Santa Fe County Draft Oil & Gas Ordinance and General Plan -- Oil & Gas Element

Today, the draft oil & gas ordinance was approved by the Santa Fe County Board of County Commissioners (BCC) to be published. Dr. Freilich and Bruce Peshoff gave a presentation. The Power Point presentation link is in the top right panel of the Drilling Santa Fe blog, as well as on the Santa Fe County website under Oil and Natural Gas Drilling Ordinance and at Common Ground United, Calendar/Santa Fe Co. Gas & Oil Ordinance & Public Hearings. Also posted at all three sites are the Oil and Gas Plan, the Santa Fe County Ordinance (draft), and Next Steps.

Although we are off to a great start, please review these documents carefully. On October 16th at the new Santa Fe Convention Center, the County Development Review Committee (CDRC) will have the first round of round of public hearings regarding the oil & gas ordinance. The CDRC will submit to the BCC recommendations about the ordinance. This is the time for public input! A second CDRC meeting will be held on November 13th (location & time to be announced).

The New Mexico Environmental Law Center will review the documents and provide feedback to Drilling Santa Fe. However, a few things to note: Some have already pointed out issues of setbacks from homes as being inadequate. Also, there are areas around Cerrillos and County Road 42 that are not indicated as highly sensitive areas, which should be. There are likely other areas of the Galisteo Basin that should be considered highly sensitive areas that are not at this juncture. So please, review the Santa Fe County General Plan/Oil & Gas Element maps.

Also, read the very informative articles in the Santa Fe New Mexican by Staci Matlock, "County unveils oil and gas ordinance," and in the Albuquerque Journal North by Raam Wong, "Oil and Gas Ordinance Unveiled."

For updates, check the Drilling Santa Fe blog (http://www.drillingsantafe.org) and Common Ground United (http://www.commongroundunited.org) website for updates about the process.

OIL AND GAS ORDINANCE PRESENTATION AVAILABLE ON TV

Santa Fe County

FOR IMMEDIATE RELEASE

OIL AND GAS ORDINANCE PRESENTATION AVAILABLE ON TV

Santa Fe – September 29, 2008 – The presentation of the new draft oil and gas ordinance at tomorrow’s Board of County Commissioners meeting can be seen live beginning at 2:00 PM on Comcast channel 28 and possibly at santafecounty.org (pending correction of technical challenges). Copies of the new ordinance are slated to be released online at 1:00 PM tomorrow at santafecounty.org.

# # #

Contact:

Stephen Ulibarri

Public Information Officer

505.986.6353

sulibarri@co.santa-fe.nm.us

Statement of Dusty Horwitt, JD Senior Analyst for Public Lands, Environmental Working Group

Statement of Dusty Horwitt, JD, Senior Analyst for Public Lands, Environmental Working Group for the Oversight Hearing on Natural Gas Drilling in the New York City Watershed before the New York City Council Committee on Environmental Protection. Wednesday, September 10, 2008 at 1:00 p.m.

"Environmental Working Group is not opposed to all natural gas drilling. But due to the highly polluting nature of the oil and gas industry, the likelihood that thousands of wells could be drilled, and the multi-billion-dollar cost of building a treatment facility to clean up contaminated water, we strongly recommend that New York officials not allow any drilling in New York City's watershed." Entire Statement>>>>

Santa Fe County Gas & Oil Ordinance Public Hearings & Tracking

In the top right hand corner of the Drilling Santa Fe Blog, there is now a link to the Common Ground United Upcoming Events calendar labeled as Santa Fe County Gas & Oil Ordinance Public hearings and tracking that will track the ordinance process.

Please note: On September 30th, the oil and gas ordinance and amendments will be presented to the Board of County Commissioners (BCC) at 2:00 p.m. for authorization to publish title and summary. Not technically a public comment meeting, but it would be doubtful that the BCC would not allow the public to speak. The BCC meetings broadcast on Channel 28. The ordinance will also be uploaded to the Santa Fe County website. The meeting will begin at 10:00 a.m. in the BCC chambers, 102 Grant Avenue. Written comments can be submitted to either Steve RossThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it or Jack KolkmeyerThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Public Meeting about County/Citizens Communication

A well attended public meeting was held at Unitarian Church last night. In attendance were Commissioner Campos, in-coming commissioners Kathy Holian and Liz Stefanics, Planning Director, Jack Kolkmeyer, Public Information Officer, Stephen Ulibarri, many county staff and citizens. The following are some highlights from the meeting:

• Rapid information, such as website updates with timely information.
• Disjunctures in communication.
• How to let public officials know what citizens are thinking. Public input.
• Bottoms up public participation and how to meaningful bring in the more citizens.
• Projects to not be ad hoc and designed behind closed door, then with public comments taken afterwards.
• Citizens' perception that there is too much access by lobbyists, etc.
• A call for public participation guidelines or ordinance.
• Clear wording from the county about issues.
• Transparency.
• The possibility of setting up citizens boards with standing and with the ability to draft ordinances, such as a Citizens Energy Board.
  

The meeting was one of discussion that did not lead to resolutions per se. Many seemed to agree that two-way communication will take a lot of work and there would need to be more meetings.

KSFR reporters attended the meeting and interviewed the organizers, Paul White and Katherine Andrews. If there is a report on podcast, it will be posted later.

Conservation easement aims to protect Galisteo Basin

New Mexico Business Weekly :

Wednesday, September 24, 2008 - 12:05 PM MDT | Modified: Wednesday, September 24, 2008 - 12:19 PM

"The Commonweal Conservancy in Santa Fe has donated a 320-acre conservation easement valued at $1.2 million to the Santa Fe Conservation Trust.

