IPANM (June 25, 2025) – On Tuesday, June 25, 2025, the non-partisan New Mexico Legislative Finance Committee (LFC) released this 47-page report intended to present a non-biased view of the abandoned well program in New Mexico.

In anticipation of the release of the report, IPANM (and a representative from the New Mexico Oil & Gas Association – NMOGA) traveled to Taos to get hands-on the first paper copies of the report, released around Noon Tuesday. Because an LFC presentation of the report was set for hearing immediately upon release of the report, IPANM and NMOGA both requested the opportunity to offer immediate public reaction to the report and presentation.

IPANM’s public comments during the hearing can be found by clicking and scrolling to TIME CODE 4:57:20  of the LFC Committee Hearing Stream – June 24, 2025. NMOGA’s public comments are immediately after in the video stream.

To watch the entirety of the LFC Abandoned Wells Report presentation followed by comments from the New Mexico Oil Conservation Division (OCD), start at TIMECODE 2:40:45. Questions from legislators begin at TIMECODE 3:15:15 immediately following the LFC and OCD presentations.

As noted during public comments, IPANM was not consulted by LFC or any LFC analysts -at any time- during the information gathering phase of this report. Without consideration and analysis of data from small producers, the LFC report is “highly problematic”.

Following Tuesday’s public comments, IPANM Executive Director Jim Winchester issued the following statement:

“While we appreciate the hard work of the Legislative Finance Committee with the goal to present a non-biased analysis, IPANM strongly believes the study has some conclusions and erroneous estimations due to a lack of sufficient data and an underreporting of the detrimental consequences of haphazardly raising financial assurance bonding on small producers. Some of the recommended actions would make the problem worse by leading to an immediate spike in abandoned wells and driving many highly reputable small oil & gas companies out of business.

IPANM members and the industry plugs their own wells after they cease production at a rate of 98%, but that is not good enough. That is why the Reclamation Fund is set up and entirely funded by industry to account for abandoned wells. Sadly, it is the Legislature that has taken 15 out of every 17 dollars of industry’s money in the fund earmarked for clean-up, and unjustifiably allocated those industry dollars elsewhere for the past 15+ years. This problem can be fixed by the Legislature simply reallocating industry’s money back to their intended purpose, as proposed by industry in SB249 in 2024 and HB403 in 2025 during the New Mexico Legislative Sessions. This bill fix must be passed by the very Legislators who continue to annually rob the fund to pay for low-priority pet projects.”

IPANM contends that raising financial assurance will not solve the problem of abandoned wells, as the industry-financed reclamation fund has long been the mechanism to provide insurance to the state to plug abandoned wells. In addition to the Legislature robbing the state of those earmarked clean-up funds, it’s inexcusable that the New Mexico Oil Conservation Division has a balance of tens of millions of dollars of unspent money still sitting in that fund today. The state needs to take be more efficient and held responsible to spend those existing industry funds, which continue to accrue even with the Legislature raiding 15 of every 17 dollars already funded by industry for clean-up.

The LFC report comes at a time when the environmental groups and the the New Mexico Oil Conservation Division are pushing for higher financial assurance levels for operators, rather than fixing the systematic breakdown of spending industry clean-up dollars. IPANM has intervened in the October 20, 2025 rulemaking hearing in front of the Oil Conservation Commission. With IPANM’s efforts to correctly fix the state’s own issues, IPANM holds true to its mission to protect, defend, and promote the work of independent producers and all of industry in New Mexico.