American Oil and Gas Reporter - July 2016 - 88

ConventionSection: Independent Petroleum Association of New Mexico
New Mexico its next battleground over
pre-emption.
"In the last 60-day session, held in
2015, IPANM was successful in getting
a pre-emption bill passed through the
House of Representatives, but was not
able to get it heard in the Senate," Foster
says. "I will ask the association to support
a pre-emption bill again, but this time
IPANM needs to have stronger industry
support to do that. I am hoping that New
Mexico industry will watch what is happening in Colorado and see that the New
Mexico Legislature needs to pass legislation that will prevent counties from
adopting their own sets of regulations,
which would result in 33 sets of oil and
gas ordinances in the state."
From a legal perspective, Foster says
she is concerned that the New Mexico
Oil and Gas Act is not strong enough to
support pre-emption. Individual companies
could win in court, as they did when a
federal judge overturned Mora County's
restrictive community rights ordinance
that amounted to a complete ban on any
extractive activity in the county, but the
statutory language may not be strong
enough to support results similar to those
of Colorado, she indicates.
Krakauskas says that while IPANM
enjoys a strong relationship with state
legislators, New Mexico still faces a number of challenges in the near term.
"We are so dependent on what the oil
and gas industry brings to the state budget,"
he says. "The low oil and gas prices we
experienced this year opened legislators'
eyes. It has made them realize how important this industry is to the state. I hope
legislators wake up next year and we pass
some bills that will help industry."
Weighing county rapport with local
governments, Krakauskas says those with
strong oil and gas development work
well with industry. "Some of these counties
that are hostile to the industry need to
look at what the growth of this industry
can do to a county. If they are going to
benefit from our tax dollars, they need to
open their counties to oil and gas development," he poses.
Watershed Protection
On the state regulatory level, Foster
says she is monitoring the New Mexico
Oil Conservation Division's plans to impose additional regulatory protections on
the Pecos/Artesia conservation district
watershed in Chavez and Eddy counties.
She indicates the regulatory push comes
88 THE AMERICAN OIL & GAS REPORTER

not from any cases of contamination, but
out of a state geologist's desire to change
agency rules.
In May, OCD called an emergency
hearing to suspend 200 approved applications to drill within the watershed. The
division reported it ordered the suspension
to give operators time to change their
drilling plans and to run an intermediate
casing string, Foster says. She estimates
the additional string requirement will
cost operators $150,000 a well.
"There is no scientific basis for this
new casing requirement in this area whatsoever, but for some reason, OCD feels
this particular watershed area needs additional protection," she says. "IPANM is
opposing the change. Instead of going
about this the correct legal way, by discussing a change in the rule for casing requirements, OCD wants to declare a special
district that encompasses 28 townships in
Chavez and Eddy counties, and impose
special casing rules for that specific area."
IPANM strongly opposes OCD's move
on the grounds that no special reason
calls for this special casing requirement
in this area, Foster says. On top of the additional expense it would lay on operators,
she predicts, the division easily could expand the casing string requirement
statewide with minimal oil and gas industry
input.
Foster says that at the June prehearing
conference, the division unexpectedly
asked the full Oil Conservation Commission to take on the issue, which it
did. IPANM made the argument that the
proceeding before the OCC, now scheduled for mid-August, is in actuality a
rule-making proceeding requiring additional notice and a 30-day public comment
period to review the division's proposal,
which she notes has not been released.
"If the ruling goes against industry, it
has the opportunity to appeal it to a
district court," she says.
Wildlife Action Plan
The New Mexico Department of Game
& Fish's proposal to revise its state
wildlife action plan also is drawing
IPANM's attention, Foster reports. The
federal government requires all states to
develop and implement wildlife plans to
determine which animals or species need
conservation, she says. Washington then
provides grant money to assist those conservation programs.
Since the federal program was implemented in 2006, Foster says New Mexico

has received $16 million for conservation.
"The problem is the state's conservation
plan that came in 2006 covered nearly
500 species. Even $16 million is not very
much," she says. "The plan requires
amendments every decade. The Game &
Fish Department came out with its proposed plan in November 2015. It was extremely anti-oil-and-gas."
According to Foster, New Mexico's
State Wildlife Action Plan blames oil
and gas activities for all habitat fragmentation, and water impacts across the state.
IPANM opposes the 2015 proposal, and
in monthly meetings has persuaded the
agency to rewrite it before submitting it
to Washington, she says.
"The original Species of Greatest Conservation Need (SGCN) list was nearly
475 animals. The association was successful in getting Game & Fish to trim
200 animals because they were arthropods,"
Foster says. "IPANM then got the department to eliminate birds of prey, as well as
place any animal that already was 100
percent under federal management programs to lower tiers. So, the state SGCN
list is down to around 250 animals now."
The next proposal will be for the department to delete 40 animals ranked on
the lowest level of the Natural Heritage
Global Ranking System. Foster says
IPANM is arguing that if an animal is
ranked in that tier, but there is no interest
in studying the species, there is no federal,
state or industry funding, and no federal
or state listing of the species, this suggests
New Mexico should not spend limited
resources on placing the species on the
SGCN list.
"I hope the department will come out
with a list of 180 species for the State
Wildlife Action Plan," Foster says. "Also,
I hope IPANM will be successful in
getting the department's wildlife action
plan to change its tone with regard to its
current anti-oil-and-gas and anti-agriculture
position."
Tied into the wildlife action plan discussion is New Mexico's biennual review
for threatened and endangered species,
Foster points out. The state has to release
its listing in 2016. However, she says,
the dunes sagebrush lizard still is listed
as an endangered species in the state of
New Mexico, despite a federal court
ruling stripping it of Endangered Species
Act protection. The association plans to
ask the state to hold a hearing to delist
the lizard, she says.
❒



American Oil and Gas Reporter - July 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - July 2016

 Contents
American Oil and Gas Reporter - July 2016 - Cover1
American Oil and Gas Reporter - July 2016 - Cover2
American Oil and Gas Reporter - July 2016 -  Contents
American Oil and Gas Reporter - July 2016 - 4
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