2024 Annual Energy & Economic Impact Report

ANNUAL ENERGY & ECONOMIC IMPACT REPORT

2024 black gold edition

About TXOGA Founded in 1919, the Texas Oil & Gas Association (TXOGA) is a statewide trade association representing every facet of the Texas oil and natural gas industry.

The mission of TXOGA is to promote a robust oil and natural gas industry and advocate for sound, sciencebased policies and free-market principles.

Published January 2025

TABLE OF CONTENTS 05

A Message from Todd Staples

06

Fueling the Economy

09

Fueling the Workforce

12

Fueling Public Education

14

Fueling Communities

16

Fueling Savings & Highways

20

The Industry at a Glance

22

The Big Picture

A Message from Our President On behalf of the members of the Texas Oil & Gas Association, we are pleased to release our annual Energy & Economic Impact Report, which affirms the oil and natural gas industry’s outsized and unmatched contribution to the financial might of our state – and the energy leadership of our nation.

During my first race for Texas Agriculture Commissioner, I pledged to visit all 254 Texas counties – a challenging, but accomplished, mission. I can personally attest that at the heart of every Texas community is a call for jobs, economic security and a quality of life. For 10 years now as president of TXOGA, I have witnessed how the Texas oil and natural gas industry is literally answering that call and improving the life of every Texan.

2024 was yet another record-breaking year as the Texas oil and natural gas industry does its part to help reach Governor Abbott’s goal for the Texas economy to surpass France as the 7th largest economy in the world.

From tax revenues and production to pipelines, storage, processing, refining, and exports, Texas' oil and natural gas industry has achieved record-breaking performance across every sector.

On the economic front, the Texas oil and natural gas industry paid a record $27.3 billion in state and local taxes and state royalties – the highest total in history – shattering last year’s record by almost a billion dollars. This translates to an astonishing $74.8 million a day that directly fund our public schools, universities, roads, first responders and other essential services for every Texan. $27.3 billion is greater than 34 states’ entire tax revenues.

The industry’s success in delivering for the Lone Star State – a success shared by every Texan – is the direct result of Policy, Partnerships and Perseverance.

Texas leaders embrace science-based policies that recognize oil and natural gas as an asset, not a liability. They view businesses as a partner, not an adversary. For its part, in 2024, the industry persevered through hostile federal policies, global unrest and market volatility – including negative prices for natural gas – to shatter its own records, while protecting and improving the environment.

Together, policy, partnerships and perseverance benefited every Texan again this year, whether they live near the oil patch or not. Texas-produced oil and natural gas, robust pipeline and export infrastructure and world-class refining reduce our dependence on other nations and help to keep prices down and our supply stable at home. Abroad, we are increasingly answering the energy call for an ever-growing global economy thanks in large part to our ever-expanding LNG facilities.

At every level, we need policies that bolster our energy leadership so that Texas can continue to build a cleaner, stronger, better future for America and our allies around the world.

Todd Staples President Texas Oil & Gas Association A Message from Todd Staples | 5

In FY 2024, the Texas oil and natural gas industry paid state and local taxes and state royalties totaling

$27.3 billion This number equates to more than $74 million each day.

Royalties to state funds** $3.397 billion Oil/gas well servicing** $0.158 billion Property taxes* $8.327 billion

Production of natural gas** $2.134 billion

Production of oil** $6.304 billion

State franchise and other taxes* $1.517 billion

Sales, state and local taxes* $5.425 billion

* Estimated, Tax & Fiscal Consulting, Austin ** Source: Texas Comptroller

6 | Energy & Economic Impact Report 2024

Since 2007, when TXOGA first started compiling this data, our industry has paid more than a quarter of a trillion dollars ($257.6 billion) in state and local taxes and state royalties. billion dollars 30 25 20 15 10 5

20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 2 20 1 22 20 23 20 24

0

When direct and indirect impacts are considered, the Texas oil and natural gas industry supported

$719 billion (30.6%)

of total private sector Texas GSP in calendar year 2023 alone, the latest year for which this data is available.

