Wednesday, July 30, 2008

Rio Arriba lawyer reacts to withdrawn lawsuit

KSFR Local

Rio Arriba lawyer reacts to withdrawn lawsuit

SANTA FE (2008-07-30) -- The company that had sued Rio Arriba County for its moratorium on oil drilling has now withdrawn that lawsuit. Bill Dupuy asked lawyer Adan Trujillo his reaction. He represents the county from Espanola.


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Oil Firm Drops Drilling Lawsuit

The Albuquerque Journal North :

By Raam Wong And Kiera Hay
Journal Staff Writer

'"A Texas-based oil company has dropped its lawsuit challenging Rio Arriba County's moratorium on new drilling.

The action is a partial victory for several northern New Mexico counties seeking to regulate the oil and gas industry as exploration increasingly moves into sensitive areas, such as the lush mountains of northeastern Rio Arriba and the Galisteo Basin southeast of Santa Fe.

"Our county has felt that there were voids in (state Oil Conservation Division) regulations that weren't being addressed and certainly counties have the right to regulate and to make sure we protect our residents," said Alfredo Montoya, chairman of the Rio Arriba County Commission.

The commission adopted the four-month drilling ban in April in response to Approach Resource's plan to drill in the scenic, water-rich foothills and mountains east of Tierra Amarilla. The moratorium was designed to buy the county time to update its drilling regulations to protect the region, which drains into Tierra Amarilla Creek, a Rio Chama tributary.

Rio Arriba is preparing to extend the moratorium by as much as six months, Montoya said.

Meanwhile, Santa Fe County has taken similar action in enacting its own drilling ban, one that the New Mexico Oil and Gas Association says it plans to challenge in court." More>>>>

Tuesday, July 29, 2008

Drilling company drops suit against Rio Arriba County

Phaedra HaywoodThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it | The New Mexican

"Rio Arriba County is no longer being sued over its four-month moratorium on oil and gas drilling.

Approach Resources Inc. — the parent company of Approach Operating LLC — said in a statement Tuesday that it was withdrawing its lawsuit against the northwestern county.

The company — which owns the mineral-rights leases on 90,000 acres in Rio Arriba County — filed the suit that said the state, not individual counties, regulate the oil and gas industry." More>>>>

Oil developer drops lawsuit against Rio Arriba County

KSFR Local

Oil developer drops lawsuit against Rio Arriba County

SANTA FE (2008-07-29) -- The oil company that is hoping to drill in a watershed area of Rio Arriba County has dropped its lawsuit against the county.

Approach Resources filed the suit in June in response to the county's four-month moratorium on drilling.

They said at the time that a county does not have the right to issue a moratorium because regulation of wells is a state responsibility.

Since that time, the state Oil Conservation Division has revoked a permit it had previously given to the company because the site of the well was too close to surface water.

The agency is also making another review of a number of other permit applications filed by the company. And they are drafting special rules to govern drilling in Rio Arriba County, especially in the Rio Chama Watershed.

Neither the company nor county officials were immediately available for comment. © Copyright 2008, KSFR


Approach to drop the suit against Rio Arriba County without prejudice.

New county gas rules require disclosure

The Durango Herald:

Commissioners propose drillers make known chemicals used

July 29, 2008
| Herald Staff Writer

Revised gas and oil regulations recently released by La Plata County include a proposed provision that would require companies to disclose the chemicals they use to emergency-room workers treating a case of exposure.

To comment or learn more

To view La Plata County’s proposed gas and oil regulations, visit and click the link “Chapter 90 Oil and Gas Code Revisions” or call 382-6260.

The rules go before the county’s Planning Commission at 6 p.m. Aug. 7 in the Anasazi Room at La Plata County Courthouse.

Public comments about the rules are being accepted through Friday by e-mail, , or mail, La Plata County Community Development Department, Attn: Oil & Gas Code Amendment, 1060 East Second Ave., Durango, CO 81301.

Questions have been raised recently about a hydraulic fracturing chemical used to bring gas to the surface after a nurse at Mercy Regional Medical Center required intensive care after being exposed to it while treating a patient.

Doctors treating nurse Cathy Behr were unable to obtain specific information about the chemical because the company using it said it was proprietary.

The provision is one of several alternatives related to chemicals being considered by the county. Another alternative would give the companies three days to disclose the information.

The revised regulations, which will go before the county's Planning Commission Aug. 7, have been in the works for two years and represent the first major overhaul the county has done on its gas and oil rules since they were enacted 20 years ago.

The changes include a new definition for a major facility, which requires a higher level of review, and contemplate giving neighboring landowners the right to appeal new wells. Now only surface owners can.

The revisions come just as the state is revamping its rules, which also could require companies to disclose the chemicals they use.

The state is expected to take final action on its rules later this month, as could the county. The similar timelines have raised concerns among industry officials who fear the two sets of rules may overlap or conflict.

County Manager Shawn Nau said the county's proposed rules address this by either mirroring the state's proposed regulations or by having the county's rules apply only where the state's don't.

"We've basically tried to use some creative drafting to solve the problem," he said.

La Plata County Planning Commission is expected to choose from among the various alternative provisions in making its recommendations to county commissioners, who will have the final say on the rules.

Public comments are being accepted until Friday.

Click here to send an email to the author

All tapped out

The New Mexico Independent:

By Joel Gay 07/29/2008
ALBUQUERQUE -- "There's been a lot of talk recently about increasing U.S. domestic oil production, and one might think New Mexico — the sixth-highest oil-producing state in the nation — would be a candidate for helping fill the order. But for reasons ranging from a dearth of drill rigs to a lack of promising land, don't expect a flood of black gold out of the Land of Enchantment.

