Wednesday, February 3, 2010

Oil Patch Times: 2009 economics

Los Alamos Monitor

By Don Neeper, John Bartlit

"Going on four years now, lobbyists for New Mexico’s oil and gas industry have said the “Pit Rule” should be based on sound science.

If they wanted to be judged on facts, they would supply a decent sampling of information. Instead, their pitch crumbles into raw politics as other information pops out in print.

The full story begins with the hundred thousand oil and gas wells drilled in New Mexico over the years, and continues with the tens of thousands of new wells slated to be drilled. Each well has a surrounding work area, called a “drill pad,” of one to five acres, accessed from the highway by a network of dirt roads long enough to reach every well.

Where geologic formations hold substantial oil and gas, the result resembles a giant Chinese checkerboard of well sites laid on ranch land, forest land or BLM land.

As with car exhaust, problems that are small at first grow as they occur on a larger scale. A notable issue is what happens with the drilling wastes.

“Drilling wastes” include “drilling mud,” a commercial product of clay and unstated ingredients that works as a lubricant and pressurant in drilling. Then come wastes of crude oil and salt from brine.

The industry aims to bury its highly salty wastes at the well sites, or “pits.” This would not be too bad if the salt would never move and no one would ever disturb the land.

But if the salt dumped in the land moves, as by rainfall, water in soil or a future use of land, bad things happen. The loss is to the land if the salt moves up or spreads out. The loss is to aquifers beneath if salt moves downward.

What is known and not known about the science of salt moving in soils and key factors like the lifetimes of thin plastic pit liners, occupied 17 days of expert technical testimony, most of it hired, at state hearings on the Pit Rule. To test for truth, every technical witness is subject to lengthy cross-examination by teams of lawyers, also hired, working to spot holes in the testimony.

But don’t take my word for it; see the 5,075 pages of verbatim record and technical exhibits from the hearing.

The two years of work plus weeks of testimony yielded final rules known collectively as the “Pit Rule.”

After the rule was adopted, the industry went to the governor to get it relaxed. With the governor’s weight in the picture, a new hearing raised the limits on salt buried widely in pits or trenches.

Now another piece of news shows up, hoping to muddle the science with more politics. On the Internet, Susana Martinez, candidate for governor, declares, “The pit rule has no scientific basis and must be removed immediately.” As tutored by the oil and gas lobby, her one-liner ignores the sum of the 5,075-page hearing record.

The political hopeful also shaves the economics down to nothing, again tutored by the oil and gas lobby. She declares: “It’s costing our state millions of dollars in revenue.

Revenue from the gas and oil industry is down from 21 percent (in past years) to around 13 percent in 2009.” (Artesia Daily Press, Dec. 23, 2009).

This sliver of fact ignores the big story printed on the front page of the Albuquerque Journal a month earlier on Nov. 20. The headline read: “N.M. Falls Hard Into Recession — Federal Reserve official says energy-producing states hurting.”

The Journal story says energy-producing states are being hit by low demand and low prices for oil and gas. As the overall economy fell, energy demand fell, the effect of which is now hitting energy-producing states, such as “New Mexico, Colorado, Oklahoma and Wyoming.” The cause is not N.M.’s Pit Rule. In all states, oil revenues are down because oil prices are down.

The Federal Reserve analyst said, “I think we hit the life-time low in oil prices last summer. The lower energy prices help the national economy recover but hurt energy producers.”

The front-page news also reports: “Meanwhile, natural gas prices are being depressed by abundant new supplies coming from shale deposits in Texas, Arkansas and the eastern United States.”

The public could judge oil and gas on facts, if the industry lobby did not cover up the science record and economic facts.

Meanwhile, the nation’s oil industry fights for more drilling of sites with higher costs than New Mexico, as in Gulf waters and Alaskan tundra."

Article link>>>>


Thursday, January 28, 2010

Gallagher's out as NMOGA president

bizjournals.com

January 28, 2010 7:56 PM ET

Kevin Robinson-Avila

"Bob Gallagher, who has led the New Mexico Oil and Gas Association for a decade, is no longer its president.

Gallagher said in an interview Thursday that the organization has “terminated” him from his position.

