The State Land Office in New Mexico is making another attempt to increase oil and gas royalties on leased land. This marks the fourth effort by the agency to push for higher rates in recent years. Greg Bloom, assistant commissioner of mineral resources, presented the proposal during a meeting with the Legislature’s Water and Natural Resources Committee.

This initiative follows a failed legislative attempt earlier this year to raise these royalties. In response, State Land Commissioner Stephanie Garcia Richard announced a halt on leasing prime tracts until the Legislature agrees to new terms. This pause remains in effect as the office seeks to update what Bloom described as "antiquated" rates that have not changed since the 1970s.

The proposed increase from 20% to 25% royalty rates aims to generate an additional billion dollars over 25 years. This includes extra funds for both the State Land Office and Legislative Finance Committee, along with $1.5 billion to $2 billion for the Land Grant Permanent Fund by 2050, which supports educational funding.

Currently, nearly all high-value land has been leased out, according to Joey Keefe, spokesperson for the State Land Office. Only about 1% of leaseholders are based in New Mexico; most come from Colorado, Texas, and Oklahoma.

By delaying leases on valuable tracts nominated by private companies for potential development at a 25% royalty rate, the office risks losing immediate bonus payments that can reach millions of dollars. However, Keefe emphasized that Commissioner Garcia Richard is prepared to sacrifice short-term gains for potentially larger long-term benefits for education funding.

Senator Joe Cervantes expressed caution regarding this strategy's potential outcomes. While he acknowledged some logic behind waiting for legislative action and increased rates, he also warned about missing current market opportunities if conditions change.