New Mexico was built on ranching and mining, but today it has a number of major industries, including oil and gas. The largest industry in New Mexico, oil and gas contributes $3.1 billion each year to the state’s budget—just under 40 percent of the state’s entire yearly revenue. Here’s an overview of what this branch of the energy industry contributes to the state and country.
New Mexico’s oil and gas industry, by the numbers
Contributing 39 percent of New Mexico’s yearly budget, the oil and gas industry is a powerful force. The federal government alone spends over $1.1 billion in New Mexico mineral leasing rights, which represents 99 percent of the mineral leasing rights income in the state, and various taxes on the industry bring in well over another $600 million.
The state, which is famous for its wide-open spaces and rugged scenery, supplies about 10 percent of America’s natural gas and 3 percent of its crude oil. The San Juan Basin and the Permian Basin are the main sources of gas and oil, and in fact, the San Juan is the largest natural gas reserve in the country.
Since March 2019, New Mexico is the nation’s third largest crude oil producer, accounting for about 7.4 percent of the total national production. (Texas is first, at 41 percent, and South Dakota comes in second, with 11 percent of the total.) Between 2008 and 2018, crude oil production rose exponentially, which drove the cost per barrel down: compare 2008’s $99.67 with 2018’s $65.23.
In the space between 2018 and 2019, the largest industry in New Mexico grew by another $910 million. The industry is booming like never before.
Other benefits of the oil and gas industry in New Mexico
Of course, state revenue and lower energy prices aren’t the only benefits to the oil and gas industry’s growth—it has contributed a significant amount of the state’s jobs. The oil and gas industry’s presence makes up a significant share of the state’s total private employment, and on average, pays well over twice New Mexico’s average weekly income. While there are occasional dips in the numbers, the overall trend is positive.
Additionally, the industry produces such a large amount of money for the state that they fund a significant portion of the state’s K-12 schools, hospitals, universities and other public services.
Since the supplies of natural gas and crude oil are so robust, geologists have estimated that the state will have reserves in the Permian Basin alone for another hundred years. This gives us plenty of time to investigate and implement alternative energy sources to complement oil and gas. The use of fracking, which helps decrease the surface footprint of drilling, has contributed to these reserves.
In short, the oil and gas industries in New Mexico are a crucial part of the economy, from tax revenue to providing steady employment.
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Categorised in: Oil Field Service