Hello everyone. I'm Todd Staples. We appreciate you joining us for today's release of TxOGA’s 2025 Energy and Economic Impact Report, which details the extraordinary role oil and natural gas play in under-guarding the Texas economy and securing our energy future.
At the conclusion of my prepared remarks, we will open the line for Q&A, and then we will disseminate a press release with a link to the report, which contains data as well as graphics for your use.
In my 20-plus years of public service to the people of Texas and more than a decade of representing the state's oil and natural gas industry, I can attest to this unwavering truth: in Texas lasting progress is built on performance, not opinion. Talk doesn't grow jobs, keep homes warm or cars running. Action, investment and innovation drive greatness across the Texas economy. And certainly in our industry, results matter, reliability matters. And on that score, the Texas oil and natural gas industry continues to deliver amazing results. Even when dominated by market challenges. I'm proud to say that oil and natural gas have demonstrated once again, to be the power behind Texas progress.
While oil prices decline, the industry delivered another outstanding year of strong economic performance, supporting rising employment, higher wages and critical investments statewide. In fiscal year 2025, the Texas oil and natural gas industry paid $27 billion in state and local taxes and state royalties, the second highest total in Texas history, just 1% less than last year's historic achievement. The industry remains the single largest generator of tax-like revenues per employee, paying seven and a half times more per employee than the rest of the private sector. $27 billion is greater than 34 states’ entire tax revenues. $27 billion translates to nearly $74 million every day that directly funds our public schools, universities, roads, first responders and other essential services for every Texan, whether you live in the oil patch or not.
In FY ’25, Texas school districts received $2.6 billion in property taxes from mineral-producing properties, pipelines and gas utilities. Counties received an additional $1 billion in these property taxes. Oil and natural gas revenue remains the primary source of new capital for the Permanent School Fund and the Permanent University Fund. With those funds receiving $1.4 billion and $1.72 billion respectively. Together, these education endowments exceed $100 billion. With a balance of over $66 billion, the Permanent School Fund alone is larger than Harvard's endowment, and is the largest educational endowment in the nation.
Our state's rainy day fund, or economic stabilization fund, has received over $35.9 billion from oil and natural gas production taxes since its inception in 1987. In FY ’25 the Rainy Day Fund and the State Highway Fund each received $2.7 billion from oil and natural gas production taxes. And since 2007, when Texas first started compiling this data, the Texas oil and natural gas industry has paid more than a quarter of a trillion dollars in state and local taxes and state royalties. This figure does not include the hundreds of billions of dollars paid annually in payroll for some of the highest paying jobs in the state, or the royalties paid directly to Texas families. Nor does it include tax assistance buildings and personal property and the enormous economic ripple effect that benefits other sectors of the economy.
After accounting for both the quantifiable direct and indirect benefits to the economy, the Texas oil and natural gas industry supported $779 billion for the Texas economy. That's 31% of the total private sector Texas GSP. More than 495,500 Texans have a direct job in oil and natural gas, earning an average of $133,000 per year, 68% more than the average paid by the rest of Texas private sector. Conservatively, these jobs generate approximately two more jobs, with nearly 1.4 million total jobs supported across the Texas economy. Some economic analyzes suggest that the industry's employment total over two million jobs supported by the industry across Texas.
Despite market challenges, the oil and natural gas industry shattered another string of records in FY 2025. The industry broke production records in crude oil, natural gas and natural gas liquids. This production triplet alongside increased direct use of NGOs and refining and record low crude oil imports demonstrates how Texas continues to adapt by increasingly utilizing resources produced within the state.
Throughout the fiscal year, pipeline and LNG export infrastructure continue to expand, fortifying our own energy security and contributing to global energy stability for our allies. The figures associated with these records are included in this year's Annual Report.
Operational and economic milestones coincided with another year of unmatched environmental performance. Industry led initiatives like the Texas Methane and Propane Coalition and the environmental partnership are dramatically reducing flaring, consistently achieving flaring rates of less than 1%, meaning more than 99% of natural gas produced in Texas was being beneficially used. Operators are working to eliminate routine flaring entirely by 2030 with many companies ahead of schedule.
The consistent performance of the oil and natural gas industry does not happen by chance. It reflects Texas’ long standing commitment to reliability over rhetoric and pragmatism over politics. A fair, predictable regulatory and legal framework, paired with a pro-infrastructure posture, has allowed innovation, investment and responsible development to flourish. Policy makers recognize that science-based rules and free market principles deliver affordable energy, a strong grid and broad-based economic opportunity. Sustaining our progress requires policies that build on success.
Texas is also positioned to lead in emerging technologies like carbon capture and storage and produce water recycling and reuse. I'm especially proud of the collaborative work between industry, academia, the Railroad Commission, TCEQ, the Texas Water and Seismicity Partnership, Produce Water Consortium at Texas Tech University, TexNet , and the Center for Injection and Seismicity Research, our cooperative, deliberative efforts to develop science-based, consensus-driven policies will unlock new solutions while supporting responsible development statewide.
These future opportunities require infrastructure. To maintain Texas current trajectory, we must continue to invest in pipelines, water systems, electricity generation, and transmission to drive growth reliability and opportunity across Texas.
Against this backdrop of strong performance and opportunities before us, it's important to address the broader market commentary shaping perceptions about the year ahead. Some have characterized the outlook for 2026 as a so-called year of the glut, pointing to projections that global supply could exceed demand. We do not see evidence of a disorderly oversupply. What we see instead are markets adjusting, not breaking. Much of the additional supply reflects long lead projects sanctioned years ago, not reckless new investment.
At the same time, global energy demand continues to grow and is repeatedly surprised to the upside, even amid economic uncertainty. U.S. production growth, including in Texas, is being driven by productivity gains and efficiency, not unsustainable capital expansion.
For Texans, it's important to look past the headlines. Texas energy is not disconnected from global markets, but it is more resilient. Productivity, infrastructure, investment, and export capacity all matter. And that is the core message of this year's Energy and Economic Impact Report. Texas energy remains productive, reliable and the cornerstone of the Texas economy, and is globally essential. Even in volatile markets, fundamentals, not sentiment, continue to drive outcomes for our economy and for consumers.
At a time when the energy debates are often driven by competing narratives, the Energy and Economic Impact Report focuses on facts. It underscores a simple truth, Texas runs on oil and natural gas, and it's made possible by hundreds of thousands of skilled men and women who rise before the sun every day to keep our economy moving and our community secure.
We look forward to continuing our partnership with state leaders and communities to keep Texas powered prosperous and prepared for what comes next. We appreciate you joining us today.
Editor's Note: The above commentary was provided by Todd Staples, president of the Texas Oil & Gas Association. Staples made the above remarks in a conference call with reporters, during which he unveiled TxOGA's 2025 Energy and Economic Impact Report.
