By Kevin A. Schug & Alexander Kaplitz, University of Texas at Arlington, from The Conversation

March 20, 2025 — Because plastic is so commonly used, finding new ways to manage and recycle plastic waste is becoming ever more important. Plastic waste pyrolysis is one technology that could help address this issue.

This is a relatively new technique, so researchers still have only a limited knowledge of the pyrolysis process. As analytical chemists, we strive to understand the composition of complex mixtures, especially new creations from sources such as plastic waste pyrolysis.

What is plastic pyrolysis?

Plastic pyrolysis is a chemical process that involves chemically breaking down plastics into other molecules by heating the plastics to extremely high temperatures in the absence of oxygen.

Unlike traditional plastic recycling, pyrolysis theoretically isn’t limited to specific types of plastic. It could be made to accommodate many of them, although current technology is limited to a few types – polyethylene and polypropylene, used in food containers and bottles – at an industrial scale.

So, plastic pyrolysis could help handle the waste from consumer products such as plastic bags, bottles, milk jugs, packaging materials, wet wipes and even discarded children’s toys. Pyrolysis can also handle more complex plastic waste such as tires and discarded electronics, although solid waste handlers and recyclers avoid certain plastic types in pyrolysis, such as polyvinyl chloride – or PVC, which is found in pipes and roofing products – and polystyrene, used in packaging, as these can create harmful byproducts.

During pyrolysis, the plastic polymers are broken down into smaller molecules, resulting in the production of liquid oil, fuel source gases such as methane, propane and butane, and char.

Char is the solid residue left at the end of the pyrolysis process. It can be used as a carbon-rich material for various applications, including adding it to soil to make it healthier for farming, as it increases soil moisture and pH, benefiting nutrient absorption. Char also has the ability to absorb harmful carbon gases from the air, which can help prevent climate change.

The main downside of char is if it’s used too much it can increase soil alkalinity, which may hinder plant growth.

How pyrolosis works

The plastic pyrolysis process typically involves several key steps.

In the first step of pyrolysis, community recyclers collect the plastic waste and clean it to remove any contaminants. The plastic then gets shredded into smaller…
 

March 20, 2025 — Data source:U.S. Energy Information Administration, Hourly Electric Grid Monitor
Note:ERCOT=Electric Reliability Council of Texas; CT=central time

A February 19–22 cold snap increased electricity demand in Texas, and natural gas-fired electricity generation approached record highs for hourly and daily generation.

Electricity demand in Texas typically peaks in the summer during heat waves and in the winter during cold snaps.

During peaks in electricity demand, grid operators must have dispatchable electricity generation sources available to service net electricity load, which is the generation required to meet demand after subtracting supply from intermittent sources such as wind and solar. Surges in electricity demand in the region overseen by the Electric Reliability Council of Texas (ERCOT) are primarily supplied by natural gas-fired generation; ERCOT manages approximately 90% of the electricity load in Texas. In addition to demand surges, natural gas-fired generation rises to meet supply requirements during periods of lower wind and solar generation. In February’s cold snap, demand increased and combined wind and solar generation decreased.

According to our Hourly Electric Grid Monitor, natural gas-fired electricity generation in the region increased to 48.8 gigawatts (GW) between 6:00 a.m. and 7:00 a.m. central time on February 20, 193% higher than the same time on February 18 (the day before the cold snap) and only 1% below the previous record set on January 16, 2024. Rising temperatures during the daylight hours on February 20 decreased electricity generation needs, which led to lower natural gas-fired generation during the daytime.

Although hourly natural gas generation peaked on February 20, daily natural gas-fired electricity generation peaked during the cold snap on February 21 at 991.9 gigawatthours (GWh). Natural gas generation on February 21 was the second-highest daily level ever recorded in ERCOT and 1% less than the previous record set on December 23, 2022, according to our Hourly Electric Grid Monitor. Average daily natural gas-fired generation during the cold snap was 904.8 GWh, 411.1 GWh (83%) more than the February 2025 daily average and 575.6 GWh (175%) higher than the same period in 2024.

Daily net electricity load peaked at 1,357.4 GWh on February 21 (85% higher than on February 18), of which 73% was served by natural gas-fired generation. Natural …
 

March 13, 2025 — A fire at an electrical substation is being blamed for an underground fire at the Texas Tech University campus in Lubbock, which resulted in students being sent home for an early Spring Break.