The donation is among the highest value conservation easements received by the Trust in its 15-year history. It is the first in a series of easement donations that the nonprofit Commonweal Conservancy will make to protect the Galisteo Basin Preserve.

The gift is a critical first step in the permanent protection of the Preserve’s scenic and cultural resources, as well as its wildlife habitat, said Ted Harrison, president and founder of the Commonweal Conservancy." More>>>>

KSFR Local: O&G "drilling zones" in S.F. County (Podcast)

KSFR Local

O&G "drilling zones" in S.F. County (Podcast) SANTA FE (2008-09-23) -- The level of activity at the Santa Fe County administration building has increased substantially. Or so it would appear from a look at what just happened and what is coming up. KSFR has been critical of county officials for what can only be called a quiet approach to their work on oil and gas drilling in the county. Their highly touted public outreach to get citizen opinions and opinions of groups on both sides of the issue has been minimal - at least from the evidence they've presented. But now comes the promise of shedding some light on what's been going on. County officials have appeared on a radio program on another Santa Fe radio station, KSWV 810 a.m., to unveil their plans for the coming unveiling of a draft ordinance for the county. KSFR's Marion Cox has been following the drilling issue carefully and so we asked her to listen in and report back. We asked if we heard correctly that what may be in the drilling ordinance is one or more zones where drilling could take place in the county? © Copyright 2008, KSFR Download the free Real Audio Player. Find a free MP3 Audio Player.

Steve Ross, Jack Kolkmeyer & Stephen Ulibarri from Santa Fe County on 810 AM KSWV

Notes from radio interview on 810 AM today with Steve Ross, County Attorney, Jack Kolkmeyer, Planning Director, and Stephen Ulibarri, Public Information Officer of Santa Fe County in regards to the Oil & Gas Ordinance, Galisteo Area Plan and the Santa Fe County Growth Management Plan:

Steve Ross:
Two years ago the county learned of mineral leases being acquired. The county received a request from Tecton Energy, LLC to rework a well, Black-Ferrill #1. The only relevant rules Santa Fe County had were in the Mining Ordinance. By the Fall of 2007, an oil and gas ordinance went on the "front burner."

The general process for the ordinance will be to present it to the Board of County Commissioners (BCC), establish a public hearing schedule, and finally the adoption of the ordinance.

In January of 2008, Steve Ross submitted the draft oil and gas ordinance for review to Bob Freilich.

Jack Kolkmeyer:
Need to address how to involve the community, especially unincorporated areas.

Development includes oil and gas, residential, etc. So the question is how to deal with development and growth. The county uses an approach of "settings and systems," which divides the county into four growth management areas.

The reason for the county's silence has been due to a period of adjustment to accommodate the oil and gas issues.

Steve Ross:
The legal problem is about counties' authority, which traces through Constitutional law, legislation, and Common Law. That is the reason to bring in attorneys Bob Freilich and Bruce Kramer.

The oil and gas ordinance and the amendments to the General Plan will be presented to the BCC on September 30th. What to expect? Expect protections of a host of issues and a zoning element. The protections will include public health, water, noise, pollution, lighting, etc. The zoning process will include a number of reviews for water, geology, hydrology, infrastructure, roads, police, emergency preparedness, fiscal impact assessments, and environmental impact assessments. There will be a special exceptions process for oil and gas development, which would establish an oil and gas zone(s). The public would be involved in the zoning process.

Jack Kolkmeyer:
There would be a water component. The water availability would have to be proved.

The Galisteo Area Plan should be ready for public review by the end of next week. There will be three public meetings in the Galisteo area.

Public Process for the oil and gas ordinance:
September 30th, the oil and gas ordinance and amendments are presented to the BCC for authorization to publish title and summary. Not technically a public comment meeting, but it would be doubtful that the BCC would not allow the public to speak. The BCC meetings broadcast on Channel 28. The ordinance will also be uploaded to the Santa Fe County website. Written comments can be submitted to either Steve Ross or Jack Kolkmeyer.

The County Development Review Committee (CDRC) will have the first round of meetings. The CDRC will submit to the BCC recommendations about the ordinance. The BCC will have the ordinance on the agenda for the BCC meetings of November 18, December 9th and maybe January 13th. The BCC is scheduled to adopt the ordinance January 23rd.

On October 16th, there will be a county hosted public meeting beginning at 4:00pm at the new convention center.

Related Santa Fe New Mexican article, "County to unveil draft of oil rules Sept. 30."

COUNTY OFFICIALS TO DISCUSS DETAILS OF NEW OIL & GAS ORDINANCE ON RADIO PROGRAM

Santa Fe County (Press Release)

