Industry leader provides overview of exploration
“If you look around, is there anything in this room that wasn’t either made by, manufactured from, or transported by energy?” asked T. Greg Merrion, President of Merrion Oil and Gas.
FARMINGTON — A local industry leader reminded attendees at Leadership San Juan’s “Business Day” how basic oil and gas products are to the American way of life.
“If you look around, is there anything in this room that wasn’t either made by, manufactured from, or transported by energy?” asked T. Greg Merrion, President of Merrion Oil and Gas earlier this month at the event held at the college's Quality Center for Business.
Merrion said that since 1921, when natural gas was discovered in the San Juan Basin, the world’s population has increased from two billion to its current level of 7.5 billion.
“I would argue this (increase in population) is in large part because of advances in energy, which have improved sanitation, food supply, health technology and transportation – all the things you need to support that many people on earth. The more energy we use, the better our quality of life,” he said.
The U.S. uses one quarter of the energy produced world-wide, said Merrion, but it makes up only about 5 percent of the world’s population.
“We love our energy,” he said, adding, however, that most of the energy we use is wasted and inefficient. “Two-thirds of the electricity (at power plants) goes out the smokestack. This waste is an area we should be spending more time figuring out. We would ultimately save money, reduce pollution, and save resources for future generations. It would be a win-win.”
Merrion discussed the evolution of oil and gas drilling, from conventional vertical drilling into limestone and sandstone traps to the development of horizontal drilling and fracking in the 1990’s.
“The (fracking) technology wasn’t new, but the application of it was new, and that’s what changed the game,” said Merrion. “It’s turned our oil and gas industry around.”
Merrion said the companies Encana Corporation, WPX Energy and Logos Resources led the way in horizontal drilling in the Mancos Shale, and said other formations such as the Dakota and the Lewis Shales will also be drilled horizontally.
“New Mexico receives over 30 percent of our annual state budget from oil and gas revenue, and has 13,000 direct oil and gas jobs with an average salary of $64,000,” he said, adding that in the San Juan Basin, the primary product is natural gas, while in Southeast New Mexico, it’s primarily oil.
“U.S. oil is now at 8.5 million barrels per day, and we import 10 million barrels per day. Five percent of natural gas used in the U.S. comes from New Mexico, but do you know how many drilling rigs we have now? Zero.”
Despite that fact, Merrion predicted more Mancos Shale gas development in the near future.
“There have been 700 Mancos wells drilled with good success,” he said. “I promise that natural gas in the deep parts of the Mancos Shale will be developed. Natural gas prices have more than doubled from $1.50 to $3.15 (as of Dec. 8), and as long as they stay up, we will see drilling rigs increase.”
Following Merrion’s presentation, additional business-related topics were presented to the class, such as what the Farmington Downtown Association is doing to bring businesses back into the downtown area, and which local resources are available for those wishing to start a business.
Leadership San Juan was established to increase awareness in emerging leaders on issues that impact the county. In addition to a business day, the year-long course focuses on other issues such as local government, law enforcement, and education.
“Business Day tries to strike a balance between recognizing how important the oil and gas industry is, but also how important other business sectors are and why it’s important to diversify (business),” said Liesl Dees, director of San Juan College’s Community Learning Center, and the Leadership San Juan program organizer.
For more information on Leadership San Juan, visit the San Juan College website at sanjuancollege.edu.
Leigh Black Irvin is the business editor for The Daily Times. She can be reached at 505-564-4621.