Texas Beats Natural Gas Output Record, Sector Generated $24.7 Billion in State Revenue, 2.6 Million Jobs

A crude oil pump jack in the Permian Basin in Loving County, Texas, on Nov. 22, 2019. Angus Mordant/Reuters

Texas led the United States in terms of natural gas output in 2022, with the state breaking its own production record, contributing to millions of jobs as well as billions of dollars in state tax revenues.

Natural gas production in Texas hit a “new record” of more than 11.2 trillion cubic feet (Tcf) in 2022, which is equal to the output of the next top two states combined, according to the State of Energy Report published on Jan. 30 by the Texas Independent Producers and Royalty Owners Association (TIPRO). The list of highest natural gas production ranked Pennsylvania next at 7.6 Tcf, followed by Alaska at 3.6 Tcf, Louisiana at 3.6 Tcf, and Oklahoma at 2.7 Tcf.

“Despite facing a number of unique challenges, including supply-chain bottlenecks, inflationary pressures, workforce shortages, and an adversarial federal policy environment, the U.S. oil and gas industry continued to offer significant economic support in 2022,” said Jud Walker, chairman of TIPRO and president and CEO of EnerVest, Ltd., according to a press release on Jan. 30.

“Oil and natural gas development, led by Texas operators, will play an important role in meeting growing global energy demand for decades to come under any realistic scenario.”

Employment, Taxes

The Texas oil and gas sector contributed to 347,828 direct industry employment in 2022, up by 24,731 jobs from the previous year. California was the second largest employer in the sector with 80,772 jobs.

Total direct and indirect employment in the sector stood at 2.6 million jobs in Texas. The average annual wage of the industry in the state was $139,061, which is 103 percent higher than the average private sector wage in Texas.

The total direct gross regional product (GRP) for the Texas oil and gas sector was $323 billion, accounting for 16 percent of the state’s economy.

The industry paid a record $24.7 billion in state taxes as well as state royalty payments last year. These taxes funded Texas’s investments in schools, first responders, transportation infrastructure, and so on, said the report.

According to the Texas Oil and Gas Association (TXOGA), the $24.7 billion in tax payments beat the previous record of over $16 billion in 2019 by 54 percent. The $24.7 billion payments translate to around $67 million in funds available for the state per day to use in various activities.

“The Texas oil and natural gas industry plays an extraordinary role in securing our state and national economy and advancing global stability. However, growth is not guaranteed, and policy can promote prosperity, or can hinder it,” said TXOGA president Todd Staples, according to a post. on Jan. 23.

“Policies and politics in Texas and across our nation will determine if we can continue to deliver for Texans while meeting our nation and the world’s energy needs.”

US Natural Gas Situation

TIPRO predicts natural gas production in the United States to continue climbing, driven by production in the Permian Basin region that covers West Texas and southeast New Mexico.

Pointing out that expansion projects to boost pipeline infrastructure have played a “major role” in increasing the domestic production of natural gas, the organization stressed that it is important for regulators and lawmakers to support the pipeline expansion in the country.

“Without adequate takeaway capacity, such as new pipelines, producers cannot safely increase production to meet rising demand,” the report warned.

The Biden administration has been under fire from the energy industry for adopting an antagonist attitude against the sector. During a rally in November, President Joe Biden remarked that “there is no more drilling. I haven’t formed any new drilling,” a statement that attracted criticism from the industry.

“Amid an ongoing energy crisis, Americans must look at the administration’s record on energy policy. They’ll see one step after another to restrict American natural gas and oil production—which could help address the worldwide imbalance between demand and supply,” the American Petroleum Institute stated in a tweet. on Nov. 8, 2022.

That same month, a nonprofit group representing workers from the energy industry asked House Republicans to target the Biden administration’s climate policies that have hampered the extraction and development of fossil fuels.