By Gabriel Monte: Freedom New Mexico
Oil and gas revenues could be down next year as oil and gas companies are expected to drill less in New Mexico because of poor commodity prices and tight state regulations, according to the State Land Office.
SLO Commissioner Patrick Lyons told members of the Ag 50 committee during its quarterly meeting Tuesday that major oil companies told him they are shifting funds from their New Mexico operations to Texas.
“It’s easier for them to do business in other states,” he said.
Lyons said regulations banning waste pits for oil wells increase the cost of operating each well by at least $80,000.
The Clovis/Curry County Chamber of Commerce invited Lyons to speak to shed light on land issues, Chamber Executive Director Ernie Kos said.
Oil royalties make up 94 percent of revenues for the office, Lyons said.
State Land Office Assistant Commissioner on Mineral Resources John Bemis said falling prices of gas and oil are also affecting drilling and exploration in the state.
“It’s going to obviously be a double whammy,” he said.
The State Land Office generated $546 million this year from the 77.7 million acres of land entrusted to the office, Lyons said.
The revenues generated by state trust lands goes to public schools and state higher education institutions, Lyons said.
He also said regulations banning mining in areas such as Mount Taylor near Grants is making it difficult to generate revenue from state trust lands.
Lyons said there are about 77,000 acres of state trust land in Curry County used for agriculture activities such as grazing.