KEY POINTS
- New Mexico’s proposed drilling setbacks could reduce oil production and revenue.
- The restrictions aim to protect public health by limiting drilling near sensitive areas.
- The debate highlights the state’s role in balancing environmental protection with economic needs.
New Mexico, the second-largest oil producer in the U.S., is evaluating proposed drilling restrictions aimed at reducing the environmental impact of oil and gas operations.
A new study, presented by the state’s top economist, examines how these limits could affect production and revenue, predicting a loss of 12.5 million barrels in the first year if enacted.
Proposed setbacks and economic impact
The study assesses limitations that would prohibit drilling within 650 feet of natural water sources, such as lakes, ponds, and streams, and 2,250 feet from residential, educational, medical, and correctional facilities.
Also, based on the study, these setbacks might result in a 5.4 percent decrease in oil production, costing the state up to $4.5 billion a year by 2034, according to Ismael Torres, chief economist of the Legislative Finance Committee of New Mexico.
Although supporters contend that possible financial losses are outweighed by health and environmental concerns, Torres stressed that the analysis is still in progress and that any suggested limitations will need more research.
Moreover, about 15 percent of new wells will be impacted by the proposed setbacks, and roughly one-third of these sites will be at risk of being abandoned.
Debate over health versus economic growth
The health advantages of restricting drilling close to populous areas and water sources, according to environmental campaigners, are vital.
“The costs of air and water pollution far outweigh the loss of oil revenue,” said Charlie Barrett, an Earthworks advocate. He underlined that “setbacks are essential to protecting communities, schools, and businesses from harmful exposure.”
The New Mexico Oil & Gas Association, however, has expressed disapproval. According to Reuters, the group’s CEO, Missi Currier, contended that statewide impediments might impede oil and gas development, impacting money and jobs that are vital to the state’s economy.
Broader implications for energy policy
New Mexico is part of the Permian Basin, one of the most productive oil regions in the world. In July alone, the state produced over 2 million barrels per day.
Setbacks like those proposed could influence national discussions on balancing energy production with environmental stewardship, especially as the state explores pathways for sustainable growth.
The state’s Legislative Finance Committee is set to further discuss the report, weighing community health impacts against the economic contributions of the oil and gas industry.
