Mandating setbacks from oil/gas development would cost New Mexico Big $$$
In 2023 New Mexico Land Commissioner Stephanie Garcia Richard issued an executive order that places a moratorium on oil and gas leasing on state trust lands within one mile of schools or other educational facilities. In 2024 legislation was proposed that would have mandated a 2,250-foot setback — just under a half-mile — from homes, schools, health care facilities and jails, and a requirement for wells to be 350 to 600 feet from water features.
Not surprisingly the health research (such as it is) on setbacks is spotty and entirely inadequate for responsible policymaking. There are oil and gas wells throughout New Mexico currently operating that are a short distance from residences and other heavily-trafficked areas. A decent study is needed to establish whether setbacks are necessary in the first place.
Now, the Legislative Finance Committee has found that, if setbacks are imposed on a statewide basis, New Mexico could lose billions of dollars in oil and gas revenues. Read the report for yourself here. As the chart below highlights, the State would lose an estimated $800 million ANNUALLY within just a few years if setbacks similar to the 2024 legislative proposal were adopted.
As reported by the New Mexican, Committee economist Ismael Torres said in a presentation to the committee Tuesday “the $800 million figure is likely low. It doesn’t include other indirect revenue losses, such as taxes collected from trucking or other ancillary services, or lost income taxes from workers.
Setbacks for habitat protection could also drive up the price tag.
There are other costs to consider, too.”
All of this means that setbacks will likely be used as a tool by the far left to attack the oil and gas industry. But, big setbacks as some in the Legislature would like to see implemented would have