DALLAS — A new provision on how royalties are split between state and federal government from oil and gas production on federal lands will cost New Mexico $100 million over the next decade, according to the Capitol Report New Mexico, a nonprofit watchdog organization.
The change is part of the federal budget passed by the Senate Dec. 18 and sent to President Obama.
Nationwide, the royalty shift will cost states $450 million over the next decade, according to the Report.
New Mexico, Wyoming and other states that contain vast stretches of federal land where energy companies extract oil and gas currently split royalties with the federal government at a 50-50 ratio. Under the new budget deal, the split will shift to 51-49 in favor of the federal government.
The change will lower New Mexico's income by about $10 million a year over the next 10 years, according to the Report.
"These cuts are not pocket change to the West," U.S. Rep. Steve Pearce, R-New Mexico said in an email to the Capitol Report. "New Mexico schools and infrastructure projects depend on these payments, and losing out on nearly $100 million that is rightfully ours will only harm our communities."
The U.S. government paid $2.1 billion last year to 35 states that produced oil and natural gas on federal lands, according to the Associated Press. The largest payments went to five states in the west: Wyoming, New Mexico, Utah, Colorado and California.
