New Mexico’s growing oil and natural gas industry is set to generate “unprecedented opportunities” from a newly forecasted $174 billion in private infrastructure investments by 2030, the New Mexico Oil & Gas Association announced today.
The forecast was included in a study by consulting firm ICF that said the new investment coupled with sound public policy could increase production output by 323 percent.
This projected increase will ensure the industry in New Mexico remains robust. The state ranks 3rd in the United States in oil production and 9th in natural gas production.
According to Ryan Flynn, executive director of the New Mexico Oil and Gas Association:
“We have enormous potential to grow and transform the future of our state over the next several years, and increased investment in New Mexico’s vital energy infrastructure is critical to the short- and long-term success of our great state.”
New Investments, Big Gains
New Mexico will need to update current infrastructure while building new wells, refineries, roads and processing plants.
According to NMOGA and ICF, those investments would pay huge dividends:
“The study predicts that proper investment could increase production by 358% for crude oil, 106% for natural gas, and 136% for natural gas liquids. That would result in a 323% percent increase in the value of oil and natural gas outputs, from $17.1 billion in 2017 to potentially $72.6 billion in 2030.”
All of this is good news for the New Mexico economy. In 2017, the oil and natural gas industry contributed $13.5 billion to the state’s GDP. With new investment, that number could rise to $60 billion. That would be a stunning 344 percent increase in GDP.
Workers will see more opportunity from new investment as well. Already the industry supports more than 88,000 jobs in the state – 10 percent of the New Mexico population. Increased investment, new projects, and rising production will create even more good-paying jobs.
More Revenue Means Improved Public Services
It’s not just the oil and natural gas industry that stands to gain from new investments. According to NMOGA:
“For nearly a century, the natural gas and oil industry has operated in New Mexico, paying a percentage of each dollar earned in both state and local taxes. In fact, in 2017 the industry contributed ONE-THIRD OF THE FUNDING for schools, infrastructure, healthcare, and public safety – more than any other industry in the New Mexico.”
NMOGA also said, “the New Mexico Tax Research Institute found that oil and natural gas tax revenue supports $822 million in funding for public schools and nearly $241 million for the state’s universities, colleges, and other higher education institutions.”
Improved Technology Increases Production While Protecting the Environment
The growth in production in New Mexico has coincided with greater efficiencies and improved environmental outcomes thanks to increased technology and innovation.
From the ICF report:
“Oil and gas production in the state has benefited from technological improvements that have increased well productivity, reduced the per-unit cost of oil and gas development, and reduced environmental footprints and impacts.”
NMOGA notes this progress is clearly paying off:
“The industry is committed to improving environmental performance by deploying innovative technologies and implementing best practices. THE RESULTS SPEAK FOR THEMSELVES. From 2011-2017, methane emissions per unit of produced natural gas and oil FELL 57% in the New Mexico/Texas Permian Basin, even as production INCREASED 125% over the same period.”
Conclusion
The New Mexico oil and natural gas industry is growing stronger everyday and that’s good news for workers, consumers, students, and taxpayers. New investments in the coming decade will only mean greater prosperity for the state, as NMOGA summarizes in its report:
“Developing this abundant, affordable fuel provides energy for American homes and businesses, while the corresponding economic activity generates jobs, state and local tax revenue, and thus unprecedented opportunities for all New Mexicans.”
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