U.S. Federal Reserve Bank of Dallas said March 4 that because of two market conditions – slow recovery from the global pandemic and federal restrictions on new drilling – Permian Basin will produce between 230,000 and 490,000 fewer barrels per day by 2025 than if drilling continued at its current pace. The report said, “Production and employment across the basin will gradually shift from federal lands in New Mexico to private and state lands in New Mexico and Texas with wide-ranging economic implications for the region.” In New Mexico, half of Permian production in 2020 came from wells on federal lands while all production in Texas originated from wells on private and state-owned lands.
The report added, “New policies are likely months away, but oil companies, state governments and municipalities are in the process of examining the potential outcomes.”