Permian Basin losses offset population gains in N.M.

Census data show state’s growth flat despite oil industry boom

Oil prices are coming back. Will people follow?

New population estimates from the U.S. Census Bureau show counties that were once the fastest growing in New Mexico were the fastest shrinking in 2017, even as those same areas saw record oil production.

New Mexico’s population remained mostly flat last year, growing only by about one-tenth of 1 percent.

But the decline in population around the Permian Basin’s oil fields points to what observers say could be the beginning of a new era in the state’s energy industry, with

companies automating more work and using new technologies to get more oil out of each well.

“Employment in oil and gas has not

come back as fast as prices have,” said Jim Peach, an economist at New Mexico State University. “Part of that is the tremendous technological change that has occurred in drilling.”

The Census Bureau estimates Lea County lost population at a higher rate than any other New Mexico county last year.

The number of people living in the southeastern New Mexico county shrank by about 1,091, or 1.6 percent.

That left 68,759 people in the county as of July 2017 — still about 6 percent more than in 2010.

It is a similar story in neighboring Eddy County, which lost 459 residents, or about fourfifths of 1 percent, and still boasts a population that is larger than it was eight years earlier.

But the decline comes at a surprising time.

Lea and Eddy counties have been at the heart of southeastern New Mexico’s oil and gas industry.

Though declining oil prices tamped down the boom of the surrounding Permian Basin in recent years, the area has since rebounded.

New Mexico boasted record oil production in 2017, and major producers have piled in, buying up stakes in the area.

This latest boom may feel different, however.

When prices fell in 2016, oil companies dug in and made operations in West Texas and New Mexico more efficient to remain competitive.

That means more of the work in the oil fields has been automated, requiring fewer employees on the ground.

Many day-to-day operations, such as checking the levels in tanks, can be managed from the offices of oil companies in Oklahoma City or Houston. Automated water pump stations can save companies from hauling water on trucks for use in hydraulic fracturing.

And methods such as horizontal drilling have allowed wells to reach more oil and gas than wells that are drilled straight down into the ground.

To be sure, employment in the oil and gas industry has increased since prices began to rise in the latest boom.

“You can see the employment base really starting to increase. Not only is the economy growing, it’s gaining more momentum,” said Steve Vierck, president and CEO of the Economic Development Corporation of Lea County, pointing to employment data.

The mining sector — a category that includes oil and gas production — employed 5,499 people in Lea County in January 2017, according to the state Department of Workforce Solutions. By September, the sector had added more than 750 jobs in the industry and employed more people in the county than any other.

But Vierck added that the county likely would have seen even more jobs if not for a shift toward automation.

And the number of people employed in the sector has yet to return to the levels seen during the boom of 2014 and 2015.

Vierck said the major investments in the Permian Basin have yet to fully play out, but he added that more workers will need more training to fill the jobs oil companies are offering.

The state’s major counties saw only minor gains in population.

Bernalillo County, for example, gained 2,638 — an increase

of about 0.13 percent. Santa Fe County, meanwhile, gained 807 residents, or about half of 1 percent over 2016.

Los Alamos proved a sort of bright spot, again ranking among the country’s fastest-growing “micropolitan areas” — an urban area with a population between 10,000 and 50,000. The county gained about 586 residents, or 3.2 percent.

Rural counties mostly lost residents.

And no county in the state notched the sort of 5 percent population growth seen in the communities around Austin, Texas, or Salt Lake City — generally the counties with the largest percentage increases in the country. For the counties with

the largest population growth in sheer numbers, look west to Maricopa County, Ariz. — home to Phoenix — and Clark County, Nev. — home to Reno.

Still, the state’s upturn in overall population is a change from 2014 and 2015, when New Mexico was losing more residents than it was gaining.

“It looks like a lot of things in the state were finally moving in the right direction,” Peach said. “But there’s no huge [economic] boom yet. And the thing to be concerned about is that oil prices can change.”