Rising Energy Revenues Boost State Budgets in Texas and New Mexico
Posted January 29, 2020
The U.S. shale revolution keeps rolling, and with it strong support for state and public priorities. Texas and New Mexico each achieved record highs for industry contributions to statewide revenues and royalties, according to new reports from the Texas Oil and Gas Association (TXOGA) and the New Mexico Oil and Gas Association (NMOGA).
In 2019, America’s natural gas and oil industry posted a record-setting year in terms of production and exports. And last fiscal year, energy operators paid billions of dollars in state and local taxes that fund education, infrastructure and healthcare facilities for residents across the southwestern U.S.
Fueled by production growth, particularly in the Permian Basin, the industry in Texas generated $16.3 billion in taxes and state royalties – equating to more than $44 million per day. Since 2007, natural gas and oil companies have contributed more than $149 billion in revenues, which support public works through programs like the State Highway Fund, Economic Stabilization Fund and Permanent School Fund. These earnings benefit all Texans, whether they live near a production zone or not.
TXOGA President Todd Staples explained:
“Oil and natural gas does more than fuel our cars, power our homes and businesses, form the building blocks of our everyday goods and secure our nation. Taxes paid by the oil and natural gas industry support teachers and schools, build roads, boost essential and emergency services, improve healthcare facilities and bolster our state’s infrastructure.”
In New Mexico, the natural gas and oil industry delivered $3.1 billion to the state budget in 2019, an increase of about $910 million over the previous fiscal year. Energy production now accounts for 39% of the state’s General Fund revenues, the highest share in recent history. The industry supports the employment of more than 100,000 New Mexico residents and contributes over one-third of the funding for public schools and higher education, infrastructure, healthcare and public safety.
NMOGA Executive Director Ryan Flynn commented:
“New Mexico now begins the 2020s with strengthened public schools, expanded economic opportunities, and potentially the opportunity for every New Mexico student to get a college degree tuition-free. As a state and an industry, our future is bright. This new decade promises to offer even more opportunity for New Mexico than the past and generations of New Mexicans will develop, grow, and thrive with a strong energy sector paving the way.”
Gov. Michelle Lujan Grisham made national headlines last fall by announcing the New Mexico Opportunity Scholarship, which guarantees free tuition at public universities for all state residents, using climbing revenues from natural gas and oil production.
Looking ahead, the value of natural gas and oil development in the Permian Basin is forecast to continue rising. According to an ICF study, the industry is poised to attract as much as $174 billion in new infrastructure investments through 2030, which could grow the combined value of energy production in New Mexico by 323%.
And industry-led initiatives, like The Environmental Partnership, are continuously improving performance – meaning energy development and emissions reductions can coexist in Texas and New Mexico. Between 2011-2018, natural gas production in the Permian Basin grew almost 170% while methane emissions relative to production fell by nearly 45%. This dual progress has come to define the energy revolution in the southwestern U.S.
A thriving energy industry supports the public good in natural gas and oil producing states across the country by boosting teacher salaries, funding critical infrastructure projects and contributing to household energy savings. Advancing the industry’s growth, through policies that prioritize innovation and drive investment, means expanding economic and educational opportunities in Texas and New Mexico.
About The Author
Sam Winstel is a writer for the American Petroleum Institute. He comes to API from Edelman, where he supported communications marketing strategies for clients across the firm’s energy and federal government practices. Originally from Dallas, Texas, Sam graduated from Davidson College in North Carolina, and he currently resides in Washington, D.C.
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