New Mexico’s oil and gas bonding rules haven’t kept pace with skyrocketing cleanup costs, leaving taxpayers with billions of dollars in potential reclamation liabilities. Now, the state is considering important amendments (Case No. 24683) to update bonding requirements.

In exchange for the privilege to extract resources from state lands, oil and gas operators in New Mexico are required to reclaim—clean up—wells and surrounding sites. To ensure complete and timely reclamation, the state obtains a bond or other financial assurance from operators before drilling begins, which is then used to cover at least some of the costs of reclamation. However, outdated bonding minimums have left taxpayers covering the bill.