New Mexico publishes new rule for geothermal leasing in state trust lands
Valles Caldera, Santa Fe National Park, New Mexico (source: flickr/ Larry Lamsa, creative commons)
Carlo Cariaga
29 Apr 2026
New Mexico has published new rules that standardize and modernize the State Land's Office process for issuing and managing geothermal leases.
The New Mexico State Land Office (NMSLO) has published a new rule on the leasing of state trust lands for geothermal resource development. This provides a structured framework for geothermal leasing as New Mexico aims to build upon its substantial geothermal potential, as indicated by recent reports and early-stage projects.
State Land Commissioner Stephanie Garcia Richard says that the new rulemaking positions New Mexico to become a leader in geothermal energy in the United States. She further adds that the state has a trifecta of political will, geothermal resources, and a workforce of oil and gas employees, and that New Mexico has enough geothermal potential for the needs of the state.
Among the measures introduced in the rulemaking is the granting of authority to the commissioner to determine the royalty rate on revenues collected by geothermal operators, as well as which information is made public when a lessee is awarded a geothermal lease on state land. The rule making introduces a two-stage leasing structure consisting of a due diligence lease (up to 5 years) and a long-term production lease. Production leases will be awarded through a competitive bidding process.
The rulemaking also sets a 51,200-acre limit on the geothermal acreage that any single person or entity may hold under a lease.
Just around a year ago, a report published by Project InnerSpace indicated that New Mexico has 163 GW of geothermal potential and made a number of policy recommendations that would facilitate development of this potential. The new rulemaking addresses only a very small part of these recommendations, but otherwise still represents progress toward creating a structured geothermal leasing system.
New Mexico currently has one operational geothermal power facility – the Lighting Dock project which was acquired by Zanskar and repowered to its full capacity by drilling a new production well. XGS Energy is also planning a 150-MW geothermal power facility in New Mexico in partnership with Meta. Later this year, a geothermal lease sale for 68 parcels in New Mexico will be conducted by the Bureau of Land Management.
Source: New Mexico State Land Office and Albuquerque Journal
