October 21, 2020 Read More →

New Mexico placed too many eggs in oil and gas basket

Carlsbad Current Argus:

Economic analysts warned that New Mexico could be unable to rely on its oil and gas industry as the market continues to struggle amid the COVID-19 pandemic.

Lease fees, royalty payment and taxes from oil and gas operations accounted for about 30 percent of the state’s budget in recent years, per a recent study from the Institute for Energy Economics (IEEFA) and Financial Analysis.

The industry also provided about a quarter of the state’s operations budget last year, the study read. 

Co-author of the IEEFA report Tom Sanzillo said estimates show the average price of oil will remain as low as $43 per barrel through 2022.

“It’s an improvement over the historic lows hit in April 2020, but still far below what’s needed to return New Mexico to robust fiscal health,” he said. “The situation is unlikely to improve anytime soon.”           

[Adrian Hedden]

More: New Mexico’s oil and gas collapse could last years amid calls for economic diversification

Posted in: IEEFA In the News

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