“As of yesterday, NMOGA bought out my contract and terminated me,” Gallagher said. “They say I damaged the image and reputation of NMOGA so bad that I am no longer effective in representing the oil and gas industry.”' More>>>>


Wednesday, January 27, 2010

Legislture in session. Time for bad bills: HB 192 RESCIND OIL & GAS PIT RULES

2010 Regular Session

* HB 192 RESCIND OIL & GAS PIT RULES

Sponsor: Thomas C. Taylor

Current Location: House Rules & Order of Business Committee


Text Document PDF Document Introduced (1/27/10)

Yet, according to OGAP (Oil & Gas Accountability Project), "Pits under the new rule: lined, permitted, more respectful of water and property.

The new pit rule bans unlined pits entirely and requires that all pits are permitted with the Oil Conservation Division (OCD). At long last, the public will finally have an inventory of pits in our state! The new rule also strengthens liner requirements and effectively requires the use of closed loop systems in close proximity to our water resources and homes.

The Oil & Gas Accountability Project (OGAP) maintains that the industry will end up saving money in the long run by moving to closed-loop systems. Mary Ellen Denomy, Petroleum Accountant, told the Oil Conservation Commission that closed-loop systems saved 3% per well. Denomy stated that companies were able to cut costs on construction, water, drilling muds and waste disposal when utilizing closed-loop systems. View OGAP's Op-ed." More>>>>

So, why does Representative Taylor think that the pit rules are a bad idea?

Representative Thomas C. Taylor - (R)

District: 1
County: San Juan
Representative Since: 1999
Occupation: Investments
Address: 5909 Rinconada

Farmington, NM 87402
Capitol Phone: (505) 986-4757
Office Phone: (505) 320-0306
Home Phone: (505) 325-9828
E-mail: tom@tomtaylor.net

Friday, January 15, 2010

(San Miguel) County enacts drilling moratorium

Las Vegas Optic

15 January 2010

By David Giuliani

"The San Miguel County Commission passed a year-long moratorium on permits for oil and gas drilling — a move supported by everyone who spoke before the panel, including an industry spokeswoman.

No one has approached the county about possible drilling, but companies have proposed such activity in neighboring Mora and Santa Fe counties.

In calling for the moratorium, the county plans to form a task force and seek the advice of experts to develop a new ordinance for drilling. The current land-use ordinance includes just a half page dealing with such activity.

More than 20 speakers came before the commission to urge the moratorium’s passage." More>>>>


Proposed Tougher Ozone Standard Worries Intermountain West Drillers

The New York Times

By SCOTT STREATER of Greenwire

Published: January 14, 2010

"More than a dozen Western counties with high levels of oil and gas drilling could face tougher requirements for ozone pollution under new proposed federal standards rolled out last week, adding another dose of regulatory uncertainty to an industry already facing tougher scrutiny over its air emissions."...

..."In New Mexico, which currently meets federal health standards for ozone statewide, two counties -- Rio Arriba and San Juan in the state's Four Corners region -- could fall into nonattainment largely because of power plant emissions, as could several others on the state's southeast side, "where there's a lot of oil and gas development," said Mary Uhl, air quality bureau chief for the New Mexico Environment Department.

While New Mexico has been more cautious than some other Intermountain states about new drilling, it remains in the top five natural gas producing states, with most of the gas coming from the San Juan Basin in northwestern New Mexico and the Permian Basin in the south.

In 2008, Gov. Bill Richardson (D) joined Santa Fe County in imposing a moratorium on oil and gas drilling in the Galisteo Basin south of Santa Fe after environmental groups complained that a proposal to drill new exploratory wells there would harm the area's environment and important archaeological and cultural resources.

Included in Richardson's executive order was that the New Mexico Environment Department consider adopting new air quality regulations to further protect ambient air quality from drilling activity in the basin.

The developer, Tecton Energy of Houston, later abandoned the proposal." More>>>>


Tuesday, January 12, 2010

San Miguel County Board of County Commissioners Pass Oil and Gas Drilling Permit Moratorium

Today, the San Miguel County Board of County Commissioners passed and adopted a one year oil and gas drilling permit moratorium.

See related post:

(San Miguel) County Wants Drilling Rules

Saturday, January 9, 2010

Environmentalists debate whether natural gas is safer for the environment

Staci Matlock | The New Mexican
Posted: Friday, January 08, 2010

"New Mexico is a top producer of natural gas and some environmentalists see the fuel as a more environmentally friendly energy choice than coal.

But is it?

Carl Pope, executive director of the Sierra Club, sees well-regulated natural gas production as a good way to transition from coal and oil to renewable sources like solar, wind and biofuels. "Natural gas is an excellent example of a fuel that can be produced in quite a clean way, and shouldn't be wasted," he said. "We see it as part of the energy transition to a post-fossil fuel economy."

