By Amber Wallin
June 4, 2022
New Mexico’s children deserve every opportunity to thrive, but those opportunities have long been stymied by the Department of the Interior’s outdated oil and gas leasing system. This broken system has led to billions in lost funding for our classrooms and communities, and has allowed the oil and gas industry to hoard thousands of unused permits to drill at century-old prices, all while raking in historic profits.
With lease sales resuming in June, reforms to our leasing system have never been more pressing. As it stands, oil and gas companies pay pennies on the dollar to extract resources on the public lands that belong to all of us. The federal onshore royalty rate was set over 100 years ago and hasn’t been updated since, meaning companies enjoy “sweetheart deals” while leaving taxpayers without fair compensation for the use of New Mexico’s public lands.
The problem goes beyond missing out on important funding our kids deserve. There are more than 3,300 documented orphaned wells across New Mexico, and lax policies have led to there being at least another 500 on federal lands alone that are at risk of becoming orphaned. Because of inadequate federal bonding levels, orphaned and abandoned wells litter our state’s beautiful landscape, polluting our air and water while taxpayers are forced to foot the expensive bill necessary to clean up the industry’s mess.
When the government leases lands at far below market rates and forces taxpayers to cover the cost of cleanup, we’re all missing out on money that is rightfully ours. This is revenue that should be used to pay for books for our schools and teacher salaries, not padding industry profits. We have an obligation to provide New Mexico’s next generation with the best possible education, but an outdated oil and gas leasing system is standing in the way.
An antiquated leasing system also impacts the health of our children, as orphaned wells leach methane and toxic substances into the surrounding environment, harming the families that live nearby. These wells leak oil and gas into the air and water, creating dangerous environments that are no place for children to live, learn or play. We can no longer let oil and gas CEOs have their way while the health and well-being of our families and children suffer.
We need a system that prioritizes people over corporate profits. While the Biden administration has included important reforms for the upcoming lease sales, including requiring a higher royalty rate and not offering lands in sensitive areas, we need to take this further. President Joe Biden, interior Secretary Deb Haaland and Congress must make these updates permanent.
We are grateful to our leaders who have already taken charge on these important issues, including Sen. Martin Heinrich, who introduced the Oil and Gas Bonding Reform and Orphaned Well Remediation Act, and Rep. Teresa Leger Fernández, who introduced the Orphaned Wells Cleanup and Jobs Act of 2021.
Each of these bills would raise federal bonding rates and prevent another orphaned well crisis. Additionally, Sens. Jacky Rosen and Chuck Grassley have introduced a bipartisan Fair Returns for Public Lands Act, which would modernize royalty rates and ensure taxpayers in New Mexico and across the nation are seeing fair returns on public lands leasing. We hope to see our other members of Congress unite in this effort to turn these important protections into law.
We want our children to grow up in a world where we prioritize funding their schools, protecting their health and providing them opportunities to reach their full potential, not big breaks to oil industry CEOs and their shareholders. The oil and gas industry has taken advantage of a broken system for a long time, but fortunately we have a clear path toward reform and a clear incentive to act now with lease sales resuming. It’s time for a federal leasing program that works for New Mexico’s families and children.
Amber Wallin, MPA, is executive director of New Mexico Voices for Children.