American Oil and Gas Reporter - July 2015 - 135

ConventionSection: Independent Petroleum Association of New Mexico

Preemption Legislation
Will Live To Try Again
By Danny Boyd
Special Correspondent

FARMINGTON, N.M.-Members of
the Independent Petroleum Association
of New Mexico prepare for their annual
convention, Aug. 5-7 at the Sandia Resort
& Casino in Albuquerque, N.M., amid a
changing state political landscape that
appears more favorable, but braced for
what could be an effective increase in
royalty rates on federal and Indian lands.
With Republicans now holding a majority
of seats in the New Mexico House of Representatives for the first time in 60 years, a
preemption bill favored by IPANM passed
before being halted in the state Senate,
notes association President Glen Papp.
HB 366, which was carried by House
Majority Leader Nate Gentry, R-Albuquerque, sought to clarify the New Mexico
Oil Conservation Division's sole authority
to regulate oil and gas operations statewide,
following an attempt by Mora County to
ban industry activity outright while other
counties adopted restrictions, reviews Papp,
principal and operations manager at Synergy
Operating LLC in Farmington.
"We are optimistic we will get that
legislation passed," he states. "We are
not trying to change anything. We basically
are clarifying language in the current law
that states the New Mexico Oil Conservation Division is the sole governing
body over the oil and gas industry."
In November 2013, IPANM and Mora
County royalty owners sued Mora County
and the Mora County Board of County
Commissioners in U.S. the District Court
for the District of New Mexico to have
the ordinance overturned, Papp recalls.
SWEPI LP, an affiliate of Royal Dutch
Shell, also filed a lawsuit contending,
among other things, that the county's
actions were unconstitutional, which the
federal district court eventually agreed
with, Papp says. In response to that ruling,
the Mora County Commission voted unanimously in March to repeal its ordinance.
Not Yet Finished
Papp says the preemption bill favored
by IPANM was crafted narrowly on the

IPANM Annual Meeting - Albuquerque, N.M.
Wednesday, Aug. 5

4 p.m. Board of Directors Meeting, Sandia
Casino & Resort Hummingbird Room
Directors Only
6-8 p.m. Welcome Reception, Sandia Golf
Club Events Center

Thursday, Aug. 6

7:30 a.m. Golf Tournament Check-In, Sandia
Golf Club
8 a.m. Shotgun Start
3-6 p.m. Government & Education Reports,
Sandia Ballroom D
6-8 p.m. President's Reception, Sandia
Salon A/B
Sponsor Exhibits Located in Salon A/B
Play Booth Bingo during Reception for
Nambe Prizes
Drawing Held 8 a.m. Friday at the Plenary
Session. Must be Present to Win

Friday, Aug. 7

7 a.m. Membership Breakfast, Salon A/B
8-9:45 a.m. Plenary Session, Ballroom D
Opening Remarks, Glen Papp, IPANM
President
Bureau of Land Management Update,

federal judge's decision. "I am sure we
are going to make another run at it," he
says. "Similar bills have been successful
in Texas and Oklahoma.
"It's a big issue for us," Papp continues.
"Even though we are an oil and gas state
with production in the northwest and southeast corners, in the middle of the state in
Albuquerque and Santa Fe, where most of
the population is, people don't understand
the oil and gas industry as well. It's evident
that regardless of our industry's contribution
to the state budget, many of our legislators
are anti-oil-and-gas."
Despite its passage in the lower chamber, Senate Conservation Committee
Chairman Peter Wirth, D-Santa Fe, held
up the IPANM-backed proposal after exchanges in the audience became heated
over a similar bill, reveals IPANM Executive Director Karin Foster.
She says IPANM plans to include a
provision in a future bill that weighs
whether local government mandates are
commercially reasonable requirements,

Aden Seidlitz (invited), BLM Acting
State Director
BLM Fracturing Rule, David Martin (invited), Secretary New Mexico Energy,
Minerals & Natural Resources Division
Update on the War on Fossil Fuels, Marita
Noon, Executive Director, Citizens' Alliance for Responsible Energy
Plans for the New Mexico Oil Conservation
Division, Scott Dawson, Deputy Director
"Fractured-How Energy Language Deceives
Us All," Mark Mathis, Filmmaker
9:45 a.m. Break
10-11:20 a.m. Plenary Session, Ballroom
D
Plans for the State Land Office, Aubrey
Dunn, Commissioner
"Fracking-Why Environmentalists Don't
Care About the Science and What to do
about It," Phelim McAleer, Journalist,
Film Producer and Director
11:30 a.m. Awards Luncheon
Wildlife in the Oil Field Photo Contest
Winners
IPANM Awards Presentations
1 p.m. Conclusion

which is a provision in the Oklahoma
and Texas bills.
She notes that HB 40, which passed
the Texas Legislature this year, allows
counties to set certain surface restrictions,
as long as the regulations are commercially
reasonable. In contrast, Foster says, "Under
the restrictions in Santa Fe County, N.M.,
for example, the cost of actually operating,
if you go through all their administrative
hoops, is about $60 million. Obviously,
that isn't commercially reasonable."
However, local governments could require companies to perform basic studies
considered commercially reasonable, Foster acquiesces. "We didn't have that in
our bill because we felt very strongly
that operators have the right to dictate
location siting, and a municipality does
not have the right to impose an unreasonable setback," she says.
Since the New Mexico Legislature will
hold only a 30-day budget session next
year, the preemption legislation may have
to wait until 2017, offers Mitch Krakauskas,
JULY 2015 135
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