There were no injuries reported and no foul play is suspected, according to officials.

About 40% of the buildings on the Tech campus were without power Thursday morning, while Lubbock Power & Light worked to restore service, the campus police department said.

The fire sent blue flames up through manhole covers and there were reports of a gas odor all over campus.

By Thursday afternoon…
 

By Lucia Vasquez

March 12, 2025 — The Texas Senate on Wednesday unanimously approved a bill that would create a task force to combat the escalating issue of petroleum theft in the state.

Senate Bill 494, authored by Republican Sen. Kevin Sparks of Midland, would form a statewide task force that would “analyze organized oil field theft and recommend solutions” to address petroleum-product theft in Texas, Sparks said on Wednesday. The taskforce, under the oversight of the Railroad Commission of Texas, would be made up of industry stakeholders and law enforcement agencies.

“Thieves engaged in organized theft often operate across multiple jurisdictions, complicating efforts to apprehend and charge them due to a lack of coordination between authorities,” Sparks said.

Petroleum theft has been a persistent problem in Texas. The Energy Security Council…
 

March 12, 2025 —

In February 2025, Corpus Christi Stage 3, an expansion of the existing Corpus Christi liquefied natural gas (LNG) export facility, produced its first LNG cargo according to the developer Cheniere Energy. Corpus Christi Stage 3 started producing LNG in December 2024. The start of LNG exports from Corpus Christi Stage 3 follows shortly after the start of exports from another U.S. LNG export facility—Plaquemines LNG Phase 1—also in December.

The Corpus Christi Stage 3 expansion facility, located…
 

There are many ways to make hydrogen — a carbon-free energy source and petrochemical ingredient. But no matter the method, all hydrogen production requires a lot of water.

In a recent study, researchers from The University of Texas at Austin examined just how much water the growing Texas hydrogen economy might need. They found that by 2050 new hydrogen production facilities could account for 2–6.8% of water demand in the state.

In comparison to big water draws, such as irrigation or municipal use, hydrogen’s demand is relatively small, said the study’s lead author Ning Lin, an energy economist at UT’s Bureau of Economic Geology. But it has the potential to disproportionately affect communities that face future water issues.

This includes the Gulf Coast, where most current hydrogen infrastructure is built and where most new hydrogen infrastructure is planned. The State Water Plan projects this region to face large annual shortages of fresh groundwater by 2040.

“Where you put a project can make a huge difference locally,” Lin said. “With multiple hydrogen facilities planned in water-stressed Gulf Coast counties, this study highlights the urgent need for integrated water and energy planning and provides a solid foundation to help policymakers, industry, and communities make informed decisions about hydrogen and water management,” she said.

The research was published in the journal Sustainability.

Eight new hydrogen production facilities are planned for the Gulf Coast and in South Texas as part of the HyVelocity Hub project, a collaboration between industry, academia and non-profits that seeks to build up the hydrogen economy in Texas.

To estimate future water demand, Lin and her colleagues used data from a 2024 National Petroleum Council study that estimated the regional hydrogen demand from 2030–2050 based on two policy scenarios: a net-zero scenario and a stated policy scenario.

The UT researchers examined the water requirements from all aspects of hydrogen production, including water used for cooling. They also examined the water needed for different mixes of “blue hydrogen” and “green hydrogen.” Green hydrogen is produced from water using electricity without carbon dioxide emissions. Blue hydrogen produces emissions and is made by burning natural gas. It can be made low-carbon by trapping its emissions underground using carbon capture and storage technology.

Based on a 50:50 mix of blue and green hydrogen, the researchers determined that water demand for net-zero hydrogen is about 3.4 times more than status-quo hydrogen: 6.8% compared to 2%. Much of the additional water demand is associated with capturing and storing the carbon dioxide emissions from blue hydrogen production.

“Decarbonization is expensive,” Lin said. “You don’t get rid of carbon for free.”

As part of the study, the researchers also provide an overview of water use and water quality for a range of production methods, which affects whether water left over after hydrogen production can be recycled.

