Permian basin oil, natural gas activity contributes $181.8 billion in GDP, report finds

World Oil Staff August 30, 2023

(WO) — The Permian basin's economic impact continues to gain momentum, bringing promising news for Texas, New Mexico and the entire nation. According to the latest report by the Permian Strategic Partnership (PSP), the Permian basin had a record year for tax revenue collected from the oil and gas industry. These funds support tax relief, road improvements, public schools and teachers, police and fire departments, community hospitals, universities, and other essential services. The Perryman Group projected the Permian basin to generate $325 billion in gross product and provide more than 1,200,000 jobs for the nation's economy by 2050.

Texas Governor Greg Abbot

According to the Economic Impact report, the Permian is also responsible for $24.5 billion in taxes collected across Texas and New Mexico. The area also doubled the amount of oil and gas severance and production taxes across both states compared to the previous year

The Permian basin also contributed $2.1 billion to Texas’ Permanent University Fund, and $2.1 billion to Texas’ Permanent School Fund, more than double the previous year.

The region also accounts for 35% of New Mexico’s state budget ($5.8 billion) and more than 1/3 of the total funding for New Mexico’s schools, as well as roughly 3% of U.S. wind capacity and approximately 8% of U.S. total solar plant capacity. Investments in both wind and solar are growing rapidly in the Permian basin

The Permian basin is a global energy-producing region with abundant natural and renewable resources. With 105 MMbbl of recoverable oil and 229 Tcf of recoverable natural gas, the Permian basin helps fuel economies worldwide.

By 2025, the Permian basin will be responsible for generating 50% of U.S. oil production.  Despite being home to only 1.6% of Texas's population, the Permian basin accounts for 8.2% of the state's private sector GDP. The same goes for New Mexico; only 9.3% of the state’s population lives in Lea, Eddy and Chaves counties, but the Permian basin accounts for 26.5% of the state’s GDP.

“Texas is blessed to be home to the Permian basin, the nation’s most prolific energy producing region that not only strengthens our state’s thriving economy, but helps secure America’s energy independence. The vast oil fields of the Permian basin have helped create unprecedented levels of economic success and opportunity in Texas, keeping our state the economic engine of America. Our continued support of this critical region will ensure Texans—and Americans—have the necessary energy to power their homes, businesses, and growing local communities,” said Texas Governor Greg Abbott.

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