PUBLISHED JANUARY 2024
TABLE OF CONTENTS 01
A Message from Todd Staples
02
Fueling the Economy
05
Fueling the Workforce
08
Fueling Public Education
10
Fueling Communities
12
Fueling the Rainy Day Fund
16
The Industry at a Glance
18
The Big Picture
A Message from Our President On behalf of the members of the Texas Oil & Gas Association, we are pleased to release our annual Energy & Economic Impact Report, which affirms that American energy leadership starts in Texas. 2023 was such a blockbuster year that Texas effectively rewrote its oil and natural gas record book. Throughout the year, the Texas oil and natural gas industry clocked unmatched economic and energy achievements that translate into greater economic stability, personal safety, and energy security for our state, our nation, and our allies. On the economic front, the Texas oil and natural gas industry paid a record $26.3 billion in state and local taxes and state royalties – the highest total in history – breaking last year’s record by more than $1.5 billion. This translates to an astonishing $72 million a day that directly funds our public schools, universities, roads, first responders and other essential services. These funds benefit every single Texan whether you live in the oil patch or not.
American energy leadership starts in Texas. The record-breaking performance of the Texas oil and natural gas industry amounts to more than phenomenal statistical achievements. The natural resources, fuels and essential products produced here are saving lives, shaping communities, growing economies, and restoring stability. With so much uncertainty in the world, the need for reliable, responsibly produced energy from a stable trading partner has never been more crucial. Texas is that trade partner. Our producers, pipelines, refineries, service companies, LNG facilities, and exporters are answering the call to alleviate a global energy crisis, made worse by war. Growth like we’ve seen in Texas is not only unprecedented, it is not guaranteed. We cannot take for granted that this industry can continue to rewrite its record book in the face of policies blatantly designed to undermine progress. At every level, we need policies that bolster America’s energy leadership and encourage increased domestic investment in the energy production and infrastructure an ever-growing world needs to build a cleaner, stronger, better future.
Todd Staples President Texas Oil & Gas Association
A Message from Todd Staples | 1
In FY 2023, the Texas oil and natural gas industry paid state and local taxes and state royalties totaling
$26.3 billion This number equates to more than $72 million each day. Royalties to state funds** $3.728 billion Property taxes $6.750 billion
Oil/gas well servicing** $0.194 billion
Production of natural gas** $3.350 billion
Sales, state and local taxes* $5.379 billion
Production of oil** $5.931 billion State franchise and other taxes* $0.949 billion
* Estimated, Tax & Fiscal Consulting, Austin ** Source: Texas Comptroller
2 | Energy & Economic Impact Report 2023
Since 2007, when TXOGA first started compiling this data, the Texas oil and natural gas industry has paid more than $230.3 billion in state and local taxes and state royalties. $30 billion $25 billion $20 billion $15 billion $10 billion $5 billion
20 0 20 7 0 20 8 09 20 10 20 1 20 1 1 20 2 1 20 3 1 20 4 1 20 5 1 20 6 1 20 7 1 20 8 1 20 9 20 20 2 20 1 2 20 2 23
$0 billion
When direct and indirect impacts are considered, the Texas oil and natural gas industry supported
$751 billion (34.5%)
of total private sector Texas GSP in calendar year 2022 alone, the latest year for which this data is available. Fueling the Economy | 3
In 2023, Texas rewrote the oil and natural gas record book This type of unmatched, repeat economic performance does not happen by accident. Success is the result of non-stop industry innovation, investment and operational efficiencies that shattered a string of oil and natural gas production, supply, refining and export records last year – all while achieving world-leading environmental progress. Texas hit production records in six of 12 months in 2023, producing as much as 5.6 million barrels per day of crude oil in October 2023 – more than 42% of the nation’s total and the highest monthly oil production total ever. New record-highs in natural gas marketed production occurred in seven of 12 months in 2023, and in October eclipsed 1.0 trillion cubic feet in a single month for the first time ever, accounting for nearly 30% of U.S. production. Texas refineries processed a record 5.6 million barrels of crude oil per day in July 2023. And as Texas produced and exported record amounts of natural gas liquids (NGLs) in 2023, refineries also utilized record amounts of NGLs. Texas also broke records for crude oil supply and crude oil and condensate exports. This past year’s achievements define Texas oil and natural gas’ impact in ways never conceived just a few years ago, thanks to this industry’s commitment to innovation and technology and the famed Texas wildcatting spirit that continues to thrive in this new era.