For example, green hydrogen production requires ultrapure water that undergoes extensive filtering, so leftover water could be potentially returned to the water supply…
 

February 26, 2025 — The American energy industry has always taken great pride in being innovative, independent, and committed to free market principles. Recently, however, executives at some of the nation’s biggest oil and gas companies are publicly embracing the same corporate welfare schemes that have propped up unreliable so-called “green” energy for decades. This is discouraging because government subsidies distort markets, encourage dependency, and waste taxpayer dollars, whether they are handed to wind farms or carbon capture projects.

As an energy regulator, my position is simple: I am agnostic on technological innovation, but I am categorically opposed to corporate welfare for energy production. I oppose it for “green” energy, and I oppose it for oil and gas. Why? Because I am not a hypocrite. If a technology is viable, it shouldn’t need subsidies; and if it needs subsidies, it is not viable. Economically workable technologies will thrive on their own—they don’t need billions or trillions of debt-financed, taxpayer-funded handouts.

This debate isn’t new. Here in Texas, we saw firsthand how carbon capture projects, like Petra Nova, fold without government support. In 2017, Petra Nova proudly opened its doors for business, with many Texas leaders –me included– attending in support. Three short years later, the company completely shut down. In 2022, Petra Nova announced it was re-opening for business conveniently after the Biden Administration oversaw increased federal funding, through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, for carbon capture projects.

Instead of playing the same game as the “green” energy grifters fighting to enrich themselves from the government trough, major oil and gas companies should fight to level the playing field by eliminating all subsidies for all forms of energy. If they spent even half as much time and resources fighting for free markets instead of virtue-signaling to shareholders with windmills, solar panels, and empty rhetoric about a “carbon-free future,” energy would be cheaper, cleaner, and more reliable for consumers.

Supporters of carbon capture justify subsidies as a way to reduce carbon emissions, yet the facts don’t support the hysteria. Over the last two decades, U.S. CO₂ emissions have already dropped by 16 percent[1], and our oil production is 23 percent[2] cleaner than the global average. The U.S. accounts for about 16 percent[3] of global carbon emissions, while China and other countries continue increasing their emissions unchecked. Even President Biden has admitted, “Even if we do everything perfect, it’s not going to matter.” So why are some in the oil and gas industry aligning with Democrats to push for subsidies that will only invite more government control, more regulation, and ultimately, more attacks on the ability to produce oil and gas? You’d think an industry that helps power 80 percent[4] of the world’s energy would be proud of their contribution that drives mankind forward.

President Donald Trump and Elon Musk have for the first time in decades really shined a spotlight on dangers of runaway government spending, and it’s time for the oil and gas industry to stand with them by fighting against government waste. No one likes corporate welfare, especially not the American taxpayers who are footing the bill. It is time to stop playing defense against radical environmentalists and go on offense: end all energy subsidies, eliminate market distortions, and let innovation and competition determine the future.

The bottom line is that America’s energy policy shouldn’t be tipping the scales, it should be a hands-off approach and meritorious by having consumers reward success. If we don’t take a stand now, we’re surrendering leverage to our adversaries for them to dictate the future of American energy. I urge you to reject misguided subsidy schemes and reaffirm a commitment to a strong, independent energy sector—one that thrives on its own merits, not government favoritism.

References: 

1. https://www.iea.org/regions/north-america/emissions
2. https://www.noia.org/new-report-u-s-gulf-of-mexico-oil-gas-production-leads-with-lower-emissions-including-methane/
3. https://www.iea.org/regions/north-america/emissions
4. https://oilprice.com/Energy/Energy-General/Fossil-Fuels-Still-Account-For-82-Of-Primary-Global-Energy-Consumption.html

By Bethany Blankley

February 26, 2025 — Of the roughly 4,000 bills filed in the Texas legislature so far, about 120 affect the Texas oil and natural gas industry, according to an analysis by the Texas Independent Producers and Royalty Owners Association (TIPRO).

On Tuesday, several lawmakers discussed legislative priorities at a TIPRO annual meeting in Austin.

State Rep. Drew Darby, R-San Angelo, who chairs the House Energy Resources Committee, said the committee would “to try to make sure we focus on the important issues facing the state and make sure that this industry is equipped with legislative authority and statutory authority to do what you need to do [to meet] the energy needs of this state.”

