The growth of the Permian Basin oil fields propelled Carlsbad’s economy for years, while southeastern New Mexico provided an energy supply that was harnessed across the country and around the world.
After the COVID-19 pandemic, which led to an historic drop in oil prices and production, renewed market growth fueled a rebuild of the Permian’s operations – resulting in it becoming the largest oil-producing basin in the US, housing the world leader is gross.
Production should pick up again to a record more than 5 million barrels per day (bpd) coming out of the Permian in November, nearly half of total US production of about 11 million bpd, according to the US Energy Information Administration.
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Much of this can be attributed to New Mexico and its southeastern region, which includes the cities of Carlsbad and Hobbs, as the state became the second-biggest oil producer in the US after Texas, which divides the Permian, records show.
It also meant that New Mexico had more drilling rigs than any other state except Texas, and big business for local communities like Carlsbad.
City Mayor Dale Janway said the industry has grown again in the two years since the pandemic began in New Mexico, bringing a stream of jobs and tax revenue to the Carlsbad, Eddy County and state governments.
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This year, the New Mexico Legislative Finance Committee reported that lawmakers would have an estimated $2.5 billion surplus during the upcoming January legislature — an increase largely attributed to oil and gas revenues.
“The oil and gas industry has seen steady overall growth since 2020. This is clearly important to the community as this industry provides thousands of jobs to our residents. It also provides a gross receipts tax (GRT) basis for the city, county and state,” Janway said in an emailed statement.
As the region boomed, Janway hoped more oil and gas giants like Chevron and ExxonMobil would open offices in the Carlsbad area to reaffirm their commitment to fossil fuel development but also provide ongoing support to the host community.
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“What we’d like to see is oil and gas companies continue to open regional offices in Carlsbad — so that our community becomes a hub for those companies’ administrative offices and technical teams,” the statement said.
But that growth could be hampered by governments’ ongoing efforts, Janway warned, to reduce industry pollution.
Over the past two years, New Mexico Gov. Michelle Lujan Grisham and her administration have enacted several oil and gas industry regulations to reduce the industry’s air pollutant emissions and improve safety for people in the oil and gas regions of the country to ensure state.
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And the Federal Environmental Protection Agency tried to enact stricter rules of its own that would apply to operators in all US states.
Regulations at both levels would tighten requirements for detecting and reporting leaks at oil and gas facilities, increase gas capture requirements and seek to reduce emissions known to pollute air and exacerbate climate change.
About 32 percent of the nation’s methane emissions come from oil and gas operations, according to the EPA.
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The agency reported that 16 percent of carbon dioxide (CO2) emissions from industry came from the production and consumption of fossil fuels, and 33 percent of CO2 emissions came from the transport sector, which mostly burns fossil fuels.
Joe Vigil, spokesman for the New Mexico Oil and Gas Association, said the industry is working to meet the stricter standards and develop better gas collection technologies to meet the goal of collecting 98 percent of the gas produced by 2026, as the recent state has said dictate regulations.
This work will become even more important in the coming decades, Vigil said, as energy demand is expected to increase by 30 percent.
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“The industry continues to balance America’s energy security while maintaining a long-term focus on environmental protection with continuous innovation,” said Vigil. “Through programs such as advanced oil recovery and gas separation, the industry continues to provide the opportunity for America’s energy independence while producing cleaner, more economical and more reliable energy.”
Janway claimed state and federal regulations could prove detrimental to the oil and gas industry and leaders should strive to support companies extracting fossil fuels from the region.
He solicited donations from oil companies to local charities and supported a recent fundraiser to provide school supplies to children in need as proof that the industry was benefitting Carlsbad.
“We wish for the continued, steady growth of the industry and our community,” continued Janway’s statement. “Of course, this assumes that state or federal officials do not impede this important industry for their own political ends.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.
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