One of the primary responsibilities of the Texas General Land Office is to lease the vast mineral holdings of the state for oil and gas development, with the proceeds going to the Permanent School Fund (PSF) to help pay for Texas public education.
Oil and gas leases on PSF lands generate more revenue than any other source of income for the public education endowment, and managing these leases is one of the GLO's core functions. Leases for oil and gas development occur both onshore and offshore.
Typically, the GLO receives a 20 to 25 percent royalty from oil and gas produced from leases on state land and may take this royalty in cash or in kind, which can be sold competitively to public entities such as gas or electricity (see Energy Marketing). Since inception, the Texas General Land Office has deposited more than $16.8 billion into the Permanent School Fund from oil and gas revenue on PSF lands.