New analysis finds that gas wasted through venting and flaring costs state as much as $8.1 million in lost revenue annually

March 16, 2016
CONTACT: Chris Saeger, (406) 438-1918, Western Values Project

A new report released by the Western Values Project finds that New Mexico lost upwards of $52.2 million in tax revenue since 2010 due to oil and gas companies wasting several hundred million dollars in natural gas annually.

Oil and gas companies ‘vent’ or ‘flare’ methane the primary component of natural gas, releasing it directly into the atmosphere or burning it off at the production site.

Although most gas produced from federal lands is subject to a 12.5 percent royalty rate—about half of these revenues are passed on to state governments—vented and flared gas is exempt from this charge. Not only is less product brought to market, but neither the federal government, nor the states, receive compensation for this wasted resource.

In New Mexico, federal mineral royalties are used to fund public education programs.

“At a time when New Mexico is struggling to pay the bills and provide vital services for health and education, we simply cannot afford to literally burn millions of dollars each year in revenue. We should stop the waste and ensure that when oil and gas companies are developing a public resource, they do so responsibly,” said Veronica C. García, Ed.D., executive director of New Mexico Voices for Children.

According to the report, venting and flaring cost New Mexicans an average of $6.7 to $8.1 million in lost revenue annually between fiscal years 2010 and 2014. This is a conservative estimate because it does not include leaks at oil and gas operations, another major source of natural gas waste.

Recently, the Bureau of Land Management (BLM) proposed changes to limit venting and flaring practices, including requiring operators to adopt proven, cost-effective technologies to increase gas capture as well as prevent leaks.

“Since 2010, New Mexicans have lost more than $50 million in revenue for education because of industry waste. Secretary Jewell is right to ensure that oil and gas companies stop wasting a taxpayer-owned resource so that we can pump more money into education opportunities for rural New Mexico,” added Bill Midcap, director of external affairs for Rocky Mountain Farmers Union.


The Western Values Project gives voice to the majority of Westerners who support a balanced approach to energy development on public lands.