Texas’ oil and gas production surges even as federal government clamps down on environmental regulations

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ODESSA — A report from the Texas Oil and Gas Association shows that the state’s energy industry is showing no signs of waning, boasting record levels of crude oil production as the federal government introduced further environmental regulations that industry leaders said are designed to hinder production.

The latest version of the group’s annual report said that oil and gas companies paid $26.3 billion in state and local taxes in 2023, $1.5 billion more than last year, due in part to record fossil fuel extraction throughout the state. The report also said the oil and gas industry employed more than 480,000 Texans who make an average of $124,000 a year.

Todd Staples, the association’s president, said the industry "has achieved these record-breaking milestones in spite of our federal government using every opportunity to thwart growth by delaying permits, canceling pipelines and introducing regulatory uncertainty.”

President Joe Biden has taken steps to limit the amount of greenhouse gas emissions from the oil and gas industry through fossil fuel burning — which scientists have said contributes to climate change — with the Environmental Protection Agency finalizing a regulation in December directing operators to reduce their methane output.

The administration also cut back on offshore drilling, awarding just three oil and gas leases through 2029. Last week, the administration halted pending approvals for some facilities that would export liquefied natural gas to other nations while the Department of Energy assesses their economic and environmental impacts.

The product of those efforts has scarcely impacted oil and gas production in Texas.

According to the Energy Information Administration, the state has outpaced the nation in oil and gas extraction and refining. Forbes reported in December that the U.S. set a new annual oil production record, based on federal data.

The federal agency suggested in a report earlier this month that crude oil production in the U.S. will set records in 2024 and 2025 due to increased industry efficiency. However, growth will slow due to fewer active drilling rigs.

Texas oil and gas companies produced as much as 5.6 million barrels a day in 2023, the highest that year, according to the agency, which collects and administers energy statistics. The state with the next highest production was New Mexico, which produced 1.8 million barrels a day at its peak.

“2023 was such a blockbuster year that Texas effectively rewrote its oil and natural gas record book,” Staples said.

Texas supplied 42% of the nation’s oil in 2023, according to the oil and gas association. Most of the state’s oil continues to come from the Permian Basin, a 75,000-square-mile area straddling Texas and New Mexico where the biggest names in the energy industry — including Chevron, ExxonMobil and Conoco Phillips — are drilling.

“Clearly, [the oil and gas industry] is doing extremely well,” said Tom Pelton, a spokesperson for Environmental Integrity Project, a nonprofit advocating for stricter environmental regulations that has sued energy companies violating existing laws. “They wouldn’t be making these incredible profits and producing record amounts of oil and gas if they were overregulated.”

Pelton said the industry should focus on supporting the quality of life in Texas, and that operators should be more mindful of their impacts on their surrounding local communities.

“What we need is for the oil and gas industry to be like everyone else and to follow the law…and to contribute to the community,” Pelton said.

Disclosure: Texas Oil and Gas Association, Chevron USA Inc., and Exxon Mobil Corporation have been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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