"Even if you had the land, the projects, the rigs and the manpower, I don't see any significant increase in production," said Bob Gallagher, president of the New Mexico Oil and Gas Association..

That's at least in part due to increasing opposition to oil and gas development, and not just by environmental groups. Ranchers, rural residents and now sportsmen are saying they don't accept the idea of energy development at any cost.

President Bush in June called for the country to start producing more oil, saying it was necessary to help bring down the price of crude oil imported from elsewhere in the world. His plan focused on tapping the vast oil shale reserves of the Rocky Mountains, resuming offshore drilling, opening the Arctic National Wildlife Refuge in Alaska and increasing refinery capacity.

Skeptics (environmental groups, energy wonks and The Wall Street Journal) say such measures would do little, if anything, to reduce the worldwide price of oil. And they argue that rather than making more territory available to the oil industry, the nation should require companies to use the millions of acres already under lease.

New Mexico seems like a logical place to look for additional oil. It's been a player in the oil industry since the early 1920s, when the first major wells hit pay dirt in the Four Corners region. Within a decade the state was among the top 10 domestic oil producers, and it still is. It's sixth in oil production, and fourth in the nation in oil reserves. In 2006, according to the state Energy, Minerals and Natural Resources Department, oil wells in southeastern and northwestern New Mexico pumped 60 million barrels.

(To put that in perspective, the United States' total domestic production that year was 1,860 million barrels, including 270 million barrels from Alaska.)" More of the article and oil shale facts and references >>>>

Saturday, July 26, 2008

Well Water Flowing Deep

Albuquerque Journal North

By Juan-Carlos Rodriguez
Journal Staff Writer

"It's a water free-for-all.

That's what the state engineer says of an increasing number of deep wells that are being explored by various public and private entities.

Atrisco Oil and Gas LLC, a company formed to manage the mineral rights of Atrisco Land Grant heirs and other shareholders, this week reported it has discovered a deep reservoir of brackish water under the West Mesa, more than 6,000 feet down in an area between the volcanos and the Rio Puerco north of I-40. This week, the company filed a notice of intent with the Office of the State Engineer to appropriate 12,000 acre-feet a year from 35 potential wells on a 50-square-mile parcel where it believes the water is contained. It filed the claim after hitting the water in a well that was being used to explore for natural gas.

And about a week earlier, Commonwealth Utilities Corp., a Moriarty-based utilities company, filed a notice of intent to appropriate 110,000 acre-feet a year from a well it has yet to sink at a location on the Southwest Mesa. The notice also states the well would be connected to a desalination plant at some point in the future.

A similar brackish water supply was found in Sandoval County about a year ago when the county, in partnership with a private company, drilled two exploratory wells. The county is just now starting tests to determine the quantity and quality of the water it found about eight miles west of Rio Rancho in the Rio Puerco Basin. Those tests should be completed in November. The county has said it will consider a desalination plant if there is enough water to supply municipal areas, such as Rio Rancho, Bernalillo and Corrales.

El Paso is the nearest city with an operational desalination plant. It processes both groundwater and water from the Rio Grande. The plant opened in 2007 and cost about $87 million.

Tests needed.

At a news conference Friday, Atrisco CEO Peter Sanchez said preliminary tests show that the water from the reservoir his company is tapping is only mildly salinated and potentially could be turned into drinking water.

"We think we can treat the water using standard desalination techniques and convert it into potable-quality water," Sanchez said." More>>>>

Friday, July 25, 2008

Atrisco strikes brackish gold

"A company drilling for natural gas on Albuquerque's West Side has struck another valuable commodity — water.

Atrisco Oil & Gas drilled into an aquifer believed to be 50 square miles in size and at least 1,000 feet deep, said Atrisco CEO Peter Sanchez. There's sand throughout the aquifer, so it's unclear how much water it contains, but it's a huge find nevertheless, he said.

"It's a very good bit of news" for the Albuquerque area, which by many accounts has already exceeded the available water for its current population, Sanchez said. The discovery of a large aquifer could make it easier to accommodate the anticipated growth of another 100,000 homes on the West Side in the next 20 years, he said.

The drilling occurred on land north of Interstate 40, between the Rio Puerco and the extinct volcanoes on Albuquerque's western rim, Sanchez said. The area has been explored in the past, and a great deal of geological information has been amassed, he said. When Tecton Energy LLC drilled a 7,900-foot-deep well last year on land it leases in the area, it expected to hit a pocket of natural gas, Sanchez said. "It turned out to be a large reservoir of water."' More>>>>

Agreement, Dated September 17, 2006 Between Westland and Tecton

New aquifer discovered on West Mesa

Posted at: 07/25/2008 12:48:05 PM
By: Eyewitness News 4
Print Story Email to a Friend

New aquifer discovered on West Mesa

A new potential source of water for the Albuquerque metro has been discovered under the West Mesa.

The deep-water aquifer was discovered on land owned by Atrisco Oil and Gas just north of Interstate 40 between two volcanoes.

An Atrisco spokesman says the water is trapped in a triangular fault block and could be as deep as 7,000 feet below the surface.

Atrisco officials say the company will need to do more testing on the water before they’ll know if it is safe for human consumption.

“We believe through our samples that we have the capability through a treatment process to commercialize this water and make it available to the Albuquerque community,” said Peter Sanchez of Atrisco Oil and Gas.

The testing is expected to take at least two years and cost more than a million dollars to complete.