But Johnny Micou, who helped martial a grass-roots effort to stop exploratory oil and gas drilling in the Galisteo Basin near Santa Fe, said the environmental impact of unconventional drilling practices that are allowing industry to tap into new natural gas sources have not been thoroughly studied. "The cumulative environmental impacts of drilling need to be considered," he said.

Micou thinks the Sierra Club needs to take a tougher stand. Supporting natural gas as a "transition" fuel only delays the sense of urgency needed to make a real and substantial shift in energy sources. "There are parts where we (he and Pope) agree, but I would like to see more strides now and a significant change from the way we do energy sources and automobiles," Micou said. "Soft-pedaling on industry now is going to perpetuate the problem."

New Mexico is the fourth- or fifth-largest producer of natural gas in the country every year and revenues generated from the billions of cubic feet extracted are a big boost for the state. Most of the natural gas comes from the San Juan Basin in northwestern New Mexico and the Permian Basin in the south. Now energy companies are eyeing basins from Tucumcari to Mora that are potentially rich in natural gas." More>>>>

~~~

Related article:

The Wall Street Journal

Sierra Club's Pro-Gas Dilemma

By BEN CASSELMAN

December 22, 2009

"LIVERPOOL, N.Y. -- When energy companies began preparations to drill for natural gas in upstate New York last year, the local Sierra Club quickly organized against them.

The group's New York chapter demanded studies on the environmental risks, pushed for stricter regulations and called for a statewide ban on most gas drilling. The drilling hasn't begun as the state works to develop regulations.

It would have been a typical story of environmentalists battling industry, except for one thing: The national Sierra Club is one of natural gas's biggest boosters.

Carl Pope, the Sierra Club's executive director, has traveled the country promoting natural gas's environmental benefits, sometimes alongside Aubrey McClendon, chief executive of Chesapeake Energy Corp., one of the biggest U.S. gas companies by production.

The national group's pro-gas stance has angered on-the-ground environmentalists in several states who say their concerns are being marginalized." More>>>>

Link to Sierra Club new national policy on gas>>>>


Friday, January 8, 2010

Amid strife, first Whites Peak land swap closes

Staci Matlock | The New Mexican
Posted: Thursday, January 07, 2010
- 1

"Angry hunters and skeptical public officials Thursday grilled state Land Commissioner Pat Lyons over a controversial package of state trust-land trades around Whites Peak.

The confrontation at the state Land Office in Santa Fe came shortly after the first such deal closed, involving the Stanley Ranch.

Lyons held the meeting to give state legislators more information about the trade. But the session more than once devolved into heated exchanges, with Lyons and a Las Vegas, N.M., hunting guide at one point shaking fingers at each other.

"This is wrong," said Albert H. Goke, who said he had been a licensed guide for 10 years and that the trust lands being traded into private hands have some of the biggest bull elk.

State Rep. Brian Egolf, D-Santa Fe, asked Lyons why the meeting was held on the day the main land trade was already completed. "It is not good policy to explain a complicated exchange after the fact," Egolf said.

Rancher David Stanley traded 3,336 acres of private land valued at $6.4 million for 7,205 acres of state trust land valued at $6.3 million. The trade consolidates his holdings and state trust lands around Whites Peak. Exchanges are proposed with three other private ranches, including a swap with UUBar that could close anytime in the next few weeks.

Lyons said the exchange will create 44,000 acres of contiguous state trust lands with more water sources, good big-game habitat and new permanent public access off N.M. 120.

Hunters from Mora and Las Vegas who attended the meeting said the Stanley trade takes away some of the best elk-hunting areas. "Those of us who know that area know what's being lost," Angelo Archuleta of Mora said. "It's painful."

Egolf has asked the attorney general to investigate the appraisals conducted for the land trade. He said he thought the only possibility to void the Stanley land trade now would be if Lyons was sued for breach of fiduciary trust or for not complying with the state Enabling Act." More>>>>

Related post:

Land commissioner to meet with lawmakers about land swap



Land commissioner to meet with lawmakers about land swap

Jan. 8, 2010
By Las Vegas Optic

"State Land Commissioner Patrick Lyons will be meeting with area state lawmakers on the proposed trade of state land with ranchers in the White Peak area.

Many sportsmen have complained about the swap, saying it's taking prime hunting ground from the public. Gov. Bill Richardson has joined them in the criticism.

The Land Office has defended the trade as providing a better alignment of state and private lands in the White Peak area. The agency has noted that many people have been trespassing on private land there.

The meeting will be open to legislators and the media at 1 p.m. Thursday at the State Land Office on Old Pecos Trail in Santa Fe. A spokeswoman for the Land Office said the public isn't invited."Link>>>>

