Texas oil, natural gas producers pay highest amount of sales taxes ever in June

(The Center Square) – As businesses and individuals have paid a record amount of sales taxes over the past few months, those in the Texas oil and natural gas industry continue to pay the lion’s share.

The industry is not only leading the U.S. in oil and natural gas production, it also continues to break records in the amount of taxes it pays and the number of jobs it creates.

In June, the state collected the highest amount of monthly remittances from the Texas oil and gas industry in history, according to a new report published by the state comptroller’s office.

June’s remittances alone – a total of $1.12 billion – were greater than the average annual revenue from oil and natural gas production taxes at $1.01 billion just a few decades ago.

Texas oil producers remitted $679 million in June, the highest monthly collection on record, up 87% from June 2021.

Natural gas producers also remitted a record high in June, having paid $439 million in May, a 176% from last year over the same time period.

The majority of sales tax revenue remitted to the comptroller’s office is based on taxes paid during the previous month. June’s report covers May sales tax totals; May’s report covers April’s sales tax totals.

“All Texans benefit from a robust oil and natural gas industry that provides hundreds of thousands of good-paying jobs and pays billions towards our state’s economy, essential services and public education whether you live in the oil patch or not,” Todd Staples, president of the Texas Oil and Gas Association, said. “These historic job and tax revenue numbers continue to signal the resiliency of our industry, which is committed to meeting our energy needs, fortifying our national security, and achieving continued environmental progress.”

June broke May’s previous record high.

Oil producers paid $595 million in taxes in April, according to May data: natural gas producers paid $413 million, the highest monthly collections on record until they paid more the next month.

The May numbers represented a record 64% increase remitted by oil producers and 216% by natural gas producers compared to the same time period a year ago.

“Despite President [Joe] Biden’s delusional desire to transition away from fossil fuels, Comptroller Hegar’s announcement reinforces the fact that oil and gas literally fuels every facet of our lives from energy to food and beyond,” Railroad Commission Chairman Wayne Christian said. “In addition to paying record-breaking tax revenue which funds our schools, roads, first responders and more, Texas’ oil and gas industry is our economy’s lifeblood, supporting roughly one-third of our state’s economy and paying an average salary of $130,000. Oil and gas production is also so much more than simply fueling our energy use and funding our government, it produces about 96% of everyday consumer items including electricity, gasoline, plastics, medicine and countless others.”

And as the Biden administration continues to hamper oil production on federal lands and waters by refusing to issue permits in accordance with federal law, the Texas Railroad Commission has been increasing the number of permits it’s issuing.

The commission issued 1,146 original drilling permits in June compared to 739 last June. This includes 1,013 permits to drill new oil or gas wells, 11 to re-enter plugged wellbores and five for re-completions of existing wellbores, according to a statement from the commission.

The Texas oil and gas industry also has broken employment records, having earlier this year reported the largest increase in added upstream oil and gas jobs in a decade.

In February, Texas upstream jobs grew by 5,100, the highest spike in over a decade and the second highest jump in at least 32 years. In April, the industry added 5,200 upstream oil and natural gas jobs, the highest monthly growth in nearly 11 years.

In May, upstream employment represented an increase of 25,500 positions compared to last May, including an increase of 5,700 jobs in oil and natural gas extraction and 19,800 jobs in the services sector.

Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said the data “once again illustrates the enormous economic contributions made by the Texas oil and natural gas industry. Instead of proposing anti-American energy policies, federal elected officials should work collaboratively with U.S. producers and develop a coherent strategy to unleash domestic production, including lifting restrictions on federal lands and waters, accelerating LNG exports and approving pending LNG applications."