Fueling the Economy, Enhancing Security and Improving the Environment

The Texas Oil and Gas Association
Written by Nate Hendley

The Texas Oil and Gas Association (TXOGA) has a simple message: oil and natural gas are good for Texas and the United States in general. Oil and natural gas drive the Texas economy, generating billions of dollars in annual royalties and taxes while providing high-paying jobs to nearly 350,000 people. Surging oil and natural gas production has enhanced domestic security by making the U.S. less dependent on foreign fuel sources, while industry-funded innovations have had a positive environmental impact.

“Texas is the number one oil and natural gas-producing state in the country. Many sources have described our state as an energy superpower in its own right. Texas alone produces forty percent of the crude oil in the U.S. and the Permian Basin [in Texas and New Mexico] is the most productive oil field in the world,” states TXOGA President, Todd Staples.

He adds, “No matter how diversified our state’s economy has become, oil and natural gas remains the backbone of the Texas economy and has been the catalyst for fueling our state’s success.”

Indeed, the statistics are astonishing. In 2017, the Texas oil and natural gas sector was worth $463 billion and accounted for twenty-nine percent of gross state product (GSP). Some 348,570 people were employed in the industry, earning an average salary of $129,991.

Founded in 1919, TXOGA is the biggest and oldest state-wide trade association that speaks for this enormous sector.

TXOGA “represents every facet of the oil and gas industry from small independents to major producers. Collectively, the membership of TXOGA produces more than ninety percent of Texas crude oil and natural gas. Our members operate over eighty percent [of Texas] refining capacity, and they’re responsible for the vast majority of our state’s pipeline,” explains Staples.

TXOGA is marking its centenary in various ways. The association’s members are funding the renovation of an oil and natural gas exhibit at the Bullock Texas State History Museum in Austin. The revamped exhibit will be unveiled this fall as part of TXOGA’s centenary celebrations.

“We’re sharing stories from men and women of the industry and [highlighting] the innovation that has revolutionized the industry and the environmental progress that we have made over one hundred years,” he states. As it enters its second century, TXOGA is focused on “ensuring that Texas remains a competitive place to do business,” says Staples.

“We have four focal points for association activities that we address: legislation, regulation, judicial affairs, and public affairs. We have a strong member-supported committee structure and mobilize representatives of our member companies that have expertise. There is no other organization in the state that can marshal the spectrum of expertise on industry issues like TXOGA can,” he continues.

Membership in TXOGA offers other benefits as well. “Safety is the number one priority of our member companies. So, TXOGA has a workers’ compensation safety group. Along with others, this group produces safety modules that are available for training purposes. We have a very strong workers’ compensation insurance program through Texas Mutual that offers affordable and quality workers’ comp benefits to eligible member companies. We also have a partnership with Blue Cross and Blue Shield of Texas that makes it possible for small businesses to provide affordable group health insurance coverage to its employees through our Association Health Plan,” he states.

The association engages in robust promotional and lobbying activities. Most of the latter is directed at the Texas Legislature, though some issues, such as environmental reviews and interstate projects, involve federal officials. TXOGA works with state legislators to keep taxation rates fair and regulations reasonable.

Public education also plays a big part in what TXOGA does. The association strives to highlight the role of oil and natural gas in the Texas economy. As Staples points out, you do not have to work for the sector to benefit from it. Texas oil and natural gas companies paid $14 billion in state royalties and state and local taxes in the fiscal year 2018, an increase of twenty-seven percent from the previous fiscal year. Between fiscal years 2007 and 2018, state royalties and taxes paid by the industry added up to more than $133 billion.

This money is used to finance road construction, support first responders, and fund education. Texas currently boasts a $44 billion Permanent School Fund and a $22.6 billion Permanent University Fund, both of which are funded with oil and natural gas royalties. The Texas Permanent School Fund supports public school education from kindergarten through grade twelve in Texas and recently became the largest educational endowment in the nation.

TXOGA also wants to educate the public about the benefits of hydraulic fracturing, also known as ‘fracking,’ a practice much criticized by environmentalists. Fracking allows oil and natural gas companies to access formerly unreachable deposits. The ‘shale revolution’ as it has been dubbed has proven to be a massive benefit for America, says Staples.

“Consumers should fully be informed that fracking is the reason we have access to affordable and reliable energy sources today. The shale revolution has elevated the United States to become the number one oil and natural gas producer on the planet. Because of the shale revolution, the U.S. is far less dependent on other nations for our energy needs. We have become a major energy exporter – something that was unthinkable a decade ago,” he says.

Tapping into new domestic supplies of oil and natural gas means more than just cheap fuel for your car. According to TXOGA, roughly ninety-six percent of everyday consumer items from laptops and shampoo to cellphones, eyeglasses and medical devices are fashioned from petrochemicals.

“Study after study has confirmed that fracking does not harm drinking water or air quality regardless of the misinformation campaigns that people are exposed to. Expanding the use of natural gas produced through fracking is one of the reasons carbon dioxide emissions in the U.S. are near thirty-year lows,” insists Staples.

On that same note, TXOGA is determined to publicize efforts the oil and natural gas sector has made to create a cleaner environment. “Our industry truly stands out as the leading investor in zero- and low-carbon technology. Our industry is a leader in carbon sequestration and capture technology,” he says.

According to TXOGA, the oil and natural gas industry invested over $300 billion in greenhouse gas mitigating technologies between the years 2000 and 2016. Thanks to industry-financed research and development and refiners producing cleaner gasoline and diesel fuels, new cars, pickup trucks, and SUVs give off roughly ninety-nine percent fewer emissions than vehicles did in 1970, reports TXOGA.

The association supports pipelines as the safest method of transporting natural gas and oil and notes that under Texas regulations, oil and natural gas-producing wells must meet strict building standards. Wells must feature multiple layers of cement and steel to protect groundwater and they are rigorously tested before being put to use.

Staples also cites the Environmental Partnership, an initiative of many U.S. oil and gas companies to share best practices to reduce methane emissions and implement other green measures.

The industry’s efforts “are working. Methane emissions from oil and natural gas systems are down fourteen percent from 1990 to 2017 all the while production has skyrocketed,” he says.

While supportive of an all-of-the-above energy approach, including renewable energy sources such as solar and wind power, TXOGA wants the public to understand that “oil and natural gas will continue to be the dominant energy provider for the foreseeable future, as these resources are the only ones capable of delivering the reliable, affordable, and abundant energy our nation demands,” explains Staples.

Being the dominant energy provider comes with its own set of challenges, however. “With record production and all forecasts indicating we will continue to grow, our state needs expanded infrastructure to transport oil and gas to communities and to our export facilities. We know there are billions of dollars in pipeline projects planned and underway that will produce thousands of jobs and substantial revenues, and will add to our energy strength and energy security. Developing this infrastructure is absolutely essential to remaining the dominant world player and for our own domestic energy security,” he notes.

He forecasts a bright future, for both the Texas natural gas and oil industry and the association that represents this sector.

“This industry is committed to partnering tried and proven technology with innovation and ingenuity in order to address challenges and environmental issues. I see no signs of slowing down. Our industry partners are committed to safety and environmentally responsible methodologies and will continue to be the world leaders. At TXOGA, our responsibility is to be a strong advocate for the industry and to be partners for growth,” states Staples.



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