- More than 200 wells inactive on state trust land have been plugged by land managers in one the U.S.’s top producing oil and gas states.
- This work resulted in an almost 20% reduction in abandoned wells located on trust land.
- State has saved taxpayers $20 million on cleanup costs
Officials said that more than 200 oil and gas wells have been plugged in New Mexico as land managers tried to crackdown on producers in an effort to enforce accountability in one of the most productive states in the U.S.
State Land Office estimates that it has saved taxpayers $20 million over the last few years in cleanup costs by having industry pay the bill.
The Land Office is separate from other work that is funded and carried out by the federal government.
In 2021, Congress will spend $4.7 billion on infrastructure to plug and reclaim abandoned wells as well as associated sites. Last summer, the Bureau of Land Management announced its first contracts for work in Utah and California. New Mexico and several other states received multimillion-dollar grants.
The State Land Office in New Mexico says that its efforts have resulted to a near 20% reduction in the number abandoned wells in state trust lands. These lands were given to New Mexico more than a hundred years ago by the federal government to be used for raising revenue to support public schools, hospitals and colleges.
One well that hasn’t been producing since 1982 is one of the inactive ones. One well on the 2020 inactive list was drilled in 1925.
Land commissioner Stephanie Garcia Richard explained that the goal is to prevent the state, and in the end the taxpayers, from paying for any mess created by companies on state trust land.
The office has made environmental compliance a top priority in light of the booming production.
New Mexico, which is home to a part of the Permian Basin and has become No. The state has become the No. 2 oil-producing state in the U.S. Although much of the development was on federal lands, state officials are using a satellite imaging program to identify spills that have occurred on state trust land. The state has also increased auditing of the royalties owed by producers.
In the Land Office’s plugging program officials first contact producers to give them the opportunity to plug inactive and contaminated wells on state leases. If operators do not respond in a meaningful way, litigation is possible.
Ari Biernoff is the general counsel of the State Land Office. He said that the agency would continue to use every tool available to bring companies in compliance.
Biernoff stated that while many lessees or operators are responsible, the program is for those who are not.
Plugging costs and cleanup costs vary greatly, from $40,000 to over twice that amount depending on the depth of the well and contamination level, according to State Land Office. The number of inactive water wells may fluctuate, but agency officials have identified over 1,000 wells that are chronically inactive on land owned by the state trust. This total has been accumulated over many decades.