NM Pit Rule a Driller Killer?

The New Mexico Oil Conservation Division Pit Rule has become the whipping post for the oil and gas industry advocates. In addition, Sarah Palin has blamed environmentalists for the BP Oil Spill. Now juxtapose these stances to Gov. Richardson's press release below:

"For Immediate Release

Contact: Jodi McGinnis Porter

May 19, 2010 505.476.3226

Governor Bill Richardson Announces Oil and Gas Drilling Activity in New Mexico Is Strong

Environmental regulations are not driving business away

SANTA FE, NM - Governor Bill Richardson today announced that New Mexico's drilling activity has more than doubled this year according to the Baker Hughes rig count with 63 operating rigs reported on May 14, 2010, compared to 31 operating rigs a year ago on May 15, 2009. The number of oil- and gas-producing wells in New Mexico remains constant with new environmental regulations balancing our energy needs while protecting New Mexico's precious ground water and our environment.

"New Mexico's pit rules have shown that protecting our health and water resources are good for industry and the environment," said Governor Richardson. "The BP oil leak in the Gulf of Mexico is a sobering reminder that preventing environmental contamination is always less expensive than cleaning it up."

Activity in southeastern New Mexico's Permian Basin is especially strong. Apache Corporation, an independent energy exploration and production company, recently announced it expects to drill in excess of 200 new wells during 2010 in the Permian Basin. Of the 200-plus wells, 100 will be drilled in New Mexico, which will represent the most wells drilled by Apache in the state in any year.

"We can produce oil and gas in New Mexico in an environmentally sound manner that works for industry and protects our natural resources." said Jon Goldstein, Cabinet Secretary for the New Mexico Energy, Minerals and Natural Resources Department. "Drilling activity closely follows the price of oil and gas. As commodity prices rise, drilling activity increases."

The price of a barrel of oil was in the mid $30 range in 2009. Current prices in the $60-$70 range are driving healthy activity in New Mexico's southeastern oil fields. Unfortunately, natural gas prices have not increased to the same extent keeping activity at a lower level in the gas fields of the San Juan Basin.

The price of oil and gas fluctuates, but companies can find and produce oil and gas more safely, efficiently and with increased environmental protections using new technologies, such as directional drilling, reusing existing well pads for new wells and using closed loop systems to manage their waste.

Earlier this week, U.S. Interior Secretary Ken Salazar followed New Mexico's lead and announced that the Department of Interior's Bureau of Land Management is reforming its oil and gas program to improve environmental protection of important natural resources on U.S. public lands while aiding in the orderly leasing and balanced development of the nation's energy supply.

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Caitlin Kelleher

Media Coordinator for Governor Richardson

Office of the Governor

State Capitol, Suite 400

Santa Fe, NM

office 505.476.2299| cell 505.795.2480"