American Oil and Gas Reporter - January 2016 - 122

The Presidential Papers
SWAP; ESA
In October, the New Mexico Department of Game and Fish proposed its
State Wildlife Action Plan (SWAP), which
is updated every 10 years to remain in
the U.S. Fish & Wildlife Service's good
graces and maintain grant money eligibility.
Since the authors refused to update
their data from 1991 and 2005 when they
drafted the plan, the SWAP included the
dunes sagebrush lizard and the lesser
prairie chicken as tier 1 species of greatest
concern. The plan also attacked both the
oil and gas and agricultural industries,
and cited them as the direct cause of climate change.
On Nov. 19, the NMDGF Commission
met in Roswell, N.M. to hear comments
on the SWAP. Our industries showed up
in force. After hearing the comments,
the commission unanimously voted to
order the department back to the drawing
board to draft a new version of the SWAP
based on current science. This is a great
win for our industries.
Meanwhile, on Sept. 1, federal Judge
Robert Junell in Midland, Tx., ruled that
the USFWS's threatened listing for the
lesser prairie chicken under the Endangered Species Act failed to properly evaluate the cooperative five-state conservation
plan.
Listing proponents claim oil and gas
rigs have overtaken lesser prairie chicken
habitat. Listing opponents and the USFWS's own data show that drought constitutes the most significant impact to the
lesser prairie chicken population. After a
wet spring and summer and alongside
the five-state conservation plan, the birds'
population has grown 25 percent. We applaud this decision and hope to see more
of this common sense in the future.
BLM Fracturing Rule
On March 20, 2015, the U.S. Department of the Interior released a rule to
regulate hydraulic fracturing on public
lands managed by the Bureau of Land
Management. This affects 700 million
acres of mineral estate underlying both
federal and nonfederal lands and an additional 56 million acres of American Indian lands. BLM estimates the new well
requirements affect 3,800 oil and gas
wells a year.
The new rule expands BLM regulations
on oil and gas operations specified at 43

CFR § 3162.3-1 and Onshore Oil and
Gas Orders 1, 2, and 7. The rule includes
a number of major components, including
some that:
* Require operators to request approval of hydraulic fracturing before they
commence operations;
* Add provisions to protect groundwater by requiring validation of well integrity prior to fracturing;
* Add new design and implementation
requirements on casing and cementing
programs, including requiring cement return and pressure testing for surface
casing, cement evaluation logs for intermediate and production casing, and remediation plans and cement evaluation
logs for any surface casing that does not
meet performance standards;
* Require fracturing fluid chemical
disclosure to the BLM through the FracFocus.org website within 30 days of completion;
* Set specific standards for interim
storage of fracturing waste fluids, including
management of fluids in rigid enclosed,
covered or netted and screened aboveground storage tanks; and
* Seek to lower cross-well contamination risks by requiring companies to
submit more detailed information on the
geology, depth and location of pre-existing
wells to enable detailed BLM assessments.
The regulation requires operators on
federal lands to comply with both BLM
rules and any state requirements. BLM
estimates the cost of complying with this
new rule will be about $11,400 a well,
but the Western Energy Alliance estimates
that cost at $97,000.
The good news is that on June 24,
federal Judge Scott Skavdahl of Wyoming
granted a nationwide stay to the new
rule. This is the result of a lawsuit filed
by the Independent Petroleum Association
of America and the Western Alliance,
whose effort to halt the rule was joined
by the states of Colorado, Wyoming,
North Dakota and Utah.
This suit was brought under the Administrative Procedures Act and alleges
the rules overstep BLM jurisdiction and
conflict with the Safe Drinking Water
Act. The states claim the move is unlawful
because it interferes with their own fracturing regulations. Judge Skavdahl says
the federal government requires more

122 THE AMERICAN OIL & GAS REPORTER

time to explain the new rule's origins
and the consideration BLM has given to
public comments. This means the bureau
will continue to process applications for
permits to drill and inspect well sites
under its old regulations. The House and
Senate also are considering legislation
that would overturn the rules or prevent
their enforcement in states with hydraulic
fracturing rules.
State Energy Policy
In early September, Governor Susana
Martinez and the New Mexico Energy
Minerals and Natural Resources Department released the 2015 New Mexico energy policy and implementation plan,
titled, "Seizing our Energy Potential: Creating a More Diverse Economy in New
Mexico." The 48-page plan focuses on
an inclusive approach to energy development in New Mexico that expands from
the state's oil and gas economic base.
In a shift from the prior New Mexico
energy plan, the 2015 plan starts with
the underlying premise that energy is
abundant in New Mexico and it attempts
to focus on energy for citizens' general
welfare and long-term security. The plan
results from the governor's request to
update the last energy policy, which was
instituted in 1991. The department held
six listening sessions around the state
with about 450 stakeholders.
The 2015 energy policy report contains
12 objectives.
It embraces energy diversity that adopts
an "all of the above" approach to diversify
the state's energy portfolio and help manage risk. It states, "Since renewable energy
industries have succeeded in moving toward more mature industries, these industries must be considered when making
policy determinations."
Another objective seeks natural gas
market enhancement that will identify
and attract petrochemical and manufacturing companies to San Juan County,
N.M. Low-cost, abundant, underproduced
natural gas also should catalyze interest
in natural gas vehicles and related infrastructure.
It advocates energy market expansion,
in which New Mexico takes advantage
of emerging technologies, including small,
modular nuclear reactors that may provide
carbon-free base-load electricity generation. Energy storage is another area of
technology that is the result of work at

American Oil and Gas Reporter - January 2016

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