TIPRO Releases “2021 State of Energy Report”

Austin, Texas - The Texas Independent Producers & Royalty Owners Association (TIPRO) today released the sixth edition of its “State of Energy Report,” offering a detailed analysis of national and state trends in oil and natural gas employment, wages and other key economic factors for the state's energy industry in 2020. TIPRO’s “State of Energy Report” series was developed to quantify and track the economic impact of domestic oil and natural gas production with an emphasis on the state of Texas. In 2021, TIPRO updated its industry definition to include the Oil and Gas Pipeline and Related Structures Construction sector and provides updated and historical data in this year's publication.

According to the association’s new report, the U.S. oil and gas industry employed 902,223 professionals in 2020, representing a net decline of 160,323 direct jobs compared to 2019. The industry paid a national annual wage averaging $113,601 last year, 86 percent higher than average private sector wages in the United States. Payroll in the U.S. oil and gas industry meanwhile totaled $102 billion and direct Gross Regional Product (GRP) for the industry was $741 billion in 2020, or 4 percent of the U.S. economy. Additionally, total U.S. goods and services purchased in 2020 by the oil and gas industry decreased, but still exceeded $527 billion from over 900 business sectors, notes TIPRO.

In Texas, the oil and gas industry continued to provide significant economic support despite challenging market conditions, accounting for 39 percent of all oil and gas employment in the nation, as outlined in the new report. The industry supported a total of 347,529 direct jobs in Texas in 2020, a net decrease of 73,982 jobs from the previous year. When factoring in direct, indirect, and induced employment multipliers, the Texas oil and natural gas sector supported over 2.3 million jobs last year. Direct GRP for Texas oil and gas equaled $278 billion in 2020, or 15 percent of the state economy.

Oil production in Texas totaled 1.73 billion barrels in 2020, representing a decline of 117 million barrels compared to 2019. North Dakota had the second highest oil production with 430 million barrels, followed by New Mexico with 360 million barrels produced. Texas also once again led the country in natural gas production with 10.4 trillion cubic feet (Tcf) produced in 2020, followed by Pennsylvania with 7.1 Tcf. Texas had the highest average rig count in the country in 2020 with 215 rigs. The number of rigs in the Lone Star State dropped from 418 in January to 181 in December, a 57 percent decline.

The new Enverus outlook for oil market fundamentals for 2021 forecasts total U.S. average yearly production to decline approximately 690,000 barrels per day (b/d) in 2021. This is a result of continued modest declines expected through most of 2021 as operators take a conservative approach to capital expenditures while they await confirmation of a commodity price recovery. Production will resume yearly average growth in 2022 at approximately 200,000 b/d, Enverus projects. On the bright side, 2021 free cash flow expectations are generally positive because operators will likely focus efforts on completing their drilled but uncompleted (DUC) inventory before ramping up drilling expenses.

As part of its new analysis, TIPRO outlines numerous factors that are expected to impact U.S. oil and natural gas production and commodity prices, led by continued recovery in global demand supported by new stimulus, growth in developing nations and increasing confidence in the effectiveness and utilization of the COVID-19 vaccine. However, new and anticipated actions under the Biden Administration targeting domestic oil and natural gas production could negatively impact this positive momentum and create a higher degree of uncertainty in the market. In response to federal government “overreach,” Texas Governor Greg Abbott recently announced that the state was going to take steps to protect the oil and gas industry, including a promise to veto any "new green deal" type of legislation, should it be passed. Governor Abbott also signed an executive order that directed every state agency to use all lawful powers and tools to challenge any federal action that threatens the continued strength and vitality of the energy industry. He has instructed each state agency to identify potential litigation, notice and comment opportunities and any other means of preventing federal overreach within the law.

“TIPRO applauds Governor Abbott for his leadership and actions to protect the Texas oil and natural gas industry,” said Brent Hopkins, chairman of TIPRO and CEO of Suemaur Exploration & Production LLC. “Our organization looks forward to working with Governor Abbott and other stakeholders to help maintain a business and regulatory environment that supports the responsible development of oil and natural gas for the benefit of all Texans."

In addition to advancing a targeted federal policy agenda, during the Texas 87th Legislative Session, TIPRO will engage in all priority issues facing its members and the Texas oil and natural gas industry. As outlined in the report, specific areas of focus from a state legislative standpoint include tax policy, critical infrastructure, workforce development and various environmental issues facing oil and gas producers and mineral owners.

"The Texas oil and natural gas industry continued to show its resiliency and economic impact during one of the most challenging periods in its history," said Ed Longanecker, president of TIPRO. “As our industry continues to recover, and we face a new set of challenges, our organization remains committed to providing effective advocacy for our members at all levels of government,” concluded Longanecker.

What does Oil & Gas mean for Texas?
Texas led the nation in oil and gas jobs with 347,529 people employed in this industry, a net decline of 73,982 compared to 2019. Approximately 39 percent of all oil and gas jobs nationwide were located in Texas last year.
When incorporating direct, indirect and induced multipliers for oil and gas employment, the industry supported a total of 2.3 million jobs in Texas last year.
Oil and gas jobs in Texas paid an annual average wage of $129,989, 113 percent more than the average private sector job in the state. The highest average industry wages were in Delaware ($288,352). South Dakota had the lowest average oil and gas wages in the country ($67,493).
Texas had the highest oil and gas payroll in the country in 2020 ($45 billion), with California coming in at a distant second ($10 billion), then Louisiana ($6.8 billion).
Oil production in Texas totaled 1.73 billion barrels in 2020, representing a decline of 117 million barrels compared to 2019. North Dakota had the second highest oil production with 430 million barrels.
Texas had the highest average rig count in the country in 2020 with 215 rigs. The number of rigs in Texas dropped from 418 in January to 181 in December, a 57 percent decline.
In 2020, total direct GRP for the Texas oil and natural gas industry was $278 billion, or 15 percent of the Texas economy.
The Texas oil and natural gas industry purchased U.S. goods and services in the amount of $198 billion, 82 percent of which came from Texas businesses.
Between 2007 – 2020, total state taxes and state royalty payments paid by the Texas oil and natural gas industry exceeded $162.9 billion, including $13.9 billion contributed last year.

The “State of Energy Report” series is published exclusively by the Texas Independent Producers & Royalty Owners Association. A full list of the data sources used to develop this report can be viewed in the methodology section of the report.

Visit https://bit.ly/3aBYzSP to download a copy of TIPRO’s new "2021 State of Energy Report."

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About TIPRO
The Texas Independent Producers & Royalty Owners Association (TIPRO) is a trade association representing the interests of nearly 3,000 independent oil and natural gas producers and royalty owners throughout Texas. As one of the nation’s largest statewide associations representing both independent producers and royalty owners, members include small businesses, the largest, publicly-traded independent producers, and mineral owners, estates, and trusts.

This release was published on openPR.