State Sen. Bryan Hughes, R-Mineola, said the legislature would be expanding Environmental Social Governance (ESG) prohibitions, strengthening the Texas grid, and address ways to counter federal subsidies for intermittent energy that have distorted the energy market. These are all legislative priorities of Gov. Greg Abbott and Lt. Gov. Dan Patrick.

“ESG has cut off funds for developing natural gas power plants,” Hughes said. “So, Texas is pushing back on that. Then a big investment last session, we’ll be…
 

February 12, 2025 — In his State of the State address on Sunday, Governor Abbott called for a “Texas-sized” investment in the state’s water infrastructure. The state water plan estimates that demand for water will increase by 9% by 2050, while water supply available during a drought will decline by 18%. So state water planners are understandably concerned we meet might not have enough water to meet our needs in the future, especially as climate change brings more frequent and severe drought and higher temperatures increase evaporation from our reservoirs.

However, creating new water supplies can have a big impact on the environment. New reservoirs, such as the proposed Marvin Nichols reservoir, require flooding vast areas of land and wildlife habitat, often seizing land from unwilling sellers via eminent domain. Ocean desalination can harm sensitive coastal ecosystems. Pumping treated oilfield wastewater into rivers and aquifers could contaminate drinking water supplies.

So, Texas should prioritize water efficiency above increasing supply. We should emphasize measures to reduce water waste over the construction of new reservoirs or pipelines. Conservation is better for the environment and often cheaper than supply-side strategies.

2020 water demand by water use category (acre-feet) – Texas State Water PlanPhoto by Staff | TPIN

Here are three water strategies the Legislature should prioritize to help meet the state’s water needs.

1. Fixing broken municipal water mains: Texas has lost over 88 billion gallons of water due to aging and leaking water infrastructure. Identifying and repairing leaks could save enough water to meet the annual needs of Austin, Fort Worth, El Paso, Laredo, and Lubbock combined. The Governor rightly emphasized the need to “repair pipes to save billions of gallons of water each year.”
2. Agricultural water conservation. Irrigation accounts for the largest share of Texas’ current water use—53 percent of total demand in 2020.  The efficiency of water use in agriculture can be improved with metering of water so farmers better understand how and when water is being used; better management practices such as brush clearing and reduced tillage; adoption of more efficient irrigation technologies, and infrastructure upgrades to limit water losses from canals. Irrigation canals are artificial waterways used for water transportation, typically for agricultural purposes. Lining canals would reduce water loss from ground seepage and smoothing the transport surface increasing water efficiency. According to the Texas International Produce Association, lining all the canals in the Rio Grande Valley could save between 300,000 to 900,000 acre feet of water every single year (the higher number is enough to fill 1.8 million Olympic-sized swimming pools!)

…
 

February 12, 2025 — Texas is known as the energy capital of the world, and for good reason, but the state has fallen behind others in its advancement of nuclear power, so now state leaders are working to change that.

South of Houston, Ft. Bend County Precinct 3 Commissioner Andy Myers is working with Governer Gregg Abbott and lawmakers currently meeting at the State Capitol to greatly increase the number of small nuclear power plants around the state, and the reasons are numerous.

For one thing, the plants are considered a lot safer than the previous generation of nuclear facilities, which have raised concerns for decades because they’ve generated dangerous radioactive waste, and the nation, in all the years since the first nuclear plants more than 65 years ago, still hasn’t settled on a central national depository for that waste.

Commissioner Myers says the new generation of nuclear plants are much…
 

February 3, 2025 — Texas tax income from O&G for the month of January was down slightly from a year earlier, according to the latest figures from the state comptroller.

Natural gas production severance taxes received were down 8% when compared to January 2024, at $174 million.

Oil production tax income for the state was down 6% from the same month a year ago, at $471 million.

Motor fuel tax income received was up 2% from January of last year, at $313 million.

And motor vehicle sales and rental taxes dropped 5% from last year at this time, at $589 million.

Overall state sales tax revenue totaled $4.3 billion in January, 6.8% more than in January 2024, according to Texas Comptroller Glenn Hegar.

