Informational Update on State Land Office Initiatives
Pore Space Density Challenges, State Land SWD Fee & Cultural Assessments
Dear IPANM Members,
The New Mexico State Land Office (SLO) continues to make incremental changes to the way it conducts business with Oil & Gas operators in New Mexico. IPANM wishes to update members on three specific issues for your awareness.
Pore Space Density
IPANM issued this update to operators back in September related to the SLO's new guidance policy on pore space density regarding proposed fees on applications to disposal wells that lie within a half-mile of state trust land. Please be aware that the SLO has yet share specific technical information or present a new draft rule on this new policy. However, the SLO does have the ability and plans to adopt a new rule to administer this initiative in the near future.
In the meantime, approximately a half-dozen operators have been notified of SLO's intention to challenge their SWD well applications in front of the Oil Conservation Commission to gain the ability to charge these fees for specific cases. At least one operator has reached a pre-hearing settlement dollar figure in a specific challenged case. Another challenge is set to go in front of the Oil Conservation Commission as early as this week. IPANM will keep operators up to date on the outcome and implications.
Operators may proceed in any manner they see fit. However, IPANM’s assessment is that engaging in negotiations with the SLO over this issue will could lead to additional, unintended consequences with other mineral and surface owners who may attempt similar actions against operators. We recommend any operator who has been contacted by SLO related to these pore space density fees to contact IPANM Executive Director Jim Winchester (jimwinchester@ipanm.org) or IPANM President Kyle Armstrong as soon as possible.
Proposed Cultural Properties Rule
The SLO has proposed a rule that would require an archaeological review and survey prior to any surface disturbing activity on state trust land—including road and pipeline construction, oil and gas drilling, and infrastructure development. Click here to read SLO's summary of the proposed rule. In addition, those projects would have to include avoidance and mitigation measures. The proposed rule would also require notification to tribes and would likely result in lengthy delays to any Oil & Gas activity. The SLO has hired a tribal liaison who would be involved in the process. A copy of the draft rule can be found here.
Members are encouraged to share comments and concerns on the draft rule at cprule@slo.state.nm.us.
Disposal Wells Bonding Information
At the end of 2018, the SLO adopted new bonding levels for SWD wells on state lands. Many operators were not aware that the bonding level for a commercial Salt Water Disposal well increased to $250,000 / per well. Please see this list for an update of all bonding levels now in effect.
The New Mexico State Land Office (SLO) continues to make incremental changes to the way it conducts business with Oil & Gas operators in New Mexico. IPANM wishes to update members on three specific issues for your awareness.
