New Mexico spent millions plugging abandoned oil and gas wells in 2020

The site of an abandoned oil and gas well as it is being remediated by the New Mexico Oil Conservation Division. The OCD plans to plug 50 wells and reclaim the land each year.

When an oil well is no longer needed operators in New Mexico are tasked with plugging it up, sealing it off and reclaiming the land back to its natural state.

But when a company goes bankrupt or for other reasons becomes insolvent, wells are abandoned leaving that state to take responsibility.

An orphaned well, when there is no present operator on file, can pose environmental and human health risks with unchecked emissions and potential impacts to local groundwater sources.

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In recent years, the State of New Mexico and its Oil Conservation Division (OCD) – an arm of the New Mexico Energy, Minerals and Natural Resources Department (EMNRD) – made plugging wells a top priority, hoping to mitigate pollution concerns but also creating jobs.

In Fiscal Year 2020, which ran from July 1, 2019 to June 30, 2020, the OCD reported it plugged 42 orphaned wells at a cost of about $1.6 million.

Adrienne Sandoval was hired in April as the director of New Mexico's Oil Conservation Division.

“This is a large priority for us,” said OCD Director Adrienne Sandoval. “We want to make sure we are plugging as many wells as we can each year. We actually expect to get close to that 42 number if not match or surpass it this fiscal year.”

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While the OCD reported it hadn’t seen an “onslaught” of orphaned wells amidst the COVID-19 pandemic and historic decline in oil prices and operations, Sandoval said it could happen “at any time” if the market’s recovery slows and more operators go out of business.