This is the first deep-water project in the Albuquerque area. There are two more in the state: one near Ruidoso, the other in Sandoval County

Oil leaders turn to courts on drilling

Business News - Local News Click here to find out more!

New Mexico Business Weekly - by Kevin Robinson-Avila NMBW Staff

An oil derrick turns on U.S. Hwy. 550 near Farmington.
View Larger

The battle over where oil and gas companies can drill is heading to the courts.

The New Mexico Oil and Gas Association is preparing litigation to challenge Santa Fe County's authority to impose a moratorium on oil operations as part of an industry effort to clearly define the boundaries between state government authority and county jurisdiction, said association President Bob Gallagher.

Separately, Texas-based Approach Resources Inc. is already challenging, through the U.S. District Court in Santa Fe, a moratorium imposed by the Rio Arriba County Commission to block Approach's drilling plans near Tierra Amarilla.

"The litigation we're preparing regarding Santa Fe County will focus specifically on that county, but with the proper judgment, it will impact other counties like Rio Arriba by setting a legal precedent," Gallagher said. "We believe strongly that state law gives the authority to regulate the oil and gas industry solely to the state Oil Conservation Division and the Oil Conservation Commission. Moratoriums by counties should be pre-empted, because if every county were allowed to adopt their own separate rules and regulations, it would be mass confusion."

A favorable ruling by the courts in the association's litigation in Santa Fe or Approach's legal challenge in Rio Arriba will not automatically allow drilling activities in either place to go forward because of executive intervention in both counties.

Gov. Bill Richardson imposed a six-month moratorium last January on drilling in the Galisteo Basin southeast of Santa Fe. On July 18, he extended that moratorium to Jan. 24, 2009, to allow more time for state agencies to examine the potential local impact of oil operations.

In Rio Arriba, Richardson has not imposed a moratorium, but on July 21 he ordered the Oil Conservation Division to propose new rules for oil and gas activities in the county's eastern zones to protect water resources, human health and the environment where Approach is active, said division spokeswoman Jodi Porter.

"The governor has directed us to draft new rules in the regions around the Chama Watershed because it's more or less a wildcat area without a history of oil operations," Porter said.

Also, on July 18, the division canceled one of four drilling permits previously granted to Approach because further review showed the proposed well would be located in a wetland about 40 feet from surface water sources. The division suspended the other three permits as well and forwarded them on to the Oil Conservation Commission for review.

Curtis Henderson, executive vice president and general counsel for Approach, declined to comment on whether the state's actions will affect the company's litigation against Rio Arriba County, which in April imposed its own four-month moratorium on drilling to draw up a new local ordinance on oil and gas activities.

But Gallagher said the issue of county authority must be resolved despite executive action, especially in Santa Fe, where the county unilaterally declared a year-long moratorium on drilling in the Galisteo Basin independently from state government.

"The thought that a locally elected body can just take your livelihood away is scary, especially when there are tens of millions of dollars in expenses involved in projects," Gallagher said. "The law is very specific that cities and counties can take action to protect their water and waterways, but state statutes don't give them authority to impose moratoriums or regulate oil and gas activities."

Gallagher said a final draft of the Santa Fe litigation is now being prepared, although it's not clear which court the association will approach.

Apart from contesting the county's right to adopt a moratorium, the case will be joined by a local property owner with significant mineral rights to stop the county from "taking" his property rights away. Gallagher declined to name the owner, but said his inclusion greatly strengthens the case.

"I'm not sure any judge would ever rule that someone can take a property right away from someone," Gallagher said.

But county officials insist they have the right to impose rules and regulations to protect local communities from things like noise and air pollution.

"Local governments have authority over many issues that state statutes don't deal with, such as traffic, water contamination or industrial activities in residential areas," said Steve Kopelman, general counsel for the New Mexico Association of Counties. "Local government does have a role to play, and it's a very important one."

The Association of Counties filed an amicus brief in the Approach litigation to show that Rio Arriba and other counties do have authority over many local issues that affect oil and gas operations. The brief said the issue is of "critical importance" to every city and county in the state.

Santa Fe County spokesman Stephen Ulibarri said the amicus brief reflects his county's position in any litigation that might challenge Santa Fe's local authority. He said the county declared its moratorium in the Galisteo Basin to draw up a gross-management plan for the Basin that reflects broad input from local communities and industry experts on the best development plan for that area.

"We're looking at the big picture, not just an ordinance for the oil and gas industry," Ulibarri said.

Oil Conservation Division Director Mark Fesmire said a court ruling on the issue will help clarify state and local authority.

"I think there are some areas where the county can legitimately police oil activities, but where those boundaries lay will be settled when the case comes to court," Fesmire said. "Clearly, I have a different take than the Oil and Gas Association, but the right take is what the court comes up with." | 348-8302

All contents of this site © American City Business Journals Inc. All rights reserved.

Independent producers appeal oil, gas pit rules

New Mexico Business Weekly - July 28, 2008

Click here to find out more!
Business News - Local News Click here to find out more!

New Mexico Business Weekly - by Kevin Robinson-Avila NMBW Staff

Unity in New Mexico's oil and gas industry has fractured somewhat over new state rules on oil and gas pits.

The Independent Petroleum Association is appealing the rules in Santa Fe District Court. That action is supported by an industry committee of 16 large producers -- including ConocoPhillips and Occidental Petroleum Corp. -- which filed a separate but complementary appeal.

Nevertheless, the New Mexico Oil and Gas Association -- which in May praised the new regulations as an acceptable compromise between industry and government -- firmly opposes the litigation, said President Bob Gallagher.

