Texas oil and natural gas industry, Texas oil and gas taxes, TXOGA Energy & Economic Impact Report 2025 — The Texas oil and natural gas industry paid a record $27.0 billion in state and local taxes and state royalties in fiscal year 2025, according to newly released data from the Texas Oil & Gas Association (TXOGA). The total marks the second-highest contribution in Texas history and underscores the industry’s outsized role in funding public education, infrastructure, first responders, and essential government services across the state.
TXOGA President Todd Staples shared the findings during a media briefing highlighting the industry’s economic impact, record-breaking production, employment growth, and long-term energy outlook for Texas and global markets.
2025 Energy & Economic Impact Report
According to just-released data from the Texas Oil & Gas Association (TXOGA), the Texas oil and natural gas industry paid $27.0 billion in state and local taxes and state royalties in fiscal year (FY) 2025—the second-highest total in Texas history. TXOGA President Todd Staples today hosted a media briefing to share the Association’s annual Energy & Economic Impact Report and to provide an update on the industry’s record-breaking operational and environmental performance, an outlook on the energy market, and TXOGA’s policy priorities.
“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,” said Staples. “Even during a year dominated by market challenges, Texas oil and natural gas has proven—once again—to be the power behind Texas’ progress.”
“Twenty-seven billion in state and local tax revenue and state royalties from the Texas oil and natural gas industry translates to nearly $74 million every day that pays for Texas’ public schools, universities, roads, first responders and other essential services,” said Staples. “Beyond this essential tax revenue, Texas oil and natural gas delivers energy security at home and global stability for our allies.”
Since 2007, when TXOGA 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, a figure that does not include the hundreds of billions of dollars in payroll for some of the highest paying jobs in the state, taxes paid on office buildings and personal property, and the enormous economic ripple effect that benefits other sectors of the economy.
As in years’ past, public education received a major infusion of funds from oil and natural gas royalties in FY 2025. The Permanent University Fund received $1.72 billion, and the Permanent School Fund received $1.40 billion. Together, the market value of these funds exceeds $100 billion. With a balance of $66.5 billion, the Permanent School Fund alone is larger than Harvard’s endowment and is the largest educational endowment in the nation.
Texas’ Rainy Day Fund, or Economic Stabilization Fund (ESF), has received over $35.9 billion from oil and natural gas production taxes since its inception in 1987. This number amounts to over 85% of the ESF revenue over time. The ESF and the State Highway Fund each received $2.7 billion this cycle.
In FY 2025, Texas school districts received $2.6 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties received an additional $1 billion in these property taxes.
In FY 2025, the industry employed more than 495,500 Texans who earned an average of $133,095 a year—68 percent 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 analyses suggest that the industry’s employment multiplier could approach three additional jobs per direct job – bringing the total to over 2 million jobs supported by the industry across Texas.
Based on the combined state and local taxes and state royalties attributable to the industry, the oil and natural gas industry pays far more per employee ($54,481) than the average private-sector industry average ($7,225). Staples observed this 7.5-to-1 difference underscores the outsized role the industry plays in financing state and local government services.
“Despite market challenges, the oil and natural gas industry shattered another string of records in fiscal year 2025,” said Staples. “Non-stop industry innovation, investment and operational efficiency raised the bar for performance, once again.”
Texas crude oil production set a new record in July 2025, reaching 5.85 mb/d. Marketed natural gas production reached 35.4 bcf/d in August. Most of these impressive totals are coming out of the Permian Basin, where innovation and efficiency are driving record production in the most important basin in the world.
Texas also set records for exports of crude oil and condensate, liquefied natural gas (LNG), and total natural gas. To transport these volumes, pipeline infrastructure grew to 472,790 miles and LNG export capacity from Texas and Louisiana approached 13.0 bcf/d, with another 19.0 bcf/d of projects already being commissioned or under construction.
Against the backdrop of this strong performance, Staples addressed market commentary related to a potential global energy “glut,” and cautioned against confusing headlines with fundamentals.
“Headlines aside, our data show markets adjusting, not breaking,” Staples said. “Texas energy remains productive, reliable, and globally essential – and fundamentals, not sentiment, continue to drive outcomes for our economy and consumers.”
Staples noted that TXOGA does not see evidence of a disorderly oversupply, but rather markets adjusting as long-lead projects sanctioned years ago come online. He explained that as global energy demand continues to grow, U.S. production gains reflect productivity and efficiency, and Texas remains uniquely resilient due to its infrastructure, export capacity, and innovation. These fundamentals, not short-term sentiment, he said, underpin the strong economic contribution detailed in TXOGA’s 2025 Energy & Economic Impact Report.
“At a time when energy debates are often driven by competing narratives, this report focuses on facts. It underscores a simple truth: Texas runs on oil and natural gas, made possible by hundreds of thousands of skilled men and women who rise before the sun to keep our economy moving and our communities secure,” Staples said. “In the coming year, we look forward to continuing our partnership with state leaders and communities to keep Texas powered, prosperous, and prepared for what comes next.”
Among local recipients, Pecos-Barstow-Toyah ISD in West Texas ranked first statewide, receiving $309.3 million in oil and natural gas property taxes, while Reeves County ranked first among counties, receiving $109.4 million paid in oil and natural gas property taxes.
