New Mexico, Texas oil boom sparks electricity demand surge
ALBUQUERQUE, N.M. (AP) — Electricity demand on Xcel Energy’s grid is reaching all-time records thanks to the oil and gas boom in southeastern New Mexico and West Texas.
Xcel Energy New Mexico and Texas president David Hudson says oil and gas production in the Permian Basin is driving accelerated load growth on the grid, The Albuquerque Journal reports .
The regional transmission network delivered 6.15 gigawatts of electricity to customers on July 19. That’s about 350 megawatts more than the company had predicted in peak demand on any given day for this year, and the highest amount ever managed by the network.
Hudson told the Journal that a heat wave in July contributed to the surge, but the Minneapolis-based company is seeing extreme strength in load growth in New Mexico’s Eddy and Lea counties.
“We’re now projecting to connect at least another 286 megawatts of load growth this year to the system, and that wasn’t even in our forecast for this year,” Hudson said.
Most of the growth is coming from the Delaware Basin, an oval shaped shale rock formation that protrudes from southwest Texas northward into Eddy and Lea counties. Modern drilling technologies have turned that zone into one of the most-productive oil and gas plays in the world. That’s particularly true in Eddy County, where companies are also setting up new large-scale gas-processing facilities.
Excel is investing heavily in new infrastructure to meet demand. Last week, it inaugurated an 86-mile (138-kilometer), 345 kilowatt transmission line from Hobbs to the newly built China Draw Substation southeast of Carlsbad.
The $140 million project is the first of several segments of a $400 million transmission improvement project that by 2020 will connect to the TUCO substation north of Lubbock, Texas, said Xcel spokesman Wes Reeves.
Since 2011, the company has invested in more than 800 miles (1,287 kilometers) of transmission lines and more than 30 new substations, plus upgrades to another 40 substations. Counting new projects now planned or underway, the company will have invested about $3 billion in regional infrastructure by 2021, Reeves said.