The State Land Office has chronicled more than 200 inactive oil and natural gas wells in New Mexico that have been plugged during a crackdown on producers as part of an accountability and enforcement program.
The State Land Office estimates the oil and gas industry has picked up a tab of about $20 million in cleaning costs that otherwise might have been charged to taxpayers if left to the state government.
In 2021, the Biden Administration committed $4.7 billion in infrastructure spending to plug and reclaim orphaned wells, some of which leaked dangerous chemicals into groundwater. The Bureau of Land Management awarded its first contracts last summer for work in Utah and California, while New Mexico and other states were awarded multimillion-dollar grants.
The other objective is for owners of abandoned wells to pay for any plugging and clean-up. Land Commissioner Stephanie Garcia Richard said the idea is to keep the state and ultimately taxpayers from having to pay for any messes that companies create on state trust lands.
“This program has proven that we can require companies to clean up after themselves and still deliver billions of dollars in record revenues for our schools and other institutions,” she said in a statement, adding that environmental compliance has been a priority for the office amid booming production in the state.
The State Land Office says its work has resulted in a nearly 20% decrease in the number of abandoned wells on state trust lands, property that was allocated to New Mexico by the federal government more than a century ago so it could be used to raise revenues for public schools, hospitals, colleges and other public institutions.
Under the Land Office’s’ plugging program, officials first contact owners to give them an opportunity to plug inactive wells and clean up any contamination on state leases. Litigation is likely if there is no compliance.
Ari Biernoff, general counsel at the State Land Office, said the agency is committed to bringing companies into compliance. “While many lessees and operators act responsibly, this program exists for those who don’t,” Biernoff said, per KOB 4.
Plugging and cleanup can cost upwards of $40,000 for one site depending on the depth of a well and contamination levels, according to the State Land Office. Agency officials have identified more than 1,000 chronically inactive wells on state trust land. That total has accumulated over several decades.
New Mexico, home to a portion of the Permian Basin, has become the number two oil-producing state in the U.S.