IPANM (October 20, 2025) – IPANM would like to thank Sen. Larry Scott and all of the many state legislators who have submitted oral and written comments AGAINST the WELC Rulemaking for new Financial Assurance Bonding Levels and new OCD Authority to reject private well acquisitions.  The following is Sen. Scott’s public comment in front of the New Mexico Oil Conservation Commission.

Public Comments of State Senator Larry Scott
4:11 P.M. MT
WELC Rulemaking Public Comments Session 1
October 20, 2025

State Senator Larry Scott: Thank you, Madam Examiner, for the opportunity to speak. I am State Senator Larry Scott from District 42. [Name spelling:]L-A-R-R-Y-S-C-O-T-T.

Hearing Officer:  Do you swear and affirm to tell the truth?

State Senator Larry Scott: Yes, Ma’am. I have some fairly significant personal experience with this subject matter. I spent the better part of 40 years as one of the very smallest independent oil and gas producers almost exclusively in southeast New Mexico, in Lee and Eddy counties.

At one point, our little company was managing, I think, close to 60 wells, counting producers and injectors. And I can assure you that all of these calculations that I’m listening to do not take into account having to a set-aside, if you will, $150,000 per marginal well, as effectively unproductive capital. That process would have driven me to bankruptcy in fairly short order.

Now, in full disclosure, I’m no longer an operator. I still maintain interest as a non-owner in a number of properties, but all of my obligations to the state of New Mexico have been fulfilled and plugging obligations and those bonds have been released.

I have serious concerns. I’ve been in the legislature long enough to have participated in the legislation that increased in blanket bonding requirements from $50,000 to 5x of that at $250,000 [in 2018].

I’m not aware that that’s had any significant impact, either plus or minus, on the obligations of the state or any plus or minus impact on small operators in the state.

Now, let’s talk about the reclamation fund. Our oil and gas producers over the years have paid millions of dollars into that reclamation fund that have been misappropriated for use, in many cases, swept when New Mexico was short of funds and not utilized for the intended purpose of overcoming the very few operators that have failed to fulfill their plug-in abandonment operations.

I think the increase in bonding requirements that was affected in 2018 was affected after robust debate and votes by both the House and the Senate. This proposal needs to be vetted through that process rather than as an administrative rulemaking.

Thank you, Madam Examiner, for the opportunity to comment and I’ll look forward to the rest of the testimony.