NEW MEXICO (KRQE) – Editor’s Note: This story has been updated to show how much money the state believes it missed out on from oil and gas revenue since 2015.
New Mexico is missing out on hundreds of millions of dollars in oil and gas revenue according to the New Mexico State Land commissioner. “The past three years, New Mexico has produced more new barrels of oil than Texas,” said a speaker at Wednesday’s meeting.
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That’s the good news. Over the last three years, New Mexico has had more oil production than any other state and that includes Texas, according to the state land office. Texas has 5,400 leases, while New Mexico has 6,000 and it continues to grow. “And this is an outdated figure y’all since 2019, $10 billion for New Mexico’s beneficiaries,” said a speaker at Wednesday’s meeting.
That growth in oil and gas production has delivered billions of dollars to state coffers. Just last year, the state earned nearly $13.9 billion from the industry, according to the New Mexico Oil and Gas Association.
But the State Land Office said that figure should be even higher. “And we would see an additional distribution to our beneficiaries of between $750 million and $1.5 billion over that same period, approximately 25 years up to 2050,” said a speaker at Wednesday’s meeting.
The land office has tried to pass a bill that would increase the state’s royalty rates from 20% to 25%. Texas already has those rates. “The land office estimate is that once a sizable number of leases have been sold and put into production, that we believe, the land office believes that we would earn 50 million to 84 million dollars extra per year,” said a speaker at Wednesday’s meeting.
In total, the state Land Office said New Mexico has missed out on $405 million from oil and gas revenue since 2015.
Another disadvantage, New Mexico takes royalties from the net proceeds, whereas Texas pulls from gross proceeds. The land office is pushing for new laws to level the playing field should the bill pass this next legislative session, New Mexico could see tens of millions of dollars more in oil revenue each year. “That’s our shot at getting top dollar for those leases. Once they’re leased at the lower royalty rate, they get held by production for the next, however many generations. And we’ve lost the opportunity to get top dollar market value for a public resource,” said a speaker at Wednesday’s meeting.
Last year, House Bill 48 passed the state House but did not make it through the Senate. Versions of the bill have failed to pass the state legislature since 2019.
