New Mexico is set to continue its breakneck pace for revenue growth from its oil and gas industry, and is expected to add $174 billion in infrastructure to support it, according to a new report submitted to lawmakers on Tuesday, cited by US News.
The $174 billion will be spent between now and 2030 on oil and gas pipelines as well as roads, pad construction, and refineries, the report commissioned by the New Mexico Oil and Gas Association and the API estimates.
New Mexico’s oil revenue alone was $2.2 billion in 2018, according to New Mexico’s Tax Research Institute. This marked a huge increase from 2017 of 26 percent, and accounting for 32.3 percent of the New Mexico State General Fund recurring revenue.
"We've been seeing it for the last 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 next decade or so,” Ryan Flynn, executive director with the New Mexico Oil and Gas Association said, adding that the infrastructure growth won’t be a challenge. Instead, it will be an organic growth that will come in response to their “new normal of continually high production.”
But New Mexico’s oil and gas future isn’t completely cut and dry. New Mexico Governor Michelle Lujan Grisham has made two important climate-friendly pledges. The first was to make New Mexico’s electricity emission-free by 2045, and the second was to curb methane emissions from the oil and gas industry more than they are now. This will be a tough sell for the state that relies so heavily on oil and gas revenues, and Permian investors may easily invest in the Texas side rather than New Mexico’s if it finds an easier environment to work in.