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Firms sue over aquifer drilling limits

SANTA FE — Two southeast New Mexico companies have filed a lawsuit against state Land Commissioner Aubrey Dunn, alleging a policy aimed at curbing how much water oil and natural gas producers can take from a massive aquifer is usurping water rights stretching back to the 1960s.

The two companies, Loco Hills Water Solution and Steve Carter, Inc., have drilled water wells on state trust land in Lea County and transport and sell the water to oil and natural gas drilling outfits, according to the complaint filed last week in state District Court in Lovington.

They say they’ve spent millions of dollars drilling wells and building pipelines and argue in the lawsuit that Dunn overstepped his constitutional and legal authority by imposing the new regulations.

“The results of this case will have far-reaching impacts on how the (State Land Office) does business — and on the future of industry in our state,” said the companies’ attorney, W.T. Martin Jr. of Carlsbad.

Dunn, a Republican, announced the new policy in May, saying he was trying to do “what’s right” for the Ogallala Aquifer, a giant underground reservoir that stretches from New Mexico to South Dakota that has been steadily lowered in recent years.

The policy limits the use of water from the aquifer for oil and gas drilling operations on state trust land, and allows the State Land Office to charge a royalty fee on such transactions. It also allows water easements for oil and gas producers to be renewed or approved only after a hydrological review.

A State Land Office spokeswoman said Monday that the office was unaware of the lawsuit until being contacted by the Journal. But she also said two Loco Hills Water Solution principals owe the State Land Office more than $1.3 million in unpaid water royalties.

“What is most perplexing is that anyone would attack Commissioner Dunn’s efforts to protect one of the country’s largest and most important sources of drinking water,” Assistant Commissioner Kristin Haase said.

Overall, more than 2 billion gallons of water was extracted from state trust land in the 2016 budget year, according to the  Land Office, but not all of that was taken from the Ogallala Aquifer.

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