Oil and Gas Pipelines, Rail and Truck Transport in New Mexico: Capacity Constraints and Economic Development Risk” Dr. Daniel Fine
Daniel Fine, Associate Director, New Mexico Center for Energy Policy, New Mexico Institute of Mining and Technology – Statement “Oil and Gas Pipelines, Rail and Truck Transport in New Mexico: Capacity Constraints and Economic
Dr. Daniel Fine
The current infrastructure of unconventional fuel production in New Mexico was designed and
constructed for 1990s activity and the access, price, and supply/demand assumptions of that period.
This was a time of lower oil output and prices that characterized a minor decline.
Rail transport in the Southeast or Permian Basin/Delaware Basin declined as short‐line track was sold
off. Class I rail carriers were mostly coal transporters. Oil pipelines were abandoned or cut‐up in
sections and others were mothballed. New Mexico was about to lose on oil refinery. Roads connecting
oil fields to existing refineries were in localized service.
With the “technology play” first in the Southeast through asset acquisition or “in‐house” vertical to
horizontal well development and as late as October 2011 in Northwest New Mexico (San Juan Basin),
New Mexico oil production began to soar, eliminating the outlook of the 1990s. Accordingly, the
existing oil infrastructure carrying capacity is 60% deficient.
Oil production is in danger of becoming “stranded” in Northwest New Mexico and subject to road
congestion and safety vulnerabilities in the Southeast. Road or highway transportation from the
wellheads in the New Mexico Northwest must connect to rail and then to refineries. This has created a
new and unregulated industry of trans‐loading oil to rail which has presented risks to small communities
unprepared for oil and rail activities. The State of New Mexico has been requested to provide technical
and regulatory support.
FOR THE COMPLETE STATEMENT USE THIS LINK-> http://energy.gov/sites/prod/files/2014/08/f18/fine_statement_santafe_qer.pdf