Permian Basin

After many years of decline, oil production in the Permian Basin began climbing at the start of 2010. Since then, production increases have averaged 15.3 percent per year.

The share of U.S. oil produced in the Permian Basin has also increased since 2010. In April 2022, the Permian Basin accounted for 43.6 percent of U.S. oil, up from 18.1 percent in 2013.

The Texas counties in the Permian Basin produce over 3.5 million barrels per day in fourth quarter 2021.

In New Mexico, the four counties in the Permian Basin dominate oil production, accounting for over 90 percent of state supply.[1]

Since mid-2011, natural gas production in the region has increased, rising over 350 percent.

The share of U.S. natural gas produced in the Permian Basin has also ticked up since 2011. In April 2021, the region accounted for 17.0 percent of U.S. production, up from 5.8 percent in 2011.

The Texas counties in the Permian Basin produce the majority of the region's natural gas, and these counties have recorded strong natural production increases from 2012-2019. Production in fourth quarter 2021 was over 360 percent higher than production in first quarter 2011.[1]

Similar to the Texas Permian counties, the New Mexico counties in the Permian Basin have experienced growth in natural gas production. Production in fourth quarter 2021 was 363 percent higher than production in first quarter 2011.[1]

The rig count in the Permian Basin increased steadily from mid-2009 to mid-2012. In May 2009, just 92 rigs operated in the Permian Basin; by June 2012, there were 525 active rigs in the region. The rig count declined in the second half of 2012, leveling off in 2013 at around 465 rigs. The Permian rig count increased steadily for most of 2014, reaching 565 in October 2014 before falling oil prices began to drive the rig count down.

The number of wells per rig in the Permian Basin peaked at 5.08 in fourth quarter 2013. It declined to 4.87 in fourth quarter 2014.

The New Mexico portion of the Permian Basin is the No. 1 producer of potash in the United States. Potash is a mineral rich in potassium, so it is most commonly used as an agricultural fertilizer. In New Mexico, this industry is concentrated in Eddy and Lea counties in southeastern New Mexico.

For most of the past three decades, potash prices hovered around $150 per ton, but prices spiked in the last few years, exceeding $750 per ton in 2009. These increases have brought new jobs and revenue to Eddy and Lea counties; employment dedicated to potash production increased 6.9 percent per year from 2006 to 2013.

Potash production increased steadily from 2006 to 2008, but declined sharply in 2009. By 2011, production still lagged behind the 2008 level, but because of steep price increases, the value of potash production increased steadily. In 2012, New Mexico potash production doubled, reaching 1.4 million tons, and then climbed again in 2013 to a record high of 2.4 million tons.

The Texas Permian counties enjoyed strong employment growth through the end of 2014. From 2010-2014, employment in these counties increased 18 percent compared with 14 percent for the rest of the state. In first quarter 2015, falling oil prices led employment in these counties to fall for the first time since 2009. Wages in the Texas Permian counties remain lower than in the rest of the state.

In New Mexico, the differences in employment growth between the Permian counties and the rest of the state are particularly stark. Employment in the Permian counties has fully recovered from the recession in 2008. The rest of New Mexico had remained below prerecession levels until it recovered in fourth quarter 2019. Average weekly wages in the New Mexico Permian counties have also grown strongly in the last decade, allowing wages in the region to surpass those in the rest of the state.