"I was surprised and disappointed by the appeal," Gallagher said. "Maybe we can't term our compromise with the government 'good,' but I believe it was reasonable and something we could work with."

The state Oil Conservation Commission approved the pit rules in June, following more than a year of stakeholder discussion and public hearings organized by the Oil Conservation Division.

The rules obligate operators to use heavy-duty liners in all pits to protect against seepage of contaminated materials. It also prohibits pits that are too close to water wells, and it requires operators to haul much of the contaminated water, soil and other materials to permanent disposal sites.

Still, industry negotiated a number of key compromises, such as significantly raising toxicity standards to allow more waste to be buried on-site in deep trenches rather than being hauled away, Gallagher said.

"My recommendation to our members was to allow the rule to shake out in the field for a few months and then collectively address any concerns with the Oil Conservation Division," Gallagher said. "I believe the litigation serves to alienate the regulatory authorities and may damage the good work accomplished over a 10-month period."

Karin Foster, director of government affairs for the Independent Petroleum Association, said her group disagrees.

"Bob believes we can still resolve this problem through negotiations, but we believe it's time to appeal it in the courts," Foster said. "We represent a lot of the same companies in our membership, but our organizations have a difference of opinion on this issue."

Independent Petroleum Association President John Byrom said that the cost of complying with the rules is just too much for small independent operators.

"It will cost an additional $50,000 to $250,000 to comply for each new well drilled, and that doesn't include costs to retrofit existing wells," Byrom said. "We're not looking for a battle, but our view on this is different from the Oil and Gas Association. Small independent operators will have a very tough time complying."

In its appeal, the association argues that no economic impact study was done as required by the state Small Business Regulators Relief Act and no transitional provisions were included to ease the conversion from old to new standards.

But state officials dispute the association's cost estimates. During pit rule hearings, independent operators testified that the costs for compliance would range from $35,000 in shallow wells to $150,000 in deep wells, said Oil Conservation Division spokeswoman Jodi Porter.

"Their numbers are off," Porter said. "Our estimates come right from the transcripts of testimony by operators at the hearings."

Porter said it would be far more costly for operators to clean up contaminated sites.

Division Director Mark Fesmire said he believes the appeal will fail. | 348-8302

All contents of this site © American City Business Journals Inc. All rights reserved.

Some great pit pictures at Bluedaze, click here.

Thursday, July 24, 2008

New Mexico gas moratorium

A unique region gets special treatment

By FRITZ MAYER This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

"GALISTEO BASIN, NM — The Galisteo Basin has some things in common with the Upper Delaware Valley. It is a pristine area that attracts a lot of tourists. Being home to the Pueblo Indians, it has abundant historical significance. It has spectacular mountain views. As a sub-basin of the Rio Grande River, it is an important source of water for just about all of the 160,000 people living in Santa Fe County, the home of the state capital.

When a company called Tecton Energy purchased mineral rights of 65,000 acres in the basin last year and applied for gas drilling permits, the community took steps to protect their community.

An organization, called Drilling Santa Fe , was formed in June 2007 with the purpose of slowing or halting the drilling. One of the people who founded Drilling Santa Fe is Johnny Micou. He wrote in an email, “A critical factor that we, first, got the county commission and, then, the governor to recognize, is the need for comprehensive baseline studies of hydrology/hydrogeology, archaeology, air, etc. The reasons for the studies are generally two fold. Firstly, if drilling were to occur, then there would be baselines to demonstrate degradation and subsequent accountability. Secondly, the studies may reflect that any degradation would be too damaging, thus there would be red line areas (such as critical management areas) to not permit drilling.”

Through letter writing campaigns and petitions, the group persuaded county leaders and, eventually, the governor of New Mexico, Bill Richardson, to impose moratoriums on drilling in the basin.

On July 15, Richardson extended the six-month moratorium by another six months, and ordered many departments of the government to do studies to determine the impact of drilling and fracking on the area.

Of special interest to people in the Upper Delaware River Valley was that the New Mexico department of tourism has already determined that drilling will negatively impact the tourism industry. Given that tourism is the second largest industry in Sullivan County and the Upper Delaware Valley, the impact on gas drilling here is also likely to be negative." More>>>>

Tuesday, July 22, 2008

KSFR Interview with Cabinet Secretay Joanna Prukop of Energy, Minerals and Natural Resources

KSFR Local

Rio Arriba drilling rules to be like Otero Mesa's (Podcast)
By: Bill Dupuy

SANTA FE (2008-07-23) -- State oil and gas regulators are beginning the process of writing special rules for drilling in some parts of Rio Arriba County.

Joanna Prukopp is secretary of the energy, minerals and natural resources department. She says the Rio Chama watershed area of Rio Arriba County is similar to other areas where they've written special drilling regulations.

The governor ordered the rules to be written after a state hearing officer found that an oil-development company had placed a well site 40 feet from surface water.


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Santa Fe County Oil and Natural Gas Drilling Ordinance Webpage

Santa Fe County has set up a webpage for the oil and natural gas drilling ordinance (click here). Also, there is a link in the right margin of the DSF website.

State To Set Rio Chama Watershed Drilling Rules

By Jackie Jadrnak
Albuquerque Journal North Staff Writer

"The state will develop new rules for oil and gas drilling in eastern Rio Arriba County in response to challenges from local government officials to wells in that scenic, water-rich section of the county.

Gov. Bill Richardson announced Monday that he has instructed the Energy, Minerals and Natural Resources Department's Oil Conservation Division to come up with regulations that take into account the water resources and traditional water uses in that area.