FOR IMMEDIATE RELEASE

Santa Fe – September 22, 2008 – Santa Fe County Attorney Steve Ross and Land Use Administrator Jack Kolkmeyer will be discussing details of the new oil and gas ordinance on the “Issues and Answers” radio program on 810 AM KSWV on Tuesday morning, September 23 at 9:00 AM.

~~~

According to the county, the draft oil and gas ordinance will be available online, September 30th. The public meetings schedule will be discussed on tomorrow's radio program.

Goldman, Morgan to Become Full-Fledged Banks

The New York Times:
September 21, 2008, 9:35 pm

"Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, fundamentally altering the landscape of Wall Street.

The move fundamentally changes one of the mainstay models of modern Wall Street, the independent investment bank, soon after the federal government unveiled the biggest market rescue since the Great Depression. It heralds new regulations and supervisions of previously lightly regulated investment banks. It is also the latest signal by the Federal Reserve that it will not let Goldman or Morgan fail."...

..."The move comes after the bankruptcy of Lehman Brothers and the near-collapses of Bear Stearns and Merrill Lynch."...

..."Announced without fanfare on Sunday night, the move signals the final end to the Glass-Steagall Act, the epochal legislation of 1933 that signaled a split between investment banks and retail banks. A law passed in 1999 repealed the earlier regulation, though Goldman and Morgan remained independent investment banks."...

..."In return, they will submit themselves to greater regulation, including limits on the amount of debt they can take on. When it collapsed, Lehman had about a 30:1 debt-to-equity ratio, meaning it had borrowed $30 for every dollar in capital it held. Morgan Stanley currently has a debt-to-equity ratio of 30:1, while Goldman Sachs has one of about 22:1." More>>>>

Related post:

Lehman Brothers, MLPs, Quantum Energy Partners, Tecton Energy, LLC & the Galisteo Basin

Alaskan Oil Tax Boondoggle?

Excerpts from a column at truthdig:

"Welcome to the People’s Republic of Alaska, where every resident this year will get a $3,200 payout."....

..."Since 1982, the Alaska Permanent Fund, which invests oil revenues from state lands, has paid out a dividend on invested oil loot to everyone who has been in the state for a year."....

..."(A) state whose residents pay no income or sales taxes but are blessed with state coffers rolling in cash at a time when all other states are suffering. Indeed, when the oil companies pay more taxes to the state of Alaska, they get to write that off against their federal tax obligation, leaving the rest of us to make up the shortfall."...

..."Alaska, despite its oil boom, is still at the top of states subsidized by federal dollars, receiving $1.84 back from Washington for every $1 that Alaskans pay in federal taxes. (California receives 78 cents for every $1.)" More>>>>

Lehman Brothers, MLPs, Quantum Energy Partners, Tecton Energy, LLC & the Galisteo Basin

Will the crisis on Wall Street have an effect on the proposed gas and oil exploration in the Galisteo Basin? Recently, the 158 year old firm, Lehman, filed for Chapter 11 bankruptcy protection (Lehman Brothers Holdings, Inc.). An investment product Lehman offered was Master Limited Partnerships (MLPs).

According to Standard & Poor's, "Master Limited Partnerships (MLPs) are limited partnerships that are publicly traded on a U.S. securities exchange. The limited partnership structure results in favorable tax treatment by avoiding the corporate income tax. MLPs as an asset class originated in the 1980s through laws passed by Congress designed to encourage investment in energy and natural resources. Early partnerships that took advantage of these laws had mixed results. Many partnerships were taking advantage of tax avoidance to extend their scopes beyond those originally envisioned. In response to this, Congress strengthened regulations to ensure that an MLP must generate at least 90% of its income from qualified sources, most of which pertain to natural resources. As a result, the majority of MLPs in existence today operate in the energy infrastructure industry, although recent issues have included companies operating in a variety of different industries. This asset class has grown rapidly in recent years, with the number of listed energy MLPs roughly tripling since 2000."

Lehman Brothers sponsored the Quantum Energy Partners 2007 MLP Investors Conference. Tecton Energy, LLC is a portfolio company of Quantum. Bill Dirks, Co-Founder and Managing Partner, Tecton Energy, LLC, co-moderated the 2nd Annual Oil & Gas Acquistion & Divestiture Conference and MLP Symposium in November of 2007. Tecton has targeted the Galisto Basin for natural gas and oil exploration. Since Tecton is a private company, there is no public disclosure of its financing.

As the current financial crisis unfolds, a situation the former Federal Reserve Chairman Alan Greenspan described as a "once in a half century, probably once in a century type of event," what will be the ramifications to Wall Street firms and speculative investments? From New Mexico through the Rocky Mountain region, from Texas to Arkansas up to Pennsylvania and to New York, unconventional oil & gas extraction plays have created a drilling boom. Such speculation needs financing.

However, according to Bloomberg TV, "Treasury Secretary Henry Paulson says the nation's credit markets are very fragile and still frozen." He urges the U.S. Congress to pass his $700 billion proposal to avert a financial meltdown. Taxpayers have already bailed out AIG with a $85 billion loan in exchange for 80% of the insurer's stock, making the federal government the majority stockholder of an insurance company.

As the market adjusts to these events, the appetite for risk will be quelled. As liquidity dries up, investment firms will deleverage. Will there be a financial melt down? We do not know. What we do know is that profits are privatized and losses are socialized. Many say that the reason for the financial crisis is deregulation. And to address our energy problems, the oil & gas industry clamors "drill, baby, drill" and whines for more deregulation.

County commissioners invited to public meeting

"County Commission members invited to public meeting

Phaedra Haywood | The New Mexican

9/20/2008 - 9/19/08

Community members have invited Santa Fe County officials to discuss further and better ways for the public to be involved in county decisions. As of Thursday, no county officials were planning to attend.

