In the 2012 issue of Focus Regional, it was reported that the oil and gas industry accounted for 29,000 jobs in the state and $2 billion in tax revenue. Between 2012 and 2014, the labor force was extremely concentrated in the Eastern region due to the oil and gas industry. Annual unemployment in New Mexico has been at 6.6 percent since 2012, in combination with the beginning of the recession and a quick recovery.
Very small, but steady growth continued through 2014. In that time, unemployment changes were negligible; however, Lea, Eddy, and San Juan counties stand out thanks to a down turn in the industry in 2015, with a 1.9 percent decrease in employment in the region. Things appear to have leveled out and the New Mexico State of the Workforce’s 2017 report projects growth only at 0.2% percent through 2024 due to the price of oil dropping.
The slight decline in employment in the Eastern Region wasn’t significant because it was offset by growth in other parts of the state. It’s also important to note that while growth in different industries such as healthcare and social services was boosted in the central metropolitan areas of Albuquerque and Santa Fe, that growth did not reach the more rural areas of the state.
State energy secretary Ken McQueen sees a lot of hopeful things for the future. With the technological advances of the oil industry, it is allowing the them to continue to propel forward despite a down turn in the 2008 recession and the small bust in 2015. New Mexico has been able to rise to the position of the third highest producer of crude-oil in the United States. The state even set a new record for barrels of oil produced in 2017, reaching 172 million barrels of oil, surpassing 2015’s record of 147 million.
Oil has seen a rebound in New Mexico in the past two years. With the entire United States oil exports rising, the Organization of the Petroleum Exporting Countries (OPEC) will have less effective means of raising oil prices, making travel across the state more cost effective, allowing citizens from rural areas to more easily afford trips to the more affluent central cities and to spend hard earned dollars that will go back into the state revenue. “This trend means continuous growth for the entire state,” said Ryan Flynn, executive director of the New Mexico Oil and Gas Association.
Roswell and other areas that have aspects of urban and rural living alike in the Eastern quadrant of New Mexico are reaping the benefits of the rebound. Roswell is flourishing with new businesses, hotels to accommodate temporary visitors, and a new housing development with French Brothers homes that has been in development since the initial boom in 2012. While there is not a lot of oil work immediately around Roswell, being the largest city for several miles means it offers more places to live, eat, and shop for industry workers.
Carlsbad is quickly expanding to become a hot bed among the Eastern quadrant of New Mexico. The Current Argus reports that in the Fiscal Year 2018, Carlsbad has gained $7 million in growth, bringing their gross receipt tax revenue to a total of $30 million. This will allow the city to do many things, but mainly contributes towards their capital spending.
The growth in oil and gas has also lead to sources of improvement. Chevron recently donated $50,000 to Carlsbad Water Park, stating the importance of the community for their workforce. The Carlsbad Water Park was opened in 2016 and is currently undergoing renovation.
The multinational oil and gas company Occidental Petroleum (OXY) has opened a frac sand transloading facility outside of Carlsbad. With so much of the Basin being underdeveloped, CEO of OXY, Vicki Hollub, states they aim to help steady Carlsbad’s economy as it ebbs and flows from the sudden economic increase. They want to avoid repeating what happened in 2015 and 2016.
As more investment comes to the New Mexico side of the Permian Basin, it is safe to say the industry will continue to expand. With Sendro Midstream Partners investing to build more natural gas plants over the next 5 years, they will employ up to 70 new permanent employees. Through all the data forecast of various companies and bodies, oil is looking even better for New Mexico than it did in 2012.
At the national level, data from the United States Energy Information Administration showed that the United States exported more natural gas than it imported for the first time in 60 years. Forecasts from the EIA show that United States crude oil production will average 10.7 million barrels per day. For comparison, in 1970 the country averaged 9.6 million per day. And to top it off, the prediction for 2019 is 11.3 million barrels a day. The New Mexico side of the Permian Basin is leading things full force as you might expect.