By Paige Knight
Dec. 21, 2022
Our state’s beautiful natural resources belong to us all, yet the outdated oil and gas leasing system has been depriving our classrooms and communities of billions of dollars over the years (as we’ve written before). Thankfully, the Inflation Reduction Act (IRA), passed in August, contained important reforms that will level the playing field in favor of families in New Mexico instead of oil and gas CEOs.
However, the job is not yet done – the Department of the Interior (DOI) still has to initiate a promised rulemaking process to durably implement these new reforms and, in several critical areas, go beyond them. That is why it was disappointing to see DOI announce plans to lease more than 10,000 acres of federal public lands in New Mexico before it has initiated a rulemaking to further fix this broken system.
Without important reforms written into rule, DOI’s lease sales could increase the already alarming number of orphaned wells – wells that have been abandoned by oil and gas companies – that pollute New Mexico. That’s because the current bonding amounts – the money oil and gas producers must stake to clean up the wells in the event that they go bankrupt – are inadequate. More than 3,300 orphaned wells currently litter our state, leaching toxic chemicals into our water and methane into our air, and many more wells are at risk of abandonment. In addition to endangering our communities’ health, these wells put hard-working New Mexicans on the hook for paying to clean them up once oil and gas companies have walked away.
Without updated federal bonding rates these companies can continue to pick up and leave once their profits run dry. When that happens, that buck (really, millions of bucks) stops here (on us), diverting money away from school programs, infrastructure projects, and other state priorities.
Before holding this proposed sale next year, DOI must take action to reform the broken federal oil and gas leasing system and initiate a rulemaking. This is about finally getting a fair return on the use of our public lands and holding oil and gas CEOs accountable. These long-overdue reforms would mean more funding for our schools and more opportunities for our children. We can’t wait any longer.
Now the ball is in the Biden administration’s court, and there is no time to waste. Congress made progress with the passage of the IRA, but DOI must finish the job by securing durable, new rules for the federal oil and gas program. Families across New Mexico deserve it.
In addition to DOI moving forward with new rules, Congress must also act to ensure that updated federal bonding requirements become law. Over the past few years, we’ve had many champions in Congress fighting to do right by our children and end the status quo. Sen. Martin Heinrich introduced the Oil and Gas Bonding Reform and Orphaned Well Remediation Act and Rep. Teresa Leger Fernández introduced the Orphaned Wells Cleanup and Jobs Act of 2021 – both important pieces of legislation that would update federal bonding rates in order to hold oil and gas companies responsible for cleaning up the wells they drilled on public lands.
With crucial reforms in place, New Mexico will be able to invest in a brighter future for our children and generations to come. It’s time for the Biden Administration and Congress to make the federal oil and gas leasing system work for people – not CEO profits – to fit the needs of the 21st century.
Paige Knight, MPP, is a Senior Research and Policy Analyst for NM Voices for Children