States generating less income from oil and natural gas
The decline in oil prices in since June of last year has reduced oil and natural gas production tax revenues in some of the largest oil and natural gas production states, according to the Energy Information Administration (EIA).
Texas, North Dakota, Alaska and Oklahoma – four of the five top oil and natural gas producing states in the United States – have all seen tax revenue from the oil and gas sector fall in recent months. California produces more oil than both Alaska and Oklahoma, but its economy is much larger, making it relatively less affected by changes in the oil and natural gas prices and production, says the EIA.
Texas has seen revenue from natural gas fall 41% since September 2014, receiving $108.9 million in natural gas production taxes in February 2015, compared to $183.5 million in September. Oil production and regulation taxes fell 48% in same period, generating $185.1 million in February of this year compared to $357.5 million in September, according to the state’s comptroller. The EIA estimates crude oil and lease condensate production in Texas also increased to 107 MMBO in December 2014 from 88 MMBO in January 2014.
In North Dakota, tax revenues from oil and natural gas production decreased to $254.1 million in January 2015 from $323.6 million in August 2014, a 21% reduction in less than six months. Production continues to increase despite declines in prices, according to the EIA. The home of the Williston Basin is projecting $869 million in less revenue through 2017 based on current prices, which accounts for about 20% of its previously planned revenue forecast.
Alaska, which relies on revenue from crude oil production for 90% of its operating budget, saw tax revenue from production fall to just $26 million in January of this year from $108 million in August 2014, a 76% decline in tax revenues. The state’s 2015 revenue projections assumed oil prices at $105 per barrel.
Oklahoma collected $62 million in funds from production oil and natural gas taxes in August 2014. This value declined 31% to $43 million in January 2015, reports the EIA. The agency also reports that the state’s production was relatively flat during that same period.
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