Back in 2020, as oil and gas prices tanked because of the COVID crisis, New Mexico implemented an emergency program that would allow oil and gas producers to temporarily stop production and shut down wells for up to three years without penalty. The state’s Oil Conservation Division (OCD) created the program so that companies could bank petroleum reserves until prices rebounded — a move that would preserve profits for the companies and safeguard future tax revenue from the state’s largest single stream. Understandably, the program proved popular and, at its peak, 34 companies idled 6,505 wells — roughly 12% of the state’s total number of active facilities. As energy prices rebounded and then soared into record territory in the last year, most of those idled wells returned to producing fuel and tax revenue. But not all.
As the Energy, Minerals and Natural Resources Department’s Oil Conservation Division reviewed gas capture data submitted by operators, the regulators noticed several companies reporting more than 100 percent gas capture, which OCD Director Adrienne Sandoval said is impossible. Phase one of the natural gas waste rule, which required data collection to gauge how much gas the operators are currently capturing, has now wrapped up and the second phase is beginning. In phase two, operators will be required to attain increasing rates of gas capture on an annual basis.
Sandoval said the OCD sent letters to 10 companies requiring them to undergo a third-party audit and warned 74 companies to check their data after reporting more than 100 percent gas capture on either their first or second quarterly report. “That gas capture percentage is important because that is the starting point for operators as they move forward and try to meet the compliance requirements of this rule,” she said. All operators must achieve 98 percent gas capture by 2026, but some operators have farther to go to reach that target.
As he stood looking at an orphaned well in Kirtland, U.S. Secretary of Labor Martin Walsh asked, “is this ground dirty here?”
Activist Don Schreiber said yes and Adrienne Sandoval, the Oil Conservation Division Director for the state’s Energy, Minerals and Natural Resources Department, confirmed that there was surface contamination in places at the site. Sandoval said the contaminated soil will have to be removed from the site and clean soil will be brought in to replace it. Walsh visited the orphaned well with U.S. Rep. Teresa Leger Fernández, a New Mexico Democrat who has been pushing for increased funding to assist states with cleaning up orphaned wells. They, and Aztec Mayor Victor Snover, met with Schreiber and Sandoval at the private property where the well is located. Related: Federal lawmakers seek funds to plug orphaned oil and gas wells
The site is one of the hundreds of oil and gas wells in New Mexico that has no operator or responsible party to clean it up.
CARLSBAD — In the Permian Basin, now the most prolific oil field in the world, hundreds of miles of plastic pipelines snake along dirt roads, drilling pads and the edges of farm fields. But they are not carrying oil. Instead, they’re transporting an equally precious commodity in this arid region straddling the New Mexico-Texas border: water.
“Pipelines are going in everywhere,” said Jim Davis as he drove a camouflage-hued, four-wheeled ATV across his land toward the water station he owns. Selling the water beneath his property to oil and gas companies has given Davis and his wife, who has cancer, a financial security that eluded them for most of their lives. Every day, a steady stream of water trucks flows in and out of his station south of Carlsbad, filling up on his high-quality freshwater — an essential ingredient for hydraulic fracturing, or fracking for short.
Davis, whose property has been in his family since 1953, says he’s never seen so much water moving around the basin.