‘Bragging rights is one thing and it’s always nice to have bragging rights, but what it means to the county is more revenue. The bottom line is it’s going to increase the revenue to the county and it’s going to increase the revenue to the state. It’s real simple.’ - Chip Low, Lea Finance Director
As New Mexico became the nation’s third highest oil producing state last year, Lea County slipped into the No. 3 slot among counties, according to research performed by Lea County Assistant County Manager Corey Needham.
“We are still trailing Weld (County), Colo., and McKenzie County, N.D., in production but have significantly more rigs currently drilling than they do,” Needham said in an email the day after Christmas.
Data posted from August, the latest available on the website www.shalexp.com, indicated 12 million barrels of oil were pumped per month from Lea County, compared to 12.5 million from Weld County (ranked second) and 14.8 million from McKenzie County (ranked first). At that time, Lea had 55 rigs while Weld had 21 rigs and McKenzie had 19 rigs.
“At current increases in production, we will be second-highest producing county in the U.S. (in late 2019),” Needham said, “but will not be able to overtake McKenzie County for four to five years at the current rate to be the nation’s top producer.”
Steve Vierck, president and CEO of the Economic Development Corporation of Lea County, receiving the data from Needham, said, “Lea County volume has more than tripled in the last five years, as the county continues to move up in relative importance in the energy sector.”
Lea County Finance Director Chip Low noted the economic advantage of higher oil production in the county.
“Bragging rights is one thing and it’s always nice to have bragging rights, but what it means to the county is more revenue,” Low said. “The bottom line is it’s going to increase the revenue to the county and it’s going to increase the revenue to the state. It’s real simple.”
As the New Mexico Legislature opens its regular session later this month, the state appears poised with more than $1 billion in “new money,” primarily credited to the recent oil boom.
Vierck noted the increase in oil production provides incentives for new businesses in the county.
“I think it also indicates there are a lot of opportunities out there related to increased production, such as support businesses, retail and medical services to support residents whose livelihood is tied to that production,” Vierck said.
Needham’s research noted behind Lea County are Midland County, Texas, fourth, at 10.9 million barrels per month; the Beechey Point area of Alaska, fifth, at 10.2 million barrels per month; Kern County, Calif., sixth, at 9.9 million barrels per month; and nearby Eddy County, seventh, at 8.8 million barrels per month.
By state, the largest oil producer is Texas, accounting for 44.14 percent of the nation’s daily oil production, followed by North Dakota (17.68 percent) and New Mexico (9.65 percent), according to the ShaleXP website.
More than half of New Mexico’s oil production in 2018 came from Lea County.