I’m not going to lie to you and say that I haven’t enjoyed the low gas prices. It has also been nice filling up my Husband’s lifted up Ford F150 for under 50 bucks. However, knowing how many friends are without jobs because of the downturn in oil and gas makes my money savings bitter sweet. There are companies out there that have done a great job of staying afloat during the crisis. I am glad to see this.
Take it as good news or bad news, the prices at the pump have been creeping up over the past few weeks. It will be interesting to see what the price per gallon will be at the end of summer 2016 versus 2015.
People working for the State of Texas are not the only ones feeling the effects of lower oil prices. The States’ coffers are too. There is a large amount of tax revenue that our State’s government collects from the oil and gas industry. There is taxation on natural gas production, oil production, permits to do any kind of drilling for oil or gas, sales tax on the purchasing or leasing of well site production equipment, utility tax for natural gas in your home, and of course the tax we all get at the gas pump. With over 26 million people living in the Lone Star State alone, this is a large amount of tax revenue.
Now some of the revenue seems to be fairly uniform, like utility taxes and taxes at the pump. The differences are going to be on permits, equipment purchasing/leasing, and the big one, production.
Below is a listing of tax revenue from 2012, 2013, 2014, and 2015. I wanted to show multiple years so you can really see the differences.
All these number thanks to Texas Transparency.
| Revenue by Source for Fiscal Year 2012 | $ Amount | %, +/- from Previous Year |
| Motor Fuels Taxes | 3,169,239,669 | 2.1 |
| Natural Gas Production Tax | 1,534,630,438 | 38.3 |
| Oil Production Tax | 2,103,268,285 | 42.8 |
| Revenue by Source for Fiscal Year 2013 | ||
| Motor Fuels Taxes | 3,221,502,038 | 1.6 |
| Natural Gas Production Tax | 1,495,202,962 | -2.6 |
| Oil Production Tax | 2,990,890,113 | 42.2 |
| Revenue by Source for Fiscal Year 2014 | ||
| Motor Fuels Taxes | 3,315,952,089 | 2.9 |
| Natural Gas Production Tax | 1,899,581,526 | 27 |
| Oil Production Tax | 3,874,070,862 | 29.5 |
| Revenue by Source for Fiscal Year 2015 | ||
| Motor Fuels Taxes | 3,446,156,816 | 3.9 |
| Natural Gas Production Tax | 1,280,409,939 | -32.6 |
| Oil Production Tax | 2,879,054,654 | -25.7 |
As you can see, there is a huge drop off of tax revenue in natural gas and oil production taxes. Motor fuels taxes gained a small amount, naturally. Gas is cheaper so people aren’t thinking much about cost of longer commutes or family road trips.
There are other states joining in the pity party. The graphic below from EIA shows a few other states that are having tax revenue declines.
We will have to wait and see what happens in 2016. Hopefully there will not be much more of a deficit that what we are already experiencing.
Of course Croft Production Systems can assist your company with natural gas processing needs, but now we are so much more.
Our Croft Certified Program can help your company save money by leasing or purchasing refurbished units. Separators; vertical and horizontal, TEG’s, JT’s, Heat Exchangers, Forced Air Coolers and Amine Plants. After being in the field, all of these units are inspected by our engineers and then brought back to ISO 9001 standards before being released to you.
references:
https://www.eia.gov/todayinenergy/detail.cfm?id=24512
https://comptroller.texas.gov/transparency/reports/revenue-by-source/history.php#2014
