A looming legacy issue

Editor’s note: This is part one of a four-part series on abandoned oil and gas wells in New Mexico.

PERMIAN BASIN — You can smell it before you see it.

On a hot, windy day near Hobbs, a black puddle of liquid sits on the ground. A lizard skitters around it, and a hawk flies above another large oil puddle at the base of a different tank.

The rest of the ground is barren of the green shrubbery that fills the landscape beyond the abandoned oil and gas well site.

The site itself is filled with massive oil tanks and rusty staircases leading to the old infrastructure. Behind a neglected, dilapidated building, oil barrels stand or rest on their sides on the ground among individual pipes, wooden scraps and other debris that hasn’t been used in a long time.

The mess has been sitting there for at least seven years. The New Mexico State Land Office labels it among “the worst of the worst” abandoned oil and gas sites and is in litigation with the company responsible for it.

“This is so emblematic of what happens in the industry — this site is — in so many different ways,” said Ari Biernoff, general counsel for the State Land Office.

It was Biernoff’s first time seeing the problematic site in person. He looked around with other experts from the State Land Office, silent at times as they surveyed land and figured out the work needed to clean it all up.

“I’m speechless,” Biernoff said.

The issue of abandoned oil and gas wells is not new to New Mexico, though activists often describe progress around the issue as painstakingly slow.

Oil and gas in New Mexico

In the southeastern corner of New Mexico sits the Permian Basin, the highest-producing oil field in the U.S. and, some argue, the world. Though most of the Permian Basin resides in Texas, experts say the small portion in New Mexico contains the best and most fruitful oil resources.

It’s a large reason New Mexico is the second-largest oil-producing state in the nation, behind only Texas.

The oil and gas industry has boomed — and busted — in New Mexico since the 1920s. The Permian Basin is known for its large oil concentrations, and the San Juan Basin in the northwestern part of the state has plentiful gas resources.

Today, New Mexico heavily depends on the oil and gas industry, despite an effort from the state to diversify its income.

Direct and indirect oil and gas revenues usually make up 25%-30% of the state budget, according to a 2023 Legislative Finance Committee report. The percentage is going up, surpassing 40% of the $10.2 billion budget for fiscal year 2025.

The money coming into the general fund comes from taxes on oil and gas extraction and federal mineral leasing payments.

A dollar increase in the per-barrel price of oil equates to about $45 million more for New Mexico’s general fund per year, according to the LFC report, while a 10-cent increase in the price per thousand cubic feet of natural gas equates to $27 million for the state.

“The energy industry plays a critical role in the New Mexico economy and is an economic driver, both when prices are up and when prices are down,” the LFC report states.

Oil and gas money drives education in New Mexico. Public schools get about 85% of the royalties collected from oil and gas production on state land and that are distributed to the Land Grant Permanent Fund. Excess oil and gas revenue goes to the Early Childhood Education and Care Fund.

But oil and gas is a finite resource.

So what happens when there are no more resources to be pulled from the ground?

Oil and gas producers are responsible for plugging their wells and restoring the land to the state it was in before the well was drilled — or as close as is possible.

That doesn’t always happen.

The issue

Abandoned oil and gas wells pose a threat to the environment and public health. Unplugged wells can be a large source of greenhouse gas emissions, even though they’re not in use.

Wells can leak methane, which is responsible for a majority of ozone formation and has the potential to cause safety hazards such as explosions. The wells also can leak volatile organic compounds known to lead to health issues, including cardiovascular problems.

A significantconcern in New Mexico is oil and gas polluting the state’s water supply, a dwindling resource amid a megadrought.

Unplugged or poorly plugged wells can cause oil, gas or produced water — a byproduct of oil and gas extraction — to leak into surface water or groundwater, according to the U.S. Bureau of Land Management, and 35% of known orphaned wells in the U.S. are within half a mile of a domestic groundwater well.

On the hot Wednesday in the Permian Basin that State Land Office employees looked at abandoned well sites, environmental specialist Becky Griffin’s mouth set in a grim line.

