ALBUQUERQUE, N.M. — New Mexico has set a record for the highest monthly royalty earnings from oil and gas leases, state officials announced Tuesday.
The State Land Office reported that nearly $110 million was earned in April, which was more than any month in state history. The previous record was nearly $109 million in February 2020, just before a global price war and pandemic market forces disrupted the oil industry.
Land Commissioner Stephanie Garcia Richard said the revenue boon will benefit public schools, hospitals and other programs that are funded by drilling and other development on state trust land.
Revenue from activities on trust land on average save the typical New Mexico household an estimated $1,500 per year in taxes that would otherwise be needed to fund state operations, Garcia Richard said.
“This is a huge monetary relief for hard working New Mexico families, particularly during the coronavirus pandemic,” she said in a statement.
While oil and gas is a driving force of New Mexico’s economy and the state budget, the Democratic land commissioner said the resources are finite and aren’t a stable long-term budgeting tool for the state.
“We are committed to diversifying the revenue coming from state trust land by increasing renewable energy generation, creating new outdoor recreation opportunities, seeking out new commercial business development, and looking at innovations in agriculture for additional revenue generation,” Garcia Richard said.
Recent data from the state’s Oil Conservation Division showed oil and gas production in New Mexico increased more than 10% last year compared to the year before even as demand for fuel dropped during the pandemic. Overall, the state produced about 370 million barrels of oil in 2020 compared to about 330 million barrels in 2019.
New Mexico in 2020 also produced about 1.9 trillion cubic feet (14 trillion gallons) of natural gas, surpassing the 2001 record of 1.6 trillion cubic feet (12 trillion gallons).
The Oil Conservation Division is preparing to implement new rules at the end of May that will limit most venting and flaring in oilfields as a way to reduce methane emissions.
The first phase will include data collection and reporting to identify natural gas losses at every stage of the process.
The state will then require operators — from those that manage pipelines to smaller production wells and other infrastructure — to capture more gas each year. The target will be capturing 98% of all natural gas waste by the end of 2026.
New Mexico’s Environment Department also is working on rules that would target oilfield equipment that emits methane, volatile organic compounds and nitrogen oxides.