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LOCAL COLUMN

OPINION: The reclamation fund and strong bonding rules work together to protect New Mexico

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Earlier this year, the New Mexico Legislature unanimously passed House Bill 80, 鈥淥il & Gas Conservation Tax Act Changes,鈥 and Gov. Michelle Lujan Grisham signed it into law.

The law strengthens New Mexico鈥檚 Oil and Gas Reclamation Fund, which relies on taxes paid by the oil and gas industry to clean up and properly plug orphaned oil and gas wells.

Orphaned wells leak methane and other pollutants into the air. They threaten groundwater and drinking water supplies. They create long-term environmental and financial liabilities that last for decades.

While HB 80 is a fair and reasonable approach for addressing wells already orphaned by irresponsible operators in the industry, it鈥檚 not the end of the story.

In addition to the reclamation fund, New Mexico needs updated oil and gas bonding and cleanup rules such as those being considered by the Oil Conservation Commission.

The reclamation fund and bonding requirements address different parts of the same problem.

In fact, they work best together.

The reclamation fund helps clean up wells that have already become orphaned. Strong bonding rules help prevent wells from becoming orphaned in the first place.

The oil and gas industry has historically experienced periodic busts. In the event of an economic downturn, many more wells could become orphaned, and there would not be sufficient money in the reclamation fund to clean them up. That responsibility would then fall to the state and become a burden on the taxpayers.

Bonding functions much like an insurance policy. Before drilling, oil and gas corporations are required to provide financial assurances that funds will be available when wells need to be plugged and reclaimed. If the well operator fails to properly cap and plug a well at the end of its lifecycle 鈥 something they are legally required to do 鈥 then the state can draw on those bonds to get the job done. If the bonds are too low, then the burden falls to the taxpayers.

That is precisely why the Oil Conservation Commission spent months reviewing evidence, hearing testimony and evaluating proposed reforms. In its deliberations, the commission recognized that strengthening the reclamation fund and modernizing bonding requirements are complementary strategies, not competing ones.

Taken together, these policies represent a balanced, practical approach to protecting New Mexico鈥檚 water, communities, public resources and economy.

This was never an either-or choice.

It was always both.

Because at the end of the day, the goal is simple: Oil and gas corporations should be responsible for cleaning up the wells they drill, and New Mexicans should not be left to pay the price when the industry fails to do so.

Rep. Matthew McQueen, D-Santa Fe, represents District 50 in the New Mexico House of Representatives, where he chairs the House Energy, Environment and Natural Resources Committee.