Tigers in the Backyard: NMOGA Makes Stunning Argument that State Land Commissioner Lacks Authority to Police Oil and Gas Activities on State Trust Lands
- 6 days ago
- 4 min read
Thank you to everyone who showed up in support of State Land Office (SLO) proposed amendments to strengthen financial assurance requirements for oil and gas operators yesterday and this morning. As we noted in our opening statement:
New Mexico is facing an orphan well crisis of staggering proportions, and it did not happen by accident. It is the predictable result of an oil and gas business model that allows major operators to extract enormous profits during the productive life of wells, distribute those profits to shareholders and investors, and then systematically offload aging, low-producing, and environmentally risky wells onto smaller, undercapitalized operators that cannot possibly afford the true cost of cleanup.
This is the industry’s “playbook.” Major operators keep the profits and externalize the liabilities. They sell declining assets downstream, often to entities with insufficient assets to cover plugging, remediation, and reclamation obligations. Eventually, those operators default, go bankrupt, or disappear, leaving New Mexico taxpayers holding the bag for billions in cleanup costs.
Today the attorney for Independent Petroleum Association of New Mexico (IPANM) scoffed at this assertion, claiming that oil and gas operators follow the rules and there's just a few bad actors that give them a bad name. He points to the fact that over 90% of wells plugged in recent years were plugged by industry operators, forgetting to mention this was precisely because the State Land Office and OCD have increased enforcement and sent demand letters or threatened litigation to enforce industry obligations.
This oft repeated lie about a few 'bad actors' does not stand up to even minimal scrutiny. National news outlets have repeatedly documented the oil and gas 'playbook,' our recent report details the history and the extent of the risk, and several recent NM lawsuits including one by the DOJ in December 2025 and this recent case against ExxonMobil detail the fraudulent accounting practices that facilitate this industry scheme.
NMOGA and IPANM complain about the cost to small operators, but oil and gas extraction involves dangerous chemicals, explosive gases and hazardous operations. The idea that just because an operator is "small" they shouldn't be required to have adequate insurance against these dangers is absurd. As one commenter put it, should someone who wants to keep tigers in a petting zoo in his backyard be absolved of putting safety measures and insurance in place just because he only has a few?
The Deputy Commissioner of the SLO, Sunalei Stewart, pointed out that during a time period in which the state earned about $15 billion in revenue from leasing out our resources to the oil and gas industry, the industry itself earned about $100 billion from selling those resources. They can afford to clean up after themselves, and they have demonstrated that they will not do so without much stronger regulations and enforcement.
How did NMOGA and IPANM respond to the SLO's long overdue proposal to modernize financial assurance rules?
They made the absurd and dangerous claim that the State Land Commissioner has no legal authority to bond for plugging, reclamation, or remediation, and that the Proposed Rule goes beyond the mandate authorized by the Legislature.
As SLO Attorney Ari Biernoff put it:
NMOGA’s position would convert the State Land Commissioner to a powerless figurehead with no authority of any kind over one industry - oil and gas.
A NMOGA attorney also made the claim that this effort was akin to an illegal taking under Article 4 of the Constitution, a laughable statement, given that the industry is literally extracting resources owned by the State of New Mexico and is only being asked to put up a financial assurance bond that they will get back if they clean up after themselves. Their sense of entitlement to take our resources and trash the land left behind without any consequences is shocking!
As Mariel reminded everyone during her comments: oil and gas failures have real consequences for real people. People whose homes, health and futures are destroyed by oil and gas pollution. Like the family near Loving whose generational land, the home built by their grandparents, and nearby acequia were poisoned by a blowout that showered the soil and water with toxic fracking waste just two weeks ago. The oil and gas industry must not be allowed to continue disrespecting our laws, our land and our people
We must end this email by giving our sincere gratitude and appreciation to the State Land Commissioner and to her staff who worked hard on these draft rules, who expressed openness to strengthening the rules in response to all of the comments received, and who listened respectfully to industry but held them accountable to the truth about the track record of the oil and gas industry in New Mexico.
The hearing that just concluded underscores how important it is to elect candidates who have integrity, courage and most importantly, values of protection and care for the earth and all the generations that will follow us. Tuesday is primary election day. We hope you will join us in voting for candidates who put people over profit, across the board, up and down the ballot. It matters.
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