U.S. states are getting about $4 billion in payments from the federal government this year from energy development revenue on federal land.
The federal government collects these dollars from energy companies for rent, royalties and lease fees. Then it disperses some of that back to individual states. States later use the funds to pay for day-to-day spending and savings.
New Mexico continues to receive the largest payments, accounting for nearly 70% of state disbursements. It received almost $3 billion in the 2025 fiscal year.
That’s because the state partially sits on top of the oil-rich Permian Basin, according to Kristin Smith, a researcher at the Montana-based nonprofit, Headwater Economics.
“If you took out New Mexico, there'd be a different story in these numbers,” Smith said.
For Wyoming, the next largest recipient of revenue payments, Smith said the story is all about declining coal revenues. The state received $544.87 million this fiscal year. That’s nearly $50,000 less than 2024 and almost $300,000 less than 2023, according to federal data.
Utah also saw drops, though it did gain more revenue from geothermal energy production ($5 million). Montana and Colorado saw upticks, largely due to oil and gas development.
Overall, the state revenue total was down slightly from previous years, which the Trump administration blamed on a drop in commodity prices. A U.S. Department of Interior press release said the administration’s efforts to unleash American energy helped unlock those dollars.
However, Smith said the market often plays a bigger role in revenue totals than federal policy.
“When you think about where are the places that are benefiting the most or the least, or who's experiencing changes, that is often dictated by market and commodity prices,” Smith said.
She added that this revenue source is volatile, and states should rely on it less for day-to-day spending and invest more in long-term savings.
“ There’s always a risk of economic dependance,” Smith said. “You don't wanna be dependent on revenue that just goes poof and isn't there next year.”
Louisiana, North Dakota, Texas, Mississippi, Alabama, California and Alaska also received millions in energy revenue payments.
The federal government also disburses the money to tribal nations, the Reclamation Fund, the Land and Water Conservation Fund, the Historic Preservation Fund and other federal agencies.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Nevada Public Radio, Boise State Public Radio in Idaho, KUNR in Nevada, KUNC in Northern Colorado, KANW in New Mexico, Colorado Public Radio, KJZZ in Arizona and NPR, with additional support from affiliate newsrooms across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting and Eric and Wendy Schmidt.
