Dallas, Texas, January 8, 2026
In fiscal year 2025, the Texas oil and gas sector paid $27 billion in state and local taxes, the second-highest amount in state history, supporting vital public services, including education and infrastructure. This revenue translates to nearly $74 million daily, bolstering essential services statewide. Additionally, the sector created significant employment opportunities, employing over 495,500 Texans and supporting a total of nearly 1.4 million jobs across the economy.
Texas Oil and Gas Industry Contributes $27 Billion in Taxes and Royalties in 2025
Dallas, Texas – In fiscal year 2025, the Texas oil and natural gas industry paid $27 billion in state and local taxes and state royalties, marking the second-highest total in the state’s history. This substantial contribution equates to nearly $74 million daily, supporting essential services such as public schools, universities, roads, and first responders.
Key Financial Contributions
Public Education Funding
The Permanent University Fund received $1.72 billion, and the Permanent School Fund received $1.40 billion from oil and natural gas royalties. Combined, these funds have a market value exceeding $100 billion, with the Permanent School Fund alone holding a balance of $66.5 billion, surpassing Harvard’s endowment and ranking as the largest educational endowment in the nation.
Rainy Day Fund
The Economic Stabilization Fund, commonly known as the Rainy Day Fund, has accumulated over $35.9 billion from oil and natural gas production taxes since its inception in 1987, accounting for more than 85% of its total revenue. This fund received $2.7 billion in the current cycle.
Local Government Support
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. Among local recipients, Pecos-Barstow-Toyah Independent School District in West Texas ranked first statewide, receiving $309.3 million, while Reeves County ranked first among counties with $109.4 million.
Industry Employment and Economic Impact
The industry employed over 495,500 Texans in 2025, with an average annual wage of $133,095—68% higher than the average in the rest of Texas’ private sector. These jobs generate approximately two additional jobs each, supporting nearly 1.4 million total jobs across the Texas economy. Some analyses suggest the employment multiplier could approach three additional jobs per direct job, bringing the total to over 2 million jobs supported by the industry statewide.
Record-Breaking Production
Despite market challenges, the Texas oil and natural gas industry set new records in fiscal year 2025, including a record-high crude oil production of 5.9 million barrels per day in July. This achievement underscores the industry’s resilience and its critical role in both the state and global energy markets.
Background Context
Since 2007, when the Texas Oil and Gas Association began compiling this data, the Texas oil and natural gas industry has contributed over a quarter of a trillion dollars in state and local taxes and state royalties. This figure excludes 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 significant economic ripple effect benefiting other sectors of the economy.
Looking Ahead
The Texas oil and natural gas industry remains poised for the long haul in 2026, continuing to drive economic growth, support public services, and contribute to the state’s energy security. Its ongoing performance highlights the sector’s vital role in Texas’ economic landscape.
Frequently Asked Questions (FAQ)
What was the total amount paid by the Texas oil and natural gas industry in state and local taxes and state royalties in fiscal year 2025?
The Texas oil and natural gas industry paid $27 billion in state and local taxes and state royalties in fiscal year 2025, marking the second-highest total in the state’s history.
How does the $27 billion contribution support public services in Texas?
The $27 billion translates to nearly $74 million daily, funding essential services such as public schools, universities, roads, and first responders.
What is the significance of the Permanent School Fund’s balance?
With a balance of $66.5 billion, the Permanent School Fund is larger than Harvard’s endowment and is the largest educational endowment in the nation.
How many jobs does the Texas oil and natural gas industry support?
The industry employs over 495,500 Texans, with each job supporting approximately two additional jobs, totaling nearly 1.4 million jobs across the Texas economy.
What record did the Texas oil and natural gas industry set in fiscal year 2025?
The industry set a record-high crude oil production of 5.9 million barrels per day in July 2025.
Key Features of the Texas Oil and Natural Gas Industry’s 2025 Performance
| Feature | Details |
|---|---|
| Total Taxes and Royalties Paid | $27 billion in state and local taxes and state royalties, the second-highest total in Texas history. |
| Public Education Funding | Permanent University Fund received $1.72 billion; Permanent School Fund received $1.40 billion. Combined market value exceeds $100 billion. |
| Rainy Day Fund Contribution | Economic Stabilization Fund received $2.7 billion, totaling over $35.9 billion from oil and natural gas production taxes since 1987. |
| Local Government Support | School districts received $2.6 billion; counties received $1 billion in property taxes from the industry. |
| Industry Employment | Over 495,500 Texans employed, with an average annual wage of $133,095, supporting nearly 1.4 million jobs across the economy. |
| Record Production | Set a record-high crude oil production of 5.9 million barrels per day in July 2025. |
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