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Texas Oil And Gas Pulled In Nearly $16 Billion In Taxes And Royalties Last Year As The Industry Recovers From Pandemic Downturn

Oil rigs and a pump jack are shown in a rural area, Wednesday, July 29, 2020, in Midland, Texas.
Tony Gutierrez
/
AP Photo
Oil rigs and a pump jack are shown in a rural area, Wednesday, July 29, 2020, in Midland, Texas.

The Texas Oil and Gas Association’s annual energy and economic impact report says both taxes and royalties paid to the state went up by more than 20% over the previous fiscal year.

From Houston Public Media:

Texas’ oil and gas industry contributed $15.8 billion to the state’s economy in taxes and royalties, directly supported more than 420,000 jobs, and continued its work to reduce pollution in 2021, according to a new report from the Texas Oil & Gas Association.

But TXOGA President Todd Staples, who introduced the association’s annual energy and economic impact report on Tuesday, also argued that the progress the industry has made is "under assault by federal policies" — efforts from the Biden administration to curb climate change and reduce emissions from fossil fuel drilling.

"Squandering our nation's energy might through misguided policy is a disservice to every American and a step in the wrong direction on the environment," Staples said. "If the world is truly serious about climate progress, we need to be producing and exporting more natural gas – not less — to provide other nations with lower emissions-intensive energy resources."

Gas produces fewer emissions than coal or oil, but scientists say the majority of oil and gas reserves need to stay underground to keep global warming to 1.5 degrees Celsius.

Staples’ remarks follow a trend among some in the oil and gas industry who claim Biden’s efforts on environmental policy amount to an attack on the energy industry. The American Petroleum Institute, a national oil and gas trade group, made similar comments about the administration's efforts to pause drilling leases on federal land.

But that position isn’t supported by evidence, according to Ed Hirs, energy fellow at the University of Houston.

"The industry is really not being hindered by federal policies," Hirs said. "The oil and gas industry has benefited since President Biden took office by increasing prices in crude oil."

After hitting historic lows in 2020, the price of West Texas Crude oil has been trading above $70 per barrel in recent months, helping boost profits for Houston oil and gas companies. Hirs said those higher oil prices make up for the costs associated with lowering emissions.

"The goal is to clean up the environment," Hirs said. "Polling from the University of Houston Hobby School shows that more than 75% of Texans want to clean up the environment and reduce emissions – and that’s an absolute majority of Republicans and Democrats. So trading a couple of dollars of cost for the additional $10 or 20 a barrel of revenue seems like a pretty fair trade."