Report: Oil and Natural Gas Puts Wealth Back in the Community

Texas played an crucial role in the United States becoming the world’s largest oil and natural gas producer last year, according to a new report that also details how industry growth is leading to more reinvestment back home.

The Texas Independent Producers & Royalty Owners (TIPRO) Association’s fourth annual State of Energy Report offers a glimpse into the full economic potential of energy for the United States while focusing on Texas, which last year provided more than one-fifth of U.S. domestically produced energy, and produced a record 1.54 billion barrels of oil.

As the Houston Chronicle reported, state leaders appreciate the results. Texas Railroad Commission Chairman Christi Craddick said in a statement:

“I’m grateful for the leadership and tenacity of the men and women in this industry to fuel our economy, provide jobs and pay significant tax revenue for our roads, water and education infrastructure.”

Higher tax revenues and local spending

The oil and natural gas industry paid more than $100 billion in state taxes and state royalty payments in Texas between 2010 and 2018. These tax revenues serve as an important source of funds for vital services such as education: the Texas constitution requires that 25 percent of the revenue collected from occupation taxes go into the Foundation School Fund, which is the primary source of state funding for Texas school districts.

The energy industry also makes an impact with its purchasing power. The report found that total U.S. goods and services purchased by the Texas oil and gas industry exceeded $204 billion in 2018, 82 percent of which were purchased from Texas businesses. The same is reflected on a national scale: the U.S. oil and natural gas industry purchased goods and services from more than 900 different U.S. industries in the amount of $534 billion in 2018.

More well-paying jobs

The increase in oil and natural gas production has also driven demand for workers.

Texas leads the country in oil and gas employment: the state’s industry accounts for 40 percent of all oil and gas employment in the nation. The demand for these jobs is only increasing, as Texas experienced a 12 percent increase in jobs in the sector since 2017.  As illustrated by the State of Energy report, these jobs pay well above the median salary. In 2018, oil and gas jobs in Texas paid an average salary of $130,706 – 134 percent more than the average private sector job in Texas.

This industry job growth is reflected across the United States as well. The American Petroleum Institute reported that in 2017, energy production employment comprised nearly 7 percent of all new jobs nationwide. Like Texas, energy salaries paid significantly more–  85 percent higher than the average private sector salary of $55,331 in America. Workers in oil and natural gas extraction earned even more – making $168,685 in 2018.


Texas Gov. Greg Abbott noted in TIPRO’s new release announcing the report that growth in oil and natural gas production means his state is “paving the way for America’s energy independence.” The report makes clear that that the industry is investing money back into the community through tax revenues and spending, and creating well-paying jobs. TIPRO Chairman and President of Hurd Enterprises Eugene Garcia summarized the industry’s impact:

“The Texas oil and gas industry has remained a cornerstone of the economy providing high-paying career opportunities, as well as significant taxes and royalty payments made to state, local and federal government entities. The favorable business environment, environmental stewardship and science-based approach to regulatory oversight in Texas is a model for all oil and gas producing states.”

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