Bright but challenging future for oil and gas - Albuquerque Journal

Bright but challenging future for oil and gas

U.S. oil and gas production remains at historic highs despite price instability, but the industry is facing major regulatory and infrastructure challenges to sustain momentum, local and national leaders told the Albuquerque Economic Forum on Wednesday.

That includes aggressive opposition by environmental organizations, restrictive government regulations and a growing need for new infrastructure, said Robin Rorick of the American Petroleum Institute in Washington, D.C.

“The industry is at a crossroads, a transformative stage,” Rorick said. “The dynamics of the country today are extremely challenging.”

On the positive side, production is at record highs. Nationally, crude output is above 9 million barrels per day, and natural gas 80 billion cubic feet. That’s up from 5 million barrels and 52 billion cubic feet a day in 2005.

New Mexico has particularly benefited, thanks to its stake in the Permian Basin.

In the early 1970s, Permian production peaked at 2.1 million barrels of crude per day. That fell to under 1 million by 2005, but since then, it’s climbed to above 2.2 million barrels per day. Now, industry projects 5 million within 10 years.

“One half of all active drilling rigs in the U.S. are now in the Permian,” Rorick said.

For New Mexico, that’s meant a steady flow of revenue for the state, despite depressed prices, said New Mexico Oil and Gas Association Executive Director Ryan Flynn.

“The industry generated $1.6 billion in revenue directly to the state last year,” Flynn said. “It’s the bedrock of the New Mexico economy.”

But challenges have grown alongside the production boom. For one thing, more infrastructure is needed to transport output from basins to refineries and domestic and foreign markets. In the Permian, for example, a lot more pipeline capacity is needed, Rorick said.

Government regulations are also a challenge, especially red tape in approving drilling and right-of-way permits on federal lands. That’s particularly true in New Mexico, which has the most federally leased land in the U.S. for oil and gas production, Flynn said.

“Conservative estimates say New Mexico loses about $2.3 million in revenue per day because of those delays,” Flynn said.

Nationally, President Trump’s administration has pursued less restrictive policies. But Congress is generally deadlocked, and aggressive opposition from environmental groups often drowns out constructive dialogue, Rorick said.

“There are many individuals with legitimate concerns, but there are also many small but loud organizations with an agenda of ‘keep it in the ground,'” he said. “As a result, we’re not having the discussions and dialogue we need, nor answering the legitimate questions that must be answered. We need to work harder to engage more in dialogue and get past all the rhetoric.”

Home » Business » Energy » Bright but challenging future for oil and gas

Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email

taboola desktop

Hungarian filling stations running out of price-capped fuel
MARTONVASAR, Hungary (AP) -- Drivers in ... MARTONVASAR, Hungary (AP) -- Drivers in Hungary are increasingly running into gas and diesel shortages at filling stations as a government-imposed price cap squeezes ...
Could EV charging stations become targets?
ABQnews Seeker
Sandia researchers sound alarm on potential ... Sandia researchers sound alarm on potential cyberattacks
US rule would limit methane leaks from public lands ...
WASHINGTON (AP) -- The Interior Department ... WASHINGTON (AP) -- The Interior Department on Monday proposed rules to limit methane leaks from oil and gas drilling on public lands, the latest ...
New Mexico court denies challenge to PRC reforms
ABQnews Seeker
Voter-approved measure repealed direct election of ... Voter-approved measure repealed direct election of commission members
Sweden: Traces of explosives found at Baltic Sea pipelines
Investigators found traces of explosives at ... Investigators found traces of explosives at the Baltic Sea site where two natural gas pipelines were damaged in an act of 'gross sabotage,' the ...
High energy prices lead to coal revival in Czech ...
In this part of northeastern Czech ... In this part of northeastern Czech Republic, huge piles of coal are stacked up ready to sell to eager buyers and smoke belches from ...
After 14 years, the SunZia transmission project is nearing ...
ABQnews Seeker
Construction on the project could begin ... Construction on the project could begin next summer
Biden tightens methane emissions rule amid push for more ...
SHARM EL-SHEIKH, Egypt -- The Biden ... SHARM EL-SHEIKH, Egypt -- The Biden administration on Friday ramped up efforts to reduce methane emissions, targeting the oil and gas industry for its ...
UN to seek out methane emitters with data from ...
SHARM EL-SHEIKH, Egypt -- Big emitters ... SHARM EL-SHEIKH, Egypt -- Big emitters of the heat-trapping gas methane can expect a call from the United Nations starting next year, when the ...