New Mexico could be on the hook for as much as $1.6 billion to clean up old oil and gas wells.
A new state report from the Legislative Finance Committee concludes that more than 60,000 wells across the state will eventually need to be plugged to protect public health, the environment, and future energy development.
While most operators are expected to plug their own wells, hundreds have been left abandoned—leaving the state responsible.
So far, New Mexico’s Oil Conservation Division has plugged about 1,000 of these “orphaned” wells.
But the number of wells needing cleanup continues to grow faster than the state can handle them.
Right now, the division has authority to plug around 700 wells, but it’s likely that more than 1,400 inactive wells will also need to be addressed.
Another 3,000 wells are producing very small amounts of oil and gas—and could soon be added to the list.
At current prices, plugging and reclaiming these wells could cost the state anywhere from $700 million to over $1.6 billion.
The report’s findings urge lawmakers to tighten rules to prevent more wells from being orphaned.
Recommendations include stronger financial requirements for operators and better tracking of well ownership and cleanup costs.
The report also calls for the state to define which wells are truly abandoned, and to require more oversight of plugging work already underway.
Despite some recent federal support, the state says it still lacks the resources to keep up with the growing backlog.