Fueling the Economy | 7

In Fiscal Year 2024, the Lone Star State solidified its position as a dominant force in U.S. energy production.

Texas accounted for as much as 44 percent of all U.S. oil production Texas

The Permian Basin drove vast majority of U.S. natural gas production growth bcf/d (y/y additions) 2.0

U.S.

Permian Basin

The Permian Basin rose to new levels of record production million BOE/d 10

U.S. 8

1.5 6

1.0

4

2

0.5

0

0.0

October 2024

2007

2024

This remarkable performance translated into a series of impressive records for the Lone Star State.

Crude oil production

5.9

Crude oil and condensate exports

4.2

mb/d

October 2024

5.8

mb/d

February 2024

NGL direct use in refining

1.5

Refiner and Blender crude oil net inputs

Refined product exports

4.5

mb/d

July 2024

2.5

mb/d

34.0

bcf/d

October 2024

475.9 June 2024

bcf

mb/d

Wellhead natural gas production

mb/d

September 2024

Natural gas in underground storage

5.5

March 2024

Exports of HGLs

August 2024

Natural gas marketed production

mb/d

June 2024

Refiner and Blender net production

37

bcf/d

October 2024

Natural gas underground storage capacity

878.1

bcf

August 2024

Sources: U.S. Energy Information Administration, U.S. International Trade Commission, and TXOGA Analysis million barrels per day (mb/d) | billion cubic feet per day (bcf/d) | barrels of oil equivalent per day (BOE/d) 8 | Energy & Economic Impact Report 2024

FUELING THE WORKFORCE Texas oil and natural gas industry jobs continue to be good for Texas as well as for the families and communities these jobs support.

Direct oil and natural gas employment plus the industry's spending on expenses such as capital goods, electricity, construction, services and supplies generate nearly 1.4 million jobs.

Fueling the Workforce | 9

In FY 2024, the Texas oil and natural gas industry employed

492,019 texans

Texas oil and natural gas employees by sector Support activities for oil and gas operations

111,623

Gasoline stations with convenience stores

83,153

Crude petroleum extraction

49,203

Oil and gas pipeline and related structures construction

45,393

Oil and gas field machinery and equipment

31,382

Drilling oil and gas wells

23,553

Pipeline transportation

22,026

Petroleum merchant wholesalers

21,139

Petrochemical manufacturing

17,564

Petroleum refineries

17,158

Natural gas extraction

15,747

Other gasoline stations

13,004

Plastics material and resin manufacturing

11,610

Natural gas distribution

8,893

Other basic organic chemical manufacturing

8,719

Industrial sand mining

4,529

Fuel dealers

3,065

Asphalt paving, roofing, and saturated materials manufacturing

2,770

Petroleum lubricating oil and grease manufacturing

992

Nitrogenous fertilizer manufacturing

496 Total: 492,019

10 | Energy & Economic Impact Report 2024

Every direct job in the Texas oil and natural gas industry creates approximately two additional jobs, with nearly 1.4 million total jobs supported across the Texas economy.

$128,255 Texas oil and natural gas employees

$72,915 Other Texas private sector employees

Texas oil and natural gas employers paid an average of $128,255 per job in 2024—76% more than the average paid by the rest of Texas’ private sector.

On a per-employee basis, the Texas oil and natural gas industry paid $55,000 in state and local taxes and state royalties in 2024.

This is almost 9 times higher than the other private sectors, which paid an average of just over $6,200 on a peremployee basis.

Per-job contributions matter because most state and local spending needs are driven by the size of the population.

In a system that relies so heavily on business to pay the cost of government, it is clear that the oil and natural gas industry more than pays its share in Texas.

