Did you know?Texas is the largest natural gas-producing state in the United States and plays a major role in the nation's energy industry. With extensive underground reserves, major pipeline networks, and large processing facilities,…
Texas is the largest natural gas-producing state in the United States and plays a major role in the nation's energy industry. With extensive underground reserves, major pipeline networks, and large processing facilities, Texas supplies natural gas for electricity generation, manufacturing, heating, and international exports. The industry has helped shape the state's economy, created employment opportunities, and influenced the development of cities and communities across Texas.
Texas Is the Largest Natural Gas-Producing State in the United States
Texas has maintained its position as the nation's leading natural gas producer for decades. According to the U.S. Energy Information Administration, Texas accounted for approximately 28% of all natural gas gross withdrawals in the United States in 2024.
The state produced roughly 12 trillion cubic feet of marketed natural gas that year. This enormous production volume reflects the size of Texas's underground reserves and its extensive drilling infrastructure.
Natural gas production remains a major contributor to the state's energy industry and supports domestic energy needs across the country.
Texas Produces More Than One-Fourth of America's Natural Gas
One of the most notable facts about Texas is that it supplies more than one-quarter of the natural gas produced in the United States.
In 2024, Texas accounted for approximately 29% of the nation's marketed natural gas production. Its production exceeded that of other major gas-producing states, including Pennsylvania, Louisiana, and New Mexico.
This large share makes Texas especially important to national energy supply, industrial operations, and electricity markets.
Natural Gas Is Texas's Largest Source of Electricity Generation
Natural gas plays a central role in producing electricity across Texas. In 2024, natural gas-fired power plants generated approximately 44% of the electricity on the ERCOT grid.
These facilities help supply electricity to millions of homes, businesses, factories, and commercial buildings.
Unlike wind and solar facilities, natural gas power plants can generally increase or decrease electricity production according to demand, although their performance depends on fuel availability and operating conditions.
This flexibility makes natural gas an important part of the state's electricity system.
The Permian Basin Is a Major Source of Texas Natural Gas
The Permian Basin, located primarily in West Texas and southeastern New Mexico, is one of the most productive oil and natural gas regions in the United States.
Much of the natural gas produced in the region is associated gas, meaning it is extracted alongside crude oil.
As oil production expanded through the use of horizontal drilling and hydraulic fracturing, natural gas output also increased significantly.
The Permian Basin has become a major contributor to both Texas energy production and the development of new natural gas pipelines.
The Eagle Ford Shale Helped Expand Natural Gas Production
The Eagle Ford Shale is another important energy-producing formation in Texas. Stretching across South Texas, the region experienced rapid drilling development beginning in the late 2000s.
Advances in horizontal drilling and hydraulic fracturing made it possible to extract natural gas and oil from rock formations that had previously been difficult to develop commercially.
The expansion brought investment, employment opportunities, and infrastructure improvements to several South Texas communities.
The Eagle Ford remains an important part of the state's oil and natural gas industry.
Texas Has Thousands of Miles of Natural Gas Pipelines
Texas possesses one of the most extensive natural gas transportation networks in the United States.
Pipelines carry gas from production fields to processing plants, power stations, industrial facilities, storage locations, and export terminals.
The state's infrastructure also connects Texas production areas with energy markets throughout the country and Mexico.
These networks are essential because natural gas must be transported continuously and reliably to meet demand from electricity generators, manufacturers, and other customers.
Texas Is a Major Exporter of Liquefied Natural Gas
Texas has become an important center for liquefied natural gas, commonly known as LNG.
LNG is natural gas that has been cooled to approximately minus 260 degrees Fahrenheit, turning it into a liquid that occupies far less space than its gaseous form.
This process allows natural gas to be transported aboard specialized ships to international markets.
Texas LNG export facilities include major operations near Corpus Christi and Freeport. These terminals connect American natural gas production with customers in Europe, Asia, and other regions.
Natural Gas Supports More Than Just Electricity Production
Although electricity generation is one of the largest uses of natural gas, the fuel also supports many other industries.
Texas manufacturers use natural gas to produce chemicals, fertilizers, plastics, and other industrial products. It also provides heat for factories, refineries, commercial buildings, and some residential properties.
