At its meeting on Thursday, September 13, the New Mexico Oil Conservation Committee will hear from an energy company that wants to double the density of gas wells in northwestern New Mexico. Hilcorp Energy Company is asking the state to amend well density requirements in what’s called the Blanco-Mesaverde Gas Pool in San Juan and Rio Arriba counties. Under the current rules, companies can drill four wells within the designated 320-acre spacing units, and only two can be drilled within each 160-acre section. Companies can also ask the state to increase the density of wells on a case-by-case basis, something Hilcorp notes in its application New Mexico has allowed it to do in 62 instances this year. Rather than continuing to file individual applications, each with its own public notice and hearing, the company is now asking New Mexico to change the spacing rules for the entire Blanco-Mesaverde pool.
Oil and gas companies reported fewer toxic spills in New Mexico last year than in 2015. According to the Center for Western Priorities’ 2016 Spill Tracker, companies reported 1,310 spills in 2016. Most of those occurred in Lea and Eddy counties, the site of most drilling activity in the state. The nonpartisan group’s Spill Tracker is based on publicly-available records from New Mexico’s Oil Conservation Division, which is within the state’s Energy, Minerals and Natural Resources Department. According to the Spill Tracker, five companies were responsible for nearly 40 percent of all spills of crude oil, natural gas and produced water.
Sen. Richard Martinez, D-Española, presented a bill to the Senate Conservation Committee Thursday that would restore a state agency’s ability to penalize oil and gas companies that pollute water. Senate Bill 307 would also increase those penalties, which haven’t been updated since the Legislature passed the Oil and Gas Act of 1935. During his presentation to the committee, Martinez pointed out the timeliness of the bill as the Trump administration has emphasized, he said, the “need to shift power to states.” If passed and signed into law, SB 307 would “ensure we meet the federal government’s standards for New Mexico to be in charge of its oil and gas programs,” he said. Under the Safe Drinking Water Act, the U.S. Environmental Protection Agency can authorize states to take over certain regulatory duties. Under that program, states must be able to assess penalties against companies that pollute water.
In recent years, spills of crude oil, natural gas and drilling wastewater have increased even more rapidly than production has grown. Yet the state of New Mexico doesn’t fine or sanction oil and gas companies that pollute water. A bill before the state legislature seeks to change that. If passed, the bill wouldn’t create new rules or regulations. Instead, it would allow the state’s Oil Conservation Division (OCD) to impose penalties on polluting companies.