This school is making tens of billions of dollars thanks to the recent high oil prices.
The University of Texas System (UT System) makes about $6 million a day from a mineral-rich land it manages in the largest oil field in the United States.
The huge source of raw gas and natural gas makes UT System capable of surpassing Harvard University to become the richest school in the US higher education system. It should be noted that Harvard’s main source of income comes from grants and financial business.
The University of Texas owns approximately 850,000 hectares in the Permian oil basin. While other universities try to reduce their dependence on fossil fuels, UT System is leasing land to 250 mining operators.
Land operated by UT System is on track for its best-ever annual revenue due to soaring oil prices, which is expected to generate $42.9 billion in revenue (in fiscal year 2022). Meanwhile, Harvard’s revenue as of June 2021 reached $53.2 billion.
William Goetzmann, a professor at Yale University, said: “The University of Texas is collecting piles of money while other schools have a cash crunch.”
Typically, the richest universities make their money from venture capital or private equity. Over the past year, the amount of money invested helps these schools bring record profits, but the risk of economic recession makes things gradually difficult.
Oil and gas revenues help protect UT System from those threats. Even if the school has a negative return on investment, oil and gas sales are enough for the school to protect its asset value.
Meanwhile, Harvard is likely to lose money this year. According to Bloomberg, the school’s 10-year annual profit as of June 2021 reached the lowest level compared to eight Ivy League schools. In 2018, UT System also surpassed Yale to become the second richest university in the US thanks to rising oil prices.
However, the University of Texas also received many criticisms for being too dependent on oil while the situation of climate change is increasingly serious.
To the public’s delight, they are beginning to use the new land in West Texas that they manage to build wind and solar energy projects.
William R. Murphy, Jr., a land administration official at UT System said:
“These lands have the potential for large-scale wind and solar energy production. UT System is expecting significant revenue growth in the emerging energy sectors.”
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