New Mexico is ready to continue its breakneck tempo for revenue growth from its oil and gas sector and is predicted to contribute $174 billion in infrastructure to support it, according to a new report submitted to legislators Tuesday.
The $174 billion will be poured between now and 2030 on oil and gas pipelines as well as roads, pad development, and refineries, the report approved by the New Mexico Oil and Gas Association and the API estimates.
New Mexico’s oil income alone was $2.2 billion in 2018, based on New Mexico’s Tax Research Institute. This marked a massive rise from 2017 of 26% and accounting for 32.3% of the New Mexico State General Fund recurring income.
“We have been seeing it for the past couple of years. That history of boom and bust, that cycle, is something we’re flipping on its head right now,” Flynn said. “The new normal for the Permian Basin is going to be solid growth for the following decade or so,” Ryan Flynn, executive director with the New Mexico Oil and Gas Association stated, adding that the infrastructure growth won’t be a problem. Instead, it will be organic progress that will come in response to their “new normal of high production.”
However, New Mexico’s oil and gas future isn’t utterly cut and dry. New Mexico Governor Michelle Lujan Grisham has made two vital climate-friendly agreements. The first was to make New Mexico’s electricity emission-free by 2045, and the second was to control the emission of methane from the oil and gas sector more than they are today. This will be a troublesome sell for the state that relies on oil and gas revenues, and Permian investors may invest in the Texas side instead of New Mexico’s if it finds a better environment to work in.