Fueling the Workforce | 11

FUELING PUBLIC EDUCATION The Texas oil and natural gas industry plays a significant role in funding public education in the state. Through a variety of taxes and royalties, the industry helps to provide much-needed funding for schools, teachers, and students.

This support serves as an important example of industry's contributions to the next generation of Texas leaders.

12 | Energy & Economic Impact Report 2024

Public education received a major infusion of funds in FY 2024, as 99 percent of the state’s oil and natural gas royalties were deposited into the Permanent School Fund and the Permanent University Fund. Those funds received

$1.5 & $1.9 billion respectively. Additionally, independent school districts in Texas received oil and natural gas property taxes totaling

$2.9 billion Top 10 ISDs for oil and natural gas property taxes* Pecos-Barstow-Toyah

$304.4 million

83.0% of tax base

Midland

$217.5 million

50.7% of tax base

Wink-Loving

$184.0 million

92.4% of tax base

Rankin

$130.0 million

92.4% of tax base

United

$74.6 million

36.5% of tax base

Reagan County

$70.2 million

88.7% of tax base

Carrizo Springs

$69.1 million

87.8% of tax base

Grady

$66.8 million

96.2% of tax base

Culberson County-Allamore

$63.8 million

82.2% of tax base

Andrews

$62.1 million

74.5% of tax base

*Note: "Oil and natural gas" means mineral properties producing oil and natural gas, pipelines, and gas utilities. It does not include refineries, petrochemicals, or other properties. To view all oil and natural gas property taxes paid to Texas independent school districts visit txoga.org/2024eeir.

Fueling Public Education | 13

FUELING COMMUNITIES Counties across the Lone Star State receive millions of dollars in property taxes paid by the Texas oil and natural gas industry.

This funding supports local communities and empowers them to address local needs and issues.

14 | Energy & Economic Impact Report 2024

In FY 2024, Texas counties received oil and natural gas property taxes totaling over

$1.0 billion Top 10 counties for oil and natural gas property taxes* Reeves

$110.1 million

85.1% of tax base

Martin

$54.9 million

94.5% of tax base

Loving

$53.6 million

94.7% of tax base

Webb

$37.2 million

29.1% of tax base

Midland

$35.3 million

49.8% of tax base

Ward

$33.7 million

71.8% of tax base

LaSalle

$30.1 million

83.5% of tax base

DeWitt

$25.1 million

77.1% of tax base

Andrews

$23.2 million

80.5% of tax base

Dimmit

$23.2 million

88.5% of tax base

*Note: "Oil and natural gas" means mineral properties producing oil and natural gas, pipelines, and gas utilities. It does not include refineries, petrochemicals, or other properties. To view all oil and natural gas property taxes paid to Texas counties visit txoga.org/2024eeir.

Fueling Communities | 15

FUELING SAVINGS & HIGHWAYS Texans know that the oil and natural gas industry anchors our economy and directly funds our roads, schools, emergency services and our Rainy Day Fund.

This support is critical for our state, and ensures funding for our state and local governments.

16 | Energy & Economic Impact Report 2024

The Texas oil and natural gas industry is the primary funding source for the Economic Stabilization (“Rainy Day”) Fund, contributing more than

$33.9 billion since the Fund’s inception in 1987. This amounts to 84 percent of the Rainy Day Fund revenue over time. Out of FY 2024’s production taxes paid, the Rainy Day Fund and the State Highway Fund each received

$3.1 billion Legislators have appropriated funds from the Rainy Day Fund 115 times, the first of which was to fund public education in Texas. The sum of all appropriations totals

$18.4 billion Without the direct funding from taxes paid by the Texas oil and natural gas industry, support for retired teachers, disaster recovery, healthcare services, and numerous other priority items would not have received the substantial dollars allocated to meet essential needs.