What is it about elected officials making decisions concerning public lands and the public is not invited seem odd?

Monday, January 4, 2010

Don't Blame the Pit Rule for Loss of Revenue, State Budget Crisis

Albuquerque Journal

By Joanna Prukop

"Former Secretary, New Mexico Energy, Minerals and Natural Resources Department

Don't Blame the Pit Rule for Loss Of Revenue, State Budget Crisis

New Mexico's oil and gas industry generated $1.8 billion for the state's general fund last year and employed thousands of New Mexicans. It is critical to our state's economy and so is our responsibility to protect the environment, wildlife, natural resources, and especially precious ground water.

Industry lobbyists and some politicians blame the Pit Rule, adopted by the New Mexico Oil Conservation Commission in 2008, for the state's current budget crisis and the drop in state revenues and claim that the Pit Rule is driving the oil and gas industry out of the state. This is not true and only represents half the story. Relevant facts are conveniently omitted, like the global crash in oil and gas prices and that neighboring states are also seeing reduced oil and gas drilling activity. There have been no attempts by these lobbyists and politicians to enlighten the public as to what the Pit Rule regulates and protects.

Here is the whole story:>>>>"


Saturday, January 2, 2010

Proposed Legislation Would Punish County for Regulating Drilling

Rio Grande Sun

By Joe Crawford

SUN Staff Writer

Published: Thursday, December 31, 2009 10:51 AM MST

"Proposed legislation drafted by a state senator from Farmington would punish Rio Arriba County for its new oil and gas ordinance.

Sen. William Sharer (R-Farmington) introduced a bill Dec. 15 that would penalize counties and municipalities with local laws that have an “onerous effect on extractive industries.” The legislation would keep those local governments from receiving funding from severance tax bonds, which makes up a significant portion of the state’s capital outlay appropriations.

Sharer said the legislation is aimed directly at Rio Arriba and Santa Fe counties, which have enacted ordinances the last two years to further regulate the oil and gas industry.

“If you don’t want the production, why should you benefit from the proceeds?” he said.

Sharer’s law would apply to oil and gas drilling as well as mining, according to the bill.

The Rio Arriba County Commission passed an oil and gas ordinance in May in response to plans by Texas-based Approach Resources to drill on 90,000 acres of mineral rights south of the Tierra Amarilla. Drilling had never occurred in the area before. The Commission postponed the first applications from Approach at a meeting Tuesday in Tierra Amarilla.

The County ordinance requires drilling companies to receive approval from the County before drilling new wells, but the County only monitors drilling issues on the ground surface, such as wells proximity to homes and water wells. County Planning and Zoning Director Gabriel Boyle has said County staff does not have the training or equipment to monitor anything that happens below ground.

The state Oil Conservation Commission, the state entity responsible for monitoring oil and gas drilling, would be responsible for determining which laws are onerous. The bill defines the onerous laws as those that “would increase the cost of either drilling or operating a well by fifty percent or more over the drilling or operating costs that would be incurred without the ordinance.”

When pressed for specific issues with the counties’ ordinances, Sharer said he had not analyzed the two counties’ ordinances. Sharer said he was opposed to any local regulations that go beyond what was required by the state.

“If you want environmental protection, then we can all live in a mud hut and freeze and die at age 45 with no teeth,” Sharer said. “What I’m looking for is some balance.”

Rio Arriba County Commissioner Alfredo Montoya said he was not concerned the law would cause the County any problems.

“We’ve never been about prohibiting the industry from doing business in our County,” he said.

Rio Arriba’s oil and gas drilling is based in the western part of the County which abuts San Juan County but the new ordinance applies primarily to drilling in the eastern portion.

State Sen. Richard Martinez (D-Española) said he was under the same impression as Montoya. Martinez said he is not in support of local laws that go far beyond what is mandated by the state, but the County’s ordinance is not that stringent.

“I had thought that the oil and gas industry and the County had reached a consensus,” he said.

County Manager Lorenzo Valdez said he doubted the bill would have enough support to become law.

Sharer has received $1,000 in campaign contributions from the oil company Chevron since 2006. He was also given $575 in October by the American Legislative Exchange Council, which has publicly lobbied the United States to end its moratorium on offshore drilling." Link>>>>

*

~~~

About the bill:

2010 Regular Session

SB 8

NO SEVERANCE TAX PROJECTS IN CERTAIN COUNTIES

Sponsor: William E. Sharer


Tuesday, December 29, 2009

Rio Arriba County Special Use Permit Applications to Drill Update

The Rio Arriba County Board of County Commissioners decided to postpone on the decision about the drilling permits. The reported issue is that Approach Operating, LLC did not know from where the water for drilling would come.

