Projections for oil and gas industry show more decline as lawmakers debate response | KOB 4

Projections for oil and gas industry show more decline as lawmakers debate response

Tommy Lopez
Updated: July 29, 2020 10:23 PM
Created: July 29, 2020 09:56 PM

ALBUQUERQUE, N.M.- New projections show more prolonged struggles for New Mexico’s oil and gas industry as state lawmakers continue to monitor the outlook and debate what actions to take regarding the state budget.

Since the state legislature passed the budget five weeks ago, there’s been a new spike in COVID-19 cases, leaving many wondering if economic struggles will last longer than previously anticipated.

Earlier this month, industry experts told state lawmakers that recovery for the oil and gas industry will take several years because of low demand.

New Mexico Oil and Gas Association leaders say they’ve been ready for these restricted conditions to continue, but they’re not sure it’ll take several years to recover.

Executive Director Ryan Flynn says no one knows what will happen, including the experts who are briefing lawmakers.

“While they’re good people, they’re putting out a little bit of theater for the legislature and giving them neatly-packaged soundbites instead of more of a pragmatic view,” Flynn said.

He says some projections show a little improvement as soon as next year, and he believes New Mexico’s industry will recover more quickly than other states.

“We were the last area to see a decline in production activity and we are the first area that will see an increase in production activity,” Flynn said.

Democratic leaders say they’ve been taking this outlook into account and understand that revenue losses could add up over a period of years.

Rep. Patty Lundstrom, chair of the House Appropriations Committee, says leaders are working every day on finding solutions.

“If we just had a sense of knowing when we can anticipate recovery then we have the ability to build some strategies around it,” Lundstrom said.

Republican leaders disagree, saying the state is not prepared and needs to be cutting more spending now. Sen. Bill Burt wants to chop off another 15% of the state’s budget.

“In my humble opinion, it is a plan for disaster. I think that people have no idea really how bad the state is financially right now,” Burt said.

Leaders from both parties say they will need to find solutions to difficult problems in January, when the next legislative session gets underway.

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