Four Republican Representatives that sit on the House Energy, Environment and Natural Resource Committee sent a letter to the State Land Commissioner to show their opposition to the recently announced moratorium on new land leases for oil and natural gas production.
The State Land Commissioner, Stephanie Garcia Richard, said that her office would indefinitely withhold the new leasing of public lands for oil and natural gas production.
House Bill 48, which did not make it through the legislature, would have raised the royalty rate on oil and natural gas from 20% to 25%.
Garcia Richard said the increase would generate an additional $50-$70 million a year and that leasing it at a lower rate would be “subsidizing” the money that goes to schools.
In New Mexico the royalty payments from oil and gas operations get put into a trust that benefits public institutions.
The Representatives, Jim Townsend, Larry Scott, Rod Montoya and Jared Hembree are saying that this moratorium is unacceptable and the commissioner is obstructing money from going to schools on behalf of her personal political agenda.
The letter says that the state could lose more than 10 million dollars by FY2026 and more than 30 million by FY2028 if this moratorium continues as such.
The letter reads, “Just because your office believes that increasing the royalty rate is the preferred approach, this is no guarantee a similar bill to HB 48 will pass in the 2025 session or beyond. Therefore, you are intentionally reducing state revenues based upon your hope that a royalty increase bill which has failed several times before will suddenly be viewed differently in a future legislative session.”
The letter continues, “We urge you to reverse this ill-advised decision so that no oil and natural gas development area is punished because of your failure to convince the legislature that increasing the state royalty rate is appropriate.”
In the press release, Rep. Townsend said, “It is a dereliction of Commissioner Garcia Richard’s fiduciary responsibility to withhold these lease sales and cause worthy and essential public institutions to lose millions of dollars in operating funds simply because she did not get what she wanted from the Legislature.”