Natural gas is particularly important to the petrochemical industry along the Texas Gulf Coast, where large industrial complexes transform natural gas and related hydrocarbons into materials used in everyday products.
Texas Natural Gas Helps Supply Energy to Mexico
Texas plays an important role in cross-border natural gas trade between the United States and Mexico.
Several major pipelines transport natural gas from Texas production and distribution systems into Mexico, where it is used for electricity generation and industrial activity.
The expansion of this infrastructure has strengthened energy connections between the two countries.
Natural gas exports also support pipeline construction, transportation services, and related business activity in Texas border regions.
The Natural Gas Industry Supports Thousands of Texas Jobs
Natural gas production contributes to employment across several industries, including drilling, engineering, construction, transportation, equipment manufacturing, and energy services.
Its economic influence extends beyond production sites. Processing plants, pipeline companies, power generation facilities, and petrochemical manufacturers also require skilled workers.
According to Texas state economic development materials, the broader oil and natural gas industry directly and indirectly supports approximately 1.4 million jobs in the state.
These employment opportunities have contributed to the growth of several energy-producing regions and metropolitan areas.
Natural Gas Generates Important Revenue for Texas
Oil and natural gas production contributes to state and local government revenue through severance taxes, property taxes, royalties, and other payments.
Texas imposes a natural gas production tax on qualifying gas produced within the state. Revenue from energy production helps support government programs and public institutions.
Oil and gas activity also contributes to the Permanent School Fund, which provides financial support for public education.
Because energy prices fluctuate, however, tax revenue from the industry can vary significantly from year to year.
Natural Gas Played a Major Role in the 2021 Texas Power Crisis
During Winter Storm Uri in February 2021, freezing temperatures disrupted natural gas production, processing, transportation, and electricity generation across Texas.
Many natural gas power plants experienced fuel shortages or equipment failures at the same time that electricity demand increased because of extremely cold weather.
Other electricity sources also experienced outages, contributing to widespread power shortages that left millions of Texans without electricity.
The disaster highlighted the importance of protecting natural gas infrastructure and improving coordination between the electricity and natural gas industries during extreme weather.
Natural Gas Produces Less Carbon Dioxide Than Coal When Burned
Natural gas is often used as an alternative to coal for electricity generation because burning natural gas generally produces less carbon dioxide per unit of energy.
Modern natural gas power plants can also operate more efficiently than older coal-fired facilities.
However, natural gas is still a fossil fuel, and its production and use contribute to greenhouse gas emissions.
Methane, the main component of natural gas, is a powerful greenhouse gas when released directly into the atmosphere. Reducing leaks from wells, processing facilities, and pipelines remains an important environmental challenge.
Natural Gas Development Has Environmental Impacts
Natural gas production can affect land, water resources, air quality, and surrounding communities.
Drilling operations may require significant water supplies, particularly when hydraulic fracturing is used. Wastewater management, methane emissions, and industrial equipment also create environmental concerns.
In some producing regions, wastewater injection associated with oil and gas operations has contributed to induced seismic activity.
These challenges have encouraged greater attention to environmental regulations, leak detection technology, water management, and improved drilling practices.
Texas Is Also a National Leader in Renewable Energy
Although Texas produces more natural gas than any other state, it is also a major producer of renewable electricity.
Texas leads the nation in electricity generated from wind energy and has experienced rapid growth in solar power development.
Natural gas, wind, solar, nuclear energy, and coal all contribute to the state's electricity supply.
The combination of these energy sources reflects the changing nature of Texas's electricity industry as demand grows and new technologies become more widely available.
The Lasting Impact of Natural Gas on Texas
Natural gas has played a major role in Texas's economic and industrial development. The industry has supported employment, expanded transportation infrastructure, attracted investment, and helped supply energy to millions of consumers.
Texas's extensive production fields, pipelines, industrial facilities, and export terminals have established the state as one of the most important natural gas centers in the world.
As energy demand continues to change, Texas faces the challenge of maintaining reliable energy supplies while addressing environmental concerns, infrastructure requirements, and the increasing role of renewable electricity. Natural gas remains a significant part of the state's economy and energy system.
Image Attribution: Loadmaster (David R. Tribble), BarnettShaleDrilling-9323, CC BY-SA 3.0