Economic benefits of the year’s high oil and natural gas prices – and rising oilfield activity – are being felt not just by the state’s oil and gas producers but by all Texans.
Texas Comptroller Glen Hegar reported Friday that oil production taxes and natural gas production taxes collected by the state during its fiscal year 2022 – which ended Aug. 31 – surpassed $10 billion for the first time in history. Combined, the two taxes totaled $10.83 billion, 88% than the previous high set in 2014.
Oil production taxes totaled $6.36 billion, up 84.4% from FY 2021 and $134 million higher than the revenue estimate. Natural gas production taxes totaled $4.47 billion, up 185% from the previous fiscal year and $9 million more than the revenue estimate.
In Hegar’s announcement of tax collections data for the fiscal year, his agency reported it will be depositing, within the next 90 days, $3.64 billion each in the Economic Stabilization Fund – commonly known as the rainy day fund – and the State Highway Fund. Both funds receive funding from oil and gas severance taxes. The upcoming deposit is more than the $1.46 billion deposited in each fund last November.
In a statement, Todd Staples, president of the Texas Oil & Gas Association, noted how the production taxes benefit all Texans.
“It truly is astounding to realize that a deposit of $3.64 billion will be made in both the Economic Stabilization Fund and State Highway Fund,” he said in the statement. “Highway improvement is fundamental to continued driver safety and economic growth. The ESF or rainy day fund has been used to fund both public and higher education needs, retired teachers and our state police, among many other essential services for Texans. It is good to know that oil and natural gas companies are using their recent success to fund more research and development, lower emissions technology, and add jobs for more Texans. We need to continue policies at both the state and federal level that unleash American energy leadership and ensure this production occurs here at home so that we do not become dependent on foreign countries for our basic energy needs.”
Railroad Commission Chairman Wayne Christian, in a statement, said, “The oil and gas industry paid around $11 billion in production taxes alone last year – not including its strong sales tax contributions – directly benefiting Texans and our livelihoods, while wind and solar cost about $4 billion a year to state ratepayers. Texas is blessed with a God-given abundance of oil and gas that reliably powers the world while also providing numerous monetary benefits to hardworking Texans.”
