Bill takes aim at New Mexico oil and gas rules

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Rep. Tom Taylor, R-Farmington is seeking to rescind the so-called pit rule

By Susan M. Bryan

ALBUQUERQUE — A lawmaker from northwest New Mexico, home to one of the nation’s largest natural gas basins, is taking aim at state regulations for oil and natural gas producers.

Rep. Tom Taylor, R-Farmington, has drafted legislation seeking to rescind the so-called pit rule, which restricts the use of pits for onsite waste disposal at drilling sites. The rule also regulates below-grade tanks and the use of closed loop systems during oil and gas operations.

The industry blames the pit rule in part for a slowdown in drilling activity in New Mexico and the loss of hundreds of millions of dollars in state revenues.

Taylor’s legislation says the rule has cost the state about $140 million in tax revenue since being enacted in 2008 and that rescinding the rule would help recharge the state’s coffers. Legislators are in the last stretch of a 30-day session that has focused on finding more revenue and raising taxes to plug a budget shortfall.

The legislation also says the pit rules have “no scientific basis, provide no environmental benefit and were adopted without legislative approval.”

Oil Conservation Division director Mark Fesmire disputes those claims. He and environmentalists who supported the tougher regulations say they were needed to help the industry manage its drilling waste and to protect the environment.

Fesmire said Monday if the pit rule was rescinded, it would leave the state without any regulations for dealing with drilling waste.