The forum is scheduled for Wednesday. Organizer Katherine Andrews said she sent an e-mail invitation to County Manager Roman Abeyta and County Commissioners Paul Campos, Jack Sullivan, Virginia Vigil, Harry Montoya and Mike Anaya on Sept. 8.

The invitation — signed by more than 25 groups and residents, including the League of Women Voters, Drilling Santa Fe and the Southwest Energy Institute — requested an RSVP by Sept. 15.

Andrews said only Montoya and Vigil replied, both to say they probably could not come.

The stated purpose of the meeting is to "define a mechanism for greater citizen participation in the current strategic planning for growth management."

Abeyta told The New Mexican on Thursday that he will send someone from the county's land use department. "They are the ones doing growth management," he said." More>>>>

FWCanDo!: Emissions from gas drilling operations in the north Texas region are TWICE the ozone forming pollution as ALL the cars in a 9-county area

From an email:

"Prof. Al Armendariz dropped a bomb in Fort Worth last night. He is an air quality expert and a professor at Southern Methodist University.

He has been researching the effects of gas drilling in the Barnett Shale.

Last night he announced that:

The combined air pollution from gas drilling in the Fort Worth area (drilling, piping, processing, compressing, etc.) is equal to all the motorized, moving vehicles in the Dallas/Fort Worth Metroplex - times 2.

Here's a link to Prof. Armendariz's website:

http://engr.smu.edu/~aja/

Don Young

FWCanDo

P.O. Box 470041

Fort Worth, TX 76147

http://www.fwcando.org

"God bless Fort Worth, Texas. Help us save some of it."'

From FWCanDo! website:

"Emissions from gas drilling operations in the north Texas region are TWICE the ozone forming pollution as ALL the cars in in the nine-county non-attainment area." -- Dr. Al Armendariz, Asst. Professor of Engineering at Southern Methodist University

Common Ground United: Galisteo Basin

Drilling Santa Fe is a part of Common Ground United, a coalition. The Galisteo Basin is one of the projects. Like the logo above? How about on a T-shirt or a baseball cap? For a $100 or greater donation to Common Ground United, upon request, we will send you a professionally printed poster.

Common Ground United

P.O. Box 23150

Santa Fe

New Mexico

87502

info@commongroundunited.org
505-474-3061

Controversial path to possible glut of natural gas

The Cristian Science Monitor:

Water and chemicals injected at high pressure can extract more gas – and possibly pollute drinking water.

..."Now, scores of natural gas companies are fanning out from Fort Worth, Texas, where hydraulic fracturing of shale has been done for at least five years, to lease shale lands in 19 states, including Pennsylvania and New York.

But some warn that by expanding “hydraulic fracturing” of shale, America strikes a Faustian bargain: It gains new energy reserves, but it consumes and quite possibly pollutes critical water resources.

“People need to understand that these are not your old-fashioned gas wells,” says Tracy Carluccio, special projects director for Delaware Riverkeeper, a watchdog group worried about a surge in new gas drilling from New York to Pennsylvania and from Ohio to West Virginia. “This technology produces tremendous amounts of polluted water and uses dangerous chemicals in every single well that’s developed.”

Traditional gas wells bore straight into porous stone, using a few thousand gallons of water during drilling. But dense shale has gas locked inside.

Hydraulic fracturing, or “fracking,” and horizontal drilling unlock it.

Each hydraulically fractured horizontal well can require from 2 million to 7 million gallons of fresh water mixed with sand and thousands of gallons of industrial chemicals to make the water penetrate more easily.

This frac-water mixture is blasted at high pressure into shale deposits up to 10,000 feet deep, fracturing them. The sand lodges in the cracks, propping them open and providing a path for the gas to exit after external pressure is released.

Besides using vast amounts of groundwater, scientists and environmentalists worry that toxic frac water – 30 percent or more – remains underground and may years later pollute freshwater aquifers.

Millions of gallons of frac water come back to the surface. It could be treated, but in Texas it is most often reinjected into the ground.

Millions more gallons of “produced” water flow out later during gas production. This flow, too, is often tainted with radioactivity and poisons from the shale. Often stored in pits, that waste can leak or overflow while awaiting reinjection.

Simply put: “Each of these wells uses millions of gallons of fresh water, and all of it is going to be contaminated,” Ms. Carluccio says.
Industry spokesmen say such fears are overblown."...More>>>>

0il and gas leases sold in Mora County

Santa Fe New Mexican/Associated Press:

9/17/2008

"Thousands of acres in northeastern New Mexico were leased for possible oil and gas exploration as part of the state Land Office's September lease sale."...

..."Some New Mexico communities have voiced concerns about increased oil and gas development in the state.

At the beginning of the year, Gov. Bill Richardson imposed a six-month moratorium on drilling in the Galisteo Basin. The Santa Fe County Commission followed with a one-year ban, and the governor extended his moratorium in July to give government agencies more time to protect water aquifers and archaeological and cultural resources.

In August, the Rio Arriba County Commission approved a 180-day extension on a four-month ban on new oil and gas drilling in the county. The county wanted more time to hone new regulations aimed at protecting the county's watersheds.

In response to environmental concerns, Lyons said the state Oil Conservation Division strictly enforces oil and gas statutes to assure responsible energy development." More>>>>

The question is not to drill or not to drill. The United States simply does not have the fossil fuels to meet demand. The question is how to switch to alternative energy sources and have many of those sources local, which would create jobs and foster local economic growth.

As far as the Oil Conservation Division goes, the oil & gas industry fights every regulation and tries to viscerate the OCD's capacity to regulate. Also, local governments have the right to protect resources. And, the lease average was only $30.54 per acre! What about the adverse impacts? What is the price tag for that? OCD also needs a bigger budget, greater staffing, more rule making, and an up-to-date penalty system.

