This month in Lea County, 36 drilling permits have been granted by the Oil Conservation Division (OCD) of the New Mexico Energy, Minerals and Natural Resources Department to 12 different operators. All of these permits are for gas wells.
EOG Resources, Inc., which already is one of New Mexico’s largest oil and gas operators, was granted 13 of these permits and is expanding its operations in Lea County. According to Mineral Answers, as of April 2021 EOG has 1,677 actively producing wells in New Mexico, as well as 155 permits on file with the OCD to drill additional wells in the future. A significant number of these wells will be in Lea County.
The OCD is the governmental body that regulates the oil and gas industry in the State of New Mexico and is an arm of the Energy, Minerals and Natural Resources Department. Information about the activities of the OCD are available at its new website. “Our website has been designed to provide [the public] with information about doing business with the Oil Conservation Division of New Mexico, as well as access to forms, services, and data provided by the division,” states the OCD.
In regulating the activities of the oil and gas industry, the OCD has several oversight responsibilities. Added back into the OCD’s bag of duties is the administrative authority to issue civil fines to operators for oil and natural gas spills. This power was taken from the OCD by the New Mexico Supreme Court in 2009 when it ruled that the agency did not have the legal right to issue civil fines under the then language of the state’s Oil and Gas Act.
In 2021, the 2009 decision was revised, and it was decided that the OCD does have the power to issue fines. This renewed authority comes to the OCD as a result of a petition filed by WildEarth Guardians and the New Mexico Energy, Minerals and Natural Resources Division. After the petition was filed and a subsequent two-day hearing took place in June, the new ruling, which will take effect after it is published in The New Mexico Register in August, was made.
Currently, the only authority the OCD has is to fine operators for spills that are not reported. “Those spills include oil, gas, produced water, oil field waste and other contaminants,” according to NM Political Report. However, this is changing, and the OCD will soon have the authority to hold operators accountable for failing to clean up well sites after spills.
No one doubts that oil and gas is big business in many of New Mexico’s counties, including Lea. But the state’s governing bodies are demonstrating that the days are gone when oil and gas companies are able to go about their daily operations without concern for the environment, and spills are a big problem. During testimony from the recent hearing, environmentalists stated that 12,000 spills occurred between 2010 to 2020. Although 8,000 were water spills, about 4,000 were oil spills.
Charlie de Saillan, staff attorney for the New Mexico Environmental Law Center, contends that oil and gas companies need to take clean up seriously. “It’s crucial that violators pay enough to hurt their bottom line so they don’t simply write it off as the cost of doing business”, he says. With the new ruling de Saillan’s argument may become the norm, as the OCD will have the power to issue fines that hurt.
Only time will tell how far reaching the OCD’s renewed authority will be. Time will also tell how significant fines must be for companies to decide to take spills and clean up seriously. Hopefully, the new authority entrusted to the OCD will prove an incentive for operators to prevent spills in the first place. Certainly, reducing the number of spills will be a cost savings to operators, as well as beneficial to the environment and New Mexican residents.
Photo by Josue Michel / Unsplash
