Land Office, water company lock horns over well

State Land Commissioner Aubrey Dunn and Santa Fe lawyer Brian Egolf Jr. are locked in a legal dispute over a private company’s plan to draw potable water from wells in southeastern New Mexico that could be used for fracking operations.

Ironically, the conflict has inverted traditional positions promoted by Dunn — a Republican who generally supports oil and gas activities — and Egolf, a House Democrat in the state Legislature known for his efforts to limit environmental damage from hydraulic fracturing.

State Land Commissioner Aubrey Dunn
State Land Commissioner Aubrey Dunn

Dunn is now opposing plans by the private company, GUS H20 LLC, to drill into a shallow part of the Ogallala aquifer in Lea County that generally holds fresh, potable water that could be used for oil and gas operations. The State Land Office says it wants the company to dig deeper into more brackish layers of the aquifer.

Egolf, who is defending the company as a legal representative from the Santa Fe law firm Egolf+Ferlic+Harwood, said the State Land Office is trampling on the rights of a small company that deserves legal protection independent of Egolf’s environmental positions as a state legislator. In addition, he said the water could be sold for any commercial use, not just for oil and gas operations.

Brian Egolf
Brian Egolf

The dispute began on June 7, when Dunn asked the State Engineer to allow his office to withdraw applications it had filed in support of GUS H20 LLC, the company seeking to drill wells near Eunice, south of Hobbs. Because water would be withdrawn from wells on State Trust Land, State Land Office support is a prerequisite for the applications to be processed by the State Engineer.

Dunn said his office withdrew support after the DRASCO Cattle Co. in Lea County protested to the State Engineer against the applications. That protest prompted a new review of the applications by State Land Office geologists, who determined that the wells as proposed would target potable Ogallala water, Dunn told the Journal.

“The protests kicked it back to our oil and gas division,” Dunn said. “Our geologists then looked at it and felt the wells should go to a part of the aquifer that’s not as potable.”

State Land Office attorney Michelle Miano said GUS H20 did submit amendments to its plans to drill deeper wells. But Egolf filed a lawsuit on June 18 in the First Judicial Court to block Dunn from withdrawing the water rights applications from the State Engineer’s Office.

“We think digging deeper is a great option, and we encourage GUS to pursue that, but they filed a protest,” Miano said. “So we’re confused about what their development plans are now.”

Egolf, however, said GUS is a new, tiny company with limited resources that has already spent more than $100,000 to gets its applications filed and processed.

“The State Land Office acted virtually without warning to cancel its agreements with GUS to that firm’s detriment and no compensation offered,” Egolf told the Journal. “When you have a state official acting unilaterally to harm a small business, you have no choice but to seek assistance in the courts to protect their interests.”

The drilling and water rights applications comply with all state rules and regulations, and they include assurances that pumping will not adversely affect other wells in the region, Egolf said.

The court will hear the case on June 24. In the meantime, a restraining order prevents the State Land Office from withdrawing the drilling and water rights applications.

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