“U.S. crude,” The Wall Street Journal reports, “closed above $50 a barrel for a second day in a row on Wednesday and is up around 95% from its decade-lows reached earlier this year.”
Daniel Yergin, vice chairman of consulting firm IHS, recently told the Journal that the “big news in demand is growth in India, which now rivals China. India really is seen as the growth market for oil.”
BP’s annual energy outlook is predicting a global petroleum-demand increase of 20 million barrels per day by 2035, driven by “use in Asia for both transport and industry.”
It’s all good news for New Mexico, which ranks sixth among the states in oil production. Drilling in the Land of Enchantment hit bottom in 2007, but the fracking revolution has helped to more than double output since then.
Low prices during the last year and a half have induced layoffs, as well as a slight production decline that started in May 2015. But for the moment, the future looks bright. Prices have recovered. (Maybe they’ll even rise further.) The ban on oil exports has been lifted. And the oil industry has yet to tap the massive Mancos play in the northwestern part of the state.
With petroleum providing so much direct and indirect employment in New Mexico, as well as contributing about a third of the tax revenue generated here, it’s more important than ever to fight the eco-left’s anti-fracking hysteria and “keep it in the ground” nonsense. Sorry, “greens,” but oil is a huge part of our economy, and the latest indications are that it will be for a long, long time to come.
2 Replies to “The Answer to New Mexico’s Woes Is … Oil?”
You mention that the ban on oil exports has been lifted. Many don’t realize the Federal 2016-17 Omnibus budget, while it didn’t balance the budget, was a great compromise. We got many good things out of it to include:
-ACA Medical Device tax lifted (at least temporarily)
-Lifted crude oil export ban
-Repeals Country of Origin Labels (COOL) for food avoiding $1B tariffs from Mexico & Canada
-Made 20 of the “Tax Extenders” permanent
-Risk Corridor bailouts avoided
-Extra $32 billion for the military and the war on terror which was desperately needed after the cuts from sequestration.
All-in-all not a bad deal.
I’m not willing to go quite that far (saying it was a “great compromise”) but it did have a few good things. The spending is a serious problem: http://reason.com/archives/2015/12/18/the-gops-omnibus-spending-binge-will-und