The New Mexico Oil Conservation Commission on Wednesday voted to increase the amount of money that oil and gas operators have to post for cleanup costs.
The commission for months has weighed the changes, which supporters say will relieve taxpayers of the cost of cleanup and provide New Mexico some of the strongest protections in the nation. Across New Mexico, plugging and cleaning up after thousands of abandoned wells could cost the state between $700 million and $1.6 billion, according to a 2025 Legislative Finance Committee report.
Unplugged and inactive oil and gas wells proliferate so much of the state that a coalition of environmental groups earlier this year filed a lawsuit against the state Energy, Minerals and Natural Resources Department, accusing it of endangering residents’ health by failing to address them.
Wednesday’s vote will require oil and gas operators to guarantee $150,000 for wells at high risk of abandonment; require operators with more than 20% inactive wells to post single-well bonding of $150,000; prevent operators with unstable finances from buying aging wells; require operators to plug or demonstrate that low-producing wells have a useful purpose; and require operators to demonstrate how inactive wells will resume production.
The State Land Office in May also held a multi-day hearing over a similar pending proposal for oil and gas companies operating on state land.
“New Mexicans should not be left paying to clean up oil and gas pollution after companies move on,” Sierra Club Rio Grande Chapter organizer Antoinette Reyes said in a statement. “Strong bonding requirements help ensure that taxpayers are not stuck footing the bill plugging wells and restoring land, and that those responsibilities stay with industry. Oil and gas operators should be responsible for cleaning up their mess after they privately profit from extracting public resources.”