Unlike the Galisteo Basin in southeastern Santa Fe County, Richardson did not call for a moratorium on drilling while those rules are being written and reviewed.

But Gilbert Gallegos, Richardson's spokesman, said, "This action has the same effect." He said the Oil Conservation Division most likely will hold off acting on permit applications until the new rules are finished.

"It's the governor's preference that we hold off on pending permits," he added.

Gallegos said it would not be practical to put a countywide moratorium on new drilling permits. "You have a different situation here as opposed to the Galisteo Basin," he said. "Rio Arriba County has a history of drilling; there's active drilling going on."

Rio Arriba County officials had asked the Oil Conservation Division to revoke four drilling permits already approved in the Rio Chama watershed and to deny six others that are pending.

Last Friday, the Oil Conservation Division revoked one of those active permits and suspended three others, referring them to the Oil Conservation Commission. Of the six pending applications, one has been withdrawn by Approach Resources, the applicant, and the other five were referred to the Oil Conservation Commission.

Rio Arriba County has imposed a moratorium on new drilling to update its drilling regulations, but that move has been challenged in court. Rule-making on oil and gas drilling belongs in the state's bailiwick, according to a lawsuit filed by Approach Resources.

County officials had been grumbling about Richardson taking no action on Rio Arriba County's concerns, while at the same time issuing executive orders to impose a moratorium on drilling in Santa Fe County. Monday's news release was Richardson's first public action on Rio Arriba's drilling concerns.

"It is important that we identify and thoroughly scrutinize proposed drilling in highly-sensitive areas like portions of the (Rio) Chama watershed," Richardson said in a news release.

This wouldn't be the first time the Oil Conservation Division has developed special rules for a specific area of the state, according to Jodi McGinnis Porter, spokeswoman for the Energy, Minerals and Natural Resources Department. The same thing was done a few years ago for Otero Mesa, she said.

She estimated that it would take two to four months to develop special rules for the Rio Chama watershed in Rio Arriba County. Timing depends on when the matter can get on the Oil Conservation Commission's agenda, she said.

The commission's next meeting is Sept. 11, but "the docket is almost full," she added."

Governor seeks draft on oil rules

"Governor Bill Richardson Monday directed the state Oil Conservation Division to begin drafting new rules specifically aimed at protecting certain portions of Rio Arriba County.

Thousands of oil and gas wells are already located in Rio Arriba County, but recent interest in drilling the relatively untouched eastern side of the county has raised concerns that about contamination of the streams that feed into the Rio Chama and Rio Grande.

"It is important that we identify and thoroughly scrutinize proposed drilling in highly sensitive areas like portions of the Chama Watershed," Richardson in a statement released Monday.

Rio Arriba passed a four-month moratorium on drilling in April hoping to buy time to rewrite its rules governing oil and gas development. That moratorium is being challenged in state District Court by Approach Resources LLC, which seeks to develop about 90,000 acres worth of mineral rights in the county.

Rio Arriba County planning and zoning director Gabriel Boyle recently called on Richardson to issue a moratorium on drilling in the area, as the governor has done in the Galisteo Basin.

Energy Minerals and Natural Resources spokesman Jodi Porter said based on how long it took to write special rules for Otero Mesa, it will likely be two to four months before the new regulations are done. Asked what would happen to new drilling permits in the meantime, Richardson spokesman Gilbert Gallegos said in a statement: " I assume all pending permits in that area of the county will be on hold so the new rules can be applied."

Porter said she couldn't answer the question without consulting the department's legal department for confirmation. "

Contact Phaedra Haywood at 986-3068 or
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Comment on this story!

Monday, July 21, 2008

Governor Bill Richardson Requests Special Rules for Oil and Gas Activity in Areas of Rio Arriba County

Governor Richardson News Release:

"SANTA FE – Governor Bill Richardson today directed the Energy, Minerals and Natural Resources Department’s Oil Conservation Division to propose new rules for portions of Rio Arriba County to protect water resources, human health, and the environment. This decision was prompted by recent oil and gas activity in Eastern Rio Arriba County that demonstrated the need to respect the unique hydrologic and cultural resources of this area.

“I have directed the Oil Conservation Division to develop requirements designed to protect our limited water resources and traditional water uses,” Governor Richardson said. “It is important that we identify and thoroughly scrutinize proposed drilling in highly sensitive areas like portions of the Chama Watershed.”

Arriba County
is no stranger to oil and gas activity with considerable development in the western half of the county. However recent exploration in the Rio Chama Water shed and the eastern half of the county have demonstrated the need to examine exploration and drilling practices as they apply to this area.

The Oil Conservation Division will immediately begin the process of formulating proposed regulations to implement the Governors directive. These proposals will then be presented to the Oil Conservation Commission which will begin the formal rule making procedures."

KSFR Interview with Rio Arriba County Attorney Adan Trujillo

KSFR Local

July 21 At Noon midday report (Podcast)

SANTA FE (2008-07-21) -- On Monday's midday report:

Airlines have been cutting people and services way back in recent weeks. What are chances that will kill regional commuter jet service to Santa Fe?

We'll talk with a lawyer for Rio Arriba County about next steps, now that state regulators have rescinded one oil drilling permit and put a hold on a number of other applications.

And the Santa Fe Writers Conference is underway and in full swing.

Plus 60 Seconds with Christopher Hagen, local headlines with Dan Gerrity, BBC news.

Host: Bill Dupuy

Saturday, July 19, 2008

Agency: Well Site Misrepresented

Albuquerque Journal North :

By Raam Wong
Journal Staff Writer

"State regulators on Friday revoked a controversial oil drilling permit near the headwaters of Tierra Amarilla Creek along the scenic byway connecting T.A. and Tres Piedras.

