New Mexico Representative wants government to okay well shut-ins

Just as Oklahoma regulators have dealt with the requests of energy companies to allow the shut-in of their wells, some in Congress want the Interior Department to do the same for operators of wells on government lands.

As New Mexico’s oil and gas industry continued to struggle with plummeting prices and slowing production brought on by the COVID-19 pandemic, a group bipartisan of congresspeople urged the U.S. Department of the Interior (DOI) to allow operators to temporarily shut in wells without penalty until prices stabilize.

The price per barrel of domestic crude oil fell as low as -$38 per barrel in April and was slow to recover – trading at about $37 per barrel as of Friday.

A year ago, in early June 2019, the price hovered comfortably between $50 and $60 per barrel, as production hit historically high levels.

But all that changed with COVID-19 spread to the U.S. and around the country as travel restrictions and stay-at-home orders led to a massive decline in demand for the fuel being produced at record levels.

The industry suffered as capital spending was cut and thousands of New Mexicans lost their jobs along with oil workers around the country.

To provide some relief to the struggling fossil fuel industry, U.S. Rep. Xochitl Torres Small (D-NM) and a bipartisan group of lawmakers penned a letter to U.S. Secretary of the Interior David Bernhardt urging the DOI to issue a rule that would give operators flexibility in shutting down wells and curbing production as the market recovers.

“Increased supply combined with a dramatic cut in demand due to COVID-19 has caused the price of oil to plummet,” Torres Small said. “The consequences have been devastating for local economies across southeastern New Mexico. Providing oil and gas operators the flexibility to temporarily shut in their wells will help meet needs where current guidance falls short.”

“I’m calling on Secretary Bernhardt to follow New Mexico’s example and take swift action to implement this policy that will benefit oil and gas workers, the environment, and the economy.”

Source: Carlsbad Current Argus

New Mexico Representative wants government to okay well shut-ins

Jerry Bohnen

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New Mexico Representative wants government to okay well shut-ins

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Jerry Bohnen

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