Related post:

Rio Arriba County Special Use Permits to Drill for Oil and Gas



Monday, December 21, 2009

(San Miguel) County Wants Drilling Rules

Front Page north

County Wants Drilling Rules

Albuquerque Journal--> By Jessica Dyer
Journal Staff Writer

"San Miguel County officials know their county's energy-generating possibilities will soon spark interest, and they want to be prepared for all comers.

After watching other northern New Mexico communities race to get drilling ordinances in place with prospectors already at the door, San Miguel officials are getting proactive. The County Commission on Jan. 12 will vote on a proposed one-year moratorium on applications for permits to explore or excavate for oil, gas or geothermal energy. County attorney Jesus Lopez said the moratorium will allow the county time to draft an up-to-date and more thorough drilling ordinance than the one now in place.

The current ordinance — adopted in 1986 — requires a county permit for any drilling activity but has been deemed by officials as inadequate. Lopez said there are no drilling applications through the county now but "because it's happened in Rio Arriba and Santa Fe, we figured it's right around the corner and we might as well get on it."

Santa Fe County enacted its own drilling ordinance last year, while Rio Arriba County adopted its ordinance last spring.

County Manager Les Montoya said the move was prompted at least in part by news that the Santa Fe Opera recently had leased out 27,000 acres of mineral rights in Mora and San Miguel counties for oil and gas drilling. The rights were donated to the opera by a benefactor.

"We kept hearing this and that, so we thought we better look at the ordinance," Montoya said.
County commission chairman David Salazar said the county's present regulations are minimal when it comes to drilling and don't focus enough on safety — especially on the safety of the county's water supply.

"Water is one of the major things we have problems with," he said. "Any contamination would really hurt our county."

Montoya said having enough good water is an ongoing issue within the county. The city of Las Vegas, he said, has faced "very strict" water conservation ordinances for most of the last decade because its relies so heavily on surface runoff that hasn't been particularly plentiful.

"We have limited supplies at this point, and we need to do what's necessary to ensure the quality and quantity," he said." More>>>>

Thursday, December 17, 2009

Rio Arriba County Special Use Permits to Drill for Oil and Gas

Rio Arriba County is not unfamiliar with oil and gas drilling. From the 1980's to 2008, Rio Arriba County, New Mexico had reportedly 7,597 oil and gas wells. In 2009, more than 400 additional wells have been or are intended to be drilled. In May 2009, Rio Arriba County adopted an oil and gas ordinance in regards to Approach Operating, LLC targeting the water-rich, fragile ecosystem of the Rio Chama Watershed for exploratory drillings (aka, "wildcatting"). Up to this time, the oil and gas drilling had primarily been the San Juan Basin portion of Rio Arriba County.

In addition, the County protested to the New Mexico Oil Conservation Commission (OCC) 24 applications to drill (APDs) by Approach Operating , LLC. In July 2008, Governor Richardson directed the OCD to draft special rules for oil and gas drilling in certain areas of Rio Arriba County (i.e., Tierra Amarilla and portions of the Rio Chama Watershed). This did not occur. Subsequently, Approach Operating, LLC sought dismissal of the case and the County agreed.

Presently, the Oil Conservation Division (OCD) has approved eight APDs and Rio Arriba County Planning and Zoning Committee has recommended for approval three special use permits for five oil and gas wells in the Rio Chama Watershed of Rio Arriba County. On December 29, 2009, the three County permits will go before the Rio Arriba Board of County Commissioners in Tierra Amarilla. The public meeting is scheduled to begin at 1:30pm:

Rio Arriba County:

For Contact, please go through the ESPANOLA OFFICE
1122 Industrial Park Rd
Espanola, NM 87532
Phone: (505) 753-7774
Fax: (505) 753-4732

The meeting will be held at the TA OFFICE:

PO Box 127
Tierra Amarilla, NM 87575
Phone: (575) 588-7254
Fax: (575) 588-7810
Website: www.rio-arriba.org

Map

Rio Arriba County Approach Operating, LLC Permits, Combined (3 permits for 5 wells)>>>>

Wednesday, December 16, 2009

Has Natural Gas's Moment Come?


