The Permian Basin became the world’s most productive oilfield in 2019, and New Mexico is reaping the financial benefits. The state saw a significant revenue surge this year, resulting in a projected $7.8 billion collected.
The New Mexico Oil and Gas Association estimates the state produces 900,000 barrels of oil a day. It anticipates the state will surpass 300 million barrels of oil in 2019, the third year in a row for the state for record-setting production. Projections from the state’s Legislative Finance Committee (LFC) predict the state could see over $900 million in new money in 2020, due in large part of growing oil and gas royalties generated in 2019. Oil and gas now makes up 40 percent of the state’s budget.
The U.S. has oscillated from being the largest economy to participate in the 2015 Paris Agreement on climate change to becoming one of the world’s strongest voices promoting the continued burning of coal and other fossil fuels. New Mexico has had a front row seat to that change, of course. In 2019, the Permian Basin became the world’s most productive oilfield, and New Mexico has emerged as a top oil-producing state.
Oil and gas expansion across New Mexico and Texas will be a chief driver of future greenhouse gas emissions in the U.S., according to a recent report compiled by 15 global environmental groups that was released ahead of the U.N. climate-focused COP25 conference held in Madrid this year.
“Right now, the Permian Basin is the biggest projected driver of oil and gas expansion — not just in the U.S. but in the world,” said Kelly Trout, senior research analyst at Oil Change International, a research and advocacy group. Trout was a contributor to the report.
“Our data shows that the potential year of peak production for the Permian Basin in 2032,” Trout said. “The Permian Basin itself could produce more oil and natural gas liquids than Saudi Arabia [at that time].”
U.S. outpaces all other countries in planned oil and gas expansion
The U.S. is poised to outpace every other country in the world in new oil and gas development, according to the report.
A bill to establish a permanent 10-mile buffer around Chaco Canyon to protect it from oil and gas extraction activity passed the U.S. House on Wednesday with bipartisan support. The bill, sponsored by U.S. Reps. Ben Ray Luján, Deb Haaland and Xochitl Torres Small, would prohibit oil and gas activity on nearly 500 square miles of Bureau of Land Management (BLM) held land surrounding the Chaco Culture National Historical Park. The bill passed 245-174, with all Democrats in the House voting in favor of the legislation, along with 17 Republicans. The legislation would withdraw BLM-held land within the 10-mile buffer around the Chaco Canyon park from future oil and gas development, but would not prevent the Navajo Nation or individuals with allotments in the buffer zone from pursuing energy development.
While fresh water supplies in the state are slowly dwindling, oil and gas activity generates millions of gallons of produced water each year. The state is currently deciding how best to regulate the use of treated produced water, while researchers, oil and gas producers and other companies are trying to find new uses for the wastewater. Produced water is a byproduct of the oil and gas extraction activities currently going on in two energy-generating sections of the state, the Permian Basin in the southeastern portion of the state, and the San Juan basin in the Four Corners area. The wastewater comes into contact with hydrocarbons and drilling constituents, and is generally considered contaminated. As the state gears up to hold a series of public meetings on recycling produced water throughout October, there are some serious question marks over the feasibility of using treated produced water in applications outside the oil and gas industry.
ROSWELL AND CARLSBAD — At one end of Pauline and Joe Ponce’s spacious dining room in Roswell lies a cabinet crowded with photographs and mementos of their son, Michael. An old wrestling match program rests amid snapshots of Michael with his daughter, his parents, his wife. Pauline lingers beside an image of Michael holding his then one-and-a-half-year-old son, captured in December 2017. “That was taken only two months before Michael died,” she said. On the morning of Feb.
This week, Intel announced it would hire 300 more employees. Those new hires would bring the number of employees at its massive Rio Rancho plant to around 1,500, well below the peak of nearly 7,000 employees, decades ago. Economic Development Department Secretary Alicia J. Keyes called it “good news” as the state tries to diversify its economy. Diversifying the economy has been a rallying cry for years, as the state has increasingly been reliant on oil and gas money to balance the state budget. If the most recent Legislative Finance Committee hearing last week is any indication, those efforts are still a work in progress.
COUNSELOR — About halfway through a late-April Sunday service at the Living Spring Baptist Church, the sermon took an unusual turn. Pastor Tom Guerito’s exhortations to trust in God and resist sin, delivered mostly in Diné, gave way to a more earthly concern: oil and gas. “People say, ‘I smell it,’” Guerito told the 20 or so parishioners, who since 2012 have lived among an expanding constellation of oil and gas wells. But an air monitor installed nearby found nothing out of the ordinary, he said. “There’s nothing in the air.
When energy corporations produce oil, gas or coal on public lands, they make royalty payments to the federal government and the states where production takes place. In 2016, the Obama administration closed a loophole that allowed companies to dodge those fees. The valuation rule was set to provide tens of millions of dollars to taxpayers, until then-Interior Secretary Ryan Zinke repealed it shortly into his tenure in 2017. This story originally appeared at High Country News. Now, a federal judge has deemed that move illegal, putting the valuation rule into effect immediately.
Stepping to the microphone at a press conference wrapping up this year’s legislative session, House Speaker Brian Egolf, D-Santa Fe, hammered the podium to the drum beat for Queen’s “We Will Rock You” before declaring it the “best, most productive” legislative session in state history. He proclaimed major achievements in education funding, criminal justice reform, a path for carbon-free electricity — and a bill that would save 100,000 acre feet of water each year from use in oil fields. “The produced water bill, I think, is going to go down as one of the greatest environmental accomplishments to come out of the state legislature of New Mexico,” Egolf said. “Just the quantity of fresh, potable water that’s going to be saved for agricultural and municipal use is breathtaking.”
The bill Egolf held up in victory paves the way for recycling wastewater from oil and gas production for reuse by the industry, reducing the need for freshwater in the production process.
It had the support of the New Mexico Oil and Gas Association but was controversial among environmental groups because it sets the stage for such water to see other, non-industrial uses in the future. In the final days of the session it was amended to allow the Oil Conservation Division to issue fines and penalties for permit violations, a measure championed by environmentalists.
Last week, Gov.-elect Michelle Lujan Grisham started announcing appointments to top spots in state government. Among the positions she announced was her choice for secretary of the Energy, Minerals and Natural Resources Department (EMNRD), Sarah Cottrell Propst. Most recently, Propst worked as executive director of Interwest Energy Alliance, a nonprofit trade association of renewable energy companies in six western states, including New Mexico. During the administration of Gov. Bill Richardson, Propst served as his energy and environment advisor, and then as deputy secretary of the New Mexico Environment Department (NMED). She came to New Mexico after earning a master’s degree from Princeton University’s Woodrow Wilson School of Public and International Affairs.