San Juan Basin's Oil and Gas Industry Faces Continued Downturn
The San Juan basin in New Mexico has witnessed a significant downturn in oil and gas prices, following a boom in the early 2000s. This shift has had profound effects on the region's economy and population.
In the early 2000s, thousands of coalbed methane wells were drilled in the San Juan basin, yielding substantial natural gas but relatively little oil. However, as new technologies made extracting gas from shale more economical, companies migrated to shale and other tight gas plays in states like Colorado, Wyoming, and Texas. This shift led to a dramatic decline in drilling activity in the San Juan basin, with only four rigs active recently, down from dozens in the mid-2000s.
The consequences of this shift have been stark. Government revenues in the basin have plummeted, with property tax revenues from oil and gas production and equipment dropping from over $17 million in 2008 to less than $7 million in 2013. The population of San Juan County has also decreased by roughly 3 percent since 2010. Despite the decline, local officials still view the oil and gas industry as the backbone of the regional economy.
The San Juan basin's oil and gas industry has experienced significant fluctuations over the past 15 years. While the region once thrived on coalbed methane production, it now faces a continued decline in revenues due to low commodity prices and the industry's preference for shale plays. Local officials are planning for this continued downturn, acknowledging the industry's importance while preparing for a changing economic landscape.
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