Santa Fe New Mexican (Nov. 2, 2025) – by Rep. Mark Murphy (D-59 Roswell)
Opinion Editorial – The state of New Mexico is sitting on tens of millions of dollars meant to clean up orphaned oil and gas wells. Instead of using those funds to fix the problem, state regulators are pointing fingers at the very industry already doing nearly all the work — and paying the bill.
Here’s the reality: When an oil or gas well reaches the end of its life, it’s the producer’s responsibility to plug it and restore the surrounding land. In New Mexico, companies do exactly that for roughly 99% of all wells. Only a small fraction becs ome “orphaned” — and that’s where the state steps in, using money from the Conservation Tax.
A portion of that tax goes into the Oil and Gas Reclamation Fund, created specifically to plug and reclaim orphaned wells. The Oil Conservation Division is responsible for using those funds efficiently and getting the work done. But that’s not happening.
As of November 2024, the Reclamation Fund had swelled to over $66 million from the Conservation Tax and federal grants. That’s more than enough to address the state’s small backlog of orphaned wells. Yet instead of using the money, OCD has allowed it to sit idle — trapped in red tape and mismanagement.
Procurement rules have limited the number of companies that can bid on reclamation projects, leaving only a few to handle the work. Other qualified contractors have been shut out for years. The result? Hundreds of orphaned wells sit untouched while the fund meant to fix the problem gathers dust.
Now, OCD wants to “solve” this self-inflicted problem by raising financial assurance requirements — the bond companies must post to guarantee they can plug their wells. Every producer already maintains financial assurance and pays the Conservation Tax. Increasing those requirements would hit small producers the hardest, making it harder — and in some cases impossible — for them to stay in business. And when small producers go out of business, what happens? More orphaned wells.
We’ve seen this before. In Colorado, when regulators hiked bonding requirements, more than 2,000 wells were added to the abandoned well list because small companies couldn’t afford the new rules. The result was less production, lost state revenue and more cleanup costs for taxpayers. That’s exactly the wrong direction for New Mexico.
During the past two legislative sessions, lawmakers had a chance to fix this. House Bill 403 — a commonsense, pro-environment measure — would have redirected a larger share of the Conservation Tax to the Reclamation Fund, ensuring the industry’s own tax dollars were fully dedicated to the cleanup work they were meant for. Yet the Legislature rejected it — twice.
Make no mistake. This isn’t a funding problem. The oil and gas industry is already footing the bill through the Conservation Tax and is successfully plugging nearly every well in the state. The problem is the state refuses to use the money it already has.
Instead of piling more financial burdens on small producers, New Mexico’s regulators should do what they’ve been funded to do — clean up the few remaining wells and stop pretending the industry isn’t doing its part.
When government hoards money instead of solving problems, everyone loses. Especially the small producers who keep New Mexico’s economy — and its energy future — alive.
Rep. Mark Murphy, a Republican, represents District 59. He is an oil and gas producer from Roswell.
