TIPRO Report Finds Texas Leading in Oil and Gas Production, Activity
State of Energy report also sees a widening role for natural gas due to robust global LNG demand.
The Texas Independent Producers & Royalty Owners (TIPRO) Association’s eighth edition of its State of Energy Report found Texas in the driver’s seat when it comes to oil and gas production and oil industry-related jobs for 2022. Oil production in Texas was 1.83 billion bbl in 2022, while New Mexico with 534 million bbl was a distant second, followed by North Dakota with 393 million bbl. Texas also led the country in natural gas production with a record 11.2 Tcf produced in 2022, followed by Pennsylvania with 7.6 Tcf. The Lone Star state had the highest rig count in the country in 2022 with an average of 380 active rigs. The number of rigs in Texas increased from 332 in January 2022 to 410 in December 2022.
The Texas oil and natural gas industry paid a record $24.7 billion in state taxes and state royalty payments in 2022. Royalty funds support all aspects of the state economy, including schools and education, first responders, and transportation infrastructure investment, among other things.
“Despite facing a number of unique challenges, including supply chain bottlenecks, inflationary pressures, workforce shortages, and an adversarial federal policy environment, the US oil and gas industry continued to offer significant economic support in 2022,” said Jud Walker, chairman of TIPRO and president and CEO of EnerVest Ltd. “Oil and natural gas development, led by Texas operators, will play an important role in meeting growing global energy demand for decades to come under any realistic scenario.”
The report found the state’s oil and gas industry supported a total of 948,943 direct jobs in the US last year, with total direct and indirect jobs tied to the industry exceeding 19 million. The US oil and natural gas sector paid a national annual wage averaging $120,665 during 2022, 74% higher than average private sector wages. Payroll in the US oil and gas industry meanwhile totaled $114 billion and direct Gross Regional Product (GRP) was $854 billion in 2022, or around 3% of the nation’s economy.
Texas accounted for 37% of all oil and gas employment in the nation, as outlined in the association’s new report. The industry supported a total of 347,828 direct jobs in Texas in , with total direct and indirect employment of 2.6 million. Direct GRP for Texas oil and gas equaled $322 billion, or 16% of the state economy. Total US goods and services purchased by the Texas oil and natural gas industry surpassed $264 billion last year, 82% of which came from Texas businesses.
Last year, the US also drastically increased its liquefied natural gas (LNG) exports to Europe as the continent's energy crisis intensified with 74% of all US exports going to Europe in the first of half of 2022. In that same period in 2021, exports to Europe only represented 34% of the nation’s LNG exports.
Natural gas exports from Texas are expected to surpass record levels in 2023, as both the Freeport LNG facility returns to full capacity during the first half of the year after a June 2022 fire sidelined the plant, and demand from Europe and Asia continues to grow.
Natural gas production from the state is expected to grow driven by output from the Permian Basin as new pipeline infrastructure to move the product out of the area comes online.