The state of Texas collected at least US$13.4 billion in the form of royalties and taxes from the oil and gas industry last year, just before the oil price crash, the Houston Chronicle reported on Tuesday, citing data from the Permian Basin Petroleum Association (PBPA).
According to the association's data, the oil and gas industry in Texas paid the state a total of US$11.3 billion worth of taxes and another US$2.1 billion in royalties last year, up by 14 percent compared to 2018.
Part of the 2019 tax and royalty proceeds from the oil industry will go to the state of Texas' US$8 billion Rainy Day Fund. The 2019 state income from oil and gas activities are expected to help balance the Texas budget for the next financial year, according to PBPA, as quoted by the Houston Chronicle.
In fiscal year 2019, amid record oil and gas production, the oil and natural gas industry in Texas paid a total of US$16.3 billion in local taxes and state royalties-the highest taxes the industry has paid to the state of Texas on record, the Texas Oil & Gas Association (TXOGA) said in a report earlier this year.
The taxes and royalties paid in 2019 were up by 16 percent compared to the taxes the industry had paid in 2018, according to the association, which estimated that in 2019, qfc66666dem 2,the oil and gas industry contributed about US$44 million a day to state and local revenue.
This year, however, the state of Texas and all other oil-producing states in America are expected to see their tax and royalty proceeds from the oil and gas industry significantly reduced because of the oil price crash and the crisis in the shale industry as producers idle rigs and curtail production.
Oil towns in Texas, North Dakota, Alaska, Wyoming, and Oklahoma are accustomed to the boom-and-bust nature of the oil industry. But this time around, the economic prospects and job losses are aggravated by the layoffs in the hospitality and entertainment industry during the lockdowns, and the oil towns and counties could take years to recover, officials fear.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More