Texas easing out of downturn, oil association leader says

Oil and gas

AUSTIN, Texas (AP) — Texas’ oil and natural gas industry added 4,700 new jobs between September and December last year and is starting to “ease out of the dramatic downturn.”

That’s the message from Texas Oil and Gas Association President Todd Staples, anyway.

On a conference call Tuesday, Staples said that, despite the downturn, his industry paid $9.4 billion in state and local taxes and royalties in fiscal year 2016.

The energy sector lost nearly 100,000 jobs statewide as oil prices crashed from 2014’s $110-plus per barrel peak to less than $30 last year. They’re improving, but Staples said projecting prices only up to $59 per barrel through fiscal year 2019 was “fairly realistic.”

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That likely means little relief for Texas Legislature budget writers already struggling with tighter coffers caused by plummeting oil prices.

“We can’t take for granted all that is possible because Texas is the nation’s #1 state for oil and natural gas production, pipeline miles and refining capacity. Those accolades translate into jobs, tax revenue, financial security and personal well-being for all Texans,” said Staples.

“Even in a down market during fiscal year 2016, the Texas oil and natural gas industry contributed an average of $26 million a day to state and local revenue. The oil and natural gas industry has paid $108 billion in state and local property taxes and state royalties since 2007– 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.”

Staples also noted the industry’s contributions to the state’s Rainy Day Fund, funded almost exclusively by oil and natural gas severance taxes. It has a current balance of more than $10.1 billion, noted Staples. “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,” he said.

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Staples noted that 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.