(The Center Square) – The Texas oil and natural gas industry paid $27 billion in state and local taxes and state royalties in fiscal 2025.
It was the second highest total the industry paid in recorded state history.
The industry data was compiled by the Texas Oil & Gas Association and released in its annual Energy & Economic Impact Report. The data excludes hundreds of billions of dollars in payroll for some of the highest-paying jobs in the state, taxes paid on office buildings and personal property, and millions of support jobs.
“Twenty-seven billion in state and local tax revenue and state royalties from the Texas oil and natural gas industry translates to nearly $74 million every day that pays for Texas’ public schools, universities, roads, first responders and other essential services,” TXOGA president Todd Staples said in a statement. “Beyond this essential tax revenue, Texas oil and natural gas delivers energy security at home and global stability for our allies.”
Since 2007, when TXOGA first started compiling industry tax data, the industry has paid more than a quarter of a trillion dollars in state and local taxes and state royalties, the report states. The fiscal year in Texas begins Sept. 1.
The bulk of industry taxes and royalties finance four major funds in Texas based on statutory requirements and stipulations: the Permanent University Fund, Permanent School Fund, Texas’s Rainy Day Fund (Economic Stabilization Fund) and State Highway Fund.
In fiscal 2025, the PUF received $1.72 billion, the PSF received $1.4 billion and ESF and SHF each received $2.7 billion from industry taxes.
The market value of the combined education funds exceeds $100 billion. With a balance of $66.5 billion, the PSF is larger than Harvard’s endowment and is the largest educational state fund in the country.
The ESF has received more than $35.9 billion from oil and natural gas production taxes since its inception in 1987, or more than 85% of the ESF revenue, TXOGA says.
The industry also funds local school district and county budgets. In fiscal 2025, school districts statewide received $2.6 billion and county governments received $1 billion in property taxes paid from mineral properties producing oil and natural gas, pipeline and gas utility companies, TXOGA says.
In fiscal 2025, the Texas oil and natural gas industry employed more than 495,500 workers who earned an average of $133,095 a year – 68% more than the average private sector job, TXOGA says.
“Conservatively, these jobs generate approximately two more jobs, with nearly 1.4 million total jobs supported across the Texas economy. Some economic analyses suggest that the industry’s employment multiplier could approach three additional jobs per direct job – bringing the total to over 2 million jobs supported by the industry across Texas,” TXOGA says.
The combined state and local taxes and state royalties the industry paid are “far more per employee ($54,481) than the average private-sector industry average ($7,225),” TXOGA argues. A 7.5-to-one difference underscores the outsized role the industry plays in financing state and local government services, TXOGA says.
The industry paid record high taxes as it continued to break production records.
Texas crude oil production set a new record in July 2025, led in the Permian Basin, reaching 5.85 million barrels a day. Marketed natural gas production reached 35.4 billion cubic feet a day in August.
“Despite market challenges, the oil and natural gas industry shattered another string of records in fiscal year 2025,” Staples said. “Non-stop industry innovation, investment and operational efficiency raised the bar for performance, once again.”
Texas also set records for exports of crude oil and condensate, liquefied natural gas (LNG), and total natural gas in 2025, The Center Square reported.
To transport the record volume, pipeline infrastructure also expanded in Texas, growing to 472,790 miles in 2025, TXOGA says. LNG export capacity from Texas and Louisiana reached nearly 13 bcf/d; another 19 bcf/d of projects is already under construction or has been commissioned. Last year, Sen. Ted Cruz, R-Texas, also introduced a bill to expedite U.S. LNG exports, The Center Square reported.
Under the first Trump administration, the U.S. became a net exporter of natural gas in 2017 for the first time since 1957, led by Texas and Louisiana, “primarily because of increased LNG exports,” according to the U.S. Energy Information Agency.
If Texas were its own country, it would be the world’s third-largest producer of natural gas and the fourth-largest producer of oil. In the first half of 2022, the U.S. became the world’s largest LNG exporter, led by Texas and Louisiana, according to EIA data.
