New Mexico’s Oil and Gas Sector Takes the Lead in Well Plugging

When it comes to environmental responsibility, New Mexico’s oil and gas industry is not just stepping up — we’re leading the way.

In recent years, oil and gas operators plugged over 90% of the wells decommissioned in the state. That’s 451 wells plugged by industry, compared to just 49 plugged by the Oil Conservation Division (OCD). For every well plugged using public funds, the oil and gas industry independently plugs ten more — without fanfare, and without burdening New Mexico taxpayers.

Let’s be clear: only tax dollars paid by the oil and gas industry are used to plug orphaned wells in New Mexico. Not a single cent comes from the pockets of New Mexico families. The millions spent by OCD to plug wells came directly from the Reclamation Fund — funded entirely by industry-paid taxes.

Of the 68,516 active wells in New Mexico, approximately 34,000 are State and Fee wells. Among those, just 349 are classified as orphaned — a remarkably low orphan rate of about 1%. This is a testament to the industry’s commitment to responsible operations and long-term stewardship. However, we know that 1% is still too many, and the industry is committed to continuing our work with OCD to ensure the reduction of that number.Yet, despite this strong track record, we face a critical challenge: ensuring that the funds dedicated to well-plugging are used for that purpose. In 2022, the Reclamation Fund held $21 million. By November 2024, that balance had grown to approximately $66 million, thanks to increased federal support and continued contributions from the Conservation Tax directly from industry.

But these funds are only effective if they’re deployed efficiently. Delays in procurement and administrative bottlenecks risk not only slowing progress but also jeopardizing future funding. New Mexico’s leadership must prioritize using these dollars as intended — on well plugging and site remediation — not diverting them to unrelated initiatives.

The oil and gas industry supports modernizing the Reclamation Fund to ensure it remains a sustainable, efficient tool for environmental protection. That means streamlining procurement, reducing administrative burdens, and preserving the fund’s integrity for its intended purpose. The oil and gas industry is proud to carry the responsibility of plugging and remediating wells. During a well’s lifetime, it provides energy for the world and contributes to our state’s economy. At the end of its cycle, the land is returned to its native state. It’s a responsibility we take seriously — and one we’re already fulfilling. Let’s work together to ensure that the systems in place support this important work, now and for generations to come.