New Mexico Sues Texas Executives for Alleged Scheme to Offload Cleanup Costs

New Mexico Sues Texas Executives for Alleged Scheme to Offload Cleanup Costs

2026-01-22 politics

Santa Fe, Thursday, 22 January 2026.
New Mexico alleges three Texas executives orchestrated a fraudulent scheme to siphon profits and dump millions in cleanup costs for leaking wells onto taxpayers, bypassing corporate bankruptcy protections.

New Mexico Sues Texas Executives for Alleged Scheme to Offload Cleanup Costs

New Mexico Attorney General Raúl Torrez has filed a significant lawsuit against three Texas-based oil executives, accusing them of executing a “fraudulent scheme” to extract profits from oil and gas operations while deliberately offloading environmental liabilities onto the public [1][2]. The complaint, filed in late December 2025, targets Everett Willard Gray II, Robert Stitzel, and Marquis Reed Gilmore Jr., alleging they utilized a complex network of shell companies and bankruptcy proceedings to sever profitable assets from aging, leaking wells [1][2]. This legal action comes as the state grapples with a potential $1.6 billion financial burden to plug orphaned wells left behind by insolvent operators [1].

The Mechanics of Corporate Shell Games

The 72-page complaint details a pattern of corporate restructuring dating back to 2015, when the defendants formed the Remnant companies [1]. According to the lawsuit, the executives transferred wells between various limited liability companies, effectively moving valuable assets out of reach while shedding environmental obligations through bankruptcy [1]. Specifically, in July 2019, Remnant filed for bankruptcy just 15 days before a state deadline to plug inactive wells, a move that allowed the company to avoid immediate remediation costs [1]. Following this, assets were allegedly transferred to new entities, including Acacia and Solis Partners, with one of Gray’s companies acquiring 87 gas-producing wells for a mere $10 [1].

Regulatory Gaps and Financial Fallout

The lawsuit argues that the defendants exploited regulatory blind spots to shift costs to taxpayers. Ari Biernoff, general counsel for the State Land Office, noted that the situation serves as a “vivid demonstration” of the need to upgrade bonding rules, as current financial assurances are “grossly inadequate” [1]. In response to this growing crisis, the New Mexico Oil Conservation Commission began updating bonding rules in October 2025, proposing a substantial increase to a $150,000 bond for each inactive or low-producing well [1]. However, industry groups such as the New Mexico Oil & Gas Association have resisted these increases, and settlement talks regarding the rulemaking are currently ongoing [1].

Legislative Push for Environmental Rights

Parallel to the judicial crackdown, New Mexico lawmakers are making a renewed legislative effort to strengthen environmental protections. On Tuesday, January 20, 2026, legislators introduced the “Green Amendment” for the sixth time, proposing to enshrine the right to a clean environment in the state constitution’s Bill of Rights [4][7]. The resolution, known as House Joint Resolution 3, would mandate that the state and local governments protect natural resources equitably for all people, including future generations [7]. If passed, New Mexico would join Pennsylvania, Montana, and New York as states with similar constitutional protections [4][7].

Sources


Orphan wells Environmental liability