Who regulates oil and gas development in New Mexico?

In New Mexico both state and federal agencies oversee every facet of oil and natural gas development and production. This oversight starts from the selection of a well site and continues through wellbore construction, which many times includes hydraulic fracture stimulation, or “fracking”. Once a well has been established, agency oversight continues through production, product processing and transportation, and ends with well plugging and land restoration. Here’s how regulators at the federal and state level are involved at every stage of oil and gas production:

Phases

Pre-Drilling Phase: Prior to drilling, agencies such as the Bureau of Land Management, or BLM (a part of the Department of the Interior which manages federal land), or the Oil Conservation Division, or OCD (on non-federal land), assess the potential environmental impact during the drilling permit review stage. These agencies ensure that drilling sites meet strict standards for protecting surrounding ecosystems and the rights of others who use the land.

Drilling Phase: During drilling, the Occupational Safety and Health Administration oversees worker safety. BLM, OCD and even the New Mexico Environment Department oversee the well construction process, worker safety, wellbore integrity, and the protection of the environment, including underground freshwater aquifers. These agencies ensure that drilling operations adhere to strict safety protocols to prevent accidents and protect workers and the environment.

Completion Phase: Many operators use hydraulic fracture stimulation or "fracking" as one of the final stages of wellbore construction. In fracking, water that contains sand and a small amount of chemicals is pumped into rock formations to allow oil and gas to flow more easily to the surface. Regulators overseeing this phase focus on the safe and responsible use of fracking techniques, ensuring neither water sources nor the environment are harmed. In 2023, the New Mexico oil and gas industry used mostly brackish water and recycled produced water in fracking operations. As a whole, the industry uses less than 1% of New Mexico’s freshwater supply for its operations.

Production, Processing, and Transportation Phase: Once oil and gas are extracted, federal and state agencies regulate the production, processing and transportation of crude oil, natural gas, and produced water. For example, operators are required to capture 98% of gas produced or gathered to limit flaring or venting of natural gas, and therefore reducing the formation of ozone. Further, operators are required to deploy specialized equipment to find and eliminate any unintended leakage. These nation-leading regulations have been in place since 2021 and have significantly reduced emissions.

*See how the state uses its Oil and Gas Reclamation Fund to address orphaned wells.

Reclamation Phase: After production operations are complete, well plugging, facility decommissioning, and site reclamation are essential. Agencies like the BLM and the OCD make certain depleted wells are properly plugged and ensure the land is responsibly restored. If the well is on State Trust Land, the New Mexico Stand Land Commission ensures reclamation activity is done properly to protect these public lands.

These regulatory agencies work together to strike a balance between energy production and environmental protection, ensuring that oil and gas drilling operations, including the fracking phase, are conducted safely, responsibly, and in compliance with established regulations. This comprehensive oversight is crucial to maintaining the sustainability of the oil and gas industry and ensure our industry's commitment to responsibility and safety.

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*The Reclamation Fund is comprised of taxes paid by operators on the sale of oil and gas in New Mexico. The Oil Conservation Division uses the Fund to plug wells and reclaim sites that have been abandoned by irresponsible operators. This fund, combined with contributions from current operators and funds from the federal Inflation Reduction Act, pay for the plugging of abandoned wells.