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Oil and gas industry discussions by public officials and industry tend toward the many worthy numbers.
For example, nearly all (96.6 percent) the interest from the Land Grant Permanent Fund goes into the state’s general fund, providing for continuing operations of government. The permanent fund predates statehood. Oil royalties appeared in 1924. Every county gets oil and gas production revenue.
Find the report, “Fiscal Impacts of the Oil and Gas Industry,” at the New Mexico Tax Research Institute (nmtri.org). Check the right side of the page.
Other numbers from David Martin, secretary of the Energy, Minerals and Natural Resources Department, at the Legislative Finance Committee’s July 9 meeting in Farmington: Jobs, direct, indirect and induced: 68,838. Average salary: $70,666. State gross domestic product portion: 9 percent.
The numbers obscure oil and gas as a way of life with a long history here.
Flush with “enchantment,” sunsets, and mystically seeking God, aesthetes miss this. They fail to track production numbers from the well to the permanent fund to investment income to the general fund to paying for the government they wish to expand.
Besides, production is “industrial,” involving hard physical work, pipes, large wrenches, bulldozers and pickups, commonly white, sporting flags on long antennas, cruising country dirt roads. Hiking is disrupted.
Never mind that another part of production is high technology, but sometimes done in a trailer next to a piñon, not in a cozy Albuquerque lab with Starbucks around the corner.
What is also missed about oil and gas is that it is in the rock, not in a separate cavity of only oil or gas, as my eighth grade science book implied. Instead, to totally oversimplify, the rock might have an oil molecule next a rock molecule next to an oil molecule and so on.
Luring those oil and gas molecules becomes the problem. Poking a hole in the rock to change the pressure is the approach. Some rock is harder that other rock, more impermeable or less impermeable, I think it is proper to say.
The old way was to find what is called reservoir rock — sandstone or limestone — and drill the well, which changes the pressure. Oil flows to the well. From Wikipedia, we learn that once a well has produced what it is going to produce initially, nearly all the oil (or gas) remains. “Primary recovery” gets 10 percent of the oil, plus or minus. Obviously this is inefficient.
Plan B, then, is to put something — water or carbon dioxide — back down the well to restore pressure and get more oil. “We’ve been hydraulically fracking wells for 60 years,” T. Greg Merrion, president of Farmington’s Merrion Oil and Gas, told the LFC.
“A pure shale is almost impermeable,” Merrion said.
In the San Juan Basin, where gas was first found in 1921, the rock layer called the Mancos Shale contains huge amounts of oil. Getting at the oil is possible using hydraulic fracturing (called “fracking”) combined with horizontal drilling where the pipe turns when it gets to the oil formation, 5,000 feet or more below the surface and well under the water table, and runs along the formation, accessing more oil. Horizontal drilling “changed everything,” Merrion said.
Sending stuff down the well to create tiny fissures so the oil can flow is next. The stuff consists of water (90 percent), sand (9.5 percent), and chemicals (0.5 percent). Keeping the stuff in the well is critical.
Technology, always moving, will bring more efficiency. Oil and gas will long remain central to our society and our state. Sunsets provide few jobs.
Late development: The Bureau of Labor Statistics reports that New Mexico lost jobs from June 2013 to June 2014, on a seasonally adjusted basis the third worst performance nationally, but gained jobs on a seasonally unadjusted basis.