State Land Office Files Lawsuit to Clean Up Massive Abandoned Oil and Gas Site in McKinley County

Stephanie Garcia Richard, Commissioner of Public Lands

State of New Mexico

FOR IMMEDIATE RELEASE

April 22, 2021

Contact: Angie Poss, Assistant Commissioner of Communications 505.470.2965 aposs@slo.state.nm.us

Defendants have failed to plug at least 29 wells and remediate over 500 acres of state trust land

SANTA FE, NM – Today in honor of Earth Day, the New Mexico State Land Office filed its 16th lawsuit in its ongoing Accountability and Enforcement Program. The Accountability and Enforcement Program, launched in November 2020, is a historic, agency-wide programmatic approach being undertaken to ensure oil and gas companies, and other lease holders, honor their contractual promise to operate and close out responsibly.

“At the core of our Accountability and Enforcement Program is a commitment to protecting the land for future generations. A lot of companies are proving willing to work with the State Land Office to clean up abandoned well sites. At the other end of the spectrum, we are taking decisive legal action against companies who walk away from their messes and responsibilities to the land,” Commissioner of Public Lands Stephanie Garcia Richard said of the Program.

The lawsuit filed today in the First Judicial District Court seeks damages against a former State Land Office oil and gas lessee, BC&D Operating, Inc., and a related company, Dominion Production Company, for their failure to clean up two massive abandoned leases on state land in McKinley County. The State Land Office is taking this action because the companies have not honored their obligations to the state land trust, which include:

  • Plugging at least 29 oil wells abandoned by the defendants
  • Full remediation and reclamation of over 500 acres of state trust land with 29 unplugged and 15 plugged well sites to include the full removal of infrastructure, trash, and debris, and the cleanup of any contamination associated with the site   
  • The payment of penalties for trespassing on state trust land since the leases expired in July 2018

Defendant BC&D Operating, Inc. acquired the leases in the early 1990’s, but the leases themselves date back to 1922 and 1932. The leases stipulate that they would expire when the wells on-site were no longer productive, which occurred by 2018. All of the 29 or more unplugged wells on the lease sites were operated by BC&D or by co-defendant Dominion Production Company.

“We’ve seen huge success so far, and it is fitting to file this major suit in honor of Earth Day,” Commissioner Garcia Richard added. “In just 6 months since launching the Program, we have attained the plugging of 18 abandoned wells, fully reclaimed 12 contaminated sites, and filed 16 lawsuits against companies who didn’t want to live up to their responsibilities. We are confident we will win the case filed today which will result in this massive abandoned oil and gas site being cleaned up, at last.”

Oil and gas leases on state trust land are set by state statute and require compliance with State Land Office rules including plugging wells, remediating spills and sites, including the clearing of infrastructure, trash, and debris, along with restoring the land to its original condition once a lease has expired (19.2.100.66 – 67 of the New Mexico Administrative Code).

Read the full complaint with exhibits: Commissioner Stephanie Garcia Richard v. BC&D/Dominion Production Company

View the Aerial Map

View Photo Library of partial infrastructure left on more than 500 acres of state trust land abandoned by BC&D Operating/Dominion Production Company


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