"Setting the Record Straight on the Pit Rule," Joanna Prukop

The Daily Times :

"By Joanna Prukop Guest Column

Article Launched: 09/17/2008 12:00:00 AM MDT

A story published on Sept. 14 on the decline of drilling permits on BLM land, and an editorial published Aug. 12 warning of a possible slowdown in natural gas production in the San Juan Basin were both inaccurate, misleading, and a disservice to Farmington Daily Times readers. In these cases the paper has erred by omission, leaving out relevant and important facts that would have provided much needed balance and context.

Evidence presented at a recent hearing held by the Oil Conservation Commission, or OCC, clearly and definitively demonstrated that a significant number of serious groundwater contamination cases have resulted from the use of pits by the oil and gas industry. The hearing, at which the Independent Petroleum Association of New Mexico, or IPANM, was an active participant, is a matter of public record.

The story and the editorial fail to mention that in 2006, the Oil Conservation Division, or OCD, documented nearly 300 confirmed cases where pit substances contaminated ground water. In each case the contamination was self-reported by the operators. This key information was provided to the Farmington Daily Times on more than one occasion, yet to date, the Times has not reported it.

Today, OCD records show more than 421 such cases of pit-related contamination. Such an increase in a relatively short period of time is a clear sign that the state has a problem with oil field waste pits currently in use, and from many other pits poorly closed in the past.

The industry was also fully engaged in the creation of the new Pit Rule. In fact Bob Gallagher, president of the New Mexico Oil and Gas Association, had stated that while the new regulations were tough, the industry could live with them. Furthermore, testimony during the OCC hearing clearly showed that any increased costs to industry that might result from the new Pit Rule are not unreasonable. Now, for some reason IPANM is using incorrectly inflated figures to generate opposition to the new regulations. The organization and the newspaper also fail to mention the testimony at the hearing that showed the new rules might actually result in cost savings.

The story and the editorial insinuate that the new Pit Rule is the reason for a projected drop in drilling permits. But, they fail to mention that the Bureau of Land Management recently began charging $4,000 to process each new oil and gas drilling permit application — a fee that was not assessed last year.

The new fee is required under an appropriations bill approved by Congress and signed into law by President Bush on Dec. 26, 2007. Now, companies must be serious about drilling before they spend $4,000 per application.

The editorial quotes Mr. Gallagher as saying, "rig counts throughout the state have dropped significantly since the pit rules implementation." However, in the Albuquerque Journal, on Aug. 10 "Gallagher acknowledges that a shortage of drilling rigs could slow new development. There are about 1,900 rigs in use today, compared with about 4,000 in 1980." The editorialist failed to mention rig counts fluctuate weekly, and this week the rig count is 90, 15 rigs more than the 75 one year ago.

The editorial states that more public outreach is needed on the Pit Rule, but fails to mention the outreach already conducted. The New Mexico Oil Conservation Division conducted a Pit Rule Training in Artesia on June 25 and met with 125 industry representatives. Training was held on June 27 in Farmington where OCD met with 225 people.

At the request of the Director of Governmental Affairs for the IPANM — who offered to pay for the meeting expenses but then withdrew her offer — the New Mexico Oil Conservation Division conducted another Pit Rule Training in Hobbs on July 23, attended by 150 people. The Oil Conservation Division has and will continue to offer training to anyone who asks.

The new Pit Rule was created with the input of industry, the environmental community and many other stakeholders in a completely public process. It is designed to protect the state of New Mexico and its citizens from any future ground water or other environmental contamination from oil field waste pits, and also to protect the operators from the potentially crippling liability of major environmental impacts. It is the right thing to do.

The Energy, Minerals, and Natural Resources Department recognizes the critical role the oil and gas industry plays in New Mexico and works hard to balance the requirements of industry with the need and the mandate to protect and preserve our natural resources. The citizens of this great state are better served when they get all of the facts and context of complex issues instead of incomplete analysis and an apparent pro-industry bias.

Cabinet Secretary Joanna Prukop is with the New Mexico Energy, Minerals and Natural Resources Department."

KSFR: State Land Office Auction of Mora County Oil & Gas Leases

KSFR Local

Sept. 16 At Noon midday report (Podcast) -------------------- Catch the news director's blog -------------------- SANTA FE (2008-09-16) -- On Tuesday's midday report: You'd probably ask for your money back if you were the state agency giving a million bucks to create new jobs at a company that since had job layoffs. Electric cars in our future? Sen. Jeff Bingaman says he heard testimony this morning in Washington that it's a possibility. And we'll check in on a land-lease auction at the state land office. Among the acreage, 13,000 acres in Mora County that could be up for oil and gas drilling. Plus 60 Seconds with Christopher Hagen, local headlines with Abigail Adler, BBC news. Host: Bill Dupuy PODCAST:To get this as a podcast copy and paste the following link into your podcast application: http://www.publicbroadcasting.net/ksfr/podcasts/220.xml NEWS BY CELL PHONE:KSFR listeners who might miss the first news at 7 a.m. weekdays on the air now have the chance to get it and listen to it whenever they want it - by cell phone. ------------------------------------------ NEWS ON AIR: Catch our regular hourly newscasts 7 a.m. to 7 p.m. weekdays on the radio or streaming at ksfr.org. At Noon every day, including weekend edition's review of the past week. JOURNALISM AWARDS. Check out KSFR's most recent spate of awards. © Copyright 2008, KSFR Download the free Real Audio Player. Find a free MP3 Audio Player.

Mora County State Trust Land Auctioned for Oil & Gas Leases

