Millions in royalties are wasted each year, funds which could go towards New Mexico’s state budget

Today, Western Values Project released a report detailing the lost royalties from the wasteful practices of natural gas flaring (burning off of gas) and venting (deliberately releasing gas into the air) during oil and gas development on public lands in New Mexico. Using data from EPA and Western Regional Air Partnership, New Mexico is estimated to have lost more than $50 million in royalty revenue since 2010. Of this loss, Bill Midcap of the Rocky Mountain Farmers Union says, “In the last five years, New Mexicans have lost more than $50 million in revenue for education because of industry waste. Sec. Jewell is right to ensure that oil and gas companies stop wasting a taxpayer-owned resource so that we can pump more money into education opportunities for rural New Mexico.”

And losses continue to mount, as oil prices drop.

flaring pic

In New Mexico, oil and gas revenues contribute almost $2 billion annually. Experts estimate that with each $1 drop in oil prices, the State loses between $10 and $15 million in revenue. To compensate for these revenue losses, New Mexico legislators have cut $200 million from the state budget. However, a rule proposed by the Bureau of Land Management, which would reduce natural gas venting and flaring on federal lands, can help mitigate losses.

Almost half of New Mexico’s mineral estate is federally owned. Natural gas produced on federal lands is subject to a 12.5% royalty rate, about half of which goes to state governments. In 2013, royalties from the extraction of federally owned minerals contributed more than $400 million to New Mexico’s general fund.

Vented and flared gas is exempt from royalties and neither federal or state governments are getting their fair share for the development, then intentional waste, of our public resources.

If the BLM rule is enacted, New Mexico will stand to benefit from an additional $6.7 to $8.1 million in revenue each year. What’s more, federal mineral royalties in New Mexico are earmarked for educational program such as Free Textbook Appropriation and the Public School Fund, which supports the 89 school districts across the state. Executive Director of New Mexico Voices for Children, Veronica C. García, Ed.D says, “At a time when New Mexico is struggling to pay the bills and provide vital services for health and education, we simply cannot afford to literally burn millions of dollars each year in revenue. We should stop the waste and ensure that when oil and gas companies are developing a public resource, they do so responsibly.”


During a time when every dollar is needed, New Mexico educational system stands to benefit from BLM’s proposal to reign in the millions of dollars lost through natural gas waste on America’s public lands.

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