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The oil and gas industry paid record taxes and royalties to the state of Texas last year, the Texas Oil and Gas Association reported, noting the total amount paid was 54 percent higher than the previous record set in this respect.
At $24.7 billion, the taxes and royalties that the oil and gas industry paid into the Texas budget translate into a daily payout of $67 million, TXOGA noted in its news release.
Broken down, the total represents a 116-percent annual increase in production taxes, equal to $5.8 billion, and a 102-percent increase in royalties paid into state funds, which is equal to $2.2 billion. Almost all of the royalties generated by the oil and gas industry in Texas last year were put into the state’s Permanent School Fund and the Permanent University Fund—an amount equal to $2.1 billion for each. This was double the amount the education funds received from royalties for 2021.
The Texas Economic Stabilization Fund, commonly known as the Rain Day Fund, received $1.5 billion from oil and gas production taxes last year. The Texas school districts, for their part, received $1.65 billion from property taxes paid by the oil and gas industry last year.
Texas is the biggest onshore oil-producing region in the United States, featuring both conventional deposits and two of the biggest shale plays in the country, including top producer Permian, which the state shares with New Mexico.
The Permian has been the biggest contributor to total U.S. shale oil production, but growth has begun to slow down recently. However, another Texas legacy production region, the Eagle Ford play, has begun to pick up.
Reuters reported earlier this month that oil output in the Eagle Ford could rise by 4 percent this year as higher prices motivate more drilling in the second-largest shale oil play in the country. The increase would translate into gains of between 25,000 and 40,000 bpd.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.