As New Mexico’s legislators prepare for the 2024 session, any number of data points continue to show just how significant an impact the oil and gas industry has in the state.
New Mexico is headed for a $3.5 billion general fund surplus for the year running through June 2025. Oil and gas production in Southeast New Mexico has allowed the annual state government income to grow by nearly 50 percent over the past three years. The oil and gas industry provides about a third of the state revenue in New Mexico.
The oil and gas industry is paying the bills at a federal level as well. Recent data from the Department of Interior shows that New Mexico earned $2.93 billion in federal revenue from energy production, thanks to all of the production on BLM Land. The next highest state is Wyoming at $832 million.
One way to measure success is through production. Prior to the 2020 pandemic, crude oil production in the Permian Basin was 4.9 million barrels of oil per day. Production is now closing in on 6 million barrels of oil per day.
The industry is also here to stay. Thanks to horizontal drilling and fracking, all production models predict many decades of oil remaining. New Mexico’s current rig count is at 102, putting it at second only to Texas.
As indicated in a recent article, Eddy and Lea County are driving the state’s economy. A recent Arrowhead study concludes that Eddy Country contributes $239,000 per person, with a $32,000 expenditure per person. In October, Eddy County collected $6.7 million from oil and gas activities, from business that was conducted in July.
There have also been a lot of transactions in the industry lately. The value of U.S. oil and gas mergers and acquisitions in the Permian basin this year has reached a record of more than $100 billion, according to one recent study. Another recent article points out that Exxon and Chevron have both been expanding heavily in our area. Both companies, it should be mentioned, are also implementing extremely aggressive environmental policies.
New Mexico is a state with many needs – education, infrastructure and health care, just to name a few. The numbers above, and many other similar points of data, offer a clear-cut solution for the numerous challenges facing our state. Southeast New Mexico rests on top of one of the world’s greatest resources. We hope our legislators remember this fact when they convene next month.
Sincerely,
Carlsbad Mayor Dale Janway