New Mexico produced nearly 246 million barrels of oil in 2018, up more than 40 percent from the previous year, setting a new record for oil production in the state.
New Mexico’s 2018 production is nearly three times as much as the 86 million barrels produced in the state in 2012, according to the state’s Oil Conservation Division (OCD).
The increased production is made possible by the use of hydraulic fracturing, horizontal drilling, and other technological advances which allow energy companies to access previously untapped shale oil reserves in the Permian Basin, which underlies much of New Mexico and West Texas, OCD reports.
Similarly, natural gas production in New Mexico increased by 13 percent last year, making the state’s production in 2018 the highest it has been since 2008.
The oil and gas industry has forecasted production will increase further in New Mexico in 2019.
‘No Signs of Abating’
The fracking boom in New Mexico has led to unprecedented production and prosperity in the state, says Paul J. Gessing, president of the Rio Grande Foundation.
“Thanks to fracking, oil production in New Mexico’s Permian Basin has tripled since 2012 and is expected to double again by 2021,” said Gessing. “This has led to massive budget surpluses in New Mexico, creating both direct and indirect jobs.
“According to New Mexico’s nonpartisan Legislative Finance Committee, an astonishing 36 percent of the state budget comes directly from oil and natural gas production,” Gessing said. “The production trend shows no signs of abating, given the combination of new discoveries and the fracking process which allows the previously inaccessible resources to be extracted.”
Good News, Looming Threats
The new production record in New Mexico is yet more good news from the fracking revolution, says Kenny Stein, director of policy for the Institute for Energy Research.
“These oil and gas production increases have produced a surge in jobs and economic growth for the state,” said Stein. “The royalties on this production are also money in the pockets of the landowners in the region, landowners including the state of New Mexico itself.
“The fracking boom leaves the state in the happy position of deciding what to do with the $1 billion-plus budget surplus which is a direct consequence of oil and gas development,” Stein said.
Stein says the state government may be taking actions that could harm its own and its residents’ pocketbooks.
“Given that New Mexico remains a relatively poor state, it is unfortunate the state government seems to want to look the oil and gas gift horse in the mouth by pursuing fantasies like 100 percent renewables goals,” said Stein. “Rather than driving up energy costs for its citizens through renewables mandates, the state government should embrace the prosperity sitting in the ground beneath them.”
Kenneth Artz ([email protected]) writes from Dallas, Texas.