With 100-plus years of oil and natural gas history in Texas, it may be tempting to take for granted all that is possible because we are the nation’s #1 state for oil and natural gas production, pipeline miles and refining capacity.
Those accolades translate into jobs, state and local tax revenue and financial security for our state. On top of economic impact, oil and natural gas keep Texans safe and secure in their homes and in their lives.
In difficult times, we are reminded that state and local tax revenue paid by the oil and natural gas industry is not guaranteed. Yet, even in a down market, the Texas oil and natural gas industry paid a hefty $9.4 billion in state and local taxes and state royalties in fiscal year 2016. That’s nearly 6 times more in state and local taxes and state royalties on a per employee basis than other business sectors.
Put another way, the Texas oil and natural gas industry contributed an average of $26 million a day to state and local revenue last year. This revenue is used to directly fund our schools, universities, roads and first responders. Every year. Not just during record-breaking years.
Since 2007, the oil and natural gas industry has paid $108 billion in state and local property taxes and state royalties – a figure that would finance the current annual state budgets for the University of Texas-Austin and Texas A&M University, combined, for well over 100 years.
The State’s Rainy Day Fund, with a current balance north of $10.1 billion, is funded almost exclusively by oil and natural gas severance taxes. Over the past five years, the oil and natural gas industry has contributed more than $8.3 billion to the Rainy Day Fund, providing a level of financial security that most states do not enjoy.
Local entities benefit from oil and natural gas tax revenue as well. In fiscal year 2016, Texas school districts received $1.7 billion in property taxes from mineral properties producing oil and gas, pipelines and gas utilities. Counties received $529.8 million in oil and natural gas mineral property taxes.
All of this is to say, oil and natural gas contributes mightily to Texas in good times and lean times. And fortunately, we are seeing signs of recovery as prices stabilize and activity returns to oil and natural gas fields. After years of contraction, new oil and natural gas jobs returned every month between September and December 2016, with 4,700 Texans back at work.
Beyond the dollars, cents and direct jobs, oil and natural gas enrich our lives and keep us safe every day.
Because of abundant natural gas, we have access to clean, affordable and reliable power. According to the International Energy Agency, an estimated 1.2 billion people worldwide do not have access to electricity – the very foundation of personal safety and wellbeing.
Here, natural gas keeps energy local and affordable for Texas families. In 2015, the average American family enjoyed more than$1,300 in energy-related savings.
Not everyone in America is enjoying inexpensive electricity because some don’t have adequate access to pipeline infrastructure, the safest way to deliver oil and natural gas. People in New England, for example, pay the highest electricity rates in the continental U.S. During the winters of 2014 and 2015, residents there paid about $7 billion more than neighboring regions for electricity.
Given energy’s central role in basic health and safety, it’s clear that those who advocate for restricted access to reliable power or energy infrastructure are not advocates for the people. In fact, anti-oil and natural gas activists’ efforts put people at risk, threaten jobs and pinch family budgets.
Fortunately, we don’t live in an “either or” world. We can produce more energy, grow our economy and continue to improve the environment. Efficiency is up, emissions are down and innovations continue and America is less dependent on other countries for our energy needs.
What Texas needs now, as we ease out of this dramatic downturn, is for our lawmakers to look closely at what makes Texas a good place to do business. Specifically, we hope lawmakers maintain their commitment to science-based regulations, reauthorize the Railroad Commission of Texas, properly fund the Railroad Commission and Texas Commission on Environmental Quality, preserve a low tax environment and encourage the critical infrastructure development our growing state needs. All Texans benefit when our lawmakers embrace smart policy that allows the oil and natural gas industry to provide for Texas, securing our economy, our environment and our future.