Oil and gas production grew New Mexico’s economic output by the fourth-highest rate in the country this year, as the extraction industry boomed in the Permian Basin in the southeast corner of the state.
A report from the Bureau of Economic Analysis, an arm of the U.S. Department of Commerce, showed New Mexico’s gross domestic product grew by 4.1% in the second quarter of 2019, tied with Alaska and behind Texas at 4.7% and Wyoming at 4.2%.
Nationwide, GDP grew by 2%, records show, and New Mexico also grew by 4.1% during the first quarter of 2019.
That marked an increase from 2018’s 2.5% in total growth, showing increases of 0.7% and 5.5% in the first and second quarters, respectively.
New Mexico’s GDP represented about $103 billion in the second quarter of 2019, up from 2018’s second quarter total of about $99.7 billion.
The state accounted for about 0.5% of the nation’s GDP, compared with Texas’ $1.8 trillion or about 8.8% of the nation’s GDP.
Oklahoma’s GDP was at about $206 billion or 1% of the country’s GDP, with Arizona at about $364 billion or 1.7% of the country.
Mining, quarrying and oil and gas extraction was the state’s largest growth area, contributing by about 2.2% to New Mexico’s overall GDP growth, while it only contributed about 0.33% across the U.S.
New Mexico’s extraction industry made the second biggest contribution to the state’s GDP, behind Wyoming’s 3.5% and ahead of Texas’ 1.8%, per the report.
Overall, extractive industries grew by 23.5% in the second quarter, a slight dip from the first quarter’s 26% growth, records show.
But the report credited oil and gas as driving most of the GDP growth in New Mexico and the country.
“The second quarter growth primarily reflected an increase in oil and gas extraction,” the report read.
In New Mexico, oil and gas entered a boom in 2017 and 2018, as the price per barrel recovered from a bust in 2015 and 2016, when West Texas Intermediate — a grade of crude oil used as a pricing benchmark — slumped as low as about $20 per barrel.
Ryan Flynn, executive director of the New Mexico Oil and Gas Association said the growth in oil and gas in New Mexico boosted the nation’s energy independence.
“With this kind of steady, upward movement we’re entering a new era in southeast New Mexico and the Permian, where production will remain at record highs as long as policy remains stable,” he said.