“We’re trying to keep our groundwater clean,” she said, looking at the dark oil puddles on the ground. She shook her head and said the companies should have put a berm and liner around the well to account for wind blowing the oil over the rims of storage tanks onto the ground.

Her colleague Will Barnes, deputy director of the Surface Resources Division, said they also don’t want hydrocarbons or salt to get to the groundwater, which would stop plants from growing.

The State Land Office is in active litigation to get the responsible oil and gas company to clean up the old Permian Basin site. Agency spokesperson Joey Keefe said the state recently won a summary judgement in the case and will have a hearing on damages in early July.

The oil sitting on, and possibly seeping into, the ground likely isn’t the only oil on the site. Barnes pointed to looming tank batteries nearby and said there are probably liquids in there, too.

At the top of one of the staircases leading up the tallest tank is an empty bird’s nest made up of wire, cholla and sticks.

Griffin said it’ll be a big project to clean this site up — probably will take around six months, she estimated. Biernoff, general counsel for the State Land Office, said it would take at least $1 million.

“These kinds of dead zones are all over the Permian,” Biernoff said.

How many abandoned wells are there?

With work the state has done, around 1,600 wells remain to be plugged and cleaned up on state and private land in New Mexico, said Dylan Fuge, deputy secretary of the New Mexico Energy, Minerals and Natural Resources Department.

It’s not completely clear how many orphaned wells there are on tribal land within New Mexico. The U.S. Bureau of Indian Affairs is compiling an inventory of orphaned wells on tribal trust lands, the agency told the Journal. Of more than 1,000 abandoned oil and gas wells listed on a state database, only 14 are listed as leases on Navajo, Jicarilla or Ute land.

The U.S. Bureau of Land Management told the Journal the agency isn’t aware of any orphaned wells on federal land in New Mexico.

While experts say the number of abandoned wells in the state is still far too high, it’s significantly lower than some other oil- and gas-producing states.

It’s at least five times worse to the east of New Mexico. Texas reports more than 7,000 orphaned wells, and Oklahoma estimates nearly 18,000 orphaned wells. The state containing the greatest number is Pennsylvania with a known 27,000 abandoned wells.

The U.S. Environmental Protection Agency estimates 3.7 million abandoned oil and gas wells exist in the nation, according to an analysis from the U.S. Department of the Interior.

And that’s only wells that are documented.

The numbers can fluctuate, depending on well-plugging progress. Companies are required to fill the wells with a material like cement to seal them off . That can be the easy part.

The more difficult task can be restoring the land around the well sites, which is often a much more costly and time-consuming task. Reviving natural vegetation also depends on the state of the environment, so in a megadrought, as the Southwest is experiencing, restoration can be quite a feat.

Cleanup also can become more complicated, depending on how long the site has sat untouched and how bad the damage is. Oil and gas drilling began in the late 1850s in the U.S., but it took around a century for the nation to set formal regulations, so many producers just walked away from the wells.

The U.S. Bureau of Land Management estimates companies drilled around 1 million wells before plugging and reclamation was required.

Cover-ups

Barnes said the State Land Office sometimes finds cover-ups on active or abandoned well sites, when companies pour caliche over contaminated soil to hide it.

Indeed, the state employees later in the day drove up to another well site, where an active pumpjack bobbed up and down. Griffin scraped the top layer of dirt on the ground aside and found dark, contaminated soil underneath.

A hiss of air in the well’s piping also indicated a gas leak. To the right, produced water dripped out of the site’s tank batteries.

“A person could probably spend a lifetime going around and seeing (this),” Biernoff said, looking at the poorly mai scussing how to take action on the site. “It’s disgusting,” Biernoff said.

“These guys are either going to be out of business or are going to have to change how they do business real fast,” he said.

He said the state will also look at how the company is taking care of its other wells.

“Who’s allowing this?” he said.

New Mexico oil wells

Four-part oil and gas series

Photos from the abandoned oil and gas wells in New Mexico series