Copyright © 2018 Albuquerque Journal
State Land Commissioner Aubrey Dunn says a Wild West mentality is ripping up state lands in the oil patch in southeast New Mexico, and regulatory authorities are doing little to stop it.
Dunn, a Republican-turned-Libertarian, had strong support from the oil and gas industry when he won election in November 2014. After taking office, one of his first acts was to replace a piece of public art in front of the State Land Office in Santa Fe with an oil field pump jack to symbolize how important the oil and gas industry is to the state.
This month, however, he sent a letter to Energy, Minerals and Natural Resources Secretary Ken McQueen alleging hundreds of violations by oil and gas operators on state lands, including more than 500 non-operating wells that companies have plugged up without cleaning the surrounding areas. Those sites are now littered with tank batteries, flow lines and other equipment that pose a risk to the environment, according to Dunn.
He blamed the Oil Conservation Division for failing to enforce environmental regulations.
“I have great concerns whether the OCD is adequately performing its regulatory functions to protect the citizens of New Mexico,” the letter said.
McQueen responded that the Energy, Minerals and Natural Resources is enforcing state regulations, and he offered to meet with the commissioner to review the issues.
“The OCD would be happy to sit down with the commissioner and his staff to discuss the matter,” McQueen said in an email to the Journal. “Pertaining to well plugging, the OCD is on track to plug twice as many wells as it did last year and has and will continue to monitor and ensure site remediation, which is required for the OCD to release an operator’s bond.”
In a press release on Nov. 9, however, Dunn insisted that the oil boom in the Permian Basin has led to “blatant disregard” for state trust lands, with companies constantly trespassing on public property without permits to conduct operations and committing numerous violations, such as dumping produced water, laying unauthorized pipelines, damaging archeological sites and illegally selling water.
“Companies would rather get in and out without going through established processes to legally access the land,” Dunn said. “… The rush to make a quick buck is coming at the expense of New Mexico’s environment. Our agency and the OCD need to step up to protect our state and its lands from being damaged by the California-style gold rush happening in Southeast New Mexico.”
Industry representatives dispute Dunn’s claims.
New Mexico Oil and Gas Association Executive Director Ryan Flynn said Dunn is “just flat out incorrect.”
“I disagree with the suggestion that our industry is not operating in a responsible manner,” Flynn said. “We invest hundreds of millions each year to reduce emissions, comply with regulations and protect against impacts on the environment. … There are exceptions, but the vast majority of our operators meet and exceed regulatory standards, and when there are violations, operators can and should be held accountable.”
Flynn said claims of littered well locations surrounding plugged wells is false. State regulations require cleanup within one year after plugging, and that’s been done in most of the 500-plus well locations cited by Dunn.
“I haven’t looked at each well on the list, but I’ve worked directly with companies and the majority are in compliance with OCD rules,” Flynn said.
The unprecedented boom in Permian Basin activity in recent years has led to frequent Land Office disputes with industry, including legal battles to force companies to stop trespassing and pay for environmental damages. That includes a $3.2 million settlement this month with Texas-based Salt Creek Midstream LLC for constructing a pipeline on state land in Lea County without permission.
Dunn cites other problems as well, such as truckers taking short cuts across state land.
“Our agency closed a major road in Eddy County last week because people are driving right through pastures,” Dunn told the Journal. “If there’s a corner they can cut through, they do it.”
Dunn said underfunding for his office and the Oil Conservation Division is part of the problem, because neither agency has sufficient field personnel to oversee all the activity in southeast New Mexico.
The division’s personnel budget dropped by 10 percent since fiscal year 2015, to $4.87 million, to help balance government finances after oil prices crashed in 2014, according to the Legislative Finance Committee.
That, plus the lure of higher-paying private sector jobs in the Permian, have made it difficult to attract more civil servants even with available funds, leaving both the Oil Conservation Division and the Land Office with staff vacancy rates of about 20 percent.
With state oil and gas revenue now booming again, the Oil Conservation Division is requesting a budget increase to $5.4 million for personnel in fiscal year 2020, according to the LFC. The Land Office also wants $200,000 more to hire another three people.
LFC Vice Chair Sen. John Arthur Smith, D-Deming, said budget crunches in recent years forced the state to cut expenses.
“Hopefully, with additional revenues now being generated, we can reverse that,” Smith said. “We’ll have a new governor, a new state land commissioner, and likely a new (ENMR) secretary next year, and we’ll need to bring them into the conversation.”
Democrat Stephanie Garcia Richard defeated Republican Patrick Lyons and Libertarian candidate Michael Lucero in the race for land commissioner, and will take office Jan. 1.