Fueling Savings & Highways | 17

Rainy Day Fund categories funded by Texas oil and natural gas Public Education

$4.59 billion

General Revenue Fund, Economic Development, and Transportation Needs

$3.72 billion

Health, Protective Services

$2.50 billion

Water Planning and Infrastructure

$2.15 billion

Disaster Recovery

$2.10 billion

Teacher Retirement System

$1.66 billion

DPS, TDCJ, Military and Other Agency Funding

$1.19 billion

Higher Education

$0.49 billion Total:

18 | Energy & Economic Impact Report 2024

$18.4 billion

Rainy Day Fund categories funded by Texas oil and natural gas General Revenue Fund, Economic Development, and Transportation Needs

Disaster Recovery

DPS, TDCJ, Military & Other Agency Funding

Health, Protective Services

Public Education

Teacher Retirement System Higher Education Water Planning & Infrastructure

Since FY 2015, the State Highway Fund has received over

$19.1 billion from taxes paid by the Texas oil and natural gas industry.

Fueling Savings & Highways | 19

the industry Texas oil and natural gas fuel modern life as we know it.

Beyond the hundreds of thousands of jobs the industry creates and billions in taxes it pays, oil and natural gas improve the economic and social progress of communities here and around the world.

Nearly all of the products we use every day like pharmaceuticals, electronics, cosmetics and clothing are all made from oil and natural gas.

There is no substitute for oil and natural gas for the products, fuels, and electricity that power modern life.

20 | Energy & Economic Impact Report 2024

at a glance Top crude oil producing nations (if Texas were a country)

43% crude oil 29% natural gas of total U.S. production

1

United States

2

Russia

3

Saudi Arabia

4

Texas

5

Canada

6

Iraq

7

China

8

Brazil

9

Iran

10

UAE

Top crude oil producing states

465,025 miles of Texas pipelines

34%

of U.S. refining capacity

2024 crude oil and natural gas production U.S. Crude Oil Production

13.1 mb/d

U.S. Natural Gas Marketed Production

112.9 bcf/d

Texas Crude Oil Production

5.7 mb/d

Texas Natural Gas Marketed Production

32.8 bcf/d

1

Texas

2

New Mexico

3

North Dakota

4

Colorado

5

Arkansas

Top natural gas producing states 1

Texas

2

Pennsylvania

3

Louisiana

4

New Mexico

5

West Virginia

Note: Data reflects 2024 calendar year averages Sources: U.S. EIA, Railroad Commission of Texas, American Chemistry Council, and TXOGA Analysis The Industry at a Glance | 21

THE BIG PICTURE Thanks to abundant natural resources, generational knowhow and bold leadership, the Texas oil and natural gas industry plays a pivotal role in providing economic and energy security for our nation and stability for our allies around the globe.

We can never take that for granted. Policy, crafted in partnership with our state’s leaders, is key to continued success in Texas because we know policy can promote prosperity or hinder it.

To maintain our energy leadership in Texas, we need more infrastructure of all kinds – broadband, roads, pipelines, processing plants, LNG facilities, carbon capture and storage facilities – to send a signal that Texas is indeed open for business.

On electricity, we are eager to see the positive impact of the voter-approved Texas Energy Fund and the Permian Basin Reliability Plan – bold initiatives designed to fortify the electricity grid, encourage investment in new dispatchable generation, and build transmission where Texans need it most.

22 | Energy & Economic Impact Report 2024

We need to build upon the industry’s initiative and innovation in water recycling and reuse, with more infrastructure to move produced water, and science-based, consensus-built policies and regulations related to produced water.

TXOGA members are active participants in the Texas Seismicity & Water Partnership and the Texas Produced Water Consortium and are in discussions with the Railroad Commission about their pilot programs for beneficial uses of produced water.

Finally, like all Texans, the oil and natural gas industry recognizes the impact of rising property values, and the taxes levied on them, and we support Texas lawmakers and state leadership in their efforts to drive down property taxes for everyone.

We look forward to working with our lawmakers to advance policy that promotes prosperity, security and progress for every Texan.

The Big Picture | 23

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