Defendants

Defendants are the State of New Mexico, the New Mexico Energy, Minerals and Natural Resources Department (“NMEMNRD”) of which the State’s Oil Conservation Division is a part, and the acting Secretary of NMEMNRD. The defendants have duties under New Mexico law to prevent waste of natural resources, enforce plugging and remediation of oil and gas sites, hold operators accountable for timely clean up, secure and collect financial assurance, and ensure proper use of public resources for such cleanup.

Plaintiffs

The Center for Biological Diversity is plaintiff and counsel. In addition, the case is brought by the San Juan Citizens Alliance, a grassroots environmental organization dedicated to social, economic, and environmental justice in the San Juan Basin, and Tó Nizhóní Ání, a Diné-led non-profit organization that works to protect the aquifers, streams, and lands of communities on and around the Navajo Nation in Arizona and New Mexico impacted by extraction and coal mining.

Legal Issues

Under the New Mexico Oil and Gas Act, defendants have duties to prevent waste, secure financial assurance from operators conditioned on carrying out cleanup, enforce timely well plugging and remediation, and ensure cleanup costs are paid by or recovered from operators. The lawsuit alleges four key violations.

First

The state defendants fail to carry out their legal duty to timely enforce well plugging obligations. There are thousands of inactive unplugged wells that are past the legal deadline for plugging and cleanup, and 60% of operators in the State are currently in violation of New Mexico law. Despite this, the State has taken little meaningful action to enforce the law and hold operators accountable for plugging and cleanup at their expense.

Second

The Division is also responsible for securing cleanup commitments with financial guarantees—known as financial assurance—conditioned on proper cleanup, before operators can conduct business in the State. This money is meant to be set aside for the State to access if an operator is unwilling or unable to carry out cleanup. The Oil and Gas Act further requires that the Division secure additional financial assurance for the highest risk wells, those that have been inactive longer than two years. Yet Division records show it frequently fails to secure such financial assurance.

Third

The Division has a legal duty to forfeit and collect the financial assurance from operators that default on their duties and to deposit those funds into the Reclamation Fund to be used to carry out cleanup of such wells. But documents received through open records requests in 2025 indicated the Division has only actually collected such funds once in nearly a decade, despite spending tens of millions of dollars of public funds on plugging the wells of operators who fail to do so.

Finally

The lawsuit alleges that the state defendants routinely improperly use public funds from the State’s Reclamation Fund to plug the wells of operators who could still be held accountable for cleanup and that they fail to take action to recover and recoup plugging costs to deposit into the Reclamation Fund. By doing so, the state defendants unlawfully use public funds to subsidize cleanup that should be carried out by, and at the expense of, the operators that profit off of the state’s natural resources, contrary to the intent of the statute.

Context

As the nation’s third largest gas producing state and second largest oil producing state—in the world’s largest oil producing nation—New Mexico currently has more than 70,000 oil, gas, and injection wells, concentrated primarily in the San Juan Basin in northwest New Mexico and the Permian Basin in southeast New Mexico. All of these wells and extraction sites will eventually need to be cleaned up.

Unplugged wells routinely emit toxic pollutants long after they stop producing oil and gas. The longer a well is left inactive and unplugged, the greater the opportunity for pollution, as wells that are already leaking will produce more pollution, and others will eventually leak as the infrastructure is left to deteriorate. These wells harm human health, pose unacceptable public safety risks, release methane into the atmosphere that contributes to climate alteration, and pollute the air, water, and land, harming the plaintiffs, their members, and New Mexico.

Proper plugging and remediation is essential to prevent waste and protect the environment and human health and safety. But it is well known that operators frequently delay and evade cleanup duties as long as possible. Without prompt enforcement, operators have ample time to put funds that should be earmarked for cleanup to alternative use and to offload depleted wells to smaller and smaller operators that are less equipped to carry out proper cleanup and at high risk of insolvency and bankruptcy—sometimes by design. The State itself has referred to this practice as “pass[ing] the buck.”

The longer wells sit inactive, the less likely it is that a well will be plugged and cleanup undertaken at the operator’s expense, becoming the responsibility of the State (or federal government), and ultimately the public. When wells are “orphaned,” it can be many more years or even decades before such wells are ultimately plugged by the State, and even longer until the site is fully remediated.

The State has already had to expend substantial public funds—including tens of millions of dollars in federal taxpayer funds—to plug wells. There is a backlog of nearly 1,000 such wells the State has already taken on responsibility to plug that will cost hundreds of millions more and take over a decade to address. A recent report by the New Mexico Legislative Finance Committee estimates that near-future liabilities could exceed $1.5 billion. With tens of thousands more marginal wells set to come due for cleanup soon, these costs could balloon further if the State does not take enforcement seriously.

Case documents

Complaint – March 9, 2026