5.6
3.6
mb/d
October: Crude Oil Production
34
5.6
bcf/d
October: Natural Gas Marketed Production
bcf/d
October: Natural Gas Exports
4 | Energy & Economic Impact Report 2023
mb/d
March: Crude Oil Supply
2.4
mb/d
July: Crude Oil Processing
19.3 Sources: EIA and USITC
9.2
mb/d
October: NGL Production
mb/d
November: NGL exports
4.1
mb/d
March: Crude and Condensate Exports
FUELING THE WORKFORCE Texas oil and natural gas industry jobs continue to be good for Texas as well as for the families and communities these jobs support. Direct oil and natural gas employment plus the industry's spending on expenses such as capital goods, electricity, construction, services and supplies generate more than 1.4 million jobs. Fueling the Workforce | 5
In FY 2023, the Texas oil and natural gas industry employed
480,176 texans
Texas oil and natural gas employees by sector Support activities for oil and gas operations
108,682
Gasoline stations with convenience stores
82,355
Crude petroleum extraction
48,505
Oil and gas pipeline and related structures construction
45,736
Oil and gas field machinery and equipment
30,625
Drilling oil and gas wells
25,681
Petroleum merchant wholesalers
20,566
Pipeline transportation
20,210
Petrochemical manufacturing
17,302
Petroleum refineries
16,774
Other gasoline stations
13,268
Natural gas extraction
11,994
Plastics material and resin manufacturing
11,068
Natural gas distribution
8,684
All other basic organic chemical manufacturing
8,626
Industrial sand mining
3,018
Fuel dealers
2,994
Asphalt paving, roofing, and saturated materials manufacturing
2,705
Fertilizer manufacturing
998
Petroleum lubricating oil and grease manufacturing
448
Total
6 | Energy & Economic Impact Report 2023
480,176
Every direct job in the Texas oil and natural gas industry creates an additional two Texas jobs.
$124,158 Texas oil and natural gas employees
$70,738 Other Texas private sector employees
Texas oil and natural gas employers paid an average of $124,158 per job in 2023. Other private sectors averaged $70,738, roughly 43 percent less than what oil and natural gas companies paid their employees. On a per-employee basis, the Texas oil and natural gas industry paid $55,000 in state and local taxes and state royalties in 2023. This is almost 9 times higher than the other private sectors, which paid an average of just over $6,200 on a peremployee basis.
Per-job contributions matter because most state and local spending needs are driven by the size of the population. In a system that relies so heavily on business to pay the cost of government, it is clear that the oil and natural gas industry more than pays its share in Texas.
Fueling the Workforce | 7
FUELING PUBLIC EDUCATION The Texas oil and natural gas industry plays a significant role in funding public education in the state. Through a variety of taxes and royalties, the industry helps to provide much-needed funding for schools, teachers, and students. This support serves as an important example of industry's contributions to the next generation of Texas leaders.
8 | Energy & Economic Impact Report 2023
Oil and natural gas royalties to state funds, particularly the Permanent University Fund and Permanent School Fund, widely support Texas public education. In FY 2023, each fund received over
$1.8 billion the second highest on record and more than double the amounts from FY 2021. In fact, 99% of the state’s oil and natural gas royalties were deposited into these funds. Additionally, independent school districts in Texas received oil and natural gas property taxes totaling
$2.81 billion Top 10 ISDs for oil and natural gas property taxes* Pecos-Barstow-Toyah
$275.2 million
Midland
$205.0 million
Wink-Loving
$196.7 million
Rankin
$129.6 million
United
$83.7 million
Grady
$77.8 million
Carrizo Springs
$74.2 million
Reagan County
$72.8 million
Culberson County-Allamore
$68.4 million
Cotulla
$66.0 million
*Note: "Oil and natural gas" means mineral properties producing oil and natural gas, pipelines, and gas utilities. It does not include refineries, petrochemicals, or other properties. To to view all oil and natural gas property taxes paid to Texas independent school districts visit TXOGA.org/2023eeir. Fueling Public Education | 9
FUELING COMMUNITIES Counties across the Lone Star State receive millions of dollars in property taxes paid by the Texas oil and natural gas industry. This funding supports local communities and empowers them to address local needs and issues.
10 | Energy & Economic Impact Report 2023
In FY 2023, Texas counties received oil and natural gas property taxes totaling over
$885 million Top 10 counties for oil and natural gas property taxes* Reeves
$98.9 million
58.4% of tax base
Loving
$48.5 million
30.3% of tax base
Martin
$39.0 million
57.4% of tax base
Midland
$34.6 million
83.6% of tax base
Webb
$33.3 million
63.7% of tax base
Ward
$32.5 million
83.9% of tax base
LaSalle
$29.5 million
13.9 % of tax base
Upton
$26.0 million
74.3% of tax base
Pecos
$22.4 million
36.0% of tax base
Andrews
$21.4 million
51.6% of tax base
*Note: "Oil and natural gas" means mineral properties producing oil and natural gas, pipelines, and gas utilities. It does not include refineries, petrochemicals, or other properties. To view all oil and natural gas property taxes paid to Texas counties visit TXOGA.org/2023eeir.
