Texas Hospitals and Universities Getting Millions in Oil and Gas Royalties
Thanks to a few wise investments, industries across the state of Texas have reaped the immense benefits of the oil and gas boom. Texans have seen massive returns on their investments in shale development in the form of oil and gas royalties. Just this week it was reported that the Texas Scottish Rite Hospital in Dallas has received nearly $500 million in oil and gas royalties, increasing its endowment to $2 billion. The hospital specializes in pediatric orthopedics, and provides children with medical care regardless of their ability to pay.
The hospital receives most of its royalties from a ranch in West Texas that was donated to the institute in the 1960s. According to the hospital’s president and CEO, Robert Walker:
“The oil boom contributes to the lives of children all over the world.”
This year, Bloomberg reported that the University of Texas endowment reached $25 billion thanks to royalty revenue gains from oil and gas. The university’s endowment passed Yale’s and now is second only to Harvard University. The CEO of the University of Texas Investment Management Co., Bruce Zimmerman, commented on the fund saying:
“The price of oil and hydraulic fracking out in West Texas has been very, very good,” Zimmerman said in a phone interview. “One of the sources of growth in the overall assets has come from those contributions into the fund from the oil and gas royalty revenue.”
The University of Texas is not the only college receiving these benefits either. Texas A&M University’s endowment (managed in conjunction with the University of Texas) also benefited from shale production royalties, rising 27 percent in the fiscal year of 2013-2014. Texas A&M’s endowment now ranks 7th in the nation and only one university (Michigan) had a higher growth rate. Take a look at the chart below, and it’s easy to see that Texas universities are directly benefiting from Texas oil production.
These royalties are the gift that keeps on giving, and they are put to use in all areas of business in the state, from healthcare to education. According to TXOGA president Todd Staples:
“The oil and natural gas industry supports 40 percent of the economy and pays billions of dollars in taxes and royalties each year to directly fund our schools, our roads, public services and our universities.”
Whether it’s through taxes, job creation, or royalty revenue, there’s no doubt that the oil and gas industry has created a windfall of funds for families across the state. A few wise investments have gone a long way in the Lone Star State, and if managed wisely, they will continue to work for Texans for generations to come.