New Mexico plugs record number of abandoned oil and gas wells, thanks to Biden-era funding

New Mexico environmental officials plugged a record number of abandoned and orphaned oil and gas wells last year, thanks in large part to funding from Biden-era grants, they told a panel of state lawmakers Monday.

Nonetheless, across the state, approximately 1,600 wells remain that are designated for cleanup but have yet to be plugged or fully remediated, EMNRD Deputy Secretary Ben Shelton told lawmakers on the interim Economic and Rural Development and Policy Committee.

In the most recent fiscal year, which concluded in June, EMNRD’s Oil Conservation Division plugged a record 114 wells — a significant increase from its previous annual average of 25-50, Shelton said, largely crediting multimillion-dollar grants from the federal Bipartisan Infrastructure Law.

That improved funding stream should help to plug more wells in the coming years, he added.

“They should probably break that record just about every single year for the next few years with the way that the funding is going,” Shelton said.

A 2025 Legislative Finance Committee report found that plugging and cleaning up abandoned wells could cost the state between $700 million and $1.6 billion. Currently authorized clean-up sites will cost the state about $200 million, Shelton said Monday.

Plugging 114 wells last year cost $28.4 million, Shelton said. Going forward, environmental leaders like Shelton hope that a newly approved measure will keep taxpayers from footing as much of the bill as they have in recent years.

The Oil Conservation Commission — a three-member governing body that oversees rulemaking — recently passed new bonding requirements, a term that refers to the minimum amount of money oil and gas operators have to post upfront for cleanup costs.

Historically, the state has only plugged about 5% of abandoned wells that end up plugged and private industry operators have handled the rest. That still costs taxpayers hundreds of millions of dollars, though. The goal of raising those bonding requirements, Shelton said, is to shield taxpayers from the multimillion-dollar burden of cleaning up these sites.

While conservationists praised the decision to raise the bonding requirement at the time of the vote, some Republican lawmakers Monday scrutinized it.

State Sen. Crystal Brantley (R-Elephant Butte) told Shelton she was concerned the new rules could unnecessarily penalize responsible oil and gas operators.

“I understand that there are bad apples in oil and gas,” she said. “When we raise those bonding minimums so high, who we seem to hurt are New Mexico businesses and New Mexico families…the bigs who are based out of Midland or Dallas or Houston can afford to pay those minimums.”

Shelton told her that the newly approved rules took that concern into account. In particular, oil and gas operators that do not own a high number of non-productive wells can get discounted “blanket bonds,” he said.

“We are talking about a minority of the wells in the state. Mostly the industry is plugging its own wells as it’s supposed to,” he said. “Why does the state tackle orphaned wells? It’s because they are, by definition, wells that do not have a responsible party who you can pursue to get them to clean up. At the end of the day, if you just leave a well, the community is the one that’s going to suffer.”