From Building The Texas of Tomorrow

Energy Production, Job Levels Shatter Past Records


uantifying the economic impact of an industry as large and central to a state’s economy as oil and gas is to Texas’ can be daunting. But the Texas Independent Producers & Royalty Owners Association (TIPRO) has been doing it for eight years. Its 2023 State of Energy Report, released in January, puts the significance of Texas’ energy sector in 2022 in clear focus. 

Key takeaways include these, as summarized in a TIPRO release: The Lone Star State’s oil and gas industry once again led the nation in industry employment last year, accounting for 37% of all oil and gas employment in the nation. The industry supported nearly 348,000 direct jobs in Texas in 2022, with total direct and indirect employment of 2.6 million. Direct Gross Regional Product (GRP) for Texas oil and gas equaled $322 billion in 2022, or 16% of the state economy. Total U.S. goods and services purchased by the Texas oil and natural gas industry surpassed $264 billion last year, 82% of which came from Texas businesses.

TIPRO reports that Texas also broke a new record in natural gas output last year with over 11.2 trillion cubic feet (Tcf) of gas produced. Last year, the U.S. also drastically increased its liquified natural gas (LNG) exports to Europe as the continent’s energy crisis intensified. In fact, 74% of all U.S. exports went to Europe in the first of half of 2022. In that same period in 2021, exports to Europe only represented 34% of U.S. LNG exports.

In addition, according to the report, Texas again was the nation’s top oil producer in 2022, supplying 1.83 billion barrels of oil to energy markets. “The Texas oil and natural gas industry remains a cornerstone of our state economy, and a critical source of energy security for our country and allies abroad,” said Ed Longanecker, president of TIPRO. “TIPRO will continue to work with our members and policy leaders to maintain a business and regulatory environment that supports the responsible development of oil and natural gas for the benefit of Texans, the United States and our allies abroad.” 

More TIPRO report findings:

Oil and gas jobs in Texas paid an annual average wage of $139,061, 103% more than the average private sector job in the state.

Texas had the highest oil and gas payroll in the country in 2022 ($48 billion), with California coming in at a distant second ($11 billion), then Louisiana ($7.6 billion).

Texas had the highest number of oil and gas businesses in the nation last year with 12,306. This was three times the number of oil and gas businesses found in second-ranked Oklahoma.

Oil production in Texas was 1.83 billion barrels in 2022. New Mexico had the second highest oil production with 534 million barrels, followed by North Dakota with 393 million barrels produced.

Texas led the country in natural gas production with a record 11.2 Tcf produced in 2022, followed by Pennsylvania with 7.6 Tcf.

Paying the Bills

Also in January, the Texas Oil & Gas Association (TXOGA) released its Annual Energy & Economic Impact Report. Its key finding: Texas’ oil and natural gas industry paid $24.7 billion in state and local taxes and state royalties — by far the highest total in Texas history — shattering the previous record of just over $16 billion set in 2019 by 54%. 

“The Texas oil and natural gas industry plays an extraordinary role in securing our state and national economy and advancing global stability,” said TXOGA President Todd Staples. “However, growth is not guaranteed, and policy can promote prosperity, or hinder it. Policies and politics in Texas and across our nation will determine if we can continue to deliver for Texans while meeting our nation and the world’s energy needs.”

According to TXOGA, “$24.7 billion translates to roughly $67 million every day that pays for Texas’ public schools, universities, roads, first responders and other essential services. Production taxes and royalties to state funds more than doubled over fiscal year (FY) 2021. Production taxes grew by $5.8 billion, a 116% increase, and royalties to state funds increased by $2.2 billion, a 102% increase. Oil and natural gas production taxes exceeded $10 billion for the first time in Texas history.” 

Power Projects

In February, U.K.based Linde, a leading provider of industrial gases and engineering, signed a long-term agreement to supply clean hydrogen and other industrial gases to OCI’s (Euronext: OCI) new world-scale blue ammonia plant in Beaumont, Texas. The company says it will build, own and operate an on-site complex which will include autothermal reforming with carbon capture, plus a large air separation plant. The new complex will be integrated into Linde’s extensive Gulf Coast industrial gas infrastructure. It will supply clean hydrogen and nitrogen to OCI’s 1.1 million ton per annum blue ammonia plant, the first greenfield blue ammonia facility of this scale to come onstream in the United States.

In April 2022, HIF Global announced its selection of Matagorda County as the location of its first industrial scale eFuels facility in North America. It anticipates producing approximately 200 million gallons a year of a carbon-neutral gasoline substitute that will decarbonize over 400,000 vehicles in the United States. The company is investing approximately $6 billion, creating approximately 3,000 direct jobs during the construction phase of the HIF Matagorda eFuels facility and more than 125 permanent operating jobs. The project is also expected to create and sustain thousands of direct and indirect jobs in the region. The carbon-neutral gasoline substitute can be used in vehicles without any modification to existing engines or the infrastructure on which they depend. 

In November 2022, Chevron Phillips Chemical Company LLC and QatarEnergy created a joint venture company, Golden Triangle Polymers Company LLC, and began construction of an $8.5 billion integrated polymers facility in Orange, Texas. The facility will create more than 500 full-time jobs and approximately 4,500 construction jobs and generate an estimated $50 billion for the community in residual economic impacts. Once operational in 2026, the plant will produce Marlex® polyethylene. Polyethylene is used in the production of durable goods like pipe for natural gas and water delivery and recreational products such as kayaks and coolers. It is also used in essential packaging applications to protect and preserve food, helping prevent it from going to landfills, and keep medical supplies sterile.  

Mark Arend
Editor Emeritus of Site Selection magazine

Mark Arend

Mark Arend is editor emeritus of Site Selection, and previously served as editor in chief from 2001 to 2023. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.


Latest Articles from this Author

Error in custom script module

Site Selection online is a worldwide service of Conway Data, Inc. ©1983-2024, all rights reserved. Data is from many sources and not warranted to be accurate or current. To unsubscribe from our print magazine, contact Julie Clarke. For general inquiries, visit our contact page. For technical inquiries contact the Webmaster.