NM HM56

Requests the Oil Conservation Division of the Energy, Minerals and Natural Resources Department to study options for transferring ownership of orphaned wells to third parties for energy storage and hydrocarbon recovery projects

New Mexico has an estimated 1,700 orphaned wells plus 3,400 inactive or low-producing wells that could become orphaned, with cleanup liability estimated between $700 million and $1.6 billion

The oil and gas reclamation fund had $66 million available at the beginning of 2025, with eligibility for an additional $111 million in federal grants, but the state remains hundreds of millions short on coverage

The study must estimate initial investments needed for third-party adoption, potential profits compared to state plugging costs, and identify statutory or regulatory barriers including permitting and financial assurance requirements

Findings and recommendations must be presented to relevant interim legislative committees by November 1, 2026