Critics of the project responded by saying the Oil Conservation Division's reversal highlights the agency's inadequate process for evaluating drilling applications.

On its application, Fort Worth-based Approach Resources had stated that the proposed well site was 100 feet from groundwater and more than 1,000 feet from the nearest surface water. But during a Journal visit to the site — in an alpine meadow along U.S. 64 near the 10,507-foot summit overlooking the famed Brazos Cliffs — the ground was soggy and numerous springs and streams trickled nearby.

Experts for Rio Arriba County testified at an OCD hearing last month that Approach's drilling plans could endanger a vital source of New Mexico's surface waters.

"Everything is downhill all the way to Albuquerque," Rio Arriba County planning and zoning director Gabe Boyle said Friday.

Approach has said it plans to use a closed use system and truck waste off site.

OCD said in a news release Friday that the approval of the application "was based in part on representations from the operator" about the location of the well. However, OCD said the hearing "revealed that the proposed location is within a wetland and approximately 40 feet from surface water sources; therefore, the Oil Conservation Division cancelled the permit."

"I think it's a partial victory to be sure," said Rio Arriba County contract attorney Adan Trujillo, adding that OCD is largely forced to work on the honor system when it considers applications.

Trujillo represented the county in its request to OCD to revoke the permit for the "Woolley Family" site, as well as three others. On Friday, OCD suspended the three previously approved applications and referred them to the Oil Conservation Commission.

Six other applications had been pending. One of them — squeezed between T.A. Creek and an irrigation ditch — has been withdrawn by Approach. The other five applications were also referred to the commission Friday. The commission meets once a month and the Approach permits will be scheduled for the next available docket, OCD said.

Approach is proposing to drill within 90,000 acres near T.A. The county has responded to the proposal with a moratorium on new drilling as a way to buy time to update its drilling regulations.

Rio Arriba officials note that while thousands of wells currently operate on federal and tribal land in the western part of the county, drilling is virtually unheard of in the lush mountains in the eastern part. The mountains receive as much as 38 inches of precipitation annually and generate much of the stream flow that courses through the state.

Approach Resources has sued the county, challenging its authority to enact a moratorium and regulate the industry. Company officials could not be reached for comment Friday afternoon. Similar moratoriums have been enacted by Gov. Bill Richardson and Santa Fe County for drilling on the Galisteo Basin southeast of City Different. Richardson has not weighed in on the Rio Arriba debate.

OCD spokeswoman Jodi McGinnis Porter did not return calls for comment late Friday afternoon."

Friday, July 18, 2008

State halts Rio Arriba drilling plans

Wells near Tierra Amarilla ruled too close to wetlands, surface water sources

The state Oil Conservation Division on Friday canceled a permit it had approved for an oil and gas well in Rio Arriba County, saying the proposed location was too close to water sources. The OCD also suspended three other permits it had granted to Approach Operating LLC for wells in the Tierra Amarilla area.

The suspended permits and five others Approach had applied for will be reconsidered by the state Oil Conservation Commission, a three-member board that makes rules for OCD and decides on disputed permits.

Rio Arriba County and Tierra Amarilla-area landowners had challenged the permits on the ground the places Approach wanted to drill were ill-considered and too close to creeks, irrigation ditches and drainages.

According to a statement issued by OCD on Friday, the canceled permit was rescinded because the company had indicated the well would be more than 100 feet from groundwater and more than 1,000 feet from the nearest surface water, when the proposed location was "within a wetland and approximately 40 feet from surface water sources."

"The evidence that was given at the hearing about the Woolly well was pretty compelling," said OCD Director Mark Fesmire. "That is not where a well should be sited." Fesmire said he didn't think Approach had deliberately tried to deceive OCD but it may not have had a clear picture of the area's hydrology when it chose the well site. He said there seemed to be enough confusion and questions about the sensitivity of the other three sites for which Approach had been approved to re-examine those permits as well.

Approach Operating voluntarily pulled one of six other permit applications it had pending with OCD, according to the statement. The other five will be considered by the commission along with the three that were suspended Friday at a hearing that will include public comment. No date for the hearing has been set." More>>>>

Oil Conservation Division Cancels A Permit to Drill in Rio Arriba County

New Mexico Energy Natural Resources Department News Release:

"SANTA FE, NM – The Oil Conservation Division today issued an Order of the Division in two related cases concerning drilling permits in Rio Arriba County. In one case, the Board of County Commissioners of Rio Arriba County challenged four permits issued to Approach Operating, LLC. In the second case, Approach Operating, LLC sought approval of six additional permits.

In the first case, the Order of the Division cancels one previously approved application for permit to drill issued to Approach Operating, LLC, and suspends three previously approved applications to drill, referring them to a hearing before the Oil Conservation Commission.

Approach Operating, LLC was issued a permit to drill a well named the Woolley Family LP #001, API No. 30-39-30397, on October 18, 2007, based in part on representations from the operator that the proposed location was more than 100 feet from ground water and more than 1,000 feet from the nearest surface water. Evidence at the recent hearing revealed that the proposed location is within a wetland and approximately 40 feet from surface water sources; therefore, the Oil Conservation Division cancelled the permit. The three other previously approved applications are suspended and referred to the Oil Conservation Commission.

In the second case, Approach Operating, LLC voluntarily withdrew an outstanding application to drill, a well named Benjamin Trujillo #001 and the division has dismissed it. The five remaining unprocessed applications, which have not yet been evaluated or approved, will also be referred to the Oil Conservation Commission for hearing.

