New Mexico Oil Producers Brace For Tighter Regulation As Output Jumps

Crude oil output has more than doubled in New Mexico over the last four years, making it the No. 3 producer among U.S. states, but a January change in state leadership to Democratic control has industry executives fearing tougher regulations are coming.

Incoming New Mexico Governor Michelle Lujan Grisham and state land commissioner Stephanie Garcia Richard plan to limit new leasing on state lands where drillers planned to tap freshwater aquifers. The incoming administration also has pledged to crack down on methane, a potent greenhouse gas that is often flared during oil production or can leak into the atmosphere from faulty equipment.

“They could make it much harder for operators to make a good profit in New Mexico,” said Phil Buch, a Texas oil executive with personal energy holdings in New Mexico. “There’s definitely an added risk there.”