Sales, state and local *                              2,499
State franchise tax *                                 413
Production of oil **                              2,879
Production of natural gas **                              1,280
Oil and gas well servicing **                                 128
Other taxes *                                 337
Total Taxes * $                         12,363
Royalties to State Funds**                              1,480
Total Paid $                         13,842

* Estimated, Tax & Fiscal Consulting, Austin
** Source: Texas Comptroller’s Office

Top 5 ISDs (O&G Prop. Tax)***
Karnes City ISD – $66.5 million
(88% of tax base)
Andrews ISD – $62.6 million
(79.3% of tax base)
Cotulla ISD – $61.7 million
(76.6% of tax base)
Carrizo Springs ISD – $60.3 million
(79.2% of tax base)
Ector County ISD – $56 million
(33.6% of tax base)

Top 5 Counties (O&G Prop. Tax)***
DeWitt County – $26.8 million
(79.4% of tax base)
LaSalle County – $24.5 million
(78.9% of tax base)
Webb County – $23.7 million
(30.9% of tax base)
Ward County – $20.8 million
(76.5% of tax base)
Karnes County – $20.7 million
(83% of tax base)

*** “Oil & Gas” means mineral properties producing oil an gas. It does not include pipelines, refineries, etc. Fiscal year 2015 covers those taxes imposed during 2014; property taxes are legally due by January 31 of the following year. Source of data is “self -report” information from school districts provided to the Texas Comptroller’s office.

 

+++

[1] Railroad Commission of Texas, http://www.rrc.state.tx.us/pipeline-safety/

[2] U.S. Energy Information Administration, https://www.eia.gov/todayinenergy/detail.cfm?id=24672

[3] U.S. Energy Information Administration, http://www.eia.gov/state/?sid=TX

[4] U.S Energy Information Administration, http://www.eia.gov/energyexplained/index.cfm?page=oil_refining#tab4