new mexico

For over a century, there have been people drilling for oil in the Land of Enchantment.And thousands of those oil wells have run dry and were never properly sealed threatening the environment.Its costing millions to seal them, and some say oil companies are being let off the hook.However, recently, the state of New Mexico reached a deal with a Texas-based company to pay to seal about 300 of their inactive wells.Deep dive: Target 7 InvestigatesThe state will pay the initial cost to seal them, and Texas-based Ridgeway Arizona Oil Corp. is supposed to repay the taxpayers. But it could take 100 years for New Mexico to get repaid. Ridgeway owns at least another 25 active wells in New Mexico.All of their wells are located in Lea, Chaves and Roosevelt counties.In all, there are about 1,700 abandoned wells on state and privately owned land throughout New Mexico and even more on federal and tribal lands. These wells are known to leak methane colorless, odorless gas that naturally occurs during drilling.The extent to which emissions are leaking, the extent to which there’s ground or surface water contamination, said Tannis Fox, an attorney for the Western Environmental Law Center. But they have the potential for all of those pollutants going into our air, land and water because they are abandoned because they are not maintained over time.”Fox, who is also a former state deputy attorney general, says most of these wells were owned by companies that have since gone out of business over the last century.We’ve been drilling in New Mexico for a hundred years. So the abandoned well problem, you know, has been going on for decades in New Mexico, Fox said.Stay up-to-date: The latest headlines from KOAT Action 7 NewsFor several years, the state has been using taxpayer dollars from the Oil Reclamation Fund and federal grants to seal them up.The Reclamation Fund is a severance tax on oil and gas.State leaders said sealing one of these wells costs an average of $125,000 money taken from that fund.Ridgeway owns about 300 inactive wells. State leaders dont refer to those wells as orphaned or abandoned since there is an active owner. But they have run dry.They both had issues with inactive wells and then some release and remediation obligations at discrete sites, said Dylan Fuge, the deputy secretary of the New Mexico Energy, Minerals and Natural Resources Department. And those issues prompted us to initiate enforcement.”The state cited Ridgeway for those violations in April. One of them involved gas that was flaring from one of their wells. And the sides reached an out-of-court settlement.”The balancing act here was between pushing Ridgway, you know, into sort of immediate bankruptcy,” Fuge said. “Where the state would be lot liable with limited recourse to at least developing a model where there can be positive cleanup on the ground, and the state has some revenue coming in to offset those remediation costs.”Over a year ago, the state received $25 million in federal funds to seal more than 134 wells. But it can’t use that money on wells that are owned by active companies.”Had we pushed it to say do it and reached no settlement, the state would have been on the hook, Fuge said.Under the settlement, Ridgeway pays the state at least $30,000 a month. That number could go up based on how much oil they produce on other wells. That means at a cost of $125,000 a well. It could take up to 103 years for the state to get its money back.I think that it is a poster child for the need for financial insurance reform in New Mexico so New Mexico protects itself against this abandoned well problem, Fox said.Fox has been lobbying for the state to change how much it charges oil companies upfront.Under current state law, oil companies have to put up a $250,000 bond when they start drilling, no matter how many wells they dig. That money goes into the Reclamation Fund. But that’s not enough money to cover sealing three wells.The governor’s office has said that she plans to work with lawmakers this session to make changes to the state’s Oil and Gas Act that would also include requiring companies to place wells further away from schools.Last year, the state sealed about 150 wells. That was a record. It had been sealing about 50 a year. If the state can keep that pace, all 1,700 abandoned wells on state and privately owned land would be sealed by 2035.That does not account for all of the wells on federal and tribal lands.Action 7 News On The Go: Download our app for freeFox said she doesn’t know if all of these abandoned wells will become simply markers in her lifetime.It takes time, effort and resources, and it does not happen overnight, she said.