Even when we’re grateful for something — for example, the jobs and state revenue we get from oil and gas production — that doesn’t mean we should cut ourselves short and ignore our own needs. We deserve to get the best deal we can. But when it comes to oil and natural gas, we’ve settled for a bad deal for a very long time.
While families in New Mexico face rising gasoline prices at the pump, oil and natural gas companies are getting the deal of a century. Not only are they cashing in on higher prices, but they pay pennies on the dollar to lease our public lands for development and evade having to pay New Mexicans what we’re rightfully owed in royalties. All of this undercuts funding for our schools, and our children deserve better.
Thankfully, the Department of the Interior recently released a new report on the federal oil and gas leasing program with recommendations on how to fix this archaic program, which, for decades, has let oil and gas companies take advantage of outdated rates. For families in New Mexico, which is the second-largest oil-producing state in the country, these recommendations come at a critical time, as this needs fixing, now.
The royalty rate for drilling on public lands hasn’t been revised in over a century, according to Interior’s report. As a result, our state has lost out on billions of dollars over the years that could have been used to give teachers raises, buy new textbooks and broadband for classrooms, and support students.
The problems with the federal government’s oil and gas program don’t stop there. Oil and gas companies currently are not required to put up enough money — called bonds — to cover cleanup costs for the wells they drill on public lands. That’s because current federal bonding rates have not been updated since the 1950s and ’60s. As a consequence, if companies go bankrupt, their wells frequently become “orphaned” and pollute the air, land and water around them. Meanwhile, the responsibility for the increasingly high costs of plugging these wells and restoring surrounding lands falls on the rest of us.
At a time when gasoline prices are high and oil and gas companies are raking in record profits, reforms to the federal oil and gas leasing program would be a big win for New Mexico families. Congress has the opportunity to codify these commonsense reforms through the Build Back Better Act and raise significant revenue while protecting the interests of our schools, front-line communities and future generations.
The Biden administration’s first lease sale of New Mexico’s public land for oil and gas development is scheduled for early next year. There is no time to waste — it’s urgent Congress take up the recommendations the Interior Department outlined in its report and bring the federal oil and gas leasing program into the 21st century. Doing so will help maximize the value of our public lands and ensure New Mexicans get a fair return for the natural resources that belong to all of us.