New Mexico Fracking Ban Proposed
New Mexico Senate Bill 104
There may be a temporary ban on fracking for the state of New Mexico. Senator Antoinette Sedillo Lopez of Albuquerque pre-filed a proposal for the legislative session, called Senate Bill 104, that asks several state agencies to re-evaluate the effects that fracking has on the environment and to forbid new permits for drilling until 2024.
Although a similar bill was proposed last year, many are worried that if this is considered by Governor Michelle Lujan Grisham, it would negatively impact New Mexico’s growing economy and create significant job loss.
Read more about the controversial bill here.
Impacts on New Mexico Mineral Rights
What often does not get discussed are the effects that these bans have on mineral rights. “It looks like New Mexico is only a year or so behind Colorado. Value for mineral owners in Colorado has been drastically reduced in the past 12 months,” says Craig Kaiser, President of LandGate.
Craig is referring to Proposition 112: a ballot initiative to drastically increase drilling setbacks that would have severely hurt mineral owners and the industry as a whole. This initiative was easily defeated by Colorado voters, but subsequent legislation (SB 181) was forced into law by the Colorado government a few short months later. Now, anti-oil and gas groups are pushing to get Proposition 112 back on the ballot for 2020.
“I anticipate that mineral rights in New Mexico and Colorado will soon be very similar to California and New York. Each state has phenomenal resources, but no way for mineral owners to realize that value. The majority of value derived from mineral rights will essentially be taken away from private mineral owners.” -Craig Kaiser
Recommendations for New Mexico Mineral Owners
Yoann Hispa, CEO of LandGate says, “As a ~20 yrs experienced oil & gas professional, I would sincerely recommend New Mexico mineral owners sell for the following reasons:
- The acreage prices have reached a peak in the Permian 1-2 yrs ago and have started decreasing.
- Too many uncertainties around future oil & gas consumption affect commodity prices. This affects acreage price, drilling, and investments to improve production, thus lowering royalty payments for mineral owners also.
- There is now political risk. This proposal is something that people from New Mexico have foreseen for a while and also adversely affects mineral rights value.”
Craig added, “For many folks, especially those without current production, now is the time to consider selling minerals in that region as buy prices for the larger companies are starting to decrease.”
If you’d like more recommendations from our team of experienced experts, please contact us.
You may also visit our map to view New Mexico listings and drilling for free, and/or start research on your property.
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