Texas oil and gas industry calls on Congress to pass permitting reform

As the Texas oil and natural gas industry continues to break production records and add jobs, it’s also calling on Congress to pass permitting reform legislation.

In July, Texas again set employment records. Among the new jobs added were 1,600 in the upstream sector alone of the Texas oil and natural gas industry. The upstream sector involves oil and natural gas extraction and some mining. It excludes refining, petrochemicals, fuels wholesaling, oilfield equipment manufacturing, pipelines, and gas utilities, which all support hundreds of thousands of additional jobs.

Since the COVID-19-era low point of September 2020, the industry has added 37,100 upstream jobs. The number of upstream employment increases outnumbered those with decreases by 35 to 11, the Texas Oil & Gas Association notes. Jobs in the industry are among the highest wages in Texas, with employers paying an average salary of approximately $124,000 in 2023.

“Texas continues to be the production powerhouse for the nation and the U.S. continues to lead the world in meeting basic energy needs,” TXOGA president Todd Staples said. “The men and women in the oil and natural gas industry make this possible. While there are economic variances in most industries, it is undeniable that oil and natural gas are indispensable to maintaining the high quality of life Americans deserve, and the men and women in the field deliver the goods every single day.”

Texas energy producers paid $557 million in oil production taxes last month, a 27% increase from last July, and $164 million in natural gas production taxes, according to state comptroller data.

But “with great production comes great responsibility,” the Texas Independent Producers and Royalty Owners Association (TIPRO) says. TIPRO is calling on Congress to support pipeline infrastructure development and permitting reform. As pipelines in the Permian Basin in west Texas and southeastern New Mexico reach capacity, future production is threatened,” it argues, because of a lengthy and sometimes convoluted federal regulatory permitting process.

To remedy this and other issues, the U.S. House passed the Energy Permitting Reform Act of 2024 (EPRA) last month.

“Texas producers continue to lead in providing access to reliable energy to meet growing global demand and it’s time for policymakers in Washington to work together in an expedited fashion to pass the EPRA,” TIPRO president Ed Longanecker said. “This important piece of legislation will remove infrastructure permitting delays and related federal bureaucracy to ensure that our vital energy reaches communities throughout the country and our allies abroad in a safe and efficient manner.”

The EPRA received bipartisan support in the Senate Energy and Natural Resources Committee and has yet to be considered before the Democratic-controlled Senate.

Nationally, obtaining “permits to build energy infrastructure and connecting it to the electric grid is harder today than at any point in recent memory,” TIPRO notes.

In Texas, the Texas Railroad Commission, which regulates the state oil and natural gas industry and intrastate pipeline safety, is much more efficient than the federal government when it comes to permit processing, the industry says. Last month, it processed “805 oil, 222 gas, and 355 injection completions for new drills, re-entries and re-completions.”

It also overhauled a 40-year-old oil and gas waste management rule to protect groundwater and address other issues and issued $2 million in enforcement violation fines, it announced this month. When doing so, RRC Commissioner Wayne Christian said, “The Railroad Commission continues to prove that a robust, responsible oil and gas industry can thrive while also ensuring a safe and clean environment for all.”

Republicans in the U.S. House passed a series of bills to promote domestic energy production that were important “in pushing back against the anti-energy and anti-consumer Biden Administration and its war on U.S. domestic energy,” Karr Ingham, economist and president of Texas Alliance of Energy Producers, said. “It is critical for our industry, our nation, and the world to promote and expand abundant, affordable, and reliable petroleum energy production and support efforts to maintain our economy.”

The series of bills have yet to pass the Democratic-controlled Senate.

The Institute for Energy Research identified more than 200 actions it says the Biden administration has taken against the U.S. oil and natural gas industry since January 2021. The latest include temporarily banning new permits for liquified natural gas export permits, which a federal court blocked.

But the LNG export pause “caused global uncertainty in America’s ability to supply reliable, affordable energy, leading to a 15% drop in LNG Sale and Purchase Agreements in the first half of 2024, compared to the same time period in 2023. This enabled suppliers in Asia and Canada to step in and acquire larger market shares, and Russia to once again become the largest natural gas supplier to Europe,” Longanecker said.

Pointing to the administration aggressively halting lease sales and imposing permitting restrictions on federal land and offshore, he said, "As we saw with the stay on the federal oil and gas leasing pause at the beginning of this administration, court orders don't necessarily translate into immediate action from the Biden administration. And that's what we need right now – real and immediate evidence that the administration will review permits expeditiously to reduce the uncertainty in the markets."