The Oil Conservation Commission meets once a month and these hearings will be scheduled for the next available docket."

SF County drilling regs draft by mid-September

"SANTAFE (2008-07-18) -- Work on Santa Fe County's new zoning and drilling ordinance is moving at a fast pace. The County's moratorium freezing drilling activities in the Galesteo Basin will expire in February 2009 and planners are using this as a target date to complete work on proposed zoning changes affecting growth and oil drilling activities in the basin.

Consultant Bruce Peshoff, from the Kansis-based growth management planners engaged by the county, says they expect to have first drafts of proposed regulations by early September. Regulations will be proposed as alternatives and will be presented to the public in workshops around the 2nd week in September

He said his team is presently amassing data about the Galesteo Basisn from experts in a number of fields to substantiate recommendations to be presented by his team.

Peshoff notes that his team has received a number of comments from the public at workshops and focus groups. About 90 people attended the most recent work shops held Monday and Tuesday of this week in Santa Fe to identify sensitive areas in the Basin and to express their concerns about drilling and future growth and land uses.

When questioned about the adequacy of public involvement in the planning effort, Peshoff said that their goal is to maintain an open relationship with the public. He feels that the workshops, while sparsely-attended, did provide valuable insight to the team. And, they plan additional focus group meeting here in Santa Fe in an effort to identify more comments.

Peshoff feels that strong stances and opinions about what should occur in the basin can be softened with more engagement and discussion with the planning team, particularly once people learn that tools exist to control growtyh and oil and gas activities. He notes that the most effective way to reach the planners with comments is to use the website set up by the team for communication purposes and that it is highly important that they hear from people. The site is OurPlanningWorks.Com/SantaFe.
© Copyright 2008, KSFR"

Thursday, July 17, 2008

Tecton president disputes oil official

The Santa Fe New Mexican :

Tecton Energy president Bill Dirks said Wednesday that despite what New Mexico Oil and Gas Association president Bob Gallagher told The New Mexican earlier this week, his company never agreed to partner with the association on a lawsuit challenging state and county moratoriums on oil and gas drilling in the Galisteo Basin.

"We have always stated that we intended to explore our options," Dirks said in a statement Wednesday. "We have spent countless hours consulting with state and county officials, individuals in the Santa Fe area, industry groups including NMOGA, and attorneys in an honest attempt to determine how best to proceed. Tecton ultimately determined that the best course of action does not involve litigation at this time."

Asked about his statement that Tecton had originally agreed to participate in a legal challenge but later backed out, Gallagher said he may have used the wrong wording. "Proper wording should have been: We had worked with them for several months and had assumed that they would be part of it. But we respect (an) individual company's rights to make decisions that are right for that company."

Wednesday, July 16, 2008

Planning Sessions Round One Comments

DSF received many emails and comments about the Santa Fe County planning sessions this past week. For those who have not participated in similar type planning sessions, it was confusing and yet did not delve into some of the deeper issues. In addition, the planning sessions overall addressed the General Plan, the Galisteo Basin Area Plan, the Capital Improvement District, and the Oil and Gas Amendments to the Land Use Code, which added to the confusion for some. I had the benefit of attending the third workshop following Dr. Freilich’s talk that gave context to the third planning session. The previous planning sessions did not have the benefit of such context. On the other hand, there were those who were pleased with the planning sessions.

Our group identified the entire Galisteo Basin as a Critical Management Area (CMA) due to the hydrogeology, archaeology, air quality, wildlife corridor, view scapes, and so forth. The CMA would be an area that would not permit hardrock or oil & gas extractive activities. We took the development types key code and prohibited the last four, such as I = Industrial developments. It would be inconsistent and incompatible to conduct industrial developments in a CMA and in the fragile ecosystem of the Galisteo Basin. We identified other areas of the basin for certain types of developments, such as Agricultural/Ranching, Village Centers, etc.

Maybe future sessions would have better context? It would be helpful to have earlier notifications of the future sessions and a more detailed agenda so that the community would better understand what to expect.

Community participation is critical to the legitimacy of the process. About 90 attended the three sessions. Although there was overlap at Dr. Freilich’s talk, there were about 65 attendees. There needs to be more citizen participation. Ask yourself, do you have a 50 year vision for Santa Fe County? Do you want the government or Industry to choose the vision of Santa Fe County for you?

If you have suggestions about how to organize the County planning process or other input, please feel free to send an email to . Also, Planning Works has set up a website, that has a Comment Center. Remember, democracy is not a spectator sport.

County Drilling Blocked Again

By Raam Wong
Journal Staff Writer

"Gov. Bill Richardson has once again moved to block a controversial proposal to drill for oil and gas southeast of Santa Fe, though he appears to have no inclination to step into a similar battle in Rio Arriba County.

On Monday, Richardson signed an executive order extending a state moratorium on drilling activities in Santa Fe County for another six months. Richardson first enacted the moratorium in January following a public outcry over Tecton Energy's plan to drill exploratory wells in the archaeologically rich, water-short Galisteo Basin.

The ban will run through Jan. 24, buying state agencies time to gather information and begin rule makings to protect water, archeological and cultural resources and wildlife on the basin, according to a news release Tuesday.

The governor's hands-on approach in Santa Fe has led to grumbling from some Rio Arriba County officials that he was ignoring a similar threat posed by a plan to drill in the Rio Chama watershed near Tierra Amarilla.