Nearly 13,000 acres of Mora County land was leased today over the objection of Mora County citizens. The State Land Office auctioned State Trust Land in pristine, agriculturally rich Mora County for oil and gas leases. KHL, Inc. of Albuquerque was the main lessee. The other was Daniel E. Gonzales of Santa Fe acquiring relatively few tracts to lease. Eyeballing the sales, it appears that the leases were obtained in the $28 to $50 per acre range. Cheap, especially when compared to the risk of public health, safety and well being, as well as the potential adverse impacts to water sources, to wildlife and to the land. A 640 acre tract leased for $3.13 for the low; a 40 acre tract leased for $375 for the high.

Some say that we need to "drill, baby, drill" to break the "addiction" to foreign oil and to stop exporting our "wealth" oversees. The proposition is that oil & gas drillers need to wildcat in frontier areas and drill in sensitive off shore zones. Such an argument has a hole in it so big that a semi-truck could drive through it, hopefully fueled by bio diesel.

According to the U.S. Department of Energy, Energy Information Agency (EIA), "there is no empirical basis for believing that drilling in environmentally sensitive offshore zones would significantly affect gas prices. The U.S. Department of Energy’s Energy Information Agency (EIA) projects that such drilling would add some 200,000 barrels of oil per day at peak production in about 20 years. This is about 0.2 percent of world production, and the EIA describes this as too small to have any significant effect on oil prices."


In addition, "Peak Oil" has become mainstream. The United States fossil fuels are in a state of depletion. The new, unconventional drilling methods can not change this fact. The EIA concluded that oil production in the lower 48 peaked in 1970; and in Alaska, production peaked in 1988.

As for natural gas, according to Local Energy News, "(n)ew gas wells just aren’t what they used to be. Even after drilling more than 300,000 new natural gas wells over the last 35 years, the U.S. produces less natural gas now than it did back in 1973. Putting more holes in the ground doesn’t make more gas – in fact, quite the opposite. Just ten years ago, the U.S. was drilling about 11,000 new wells per year to maintain a production rate of 20 Quads of gas per year – a rate that hasn’t changed in more than thirty years. Today, drillers must complete three times that many wells to produce the same amount of gas."

In any event, today was not a good day for Mora County, and we are not closer to solving our energy problems.

Mora Co. commissioners meeting, Sept. 16, 10 am; also, state land auction

From Drilling Mora County:

A Mora County Commissioners meeting will be held tomorrow morning, September 16th, at 10:00 am in Mora at the Mora High School administration building.

Drilling Mora County (DMC) is on the agenda to address the legal opinion from attorney, Bruce Frederick, New Mexico Environmental Law Center, regarding the power Mora County has over permitting private oil and gas drillers on state trust land (see link for the state trust land auction>>>>). Bruce will review the legalities with the commission and their attorney.

According to a newspaper article in the Albuquerque Journal North, last Wednesday, the county attorney indicated a moratorium will be passed during tomorrow's meeting as well.

An auction for the 13,000 acres of state trust land east of Ocate to I-25 is also scheduled for tomorrow, in Santa Fe. Leases usually begin about 9:00 am and are at the State Land Office.

“SURVEY 501” Report • N = 501 participants

BACKGROUND. Design and surveying for this project was conducted by members of the Eldorado Gas & Oil Team (EGOT!). Those surveyed were required only to be Santa Fe County residents of voting age. The majority of surveying was done of those passing through or in public areas, including the Santa Fe Community Days and the Eldorado Community 4th of July picnic. The survey form was completely anonymous, and all processed forms are available for appropriate public inspection.

CAUTION: The results of this survey MUST NOT be generalized beyond the group of 501 participants. It is not to be construed as representing opinions beyond the extent of the actual surveyed individuals, nor should decision-making assumptions for any group be extracted from these results.

Douglas Stewart, Project Coordinator

1. Do you approve of Tecton Energy’s plan to drill exploratory wells in Santa Fe County/the Galisteo Basin?
Yes – 42 8.4%
No – 415 82.8%
Uncertain – 44 8.8%

These numbers indicate that approximately only 1 in 10 of the 50 residents surveyed approve of the plan for the exploratory drilling for gas and oil in Santa Fe County. The group of 415 participants (82.8%) who do not approve of drilling are the vast majority of the surveyed group and therefore should not be considered an “extreme faction” by planners.

Complete "Survey 501" report>>>>>

Hurricane Ike Destroys Oil Platforms In Gulf Of Mexico

A gas pump nozzle sits among debris after Hurricane Ike passed through Surfside Beach, Texas, Saturday, Sept. 13, 2008. (AP Photo/Eric Gay)

Associated Press/The Huffington Post :

"HOUSTON — Pump prices jumped above $5 per gallon in some parts of the country Sunday as Hurricane Ike, which caused less destruction than feared, left refineries and pipelines idled and destroyed at least 10 offshore platforms in the Gulf of Mexico.

Far beyond areas struck directly by high winds and flooding, Ike left behind it a bizarre pattern of prices at gas pumps, with disparities of more than $1 a gallon in some states, and even on some blocks.

"We're on the other side of the looking glass," said Claire Raines, who lives near Knoxville, Tenn. "I just passed three gas stations with prices that ran from about $3.50 to close to $5 within walking distance."

Average prices exceeded $4 per gallon in Illinois, Indiana, Michigan, South Carolina, Hawaii and Alaska, according to auto club AAA, the Oil Price Information Service and Wright Express.

States fed directly by refineries along the Gulf Coast were particularly hard hit and supply may be sporadic for the next few weeks with refineries shut down, said Tom Kloza, chief oil analyst with the Oil Price Information Service." More>>>>

Blast at San Juan County well site kills one man

Santa Fe New Mexican : The Associated Press 9/13/2008 -

"AZTEC — Authorities are investigating an explosion at a well site in San Juan County that killed a 21-year-old man and injured another man.

