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State Land Commissioner Stephanie Garcia Richard wants oil and gas companies to pay more in upfront cleanup costs before they extract fossil fuels from state trust lands.

She says that land is often littered with unplugged wells, oil and gas spills and related equipment abandoned by companies that may declare bankruptcy, leaving New Mexicans who own the public lands on the hook.

She has proposed to increase minimum cleanup bonds by 1,400%.

鈥淭he changes we are proposing make our bonding rule much stronger and finally bring it into the twenty-first century,鈥� Garcia Richard said in a statement about the rule. 鈥淗aving an adequate bond in place is simply the cost of doing the business on state lands so we can ensure that the public doesn鈥檛 have to pick up the tab if a company goes belly up or isn鈥檛 willing to clean up properly.鈥�

Currently, companies that lease state trust land for extraction must post at least a $10,000 cleanup bond for a single lease, $20,000 for multiple leases and $25,000 for a mega lease. The proposed rule sets a minimum cleanup bond of $150,000, an amount which would be adjusted every five years for inflation, measured by changes in the Consumer Price Index.

Lessees would also have to submit annual reports to the Land Office on the status of drilling operations. The State Land Office may increase bond amounts based on risk categories 鈥� such as spills and unplugged wells.

Garcia Richard said plugging a single abandoned well with no other remediation activities can cost over $100,000, by conservative estimates.

The commissioner, a Democrat who is termed out, did not appear at hearings on the rule held Wednesday and Thursday at State Land Office headquarters in Santa Fe. Instead, State Land Office attorneys, assistant commissioners and staffers presented the office鈥檚 case for the rule, showing photographs of abandoned oil and gas operations on state trust land.

Ari Biernoff, general counsel for the New Mexico State Land Office, said the agency understands 鈥渢his is a different way of doing business. Annual reporting, for example, hasn鈥檛 happened in the past.鈥�

鈥淲e鈥檙e doing this because the Commissioner believes, as a fiduciary of state land trusts, we need better protection on state trust lands,鈥� Biernoff said during the hearings. 鈥淲e鈥檙e going to work to find a rule that works for the agency. And we are going to consider all public comment and all public engagement, whether it鈥檚 from industry 鈥� or people off the streets that care about this as taxpayers.鈥�

The oil and gas lobby pushed back hard against the rule. For one, while $150,000 may sound like a small amount, oil and gas companies often purchase multiple leases, said Andrew Cloutier, an attorney for the Independent Petroleum Association of New Mexico.

鈥淲e recognized this problem decades ago 鈥� that there was a perverse incentive for bad actors to dump wells on the state and taxpayers,鈥� Cloutier said. 鈥淲e agreed to an additional tax imposed just on us 鈥� the Oil and Gas Conservation Tax 鈥� to fund this reclamation fund, and so whoever dumps wells in this state, there鈥檚 going to be money set aside.鈥�

The Legislature, during budget crises, raided this fund to inject money into other portions of government, he said. But this past session, , bipartisan legislation that put more dollars into the fund, passed and was signed by Gov. Michelle Lujan Grisham. The New Mexico Energy, Minerals and Natural Resources Department is responsible for using the money to clean up state trust lands.

The fossil fuel industry also questioned Garcia Richard鈥檚 authority to raise the bonding requirements.

Adam Rankin, an attorney for Holland & Hart representing oil and gas interests, said it is 鈥渢oo important for the state鈥檚 economics to allow a single elected official to determine how they should be managed.鈥�

鈥淥il and gas production is so critical for the state鈥檚 revenue and budget, funding nearly 50% of the state鈥檚 coffers, that the Legislature decided not to leave any aspect of the state oil and gas lease terms to chance or to the discretion of the commissioner of public lands,鈥� Rankin said.

Environmental advocacy nonprofits praised the rule.

Many of them pointed to a June 2025 New Mexico that says New Mexico has more than 60,000 oil and gas wells that will eventually need to be plugged, most in the Permian and San Juan basins.

Unplugged wells, which can be more than a mile deep, can become pathways for hazardous substances to escape, the report notes. Those substances can include gases such as methane, hydrogen sulfide and fluids like produced water and residual hydrocarbons.

鈥淭hose leaking gases and fluids can contaminate groundwater, endanger nearby homes, and impede future development of oil and gas resources,鈥� the report said.

鈥淲e hope that the increased reporting that this rule will require will also be made available to the public,鈥� said Sarah Knopp, policy specialist with the Amigos Bravos, a nonprofit focused on water and the environment.

People off the street also voiced opinions.

Barbara Wisoff said over video that she has asthma and particulate allergies. The strong winds in New Mexico can carry air pollution from the oilfields to sa国际传媒官网网页入口, where she lives, she said.

鈥淚鈥檓 a 69-year-old fixed-income woman,鈥� Wisoff said. 鈥淚 can鈥檛 afford to pay taxes to fix the pollution. It鈥檚 not my job. And it鈥檚 not fair to the average person.鈥�

Government hearings often attract humorists. Olivia Hartwell, playing the part of an executive from a fictional fossil fuel company, brushed off oil spills as 鈥渇luid freedom events.鈥�

In reference to leases transferring to different companies, Hartwell quipped, 鈥淩egulators have started asking extremely unfair questions, like, 鈥榃hat happens if the company disappears?鈥欌��

A hearing officer will prepare a report for the commissioner summarizing the comments. Garcia Richard will then issue a final order.

After that, a phased-in compliance schedule kicks in. Companies holding 50 or more leases will have to post more cleanup bond money by Dec. 1. The rule, if approved, will apply to all leases by May 1, 2027.

Justin Horwath covers tech and energy for the Journal. He can be reached at jhorwath@abqjournal.com.