Wall Street Journal

By Ann davis, BEN CASSELMAN And REBECCA SMITH

Excerpt:

"The U.S. Energy Information Administration predicts widening use of natural gas for power. In an outlook published Monday, the agency said natural gas will account for 46% of all power plant capacity additions from 2008 to 2035.

The abundance of gas is largely thanks to a new technique to unlock dense rock first tried successfully in the 1990s and early 2000s in the Barnett Shale under Fort Worth, Texas. Riding this success and fueled by cheap financing, energy companies fanned out across the U.S. in search of new fields.

What they found has fundamentally reshaped the industry's understanding of how much gas lay beneath the U.S. Huge new fields in Louisiana, Arkansas, Pennsylvania and elsewhere could give the country a 100-year supply of gas, a sharp reversal from earlier predictions that the U.S. would begin relying heavily on gas imported from overseas. After years of decline, U.S. gas production shot up 12% from 2005 to 2008.

One of the most unexpected signs of the growing comfort that gas is becoming a more stable commodity are the negotiations between producers and consumers over long-term contracts for gas supplies.

Larry Nichols, chairman and CEO of gas-producer Devon Energy Corp., said that in the past, companies were forced to search for new gas each year, making long-term contracts impractical. But the recent shale discoveries are different—they are huge and extremely reliable, meaning they can reliably strike multi-year commitments to provide gas. Devon, for example, has drilled 4,000 wells in the Barnett Shale without a single dry hole, and still has thousands of places left in the field to drill.

"There's certainly the potential for the natural-gas producers and the utilities to develop a new relationship that has not been possible historically," Mr. Nichols said." Aritcle>>>>

Tuesday, December 15, 2009

Exxon Deal May Be Green Light for Shale

"Others may have to follow its $30 billion purchase of XTO, a company that specializes in fracturing rock with water and sand to make natural gas flow"

By Jessica Resnick-Ault

"(Bloomberg) — Exxon Mobil's (XOM) $30 billion purchase of XTO Energy (XTO), the largest U.S. petroleum takeover since 2006, may signal a wave of acquisitions as major producers seek to tap growing gas and oil output from shale formations.

Irving, Texas-based Exxon announced its deal yesterday, saying it plans to make XTO, the largest natural-gas producer in the U.S., the centerpiece of its global expansion in shale developments. XTO is among companies that drove a surge in U.S. fuel output by exploiting so-called shale plays, where rock formations are fractured with water and sand to make gas flow.

Exxon's stamp of approval on shale plays may be a watershed, encouraging companies that have already made investments in the segment to expand their positions, said Ryan Cournoyer, head of energy trading at Lighthouse Financial Group LLC in New York. The largest U.S. energy company also will help stabilize gas prices, making it easier for buyers and sellers to come together on acquisition values, he said.

"Exxon Mobil acquiring XTO is going to put a floor on natural-gas prices longer term," Cournoyer said. "These guys are finally coming out and acknowledging that they need to grow their reserves longer term."

Likely buyers include major oil companies that are struggling to boost output, such as Royal Dutch Shell Plc and Total (TOT), said Ted Harper of Frost Investment Advisors in Houston and Philip Weiss, an analyst at Argus Research Corp. in New York. They said takeover targets may include independent producers like Anadarko Petroleum Corp., EOG Resources (EOG), EnCana Corp., Ultra Petroleum (UPL), and Range Resources (RRC)." More>>>>


Monday, December 14, 2009

Underused Drilling Practices Could Avoid Pollution

"Asked why his company pursued "green" drilling and fracturing fluid innovations for drilling in the North Sea -- products that it now sometimes uses onshore too -- BJ Services' Dunlap was unequivocal: The law made him do it.

"It's because of local regulations," Dunlap said. "That's typically what drives us to develop and bring to market these environmentally friendly products."' Article>>>>

by Abrahm Lustgarten, ProPublica - December 14, 2009 12:00 am EST

Versions of this story were published in the Albany Times Union [1] and the Times Herald-Record [2].

Saturday, December 12, 2009

NM gas producers file complaint over rates

By SUSAN MONTOYA BRYAN - Associated Press Writer - Associated Press

Friday, December 11, 2009

"A coalition of natural gas producers has filed a complaint with New Mexico regulators alleging that a Houston-based pipeline company is charging excessive rates for transportation services in one of the nation's largest natural gas basins.

