NMDOT: Permian Basin oilfield roads receive millions in state funds, projects underway

Adrian Hedden
Carlsbad Current-Argus

Three of southeast New Mexico’s most notorious oilfield roads are in for major rebuilds in the coming years as the New Mexico Department of Transportation aims to use surplus state funds from oil and gas revenue to ensure workers in the industry can travel safely through the region.

In a Monday meeting with Carlsbad area business leaders in Santa Fe, New Mexico Cabinet Secretary of Transportation Michael Sandoval said a $130 million project to update U.S. Highway 285 from the Texas State Line 22 miles north to Loving was fully funded.

The road became increasingly dangerous as truck traffic increased during the area’s recent oil boom as workers traveled south from Carlsbad out to the oilfield and back into town at the end of their shifts.

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Sandoval said NMDOT was also working to develop alternate routes to be used during the rebuild, committing to match up to $10 million in funds provided by the industry or local community.

“We know that project will be a big inconvenience to the oil and gas industry. We want to make sure people have options,” he said. “We want to make sure oil and gas is still mobile in that area.”

Eddy County Director of Community Services Wes Hooper said funding for the alternative route off 285 would likely come from the industry, as the routes would be primarily used by oil and gas workers.

“We’re going to industry to help us fund projects that will help the industry run a bit more smoothly,” he said.

New Mexico Cabinet Secretary of Transportation Micheal Sandoval meets with Carlsbad business leaders, Feb. 3, 2020 in Santa Fe.

Another project to upgrade New Mexico State Road 31 to four lanes, between its intersections at U.S. 285 and U.S. 128 was also funded to the tune of about $110 million, Sandoval said.

A project to add another four lanes to US 128 from Carlsbad to Jal had about $60 million funded of the $200 million needed, he said.

Overall, Sandoval said about $150 million was still needed to fully repair and update the three priority roads in southeast New Mexico: 285, 128 and 31.

He said the projects would be conducted gradually so as not to interrupt the dense industrial traffic.

We want to be sensitive about how we release these projects,” Sandoval said. “We don’t want there to be construction ever five miles.”

The southeast region of New Mexico, known for heavy oil and gas development generating most of the state’s recent budget surpluses, must be prioritized, Sandoval said, in order to maintain the state’s fiscal momentum.

NMDOT’s budget was at about $980 million, he said, with a $300 million surplus. About $250 million of that would go to the agency, with the rest dedicated to local road projects.

“We want to support oil and gas,” he said to the Eddy County leaders. “You’re county is one of the main reasons we have this money. We want to try to bring in as much money as we can to go to local infrastructure. Some of that would definitely go to southeast New Mexico.

“We care about the entire system. We just want all of it to just work together.”

Carlsbad City Councilor Jason Shirley speaks during a meeting of between Carlsbad business leaders and the New Mexico Department of Transportation, Feb. 3, 2020 in Santa Fe.

Jerry Fanning, Eddy County public and government affairs director urged lawmakers to support policy allow for tax exemptions to private companies which donate funds to local oilfield roads.

“If we can keep those trucks running we can keep getting that money to Santa Fe,” Fanning said. “It’s also a big safety issue. Those are our goals.”

Ryan Flynn, executive director of the New Mexico Oil and Gas Association said the industry already invests heavily in southeast New Mexico where operations are concentrated.

He said the Association supported a bill to add a tax credit for road projects.

“The southeast generates the majority of the revenue and they don’t receive their fair share of the revenue,” Flynn said. “We agree that if the southeast is the economic engine of the state, we need to make sure we’re investing in the engine. That’s not a popular opinion outside of the southeast.

“We take roads very seriously.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.