(Bloomberg) — About 100 miles east of the UFO capital of Roswell, a dusty corner of New Mexico where cattle outnumber people is quietly strengthening U.S. global oil dominance.

After producing less crude oil than the largest counties in neighboring Texas in the years before the pandemic, Lea County in New Mexico has quickly made up ground. Production there has risen faster than in any other U.S. county. Last year, it became the first county to ever produce more than a million barrels a day, according to energy research firm Enverus. Neighboring Eddy County will hit the one million barrels a day mark in September next year, predicts energy analytics firm Novi Labs.

In fact, the data shows that the two New Mexico counties accounted for 17 percent of all onshore oil production in the contiguous United States last year and are expected to produce more oil over the next decade than the next five largest counties combined.

“Since Covid, the Permian Basin has been the only significant source of supply growth,” said Garrett Golding, energy economist at the Federal Reserve Bank of Dallas, at an industry conference in Hobbs, New Mexico, earlier this summer. “And since the growth in the Permian Basin is concentrated in New Mexico, that technically means the world oil market depends on what happens in New Mexico.”

When the introduction of hydraulic fracturing (fracing) made tight oil and gas deposits throughout the United States more easily accessible about 15 years ago, drillers flocked to the United States’ most productive basin, the Permian Basin.

The oil-rich area stretches across parts of Texas and New Mexico and was widely seen as the United States’ best tool for countering the dominance of the Organization of the Petroleum Exporting Countries and its allies, which seek to control global oil prices by coordinating crude production.

Originally, much of the fracking activity in the U.S. was concentrated on the Midland side of the basin, where an experienced energy industry workforce and the attractiveness of the Texas city known for its low regulation attracted both wildcatters and IOCs.

In general, ranchers in Texas offer larger and more contiguous leases than in New Mexico, where land tracts are often smaller and sometimes controlled by the state or federal government.

Texas was also originally better positioned geologically. In the Delaware Basin, a sub-basin of the Permian that extends to New Mexico, the oil is trapped under the surface in formations that are harder to reach than in Texas. The stricter drilling and environmental regulations in New Mexico have also made production more difficult, operators say.

“Because it was deeper and denser and under higher pressure, it was harder to overcome 15 to 20 years ago,” Andrew Parker, senior vice president of geosciences at Matador Resources Co., said of New Mexico.

That preference has since changed. Although Texas still has plenty of oil, it is being produced more slowly as the Western Hemisphere’s most prolific basin ages. In contrast, New Mexico still has a lot of undeveloped land, with only about a third of the Delaware Basin developed, according to Novi Labs. Much of that land sits on multiple layers of shale oil rock, which drillers call “stacked oil rock.”

“The Delaware Basin has proven to be the best place to drill because it offers 5,000 feet of stacked deposits with about 25 different, well-defined targets,” said Joseph Foran, CEO of Matador. “Over there in the Midland, on the other hand, there are basically two formations that you’re really targeting, with about six targets.”

Thanks to improved technology, getting to New Mexico’s oil is not as difficult as it once was, and a boom in infrastructure, including pipelines and gathering stations, has made the Delaware Basin more accessible.

For example, the Dune Express, a 67-kilometer-long, all-electric conveyor system that transports fracking sand between Kermit, Texas, and New Mexico, is scheduled to go into operation later this year.

“Everything that made it difficult then makes it great today,” Parker said of the New Mexico side of the Permian. “And those are the reasons why we prefer this side of the basin over the other.”

Still, the New Mexico side comes with its challenges. For one, drilling is more expensive in the Delaware, where average wells cost about $9.8 million apiece, compared with just over $8 million in the Midland area, Enverus data shows.

That makes it harder for small companies to compete with the better-funded oil companies. As costs soar, an influx of new private investors has made its way into the state.

“Projects that cost $10 or $11 million apiece have put the smallest to mid-size producers at a disadvantage,” said Larry Scott, a longtime oil and gas engineer and Republican in the New Mexico House of Representatives. “People like me who have operated, or may still operate, 50, 60 or 200 vertical wells are having a hard time keeping up with the competition.”

New Mexico operators also have to contend with stricter regulations than those they are used to in Texas. Flaring, or burning byproduct gas when there is nowhere to take it, is largely banned in New Mexico, so drillers have to find another way to get rid of the natural gas.

The state has also adopted stricter regulations on the disposal of water, a key component of oil production. Lawmakers and operators are considering measures to recycle more oilfield wastewater for reuse.

In New Mexico, a state governed predominantly by Democrats, there is a delicate balance between regulation and oil production, while climate change remains a major political issue for the national party.

Still, as a Democratic presidential candidate, Vice President Kamala Harris has not revealed many details about her stance on oil and gas. During her short-lived 2019 presidential campaign, Harris called for a ban on fracing, but has since indicated that she has moved away from it.

Missi Currier, president and CEO of the New Mexico Oil and Gas Association, estimates that the sector’s contribution to the state coffers is nearly $14 billion each year, or about 40 percent of the state budget.

Currier says she spends a lot of time educating New Mexicans about the benefits of the industry. For example, thanks to revenue from oil and gas production, New Mexico was able to become the first state in the country to offer free child care and college tuition, despite being one of the poorest states in the country.

“If there were no more oil and gas production in New Mexico,” she said, “we would be a third world country within a decade.”