The coalition argues that Enterprise Field Services LLP has increased its gathering rates in the San Juan Basin by 240 percent over the last several years and that New Mexico stands to lose nearly $440 million in direct tax and royalty revenues over the next 15 years as a result.

Gene Gallegos, a Santa Fe attorney representing the coalition, said Friday that rate increases for gas gathering services result in direct cost increases for New Mexico gas producers and that, in turn, affects tax and royalty payments made to the state.

"What you deduct from the wellhead price reduces severance tax, it reduces royalties on state leases and it reduces our share of federal royalties. That's a lot of money, and it couldn't be a worse time," Gallegos said.

New Mexico is facing a potential budget gap of $500 million to $600 million next year, and the revenue outlook is grim as the economy continues to sputter."

~~~

And even though the New Mexico Oil and Gas associations have been fighting regulations, such as the New Mexico Oil Conservation Pit Rule, the article continues, "Gallegos said the case could set precedent nationwide since fees charged by gas gathering companies go largely unregulated.

Federal jurisdiction starts with interstate pipelines at the outlet of processing plants. Everything between the wells and the processing plants is left up to states.

Gallegos said no one has complained about the lack of regulation until now. He explained that fees had held steady for decades until Enterprise purchased the basin's gathering system and raised rates four times in the last five years." More>>>>

Friday, December 11, 2009

(KSFR) Santa Fe development plan going through changes (Podcast)

(KSFR) -
-- Santa Fe's overall land development plan apparently is undergoing changes. County officials tell KSFR's Marion Cox that a meeting scheduled for Dec. 17 will be postponed because parts of the plan are not finished, after all. Cox reports that the officials are removing three parts of the existing plan that was thought to be near final approval. They include the oil and gas component, the section on community plans, and the capital improvements portion. Cox says it's not clear whether those elements will be reinserted in whole or in part. Listen. © Copyright 2009, KSFR

Link to podcast>>>>

(San Miguel) County moves toward oil and gas moratorium

Las Vegas Optic

By David Giuliani

"The San Miguel County Commission has taken its first step toward setting a year-long moratorium on oil and gas drilling permits while it enacts new regulations.

On Tuesday, the commission voted unanimously to publish the proposed moratorium and seek public comment.

As it stands, the county has about a half page of regulations for oil and gas regulations. That’s from a land-use ordinance in 1986 that’s about an inch thick.

County officials say they want a more detailed ordinance specific to oil and gas drilling. This is after oil and gas companies have taken steps toward drilling in Santa Fe and Mora counties.

No requests for permits for oil and gas drilling are pending before San Miguel County.

County Attorney Jesus Lopez said the current ordinance “very summarily and very scantily” addresses the issue of oil and gas permits, including the effects on water availability, the terrain and the environment.

“You don’t have an ordinance that adequately protects the health and safety of the people,” he said. “This is an issue of great concern, as it should be.”

Lopez said the county manager will have a year to get input and expert opinions and compile studies as he works to draft an ordinance. But he said it may well take longer than that.

Commission Chairman David Salazar said he understood that State Land Commissioner Patrick Lyons has already leased out lands around the county for oil and gas drilling. He wondered if state lands fall under the county government’s jurisdiction.

Lopez said the moratorium would apply.

“Any authority given to the State Land Office is still subject to local regulatory authority,” the attorney said.

The commission is slated to vote on the moratorium Jan. 12." More>>>>


Thursday, December 10, 2009

NM agency leader leaving for conservation job

"SANTA FE, N.M. (AP) - The secretary of the state Energy, Minerals and Natural Resources Department is leaving Gov. Bill Richardson's administration for a job with a conservation organization.

Joanna Prukop is retiring at the end of the month and will become director of business for wildlife with a group called Freedom to Roam. It's a coalition of businesses and conservation groups that wants to protect wildlife corridors that allow animals to move from place to place.

Richardson announced Wednesday that Jon Goldstein will replace Prukop. Goldstein has served as deputy secretary in the Environment Department since 2007.

Prukop worked for the state Game and Fish Department for 26 years before joining the Richardson administration in 2003 as a cabinet-level agency secretary." Link>>>>

(Copyright 2009 by The Associated Press. All Rights Reserved.)

Tuesday, December 8, 2009

