BLM says New Mexico lease sales have generated more than $4.4 billion this year, while a new federal law lowers the minimum royalty rate on new production

Damien Willis, Organ Mountain News

SANTA FE - Federal oil-and-gas leasing tied to New Mexico has generated more than $4.4 billion so far this year, as a new federal law lowers the minimum royalty rate on new production and makes development on public lands cheaper for industry.

The Bureau of Land Management said its latest quarterly lease sale covering parcels in New Mexico, Oklahoma and Texas generated about $139 million in total receipts from 25 parcels totaling 20,334 acres.

That sale follows a much larger May auction that generated more than $4 billion in New Mexico and Texas.

Taken together, BLM says lease sales administered through its New Mexico office have produced more than $4.4 billion in 2026 — about 90% of the roughly $4.9 billion in federal oil-and-gas leasing revenue generated nationwide this year.

The surge comes as the federal government shifts leasing policy in a more industry-friendly direction.

The Working Families Tax Cut Act, also known as the One Big Beautiful Bill Act, lowered the minimum royalty rate for new federal onshore oil-and-gas production from 16.67% to 12.5%.

BLM said the lower rate reduces the cost of doing business on public lands and is expected to encourage additional leasing and drilling.

The agency framed the change as part of a broader push to expand domestic energy production and strengthen U.S. energy security.

Lease bonus bids and rental payments are divided between the federal government and the states where the parcels are located.

Leasing does not itself authorize drilling. It is the first step toward development, with projects still subject to environmental review, permitting and other requirements before production can begin.

Oil-and-gas leases are generally awarded for 10 years and can remain in effect beyond that period as long as oil or gas is produced in paying quantities.

BLM says additional lease sales are expected as the federal government continues implementing policies aimed at increasing energy development on public lands.

Damien Willis is founder and editor of Organ Mountain News. If you have a personal story to share or a lead we should follow up on, reach out at OrganMountainNews@gmail.com or connect with him on X at @damienwillis.