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By W. Gardner Selby May 2, 2010

Land commissioner says state getting most ever in oil and gas proceeds though oil production topped out in 1970s

UPDATE, May 3, 2010: Oil production totals below for 1972, 2007 and 2008 have been corrected to make up for our initial misreading of a state chart. As originally noted, however, oil production in Texas still topped out in 1972. The corrected production figures don't affect our rating of Commissioner Patterson's statement.

Jerry Patterson, the state land commissioner seeking a third term this November, refers to the the state’s oil-soaked history in a recent column extolling renewable energy. In his article, published Tuesday in the Austin American-Statesman, Patterson writes: "We’re making more than ever off oil and gas right now, but it’s no secret that oil production in Texas peaked in the 1970s."

Even though oil production has been declining, state revenue from oil and gas is the tops?

When we sought background, the General Land Office shared a chart showing state oil and gas income reached a historical high of $495 million in 1982 that wasn't exceeded until 2008, when it hit $533 million.

The state's oil-and-gas-related proceeds dropped to $381 million in 2009, the land office says. Counting revenue during the first seven months of this fiscal year, we calculate it will reach $279 million by the end of the 2010 fiscal year Aug. 31.

Total state take during Patterson's seven-plus years as commissioner: $2.7 billion.

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And when did oil production peak?

According to the Texas Railroad Commission, which tracks in-state oil production, the peak year for crude oil production was 1972 when more than 167,000 wells produced nearly 1.3 billion barrels. As of 2007, production had ebbed to about 336 million barrels. In 2008, production increased for the first time since 1991 to more than 346 million barrels, before falling in 2009, according to the commission.

R.J. DeSilva, spokesperson for the State Comptroller's office, offered this analysis for the surge in state income from oil and gas surged well after oil production peaked: "Oil and natural gas production are taxed on the value of oil and natural gas that’s produced. Oil and natural gas prices were higher in the early ‘80s than in the ‘70s (and reached all time highs in 2008)."

So how does Patterson’s statement shake out?

He gets the peak-production timing right; it was the '70s.

But he's off in saying state government is making more than ever from oil and gas "right now." That was true for the fiscal year that ended Aug. 31, 2008, but in 2009 state oil and gas revenue fell 29 percent from the year before and it's on pace to register another decline this fiscal year.

We rate Patterson's statement as Mostly True.

Our Sources

Interview, Jerry Patterson, Texas land commissioner, April 27, 2010

Jerry Patterson, Texas land commissioner, column published in Austin American-Statesman, "Patterson: Future is in green energy," April 27, 2010 (accessed April 27, 2010)

E-mail excerpts, Jim Suydam, press secretary, Texas General Land Office, responses to W. Gardner Selby, PolitiFact Texas, April 27, 2010

General Land Office, "Deposits of Revenue to Permanent School Fund Since Inception," (Excel chart) dated April 22, 2010

PolitiFact Texas, "Total Oil and Gas Revenue to State," (Excel chart showing totals in column I), April 29, 2010

Texas Railroad Commission, "Oil Production and Well Counts (1935-2008) History of Texas Initial Crude Oil, Annual Production and Producing Wells," website updated 3/09/2010 (accessed April 28, 2010)

E-mail excerpt, R.J. DeSilva, spokesperson, Texas Comptroller of Public Accounts, April 28, 2010

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Land commissioner says state getting most ever in oil and gas proceeds though oil production topped out in 1970s

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