“Retail trade, the largest sector, grew by more than …
 

January 29, 2025 — Electric heavy-duty vehicles offer significant advantages, including reduced noise pollution and lower emissions. However, there’s still a disadvantage to overcome—too many heavy-duty electric vehicles (EVs) could overload the grid.

In the Department of Electrical and Computer Engineering, Dr. Thomas Overbye, professor, Dr. Jonathan Snodgrass, a senior research engineer, and electrical engineering graduate students Diana Wallison and Lyric Haylow conducted a three-year project to determine how the grid will be affected if heavy-duty vehicles are electrified in Dallas and Houston, leading to more EVs on Interstate 45.

“In some cases, it would make sense to switch from a diesel truck to an electric truck, especially if they’re just driving in a city, because if those big semis are idling, they’re just burning gas. Whereas if you have an electric truck, you can sit there with zero idle,” Snodgrass said.

“Real pollutants come out of car tailpipes,” Snodgrass said. “If we can reduce or eliminate that, there would be less smog and more efficiency. It’s also it’s just cleaner in general. And imagine if you’re able to reduce traffic noise, especially for people who live along the highways.”

Traditionally, transportation and electric grid researchers don’t often talk to each other, which makes it difficult to determine how much EVs will stress the grid. To conduct adequate EV simulations, you need reliable models of both the transportation system (for instance, how much people drive, where they drive and what the charging demand is going to be) and the grid.

“The problem is that those who model transportation systems oversimplify…
 

January 27, 2025 –– The Electric Reliability Council of Texas, Inc. (ERCOT) Board Selection Committee has two new board members: Alejandro “Alex” Hernandez and Sigmund “Sig” Cornelius, each for three-year terms effective immediately.

January 16, 2025 — Entergy Texas says it’s looking forward to a “more resilient energy future” now that the Public Utility Commission of Texas has unanimously approved Phase I of its Texas Future Ready Resiliency Plan. 

Implementation of the first phase of the company’s resiliency plan is expected over about a three-year period and “includes $137 million in strategic projects to strengthen the Southeast Texas power grid, reduce storm-related outages, and save customers millions in restoration costs over the coming decades.

“Over the next 50 years, these improvements are projected to reduce outage times by an estimated 1 billion minutes, significantly cutting…
 

As colder weather arrives in Texas, the Texas oil and natural gas industry is many months into its preparations for winter weather events to ensure reliable oil and natural gas production and transportation – no matter the weather.

On top of year-round planning, record-breaking natural gas production, increases in natural gas storage capacity and dramatically expanded pipeline takeaway capacity are bolstering Texas’ winter readiness this year. In fact, Texas produces, moves and stores more natural gas than any state in the nation.

On any given day, Texas produces more than three times the natural gas Texans need for electricity. Our storage capacity holds enough natural gas to power Texas for more than 5 months and modern pipelines can safely move more product from the wellhead and storage than ever before – all of which contribute to a Winter Ready Texas.

Operators begin preparing for cold weather months in advance and have extensive resources in place to monitor and prepare for inclement weather on an ongoing basis and utilize best practices and operational plans in order to maximize product flow. Onsite, seasonal weatherization techniques include methanol injection, temperature activated pumps, steamer units, equipment shelters, and insulated critical lines and valves.

Additional and offsite measures also prepare operators to better respond during inclement weather to ensure assets and personnel are safe and able to respond to critical needs.

Examples of additional measures include secure shelter/housing and pre-positioning personnel to be closer to and access assets; having extra methanol and other supplies on trucks; preparing and draining tanks to increase on-site storage and provide a temporary buffer for necessary 3rd party movement of product; pre-inspection of assets prior to weather event; “line-packing” to maximize product and pressurization in pipelines; communication with 3rd party vendors to prepare for inclement weather contingencies; and identification of the most critical assets to help maintain power from electric utilities and keep production online.

Because of legislative and regulatory reforms passed in 2021, operators with facilities that have been required to weatherize must share their emergency preparedness plans with the RRC. Requirements extend to external support operations such as water disposal wells, a necessary function to continue oil and natural gas production.

Even with these winterization techniques in place, production fluctuations are expected during extreme weather conditions. These production challenges are not unique to Texas but occur in much colder climates, confirming that some disruptions are unavoidable.