NM oil and gas agency warns of fewer inspections


"ALBUQUERQUE, N.M. (AP) -- The New Mexico Oil Conservation Division says it will have to reduce its routine field inspections by 66 percent this year as the state grapples with a budget shortfall.

Division officials have told legislators that fewer inspections could place the environment and groundwater resources at risk and that processing new drilling applications could be delayed.

The Oil Conservation Division regulates the oil, natural gas and geothermal industries in New Mexico. It's also responsible for preventing contamination from oil and gas operations and reclaiming past environmental damage.

Division director Mark Fesmire says he's down seven inspectors and looming budget cuts will make it impossible to fill those positions.

Fesmire says the priority will be to process new drilling applications while making sure environmental regulations are followed."

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Monday, December 7, 2009

ONE-YEAR MORATORIUM ON THE EXPLORATION AND EXTRACTION OF OIL AND GAS IN SAN MIGUEL COUNTY?

An interesting development in San Miguel County after oil and gas minerals have been leased in San Miguel and Mora Counties, including by the Santa Fe Opera:

On the San Miguel County New Mexico Board of County Commissioners meeting, December 8, 2009:

"4. SMC RESOLUTION NO. 12-08-09-OIL&GAS, PROPOSING AN ORDINANCE IMPOSING A ONE-YEAR MORATORIUM ON THE EXPLORATION AND EXTRACTION OF OIL AND GAS IN SAN MIGUEL COUNTY.


Background Information: At its October meeting, the County Commission directed staff to begin work on a moratorium relating to oil and gas exploration in the county. The Commission expressed concern that the County exists regulations in this area were very out-dated and needed to be revised and up-dated, and that during the revision and amendment process, a moratorium should be imposed. Following that direction, county staff proposes a Resolution allowing the Commission to consider at its January 2010 meeting, a moratorium ordinance.

Action Requested of the Commission: Adopt SMC RESOLUTION NO. 12-08-09-OIL&GAS, proposing the adoption of a moratorium ordinance for oil and gas exploration.

Staff Recommendations: Same as Action Requested, noted above.
Presenter: County Manager Les Montoya and County Attorney Jesus L. Lopez." Full Agenda>>>>

Friday, December 4, 2009

Big Oil's the Boogeyman in 'Split'

Albuquerque Journal North

Decembern 4, 2009

By Phil Parker

Of the Journal

'“Split Estate” presents a heartbreaking pastiche of physical and emotional woes wrought by the centuries-old law that enables energy companies to put drilling wells on the property of private landowners, so long as the companies hold rights to the minerals under the surface (they almost always do).

Just because you own your house or ranch, essentially, that doesn't mean you can keep Big Oil and Gas from having at what's underneath. And their process of extraction is invasive.

The film is timely and concise, and Santa Fe filmmaker Debra Anderson strikes a sweet balance between educating on the issue and tugging at our tear ducts. She interviews a toxicologist and a Ph.D. environmental analyst who explain plainly why chemicals used in drilling can be like poison for nearby landowners. She interviews flabbergasted men and women who have had, at least, their land violated by lawful drilling and, at worst, their health deteriorate dramatically because of that drilling.

Environmentalists will love the film.

Bob Gallagher hates it."

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SPLIT ESTATE at Santa Fe Film Festival

Time: December 5, 2009 from 5:45pm to 7:45pm
Location: New Mexico History Museum
Street: 113 Lincoln Avenue
City/Town: SANTA FE
Website or Map: http://santafe.bside.com/20...
Phone: 505.988.7414
Event Type: film, screening
Organized By: Aaron Leventman, Bioneers


For flyer, click here>>>>

Wednesday, December 2, 2009

NM report says transmission key to renewable power

This is an issue to keep an eye on:

Washington Post

By SUSAN MONTOYA BRYAN
The Associated Press

Wednesday, December 2, 2009; 10:11 AM

"SANTA FE, N.M. -- New Mexico has huge potential to produce electricity from renewable sources but a small window to develop transmission lines to deliver that power to customers, a lawmaker said Tuesday after listening to a report on the issue.

The state Renewable Energy Transmission Authority presented its first statewide transmission report to an interim legislative committee. It covers everything from existing transmission lines, barriers to building additional lines and hot spots for electricity generation using wind, solar radiation and geothermal sources.

"The issue is transmission. If we don't have any more transmission, there will be no more renewable projects in the state of New Mexico and that is critical for our future. It's a multibillion-dollar opportunity," said Rep. Jose Campos, D-Santa Rosa.

The state will lose out to other states if it doesn't do something in the next three to four years, he said." More>>>>