New Mexico looking for tougher laws controlling oil and gas production

Sep 28, 2005 02:00 AM

by Walter Rubel

Gov. Bill Richardson called for tougher laws governing oil and gas production in New Mexico, saying that higher gas prices would lead to increased production, and the state must do more to protect both its ground water and the rights of landowners.
Richardson named Bill Olsen, chief of the Environmental Department’s Ground Water Quality Bureau, to serve on the Oil Conservation Commission. And, he expressed his support for rule changes under consideration by that commission, as well as a landowner protection bill that was introduced by Rep. Andy Nunez, D-Hatch, in the last session, but not passed.

“When production increases to meet demand, we must remain vigilant in protecting our precious water resources,” Richardson said.
“I don’t accept the view that protective measures will make high energy prices even higher,” Richardson added, saying that the high prices are the result of the industry’s resistance to alternative fuels.

The announcement comes less than one week after Richardson called on the oil and gas industry to contribute $ 50 mm to his effort to provide relief for New Mexicans in the form of tax rebates and heating assistance. He said that the industry has so far rebuffed his proposal, but added that the announced crackdown was not connected to that decision.
“We’ve had this on the table for at least a month,” said Joanna Prukop, secretary for Energy Minerals and Natural Resources.

Bob Gallagher, president of the New Mexico Oil and Gas Association, said the industry supports efforts to protect ground water, and would cooperate with state officials to that end. Gallagher added that he does not understand the need for rule changes.
“We need to better understand what has precipitated the need for new regulations,” he said. “We’re unaware of any events or series of events that have occurred that would lead someone to believe there is a need for new regulations.”

The Oil Conservation Division submitted an application earlier this month for rule changes. A formal hearing on those proposed changes is scheduled in Santa Fe. The proposed change would create the concept of “good standing” for oil and gas producers. Those producers not in good standing would be unable to do things such as register and transfer wells, get drilling permits, transportation authorization and authority to inject produced water into the ground.
“These moves will hit some members of the industry -- the bad actors -- where it counts, in their wallet,” Prukop said.

Richardson also called for new regulations governing storage pits and waste disposal. Prukop said the Oil Conservation Division is in the process of drafting new rules, and hopes to have them ready for review by the end of the year.
“We have some areas of the state where pits do not need to be lined, because of distance to ground water,” Prukop said. “We’re doing away with that. There won’t be any circumstance in our state, in terms of what we’re proposing, where you would have an unlined pit.” She said the new regulation would also strengthen the kinds of liners used and the way those pits are remediated once the drilling has ended.

Environment Secretary Ron Curry said that under current state laws there is a “water quality gap,” with different regulations for different industries.
Former State Land Commissioner Bill Humphries said 10 other states have passed bills giving land owners protection, and that New Mexico should be the 11th. Richardson said he would throw the support of his office behind the bill next year to help ensure its passage.
Gallagher said the bill introduced by Nunez was “legally flawed” and that the oil and gas producers welcomed the opportunity to help work on a new bill.

Richardson also said he would support an increase in the size of the staff responsible for inspections and enforcement. Right now, New Mexico has just one inspector per 4,333 wells, according to information provided by the Oil Conservation Division. Louisiana, by contrast, has one inspector for each 1,043 wells.
Prukop said they have requested six additional inspectors, an attorney and a hearing officer, at a cost of $ 500,000. The state has already stepped up its enforcement efforts, Prukop said. Earlier, the Oil Conservation Division announced more than $ 1 mm in fines to oil producers -- the largest penalties ever handed down in New Mexico.
“We do want people top know that this kind of action will be happening more in the future,” Prukop said.

That concerns Sen. Caroll Leavell, R-Jal, who has opposed previous efforts to toughen regulations on the industry. Leavell said the vast majority of those efforts took place decades ago. Adding new regulations now could hurt both the industry and the state, he said.
Major producers are leaving the state, rather than fighting the bureaucratic and regulatory hurdles erected in New Mexico, Leavell said.

Walter Rubel can be reached at wrubel@lcsun-news.com.

Source: Alamogordo News
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