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Saturday, May 10, 2008
N.M. Regulators Approve Oil and Gas Pit Rule
Associated Press
SANTA FE — The New Mexico Oil Conservation Commission has approved a tougher rule for oil and gas pits across the state.
The Oil Conservation Division began holding hearings on the proposed rule last November and generated more than 5,000 pages of transcripts over a few months. The commission reviewed the material and made its decision to adopt the rule with some changes during a meeting Friday.
"We can produce oil and gas in New Mexico in an environmentally sound manner,'' Commission Chair Mark Fesmire said. "The adoption of this new rule is a significant step forward in preventing future legacy issues and protecting our environment.''
The rule restricts the use of pits for on-site waste disposal at drilling operations. It also regulates below-grade tanks and the use of closed loop systems during oil and gas operations.
Advocates of the tougher regulations had said unlined or poorly lined pits threaten water quality and the health of humans, livestock and wildlife. But industry groups had fought the proposed rule, saying it would be too costly and result in less drilling.
Sen. Pete Domenici, R-N.M., had also voiced his concern, saying that the rule as first proposed could cost the state's oil and gas industry up to $200,000 for every oil and natural gas well, curbing domestic production and driving business out of New Mexico.
The senator also said the proposal could result in job losses and a loss of more than $1 billion a year to the state's economy.
Bob Gallagher, president of the New Mexico Oil and Gas Association, said the commission listened to the industry's concerns and made changes before approving the rule. For example, he said, dirt under the pits will not have to be cleaned to the degree that it meets drinking water standards for chloride levels and developers will have options for handling pit waste regardless of their proximity to a licensed disposal facility.
"I would certainly commend the Oil Conservation Commission for understanding a large majority of our concerns and working with us to produce a rule that is I think is more palatable,'' he said. "... Now our concerns are how this rule will shake out, how it will be interpreted.''
Despite earlier fears that the industry would suffer a large blow because of the proposed regulations, Gallagher said he believes oil and gas development can continue in New Mexico.
The Oil Conservation Division said Friday that it has gradually imposed stricter rules in oil field waste over the last several years and that the new rule presents "major progress in the protection of the environment during oil and gas operations.''
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