The fabulous Delaware Basin.
The Delaware Basin is the largest oil and gas basin in the United States. The value of oil and natural gas at the wellhead in 2019 is $ 24 billion per ye––––ar, a staggering amount.
The Delaware Basin has approximately 45,000 oil and gas wells located near the cities of Carlsbad and Artesia in southeastern New Mexico, not far from the Carlsbad Caverns.
Royalties and taxes on these oil wells have provided income to the country, which has been a windfall in recent years. NM General Fund revenue was US$2.2 billion in fiscal year 2018, US$3.1 billion in fiscal year 2019, and US$2.8 billion in fiscal year 2020.
In fiscal year 2020, revenue of US$2.8 billion is more than one-third of the state budget, and US$1.4 billion is earmarked for education. And more than 600 million U.S. dollars for medical services. Oil production on the
plot has increased exponentially from 2011 to 2021. By 2021, crude oil production in most of the Delaware Basin will be
nautical miles. The exponential growth of EMNRD––––
in New Mexico over the past five years has been phenomenal (Figure 1). The reason is simple. The Delaware Basin contains an ocean of oil. In late 2018, the USGS (United States Geological Survey) conducted an assessment and found 46 billion barrels of recoverable oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of NGL. LGN is a more complex liquid compound than methane, like ethane and pentane.
is more suitable for you––—
What happened? Global emissions continue to rise
Carbon emissions have fallen to a record
Why Bill Gates depends on small modular nuclear reactors––––
The large amount of oil and natural gas in the Delaware Basin constitutes the United States, the largest oil reserves and natural gas in the history of the United States Geological Survey. Simply put, it is the number one energy company in the United States and has the largest recoverable reserves in the world.
This appears to be good news for New Mexico. But let’s dig a little deeper.
First of all, oil and gas work has not been fully restored after the pandemic, although oil production has resumed. The number of rigs is even lower than the peak because operations have further improved efficiency and the focus is on the goal of limiting capital expenditures, not to quickly expand the wells, but to maximize the profits of the wells you own.–––––
Secondly, due to a special reason, the entire oil and gas industry is shrouded in a shadow: climate change. The transition from fossil fuels to renewable energy sources such as wind and solar energy is real, accelerated, and has a serious impact on reducing the demand for oil and natural gas. As demand falls, so does supply. Before we dive into it, let’s take a look at a fresh assessment of New Mexico.
Economy and work. A new report issued by
NMOGA (New Mexico Oil and Gas Association) assesses the impact of the oil and gas industry on the state’s economy and employment.
New Mexico is among the top states in the United States where oil and gas contribute to the state economy. In 2019, the industry:
companies contributed $18.8 billion to New Mexico’s GDP, accounting for nearly 18% of the state’s total.
supports more than 46,000 direct jobs (employment is defined as the number of wages and self-employed jobs, including part-time jobs).
Another part of New Mexico’s economy creates an additional 1.5 jobs for every direct job in the state’s oil and natural industries. The natural gas industry added 69,000 jobs.
The climate dilemma.
Now let us cross the fence and see what is on the other side. In New Mexico, the oil and gas industry generated 60 million tons of greenhouse gas (GHG) emissions in 2018, which accounted for 53% of the state’s total emissions and 1% of the United States’ total emissions. Methane accounts for 35% of greenhouse gases in New Mexico (10% nationwide), with most of it coming from the state’s oil and gas sector.
Governor Lujan Grisham set a goal of reducing methane emissions by 45% between 2005 and 2030. New Mexico enacted new rules in 2021 to reduce methane leaks and natural gas burning, and these are now one of the stricter state rules in the United States. nation. The state government
also committed in 2019 to transition to renewable energy by reducing greenhouse gas emissions throughout the economy to zero emissions by 2050. This has two consequences:
The goal of the state government is to achieve carbon-free electricity by 2040. This means that there are no more coal or gas power plants. This will reduce the demand for natural gas. It is estimated that by 2035, the demand for natural gas in the United States will fall by 32%.
Cars and trucks will switch to electric vehicles in the process of achieving net zero greenhouse gas emissions by 2050. This will reduce the demand for gasoline and therefore oil. For the entire United States, by 2040, the demand for oil will fall by 24%.
This painting is an act of juggling, New Mexico lawmakers trying to strike a balance between a highly profitable oil and gas company and a climate-driven transformation. Fossil Energy. To renewable energy.
The “hands” that play with these two balls must be strong and flexible to maintain New Mexico’s solvency, maintain sufficient jobs, and improve the quality of life in states with lower ratings compared to other states in the United States. United States.
How long can the value of oil and gas last?
This is important not only to New Mexico state legislators, but also to the people who live there. Prosperous profits will fall and jobs will decline, at least for the oil and gas industry, as well as many jobs indirectly related to the industry. Two things are certain: change is coming and, with it, uncertainty.
The transition from fossil energy to renewable energy will be a slippery slope, not a
The fabulous Delaware Basin.