During significant weather events and expected production fluctuations, daily production combined with natural gas storage provides ample access to product for power generation and local distribution companies that have contracted for these services.

Power generators with firm contracts for supply, storage, and transmission for the volumes they need during extreme weather prove more reliable and resilient. These three items are paramount for generators to manage costs and readily available fuel.

Finally, several recent policy developments can have a positive impact on Texas’ readiness. The voter-approved Texas Energy Fund is a tool to encourage investments in dispatchable generation projects, and the Permian Basin Reliability Plan, addresses growing concerns over insufficient transmission access in the Permian Basin and represents a bold approach to ensure that the electric grid is equipped to meet current and future needs.

The oil and natural gas industry has worked closely with all stakeholders, lawmakers and regulators to develop and advance comprehensive energy solutions designed to keep Texas secure and ready, no matter the weather. We are all in this together and know that proper planning, preparation and coordination go far in ensuring that Texas is winter ready.

January 7, 2024 — The Electric Reliability Council of Texas (ERCOT) has some concerns over high electricity demand this week.

After issuing a Weather Watch on Sunday (misconstrued by some in the news media as a conservation call) the grid operator on Monday issued an Operating Condition Notice (OCN) for Wednesday, January 8th through Friday, January 10th.

Note: In a statement, ERCOT this week said, ““At this time, grid conditions are expected to be normal, and there is no current expectation of an energy emergency,” ERCOT said in a written statement, adding that it will continue to monitor weather conditions closely.”

An OCN is the first of four levels of communication issued by ERCOT in anticipation of a possible Emergency Condition, in this case “due to the possibility of Freezing…
 

This week’s news of a new Environmental Protection Agency (EPA) report showed that methane emissions from the largest oil and natural gas-producing basins fell 44 percent between 2011-2013; and also dropped in seven oil and natural gas-producing basins by up to 87 percent from 2019-2023. Following the update, Texas Railroad Commissioner Wayne Christian criticized the Biden Administration for creating new rules and taxes on oil and gas producers and power plants:

“President Biden’s own EPA said the quiet part out loud that the industry is already mitigating methane emissions, revealing that the true motive behind his horrendous policies is to squeeze the life out of the oil and gas industry,” said Commissioner Wayne Christian. “Radical environmentalists love to pick and choose ‘science’ that justifies their ‘sky is falling’ narrative that the world is ending and fossil fuels are to blame. But this couldn’t be further from the truth, just like they like to ignore the fact that EPA regulated emissions are down 78 percent in the last fifty years.

President-elect Trump’s number one priority should be to scrap Biden’s onerous and unnecessary methane rules and taxes attacking…
 

December 11, 2024 — The University of Texas at Austin joined top energy companies in issuing a report to the Texas Legislature advising the steps it could take to advance the state’s growing hydrogen industry. The report, issued by the Texas Hydrogen Production Policy (TxH2) Council, provided several key recommendations focusing on safety, environmental protection, and regulatory clarity and efficiency. UT is the only university represented on the council.

“The work carried out by my colleagues and I on the committee will significantly advance the growth of the hydrogen sector in Texas so that we can maintain our unparalleled role as a global leader in all forms of energy production,” said Professor Brian A. Korgel, Ph.D., director of the UT Energy Institute, who serves as one of the 11 members of the council. “It is an honor to contribute to the important work of the Texas Hydrogen Production Policy Council as we seek to ensure that the potential of hydrogen is fully tapped to bring greater economic opportunities and maintain reliable energy supply across Texas.”

The full report “Hydrogen Energy Development in Texas” is available online.

Via UT’s Energy Institute, Bureau of Economic Geology and Center for Electromechanics, among numerous other programs, the University is poised to take a leading role in providing the research and guidance required to implement the recommendations made by the council.

One central recommendation of the report is for development of training and education programs to improve public awareness of hydrogen, increase public acceptance of hydrogen, and enhance safety. UT is uniquely equipped to play a leading role in such programs due to its broad expertise in hydrogen, as well as other sectors and existing programs integral to the broader hydrogen industry, including geothermal, nuclear and solar initiatives…
 

December 5, 2024 — New Mexico is the nation’s second-largest oil and gas producer (behind Texas). It is the home to cutting-edge federal research and houses a busy port of entry through which a growing volume of goods passes from Mexico, the nation’s No. 1 trade partner.

