(The Center Square) – According to a new analysis of federal and state data, “direct oil and natural gas industry Gross Regional Product, essentially GDP for a region of study, exceeded $60 billion last year” in Texas coastal counties alone.
The coastal region includes communities in 16 counties stretching from Beaumont to Brownsville, along the Gulf of Mexico, Coastal Bend and Rio Grande Valley’s coast.
The region is home to the busiest ports in the country exporting liquified natural gas (LNG). The US leads the world in LNG exports driven by massive production increases in the Permian Basin in west Texas and southeast New Mexico.
The LNG export industry has become “a vital engine of economic growth and infrastructural development for Texas,” Texans for Natural Gas, a project of the Texas Independent Producers and Royalty Owners Association states in a new report.
“Each year, the LNG industry supports thousands of local jobs and contributes billions in state tax revenue. The development of LNG export terminals and pipelines has also spurred widespread infrastructure growth in Texas,” it notes, pointing to unprecedented economic expansion in the ports of Brownsville and Corpus Christi. Infrastructure growth to and around the ports has had a “rippling effect from transportation to engineering and manufacturing.”
The US LNG industry, led by Texas, “contributes a whopping $43.8 billion toward the U.S. GDP, and generates $11 billion in tax and royalty revenues for local, state, and federal governments,” TIPRO notes.
“The United States is witnessing the benefits of a strong LNG export industry unfold in real-time,” Ed Longanecker, president of TIPRO, said. “Texas is at the heart of this burgeoning industry, and will continue to experience tremendous benefits, serving as the bedrock of U.S. economic growth and securing an advantageous position on the global stage for decades to come.”
“The industry benefits virtually every business sector in the coastal region,” he told The Center Square. “In 2023, nearly $100 billion of U.S. goods and services were purchased by the oil and natural gas sector in Texas coastal counties, 30% of which occurred within the region.”
The industry supported more than 178,000 jobs in the coastal region, according to data from the North American Industry Classification System (NAICS), using TIPRO’s definition of the industry and focusing on Texas’ coastal counties.
Using NAICS data, of the 926 business sectors in the coastal region evaluated, 880 sold good and services to the local oil and natural gas industry, including to service contractors for heating, plumbing and air conditioning, restaurants, hotels and motels, supermarkets and grocery stores, retailers, medical and surgical facilities, and all elementary, middle and high schools, as well as colleges, universities and professional schools, according to TIPRO’s report.
According to a recent National Association of Manufacturers study US LNG exports support 222,450 jobs nationwide, paying American workers $23.2 billion in total annual income last year.
The average annual wage for the oil and natural gas industry in the coastal region is $120,818 compared to $58,425 for all industries in the region, TIPRO notes.
Texas Comptroller Glenn Hegar recently announced that $5.48 billion was transferred to the State Highway Fund (SHF) and Economic Stabilization Fund (the Rainy Day Fund)—receiving windfalls from crude oil and natural gas production tax revenues.
In November 2014, voters approved a constitutional amendment allocating at least half of severance taxes from the industry to the Rainy Day Fund, with the remainder going to the SHF for use on non-toll highway construction, maintenance and right-of-way acquisition.
When Texas’ fiscal 2024 ended on Aug. 31, the ESF balance was $21.02 billion, Hegar said. After the most recent transfers, the new Rainy Day Fund balance is roughly $23.96 billion. This excludes outstanding spending authority of approximately $486 million, he said.
“Although inflation has come down from the historic levels reached during the current administration, uncertainty remains in the global economy as consumers continue to grapple with elevated prices on everything from groceries to home and auto insurance, and geopolitical instability persists,” Hegar said. The transfers to the two funds indicates that “the Texas economy remains strong and well positioned for continued growth albeit at a much more moderate pace than what we have seen in recent years.”
Thanks to the oil and natural gas industry, “A healthy ESF balance provides a critical cushion against any future bumps in the road and gives the Legislature increased flexibility as they convene to tackle the critical issues important to Texans,” he said.
This article was originally published at www.thecentersquare.com
