Op-Ed: Texas oil and natural gas road to recovery
Oil and natural gas are essential and irreplaceable in our lives, to our economy and for environmental progress. Every Texan should be alarmed by efforts to undermine the oil and natural gas industry, as these misguided attempts will only threaten jobs, the economy and the environment.
As the Texas Legislature begins its work in earnest, we are encouraging lawmakers to consider a three-part policy Roadmap to Recovery to drive oil and natural investment to power Texas’ economic recovery and provide critical state and local tax revenue Texans need.
Oil and natural gas taxes and state royalties anchor the Texas budget and provide funding that directly support Texas schools, teachers, roads, infrastructure and essential services. These resources will be vital to meeting our state’s budget deficit due to the economic downturn caused by COVID-19.
As challenging as last year was, the Texas oil and natural gas industry paid $13.9 billion in state and local taxes and state royalties. Our state’s Economic Stabilization Fund (commonly known as the Rainy Day Fund), the Permanent School Fund (PSF) and the Permanent University Fund (PUF) are funded almost exclusively with taxes and state royalties paid by the oil and natural gas industry. Last year, the PUF received $771 million and the PSF received $942 million. The Rainy Day Fund received $1.66 billion from oil and natural gas taxes, bringing the balance to more than $10 billion.
This legislative session, Texas lawmakers have several opportunities to advance economic and environmental progress. To meet the needs of our booming population, lawmakers must ensure continued, responsible development of essential infrastructure. Every Texan relies on electric transmission lines, roads, high-speed internet, drainage and flood control and pipelines for water, oil, natural gas and transportation fuels, and the expansion of this infrastructure is essential to the state’s continued growth and success.
The Legislature should embrace smart tax policy such as renewing the economic development program known as Chapter 313, which attracts investments and jobs to Texas, and resist calls to increase taxes on an industry that pays 6.3 times more in taxes on a per-job basis than the average of the rest of the private sector.
Finally, we are urging lawmakers to maintain their commitment to science-based policy and rational discussions related to environmental issues, with the leading oil and natural gas innovators at the table.
A healthy oil and natural gas industry isn’t just good for the economy. The industry is advancing environmental progress as the nation’s leading investor in emission-reducing technologies. As a result, Americans are breathing the cleanest air in decades and the U.S. leads the world in reducing energy-related carbon dioxide emissions. Methane emissions rates were down nearly 70% in five of the nation’s largest oil and natural gas producing regions between 2011 and 2019, according to data from EPA and EIA. Alternative energy sources depend on Texas oil and natural gas too, not just to provide reliable backup power, but also for their very composition as wind turbines and solar panels are made from oil and natural gas.
These advancements are occurring while the United States enjoys more energy security than ever and American-made energy is powering economic prosperity and environmental improvements around the world. This progress – and ways to build on it – must be part of more rational discussions about the future of our energy, our environment and our economy. Thanks to continued technological breakthroughs, driven largely by oil and natural gas companies themselves, our energy choices do not have to be “either/or.” Oil, natural gas and alternative sources will all be part of our energy future.
Smart policies will only further encourage investment in and innovation by the oil and natural gas industry and will power us toward the cleaner, stronger, and better future every Texan deserves.
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