Rio Arriba County has asked the state Oil Conservation Division to revoke four of Approach Resources's current drilling permits and to deny six others that are pending. The county argues drilling could pollute a crucial source of the state's surface waters and scar the pristine landscape along a scenic byway. Richardson himself has not weighed in on the controversy.

Asked Tuesday if the governor would consider a drilling moratorium for Rio Arriba, Richardson spokeswoman Alarie Ray-Garcia referred questions to OCD.

"Right now OCD is in the middle of the hearing process," Ray-Garcia said in an e-mail. "Therefore, at this time, it is more appropriate for OCD to answer questions regarding Rio Arriba."

OCD spokeswoman Jodi McGinnis-Porter said Tuesday: "I think there's a huge difference between Rio Arriba County and the Galisteo Basin."

Unlike the Galisteo Basin's limited history of energy exploration, Rio Arriba County has thousands of active wells, McGinnis-Porter said. Therefore, she said, a drilling moratorium was not warranted and would only negatively impact existing operators.

Rio Arriba officials have countered that while the western part of the county has approximately 11,500 wells on tribal and federal lands, energy exploration is virtually unheard of in the water-rich and scenic mountains in the eastern part of the county where Approach wants to drill.

Rio Arriba planning and zoning director Gabe Boyle said Tuesday it initially appeared that Richardson was unaware of the sensitivity of Approach's proposed drilling sites. But Boyle said the moratorium extension for Santa Fe was an indication that the governor understood that the state's oil and gas regulations were not all that they could be.

Johnny Micou, a leader in the anti-drilling effort in Santa Fe, said it was "very important that Governor Richardson extended the moratorium." The executive order, Micou noted, directs OCD to investigate rules for protecting the basin's fragile ecosystem with public input.

The executive order also directs the following actions:

The state Environment Department to more thoroughly investigate the adoption of air quality regulations to further protect ambient air quality impacts from gas and oil drilling activity.

The Office of the State Engineer to undertake a site-specific analysis of the freshwater supplies in the basin.

The Department of Cultural Affairs to develop a timeline for and begin to undertake the necessary surveys and studies to determine what cultural resources exist within the basin and to establish a resource-based planning process.

The Department of Cultural Affairs to work with the Governor's Office and New Mexico's congressional delegation to identify and secure financial resources to fully implement the 2004 Galisteo Basin Archaeological Sites Protection Act.

The Indian Affairs Department to continue to gather information from state Indian tribes. The executive order gives state agencies until Dec. 1 to submit their reports.

"I remain gravely concerned that oil and gas drilling activities could negatively affect those resources, so I have extended the temporary moratorium to allow further information-gathering and protections to be put in place," Richardson said in a statement.

Santa Fe County has its own drilling moratorium that expires in February. Earlier this year, Tecton responded to the county's and Richardson's moratoriums with a statement threatening to sue, saying the bans amounted to an illegal taking of private property. A spokeswoman for the company said Tuesday that "Tecton has no comment on the moratorium extension at this time."

Local government's ability to temporarily block drilling and regulate industry is already being tested in Rio Arriba County, where Approach has filed suit challenging the county's authority to enact a moratorium and regulate the industry. Santa Fe County and the New Mexico Association of Counties jointly filed a brief in the case, arguing for local government's right to regulate oil and gas activities."

Tuesday, July 15, 2008

Richardson extends ban on oil, gas drilling

Moratorium on extraction in Galisteo Basin through January

"Gov. Bill Richardson has extended a state moratorium on new oil and gas drilling in the Galisteo Basin and Santa Fe County for another six months.

Richardson's order bans new hydrocarbon extraction in the basin through January. It also directs state agencies to develop baseline air and water quality data for the "fragile and ecologically sensitive" basin and write new rules specifically tailored to protecting the area.

"I am committed to protecting ground water, archeological, cultural and wildlife areas in the Galisteo Basin," Richardson said in a news release Tuesday. "I remain gravely concerned that oil and gas drilling activities could negatively affect those resources, so I have extended the temporary moratorium to allow further information gathering and protection to be put in place."

Energy Mineral and Natural Resources Department Secretary Joanna Prukop said her staff will prepare rules specific to the Galisteo Basin area, as has been done in the past for Otero Mesa.

Prukop said she feels regulations already in place for the rest of the state are "very sound for the most part," but the Galisteo Basin area is unique in the sense it is a "wildcat" area where there has been little prior oil and gas exploration.

New Mexico Oil and Gas Association president Bob Gallagher said the moratorium and additional rule-making will increase fuel costs for consumers.

Gallagher said his organization had already begun mounting a legal challenge to the governor's existing six-month moratorium, which was set to end this month, and a yearlong moratorium issued by Santa Fe County in February.

The state and county moratoriums (moratoria) were issued after Tecton Energy applied for permits to drill for oil in the Galisteo Basin last winter.

Gallagher said Tecton Energy had initially agreed to partner with NMOGA in challenging the moratoriums (moratoria), but dropped out last week. Gallagher said his organization has found a new partner, this time a mineral-rights owner, to participate in the lawsuit, which he expects will be filed in the next several weeks.

Tecton Energy president Bill Dirks declined to comment, and Gallagher would not say which mineral-rights owner will join the lawsuit. Anne Potter-Russ, whose family owns the majority of the mineral rights Tecton Energy leased in the basin, said it is not her." More>>>>

Please note: The Tecton applications at OCD are at depths that would suggest a natural gas play. Natural gas is not gasoline. Gasoline is a distillate of oil. Tecton received an OCD permit in October 2006 to perform remedial work on Black-Ferrill #1 and has subsequently temporarily abandoned it. See previous DSF post by clicking here.