The San Juan County Sheriff's Office said a tank on the back of a nitrogen transfer truck belonging to BJ Services exploded about 1:20 p.m. Friday at a new ConocoPhillips well site outside Aztec.

The cause of the explosion is unknown, but authorities said it appeared to be an accident. The explosion will be investigated by the Occupational Safety and Health Administration.

The Sheriff's Office did not identify the man who was killed pending notification of his relatives in Arizona. The man suffered head injuries and was pronounced dead at the scene.

Sheriff's Lt. Dwayne Faverino said the man's co-workers told investigators he had been on the job for a couple of months.

More than 30 workers were on site when the nitrogen tank exploded, Faverino said." More>>>>

BLM, private companies see big decline in drilling permits

The Farmington Daily Times :

— By Cornelia de Bruin — The Daily Times Article Launched: 09/14/2008 12:00:00 AM MDT

"FARMINGTON — The Bureau of Land Management says there is a 30 percent drop in the number of applications for a permit to drill compared with the number granted during 2007.

The local BLM office issued 444 permits to date, and anticipates issuing 460 by Sept. 30, the end of the federal fiscal year, according to Farmington Field Office spokesman Bill Papich.

The Farmington Office saw 630 applications during fiscal year 2007.

The to-date number indicates a 30 percent decrease from last year's permits. Assuming the Bureau's projection of 460 permits by fiscal year's end is correct, the number would indicate 27 percent fewer permits issued during 2008 than 2007.

"We are a regulatory and permitting agency, and as such the BLM doesn't speculate about the reasons behind the numbers," Papich said on behalf of Assistant Field Manager Minerals, David J. Mankiewicz.

Papich would not comment further.

Drillers point to pit rules." More>>>>

The cruel offshore-drilling hoax, part 1

Grist:
EIA maintains offshore drilling gains will be negligible
Posted by Joseph Romm (Guest Contributor) at 11:52 AM on 11 Jul 2008

"The GOP and McCain/Bush keep insisting that an end to the federal moratorium on (some) offshore drilling is a major solution to America's oil woes, even though Bush's own energy analysts make clear it is not.

That Energy Information Administration analysis is, however, a couple of years old, so I called up the author today and asked if it was being updated. Turns out a new version will be published in a couple of days, but she explained to me that the "answers are not very different" -- no significant impact for the duration of the analysis (through 2030) -- for reasons I will discuss below. First, however, it wasn't until I talked to her and looked closely at the original analysis -- "Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf" -- that I understood what a cruel hoax this whole issue is.

The oil companies already have access to some 34 billion barrels of offshore oil they haven't even developed yet, but ending the federal moratorium on offshore drilling would probably add only another 8 billion barrels (assuming California still blocks drilling off its coast). Who thinks adding under 100,000 barrels a day in supply sometime after 2020 -- some one-thousandth of total supply -- would be more than the proverbial drop in the ocean? Remember the Saudis couldn't stop prices from rising now by announcing that they will add 500,000 barrels of oil a day by the end of this year!

Here is the key data from EIA:

Look closely: As of 2003, oil companies had available for leasing and development 40.92 billion barrels of offshore oil in the Gulf of Mexico. I asked the EIA analyst how much of that (estimated) available oil had been discovered in the last five years. She went to her computer and said "about 7 billion barrels have been found." That leaves about 34 billion still to find and develop.

The federal moratorium only blocks another 18 billion barrels of oil from being developed. But, as you can see, most of that is off of California, which has bipartisan opposition to drilling from Republican Governor Schwarzenegger -- who, unlike McCain, seems serious about his commitment to greenhouse gas reduction -- and the Democratic legislature, which remembers all too well the devastating 1969 oil spill off the coast of Santa Barbara. Indeed, Karen Bass, the newly appointed speaker of the State Assembly, said, "The idea of increasing offshore drilling off the coast of California I think is absurd, and I can't even imagine we would entertain that." Why would they, given the risk to their beautiful coasts and their commitment to reduce statewide greenhouse gas emissions 80 percent by midcentury?

So that only leaves about 8 billion barrels, which is about what the world uses in three months. Not bloody much. And that assumes every other state, including Florida, goes aggressively with offshore drilling, which is exceedingly unlikely.

You may ask why big oil hasn't gotten around to the 34 billion barrels already available to them offshore, given the staggering price for oil? The answer is pretty much the same reason why the EIA analyst told me that ending the federal moratorium is "certainly not going to make a difference in the next 10 years": It ain't easy being non-green offshore.

As she explained, the constraints on offshore drilling have little to do with the price of oil, but a lot to do with timing. Once the leases are available, it is five to 10 years before you get to exploratory drilling. There is a tremendous shortage of drilling rigs and manpower. Plus, offshore drilling is so expensive, you don't want to make any mistakes. So you do a lot of seismic analysis to minimize your chances of a dry well.

And it is probably another five or more years from drilling your exploratory well to getting significant production from the area -- and that assumes you didn't dig a dry well. If you did, then you are probably going to be even more cautious. And all that assumes you have developed a pipeline infrastructure for delivering the oil. But the Atlantic Coast lacks such an infrastructure, so who knows how long it would take to get its oil?

Here are the assumptions EIA makes:

Assumptions about exploration, development, and production of economical fields (drilling schedules, costs, platform selection, reserves-to-production ratios, etc.) in the OCS access case are based on data for fields in the western Gulf of Mexico that are of similar water depth and size. Exploration and development on the OCS in the Pacific, the Atlantic, and the eastern Gulf are assumed to proceed at rates similar to those seen in the early development of the Gulf region. In addition, it is assumed that local infrastructure issues and other potential non-Federal impediments will be resolved after Federal access restrictions have been lifted.

