A bill attempting to reform New Mexico’s Oil and Gas Act passed its first committee, the Senate Conservation Committee, on a 6-3 vote on Tuesday. The Oil and Gas Act became law in 1935 and many of those original provisions remain in place. SB 418 reconstitutes the Oil Conservation Commission and requires that the Oil Conservation Division protects the public health and environment and promotes the public interest, health, safety and general welfare. It also requires “fair treatment and meaningful involvement of the public, including environmental justice communities,” according to the fiscal impact report.
SB 418 also includes an environmental justice advisory council as well as single-well bonds for inactive or low-producing wells. These bonds would provide financial assurance that the wells will be remediated and bring those financial assurances more in line with actual costs.
Mario Atencio, an activist from the Greater Chaco region of New Mexico, said the methane waste rule adopted by the Oil Conservation Commission on Thursday will set energy production in New Mexico on a path trending toward fairness. Atencio’s community in the Counselor Chapter of Navajo Nation is among the poorest in the state and, he said, it has long borne the impacts of oil and gas emissions. He is hopeful that the methane waste rule will significantly decrease emissions impacting his community. The Oil Conservation Commission, which falls under the state Energy, Minerals and Natural Resources Department, unanimously approved the final language of the new rule for venting and flaring of natural gas during its meeting and the commissioners expressed pride in the final language.
The methane waste rule requires 98 percent of the methane from oil and gas operations to be captured by 2026, although it leaves the companies with the flexibility to use a variety of technology to meet those goals. Work on the methane waste rule began in 2019 following an executive order from Gov. Michelle Lujan Grisham.
The Oil Conservation Commission agreed Thursday to set a hearing date for a proposed rule that would make spilling produced water illegal. The decision was in response to a petition filed by WildEarth Guardians in September calling on the OCC to adopt rules to make spilling produced water illegal.
Under the current regulatory framework, oil and gas operators face little to no consequences for spilling the toxic fracking fluid in the state, as long as they report the spill to the Oil Conservation Division. Produced water spills are very common in New Mexico, particularly in the southeastern region of the state in the Permian Basin. In the vast majority of cases, no penalties are assessed against the operator. “Oil and Gas wastewater, aka produced water, is toxic.
The New Mexico Oil Conservation Commission delayed a decision to approve an energy company’s request to increase well density in two northern New Mexico counties. At its meeting on Thursday, the commission also rejected a community group’s request to intervene in the hearing. Hilcorp Energy Company’s Justin Furnace emailed a statement on Thursday evening. “The Commission made it clear today that the application has merit, but at the Commission’s request, Hilcorp will be re-notifying affected operators in the San Juan Basin to ensure that they are aware of the proposed change,” Furnace wrote. Hilcorp asked the state to amend the “pool rule,” or well density requirements, in 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.
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.