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San Miguel County OKs strict drilling rules

drillingSANTA FE, N.M. — As a federal judge considers the constitutionality of one New Mexico county’s efforts to ban oil and natural gas development, commissioners in neighboring San Miguel County voted Wednesday in favor of imposing some of the strictest requirements on hydrocarbon exploration in the country.

The unanimous decision was made as several dozen people crowded into the commission chambers.

The new ordinance supersedes a moratorium on oil and gas development that had been in place since 2010. Now, exploration and drilling will be restricted to a sparsely populated stretch on the eastern side of San Miguel County, some 60 miles away from the county seat of Las Vegas.

Drilling companies will have to pay steep application fees, foot the bill for pre-drilling assessments and post bonds, among numerous other things.

Commission Chairman Nicholas Leger told The Associated Press after the meeting that close to a dozen public hearings were held and the commission considered all of the resulting comments in crafting the ordinance, which he believes will stand up to legal scrutiny.

“Personally I would like to see development in San Miguel County, and I think the ordinance ensures that it will be responsible development and the health and safety of our residents and our resources will be protected,” he said.

With fees that reach into the tens of thousands of dollars, Leger acknowledged it would be more expensive for drilling companies to operate in San Miguel County, but he said they’re still welcome as long as they follow the rules.

Critics say the ordinance discourages drilling and will ultimately hurt private mineral rights owners in the region.

While both San Miguel and Mora counties are far from the epicenters of New Mexico’s oil and gas hotspots, the industry is concerned the wave of anti-development sediment could stem future opportunities.

“It’s not your grandfather’s oil and gas business thanks to improvements in technology and understanding,” said Steve Henke, president of the New Mexico Oil and Gas Association. “We’ve got a good message, both environmentally and economically, and we would just like the opportunity to demonstrate that and not have the door closed on us.”

Nearly one-third of New Mexico’s general funds come from taxes and royalties paid by oil and gas companies.

In the southeastern corner of the state — which includes a portion of the Permian Basin, one of the country’s most prolific drilling spots — schools are bursting at the seams, housing is difficult to come by, jobs are plenty and roads are packed with oilfield trucks thanks to the latest boom.

Henke pointed to the economic windfall in Carlsbad, Hobbs and Artesia.

“If you contrast the health and the vibrancy of this area with what I call the stagnation of north-central New Mexico, Las Vegas and Mora, it’s stark,” he said.

But some residents in the two northern New Mexico counties say they’re unwilling to trade jobs and revenue for potential effects on the region’s already scarce water supplies.

Oil and gas groups were reviewing the ordinance Wednesday, but it was not immediately clear if any planned to file legal challenges.

The case against Mora County’s oil and gas ban is pending in federal court.