And here is what EIA projects would happen to offshore oil production if the federal moratorium were eliminated and none of the states block drilling and if exploration and development of resources in those areas begin in 2012:

Essentially no extra oil beyond the reference case until 2020. And then from 2020 to 2030, the extra oil production averages about 150,000 barrels of oil a day.

But of course that's not going to happen since, as noted, absent the federal moratorium, California is not going to allow drilling off its cost. So we are almost certainly talking under 100,000 barrels a day sometime after 2020. And yet Senator McCain said:

"Tomorrow I'll call for lifting the federal moratorium for states that choose to permit exploration," McCain said. "I think that this and perhaps providing additional incentives for states to permit exploration off their coasts would be very helpful in the short term in resolving our energy crisis."

It is cruel to mislead the public on a subject that matters so much to all Americans. If only we had a politician willing to engage in straight talk on this important issue.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund."

Oil Drilling in Environmentally Sensitive Areas: The Role of the Media

Center for Economic and Policy Research:




Excerpts:

"However, there is no empirical basis for believing that drilling in environmentally sensitive offshore zones would significantly affect gas prices. The U.S. Department of Energy’s Energy Information Agency (EIA) projects that such drilling would add some 200,000 barrels of oil per day at peak production in about 20 years. This is about 0.2 percent of world production, and the EIA describes this as too small to have any significant effect on oil prices."...


..."Conclusion

Major media outlets provided daily repetition of the false claim that expanded drilling in environmentally sensitive zones would significantly lower gasoline prices. At the same time, these outlets failed to report the official data from the Department of Energy’s Energy Information Agency, which showed that these claims were false. There can be little doubt that this reporting had a significant impact on public opinion, and contributed to the widespread misunderstanding reflected in polling data. In so doing, the major media exerted a very significant influence on an important matter of national policy. The media have most likely changed the debate and political climate in a way that would not have been possible if they had simply reported the most important official data, thereby showing that the central claim in this debate was false." Entire article>>>>

DRBC to find out: What’s in frack fluid?

The River Reporter:

UDC stance sought

By SANDY LONG

"NARROWSBURG, NY — They came seeking a stance on regional natural gas drilling from the Upper Delaware Council. Instead, local citizens and members of the Damascus Citizens for Sustainability learned that the Delaware River Basin Commission (DRBC), a federal-interstate compact government agency, is in the process of formulating new regulations to increase protection of the basin’s water resources.

“The DRBC has regulatory responsibility for both water quantity and water quality,” said DRBC communications manager Clarke Rupert. “We’re not hanging our hat just on water quantity; we’re using a clause in our compact which allows us to look at proposed projects that may have a negative effect on water resources of the basin.”

Rupert went on to say that the DRBC has identified three areas of concern. “Water quantity; we want to know where the water’s coming from. What kinds of activities will be taking place on the site when the drilling takes place, and the recovered fracking water, which needs to be properly treated and disposed of,” explained Rupert. “There are only two permitted facilities in Pennsylvania that can handle such briny solutions. We’ll need to know what the plans are for treating this recovered frack water.”

The DRBC also wants to know what’s in the frack water and is creating an addendum to its current application to address this. “Regarding the fracking fluids and the chemicals that will be added, my understanding is that that will be one of the pieces of information included on that addendum to the application that they will need to disclose to us,” Rupert said.

Rupert stressed that the DRBC still has not received a single application for natural gas drilling in the Marcellus Shale Formation. The agency has summarized its perspective and roles in relation to gas drilling on its website at www.drbc.net. Its standard application is available there and the new addendum will be included." More>>>>

Economic damage from Ike may be less than feared

AP Associated Press:

By DAVID KOENIG and ELLEN SIMON – 33 minutes ago

"DALLAS (AP) — Because of where a weaker-than-expected Hurricane Ike landed, first impressions on Saturday were that the economic damage may not be as devastating as feared.

"If the eye of that storm had been as much as 20 miles east, we would have a lot more havoc and damage than we did," said Chris Johnson, a senior vice president at commercial property insurer FM Global.

The eye of the hurricane missed the center of Houston, as well as the largest concentrations of oil and gas refineries, Johnson said. The storm surge and rainfall in Galveston, Texas, were also weaker than predicted." More>>>>

Hurricane Ike, Energy Infrastructure, Refineries and Damage Models Landfall Thread (Updated 9/13 9:00 EDT)

The Oil Drum:

"Updated 9/13 900 EDT. Hurricane Ike made landfall in Galveston in an area with extensive oil infrastructure, namely over 5 million bpd of US petroleum refining capacity. (5 MMBBL is about 30% of US capacity (about 15 MMBBL), and a bit less than 6% of global capacity (~85 MMBBL)).

Our thoughts and prayers go out to those affected by this storm. We would ask that you please keep this thread on point with Hurricane Ike and energy-related articles, stories, maps, data, and links in this thread.

Path observations and damage estimates for Hurricane Ike--Methaz NHC official track Sep 13 (7:00 EDT)-click twice to enlarge

For all graphics: Rigs/Platforms: Blue: evacuated only; Yellow will require inspection before restart; Red: damage requiring repair; Refineries: Black: operational impact (partial shutdown) Green: Operational impact (full shutdown) Red: Damage likely; Ports: standard hurricane flags for wind." More>>>>