As oil flows, jobs, revenue rebound in Lea County

With New Mexico’s current oil production shattering all previous records, much of the economic pain wrought by nearly four years of industry bust is disappearing in the southeastern corner of the state:

Unemployment in Lea County stood at 5.1 percent in January, down from a peak of 9.4 percent in October 2016 and nearly a percentage point below the state’s 5.9 percent unemployment rate, according to the Department of Workforce Solutions.

New Mexico’s rig count climbed above 80 in February, up from just 15 rigs statewide in June 2016. Each rig employs about 50 people directly, plus 50 to 70 more in support jobs.

About two-thirds of all rigs are operating in Lea County, which is now the No. 1 oil producing county in all of the Permian Basin, and No. 3 nationwide after Weld County in Colorado and Kern County in California.

Lea County revenue from oil and gas production reached $2.9 million in February, nearly tying the record high of $2.92 million set in 2008 when oil was earning $140 per barrel.

Hobbs, where 67 percent of the county’s 70,000 population lives, collected $176,000 in lodger’s tax revenue in February, up from just $67,000 in the same month last year. For the first eight months of the current fiscal year, lodgers tax revenue for Hobbs totalled $972,000, compared with $897,000 for all of FY 2016.

During this year’s legislative session, the Legislative Finance Committee projected $292 million in “new money” for the coming fiscal year, largely from increased oil and gas revenue, reversing the budget shortfalls that led to harsh cutbacks in state spending in recent years.