Fueling Communities | 11
FUELING THE RAINY DAY FUND Texans know that the oil and natural gas industry anchors our economy and directly funds our roads, schools, emergency services and our Rainy Day Fund. This support is critical for our state, and ensures funding for our state and local governments. 12 | Energy & Economic Impact Report 2023
The Texas oil and natural gas industry is the primary funding source for the Economic Stabilization (“Rainy Day”) Fund, or ESF, contributing more than
$31.2 billion since the Fund’s inception in 1987. This amounts to 82 percent of the ESF revenue over time. Out of FY 2023’s production taxes paid, the ESF and the State Highway Fund (SHF) each received
$3.3 billion Legislators have appropriated funds from the ESF 114 times, the first of which was to fund public education in Texas. The sum of all appropriations totals
$18.2 billion Without the direct funding from taxes paid by the Texas oil and natural gas industry, support for retired teachers, disaster recovery, healthcare services, and numerous other priority items would not have received the substantial dollars allocated to meet essential needs.
Fueling the Rainy Day Fund | 13
ESF categories funded by Texas oil and natural gas Public Education
$4.59 billion
General Revenue Fund, Economic Development, and Transportation Needs
$3.72 billion
Health, Protective Services
$2.50 billion
Water Planning and Infrastructure
$2.15 billion
Disaster Recovery
$2.10 billion
Teacher Retirement System
$1.66 billion
DPS, TDCJ, Military and Other Agency Funding
$1.19 billion
Higher Education
$0.29 billion
TOTAL ESF APPROPRIATIONS
$18.2 billion
14 | Energy & Economic Impact Report 2023
ESF categories funded by Texas oil and natural gas General Revenue Fund, Economic Development, and Transportation Needs
Disaster Recovery DPS, TDCJ, Military & Other Agency Funding Health, Protective Services
Public Education
Teacher Retirement System Higher Education Water Planning & Infrastructure
The oil and natural gas industry is important to Texas' economy and Texas families. Elected officials should support policies that encourage growth in the oil and natural gas industry and provide greater energy and economic security. Fueling the Rainy Day Fund | 15
the industry Texas oil and natural gas fuel modern life as we know it. Beyond the hundreds of thousands of jobs the industry creates and billions in taxes it pays, oil and natural gas improve the economic and social progress of communities here and around the world.
96% of products we use every day like pharmaceuticals, electronics, cosmetics and clothing are all made from oil and natural gas.
There is no substitute for oil and natural gas for the products, fuels, and electricity that power modern life.
16 | Energy & Economic Impact Report 2023
at a glance Crude oil production rank if Texas were a country
43% crude oil 28% natural gas of total U.S. production
1
United States
2
Russia
3
Saudi Arabia
4
Texas
5
Canada
6
Iraq
7
China
8
Brazil
9
United Arab Emirates
10
Iran
Top 5 oil producing states 489,657 miles of Texas pipelines
34% of U.S. refining capacity
1
Texas
2
New Mexico
3
North Dakota
4
Colorado
5
Oklahoma
2023 Oil and natural gas production in the U.S. and Texas U.S. Crude Oil Production
12.6 mb/d
U.S. Natural Gas Marketed Production
113 bcf/d
Texas Crude Oil Production
5.5 mb/d
Texas Natural Gas Marketed Production
31.8 bcf/d
Top 5 natural gas producing states 1
Texas
2
Pennsylvania
3
Louisiana
4
West Virginia
5
New Mexico
Note: Data reflects 2023 calendar year averages Sources: EIA, TXRRC, and TXOGA The Industry at a Glance | 17
THE BIG PICTURE The United States is not only the world’s number one producer of oil and natural gas – led by Texas – we also lead the world in emission reductions and environmental progress. No one produces, transports, and refines oil and natural gas with the same commitment to safety and protecting the environment as American companies. Yet, policies coming out of Washington continue to throw roadblocks in the way of world-leading environmental efforts and unmatched responsibility in oil and natural gas development. Delayed permits, canceled pipeline projects, closed or delayed federal leases, slowplaying state primacy for permitting carbon storage wells, and incoherent, inconsistent regulations discourage robust investments in energy and the environment. Such ill-conceived policies hurt American consumers and stifle our ability to deliver energy freedom and security around the world. Even as the #1 oil and natural gas state in the world’s leading energy nation, Texas has some challenges to address if we want to maintain our position as a global energy leader.
18 | Energy & Economic Impact Report 2023
Producers in the Permian Basin need infrastructure and more power generation as they electrify their operations. No other major industry must rely on generators for their electricity needs and neither should some of the most prolific oil producers in the world. A growing Texas needs more pipelines and a cost-effective electrical power generation market that puts consumers’ needs first and incentivizes dispatchable power. We must prioritize transparency and accountability as the foundation of our electrical grid to continue attracting jobs and investment here. Finally, we need policy that allows Texas to lead the emerging carbon capture and storage industry. Manufacturers of all kinds, including Texas oil and natural gas producers, pipelines and refiners, are working to lower their emissions profile and Texas must demonstrate a commitment to advance this emerging industry because it benefits landowners and enables Texas businesses to remain competitive. We know that policy can promote prosperity or hinder it. We look forward to working with our lawmakers to ensure that the American energy leadership that starts in Texas, stays in Texas.
The Big Picture | 19
www.TXOGA.org