Yet, New Mexico’s economy has historically lagged other Southwest economies and the nation. It ranks low in household income and educational attainment, and its population has little changed over the past decade, while the populations in neighboring Texas and Arizona have boomed.

However, 2023 highlighted the state’s considerable upside. New Mexico achieved solid economic growth in part due to a booming energy sector and trade with Mexico.

State builds on a noteworthy 2023

New Mexico’s economy, measured by GDP, notably expanded last year. State output grew 6.8 percent, outpacing the nation’s 2.9 percent increase (Chart 1). Much of this growth was attributable to the burgeoning energy industry. Mining contributed 4.2 percentage points to the New Mexico state GDP in 2023.

Downloadable chart

This is in stark contrast to the sluggish growth persistent through most of the 2010s. Notably, New Mexico’s annual GDP growth averaged 1.0 percent from 2010 through 2022, lagging the nation as a whole, which expanded 2.3 percent annually. By comparison, Texas’ annual GDP growth was 3.3 percent and Arizona’s was 3.1 percent during that period.

Despite the recent gains, the state’s economic output remains relatively small. New Mexico’s GDP was $135 billion in 2023, compared with $2.6 trillion in Texas. Even with record-high levels of energy production, economic growth has cooled slightly this year, though oil price volatility can distort measurement of the value of state-level real (inflation-adjusted) GDP.

Slow job growth rate, sparse population pose challenges

New Mexico is the fifth-largest state by land area, with 121,697 square miles. It is also one of the least-populated states. The economy has long faced significant structural challenges. The state labor market is relatively small, with just 888,000 on nonfarm payrolls, a fraction of the 14.2 million jobs in Texas. The state’s annual job growth rate of 0.7 percent from 2010 through 2019—compared with 2.3 percent for Texas—has historically trailed the nation (Chart 2).

Downloadable chart

This sluggish pace reflects a lack of economic diversity and investment, as well as reliance on government and tourism jobs.

New Mexico had 2.1 million residents in 2023. The state’s population grew just 2.3 percent from 2010 to 2023, compared with the nation’s increase of 8.3 percent (Chart 3). The state has experienced both domestic outmigration and slow natural increase (births minus deaths). More New Mexicans have left the state than new residents have arrived every year since 2012, with the exception of 2020.

Downloadable chart

New Mexico’s stagnant population and socioeconomic issues, such as low educational attainment and high poverty rates, pose additional constraints. The state’s labor force participation rate of 57.5 percent in August 2024 is below its neighbors—Texas (64.4 percent) and Arizona (62.3 percent). However, Texas and New Mexico unemployment rates were identical, 4.1 percent, in August.

Additionally, Texas and Arizona attract businesses more readily than New Mexico, reflecting the benefits of their strong and diverse business sectors. New Mexico ranks in the middle of the pack in business tax climate at No. 23, according to the Washington, D.C.-based think tank the Tax Foundation. That is less favorable than Texas at No.13 and Arizona at No.14.

Educational attainment also presents a challenge to workforce development. While the share of the population 25 years and older with a high school diploma or a college degree has gradually increased in the past 10 years, the state trailed the U.S. In 2023, 31.6 percent of New Mexico’s population 25 years and older had a bachelor’s degree or higher versus 36.2 percent of the U.S.’s population.

Median household income in 2023 was $60,980 compared with $80,610 nationally. Nearly one-fifth of New Mexicans (17.8 percent) lived in poverty in 2023, according to American Community Survey data. The state also has a higher rate of food insecurity relative to the nation.

Roughly 10 percent of the state is Native American, including a portion of the Navajo Nation, which extends across the Four Corners region into Arizona and Utah and operates as a sovereign nation with its own separate administrative structure. Indigenous peoples have some of the highest poverty rates in the state at 30.5 percent. Those living on tribal land often confront poorly developed infrastructure and little economic growth.

Energy fuels economic expansion

Challenging the state’s sluggish past, the energy sector has led the recent turnaround in state output. Mining has long been a major industry in New Mexico. Miners historically sought out precious metals as well as fuel resources, such as coal and uranium. More recently, hydraulic…