Posted on 04/26/2020 6:20:13 PM PDT by brownwill6767
As oil prices have plummeted to levels never before seen, a rift has opened among the companies that extract crude.
Some of them say state regulators should force producers to pump less in the hopes such regulation will raise prices.
Others say no, just let the market do its job.
While Texas, an oil-producing behemoth, is weighing the controversial idea of imposing limits, New Mexico, now an oil powerhouse in its own right, has largely stayed out of that debate.
Depending where oil prices go and what other states decide to do, there may come a point when the state needs to take a position. But key state officials disagree on where New Mexico should go.
The issue has come to the fore as the COVID-19 crisis — paired with an international price war between Saudi Arabia and Russia — triggered a precipitous decline. Stay-at-home orders that keep Americans from traveling have drained demand for products like gasoline and jet fuel.
Yet oil producers continued to pump through the spring, leading to a massive oversupply — and an unprecedented crash. Early last week, that glut of crude caused oil futures to fall into negative territory for the first time ever, and despite somewhat of a recovery since then, prices remain far below profitable levels for U.S. companies.
The decline also means New Mexico oil revenue has become peanuts compared to the hefty sums the state was taking in during the boom. One key legislator has projected oil and tax revenue will fall short of projections by as much as $2 billion for next fiscal year.
(Excerpt) Read more at santafenewmexican.com ...
When “Texas” cuts production, that generally means Texas producers.
“Garcia Richard earned her BA in political science from Barnard College (1996) of Columbia University and her teaching certificate from University of California, Los Angeles.”
THAT is who is chiming in on oil drilling policy in New Mexico. A school teacher with a poli-sci degree.
We’re not to the point we can do that, we still require around 6 million barrels a day to meet our daily needs.
I’m sure it would take months to build, but still would help the industry in the long run.
More storage should have already been built years ago, but Congress stopped it:
“Activities towards the goal of expansion of the SPR to one billion barrels, as directed by Congress in the 2005 Act, were cancelled in 2011 after Congress rescinded all remaining expansion funds.”
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