The Texas oil and natural gas industry is experiencing unprecedented growth, setting a new record of $27.3 billion in state and local taxes and state royalties during fiscal year 2024. This achievement, which marks an increase of nearly $1 billion from the previous year, underscores the industry’s pivotal role in Texas’ economy. As the Permian Basin leads the charge, the sector is poised to deliver even greater results in 2025.
Innovation and Policies Driving Success
Todd Staples, President of the Texas Oil & Gas Association, highlighted this remarkable performance in his annual energy and economic impact report. He emphasized that Texas’ success is rooted in strong policies, strategic partnerships, and resilience. “From tax revenues and production to pipelines, storage, refining, and exports, every facet of the oil and gas industry has shattered records,” Staples said. “This success is a testament to policies that view oil and gas as assets rather than liabilities and treat businesses as partners, not adversaries.” Staples noted that Texas is on track to surpass France as the world’s seventh-largest economy, a goal set by Governor Greg Abbott. The Permian Basin’s innovation and efficiency have been key drivers of this growth, with the U.S. Energy Information Administration reporting a 21% year-over-year increase in new production per rig as of October 2024.
Local Benefits: Education and Community Investment
The fiscal benefits extend deeply into local communities. The Pecos-Barstow-Toyah Independent School District received $304.4 million in oil and gas property taxes, topping the list for school districts, while Reeves County led counties with $110.1 million. These funds contribute to essential services, including public education, infrastructure, and first responders. In 2024, Texas school districts collected $2.92 billion from mineral properties, pipelines, and gas utilities, while counties received an additional $1.03 billion. A significant portion of these revenues’ bolsters Texas’ Permanent School Fund and Permanent University Fund, which received $1.5 billion and $1.9 billion respectively in royalties. These funds, now valued at $57.3 billion and $31.7 billion, are instrumental in securing the state’s educational future. Meanwhile, the state’s Rainy Day Fund has accumulated over $33.9 billion from oil and gas production taxes since its inception in 1987.
Environmental Stewardship and Future Vision
Despite global challenges and federal policy hurdles, the industry continues to lead in environmental stewardship. Initiatives like the Texas Methane & Flaring Coalition and The Environmental Partnership have significantly reduced emissions. Methane emissions in key production regions dropped 42% between 2015 and 2022, while the Permian Basin achieved a 26% reduction in 2023 compared to the previous year. Texas’ flaring rate has declined by 60% since 2019, with operators aiming to eliminate routine flaring by 2030. Staples underscored the broader economic impact of these achievements. “The industry’s daily contribution of $74.8 million supports schools, roads, and first responders across the state. This is more than the total annual tax revenues of 34 U.S. states.” As Texas continues to drive national and global energy markets, its commitment to innovation, economic growth, and environmental progress ensures a prosperous future for the Lone Star State.
