AUSTIN (KXAN) – A new report from the U.S. Energy Information Administration predicts oil companies will produce a million more barrels of crude oil a day next year. That will bring America to a new record of more than 10 million barrels a day. The West Texas oil fields in the Permian Basin will drive a lot of that production.
The state of Texas will also collect a lot of taxes on oil production. Roads, schools, colleges and the state savings account all get dedicated money from oil and gas taxes. Dick Lavine from the Center for Public Policy Priorities says lawmakers specifically set it up that way.
“TxDOT I’m sure is happy to be able to plan on a certain amount of money every year,” Lavine said.
The drawback, Lavine said, is that when the economy tanks, so do the services the state provides. It also decreases the power of state lawmakers by taking away their power to decide where money goes in the budget.
“It’s already been taken out of the legislature’s hand. It can’t go to public ed to help cut property taxes. It can’t go to health and human services,” Lavine said.
“The overall recovery in oil and gas is good for the Texas economy and Comptroller Hegar has long touted Texas as ground zero for that recovery,” wrote Chris Bryan from the Comptroller’s office, the state agencies that collects taxes, “It’s not always simple to predict exactly how changes in price or production levels will impact Texans day to day, but we do anticipate the oil and gas sector in Texas to benefit if and when global demand increases.”
Forecasts made months ago already predicted millions for some state accounts.
Oil and gas production taxes will continue to grow our $10 billion rainy day fund. Colleges lease 2 million acres of land in West Texas to energy companies, and this year the A&M System is projected to make nearly $295 million and the UT System will collect $590 million. Texas roads are expected to get three fourths of a billion dollars from oil and gas taxes and a billion dollars could go to Texas public schools.
However, what’s good for this business is bad for the environment, said Luke Metzger from Environment Texas.
“We’re shooting ourselves in our foot,” Metzger said. “We’ll see more Hurricane Harvey’s and rising sea levels, all of those things are bad for human health and safety, but are costing our economy billions of dollars in damages.”
New rules proposed for oil and gas drilling on government lands are also being rescinded by the Trump administration. They would have required companies to disclose chemicals used in “fracking,” which uses pressurized water to break up oil deposits.