Texas' oil and gas machine just delivered again, pouring nearly $27 billion into state and local coffers in fiscal 2025, even as companies quietly cut staff and tightened operations ahead of a softer market. Industry leaders say that haul works out to about $74 million a day, propping up schools, highways, and other local services while the state kept hitting new production milestones. Not exactly pocket change.
According to the Texas Oil & Gas Association’s annual Energy & Economic Impact Report, the industry paid $27.0 billion in state and local taxes and state royalties in FY2025, a sum the trade group calls the second-highest in Texas history. Texas Oil & Gas Association reports that the revenue translates to nearly $74 million per day and that major public funds, including the Permanent University Fund and the Permanent School Fund, received multimillion-dollar infusions during the year.
The Houston Chronicle reports that the industry employed more than 495,500 Texans last year, with average annual wages climbing to about $133,095, well above the broader private-sector average. The Houston Chronicle also notes that school districts collected roughly $2.6 billion in property tax receipts from mineral properties in 2025, down from $2.92 billion in 2024, while counties brought in about $1 billion.
Production Records Keep Revenue Flowing
Texas kept the taps wide open in 2025. Monthly crude production hit a peak in July at roughly 5.85 million barrels per day, and marketed natural gas also reached new highs, according to reporting tied to the industry release. The Dallas Morning News quotes Texas Oil & Gas Association President Todd Staples as saying the sector is "adjusting, not breaking" as markets rebalance and long-lead projects start to come online.
What It Means for Local Budgets and Lawmakers
The report landed while lawmakers and local officials continue to wrestle over how those energy dollars should be divided, with repeated attempts to steer more cash back to the communities sitting on top of the oil patch. The Texas Tribune has highlighted bills that would redirect portions of oil and gas tax revenue toward road repairs, orphan-well plugging, and county services, proposals that would require constitutional changes and voter approval before any money actually moves.
Looking Ahead
Industry leaders told TXOGA and reporters that surging power demand from data centers and artificial intelligence could help keep natural gas consumption higher even if crude markets wobble, offering a bit of a demand cushion in the months ahead. TXOGA emphasized that while some firms pared staff in 2025, expansions in pipeline and LNG construction added jobs elsewhere, leaving the overall employment picture mildly positive.
