Gas Prices Up, NM Oil Production Down

New Mexico is one of the largest oil and gas producing states in the country. Unfortunately, the industry — and other economic activities — are regulated by politicians who are totally ignorant of how wealth is generated and destroyed. That is why, despite record-setting oil and gas prices, the number of rigs operating in the state (according to the Albuquerque Journal) has dropped by 23 percent from last year (90 to 69).
Why would the number of rigs be dropping at a time of record prices? The answer is regulation, specifically new regulations that drive up the costs associated with drilling for oil and gas by as much as $200,000 at each well site.
With the road budget $500 million short and tax increases under consideration, one might think that the powers-that-be would like to keep money flowing into the state’s coffers, but in this state you never know.

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.