New Mexico Marks Record Year for Oil Production
ALBUQUERQUE, N.M. (AP) — Oil producers have set a record for the number of barrels pumped in New Mexico last year, and industry experts said Monday that output from the basin that straddles the Texas-New Mexico border is expected to double over the next several years.
Data from the U.S. Energy Information Association and an industry group that represents hundreds of producers in New Mexico show a record 172 million barrels of oil were produced in 2017. That is double New Mexico’s output in 2011 and tops the 147 million barrels set in 2015.
New Mexico also finished the year producing more than 17 million barrels in December to maintain its position as the third-largest oil-producing state. Texas and North Dakota lead the nation.
The surge has continued into 2018 as the federal energy analysts estimate that overall U.S. crude oil production averaged 10.3 million barrels a day in February. That’s up nearly a quarter-million barrels more than the daily level in January.
Daily production is expected to top out around 10.7 million barrels in 2018, which would surpass the highest annual average for crude oil production in the U.S. set in 1970. Analysts say that upward trend is likely to continue in 2019.
New Mexico Oil and Gas Association Executive Director Ryan Flynn said in an interview Monday that the record production is the result of more than $13 billion in investments that the industry began making last year.
The sustained rebound in oil prices and the investments in exploration also have helped New Mexico give lawmakers and the governor more for spending on government programs.
“It’s good news for anyone who cares about infrastructure like roads, schools and public safety,” Flynn said.
Despite the gains, state economists have warned that New Mexico finances are more dependent than ever on the energy industry — and vulnerable to fluctuations in world oil markets.
There are also questions about the impact of the 2018 midterm elections on any policy shifts.
Republican Gov. Susana Martinez, who is wrapping up her second and final term this year, has said she is leaving state government with strong cash reserves of more than $600 million as a buffer against any economic downturn. Less than a year ago, the state was wrestling with how to fill a budget gap by slashing agency spending.
The effect of the oil boom also is felt in Hobbs, Carlsbad and other communities in southeastern New Mexico, where the influx of oilfield workers has led to the need for more housing and services.
In Carlsbad, city development officials have reported an increase in construction and numerous national chains have moved in. Starbucks, for example, recently opened its first store in the city.
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