Incumbent land commissioner threatens to hold NM’s largest industry “hostage” to get preferred policy outcome

The Rio Grande Foundation tends to not focus on New Mexico’s Land Commissioner very much. They have one primary job which is to keep the revenue from oil and gas on state lands flowing to beneficiaries including the poor-performing K-12 school system. Thus, our philosophy on Land Commissioner has been hands off as commissioners have usually adhered to a revenue maximization philosophy.

Until now.  According to the Albuquerque Journal, “Garcia Richard said she would support a temporary moratorium on fracking permits for the oil industry on state trust land as a way to force the Legislature to boost New Mexico royalty rates to match Texas’ rates, an idea that has stalled in recent sessions at the Roundhouse.” Notably, Texas has the highest royalty rates, so Garcia Richard is hoping to match the highest rate, not a middle-ground royalty rate at 25%. In New Mexico, the royalty rate for production on state lands is as high as 20% and royalties in the Permian Basin spanning Texas-New Mexico and North Dakota Bakken Basin range from 18–20% while many western states charge royalties of 16.67 percent.