New Mexico suspends order allowing more gas well locations

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The Associated Press

SANTA FE — New Mexico oilfield regulators suspended an order Tuesday that relaxed restrictions on natural gas well locations in a major production basin over the objections of a Texas-based company, as a Democratic administration takes charge of the state’s Oil Conservation Commission.

The commission scheduled a rehearing for application by Texas-based Hilcorp Energy to double well densities in the northwest corner of the state that originally was approved late last year. Oversight of wells shifted Jan. 1 to the Democratic administration of Gov. Michelle Lujan Grisham and Land Commissioner Stephanie Garcia Richard.

Newly appointed Oil Conservation Commission Chairman Gabriel Wade said the rehearing is needed to ensure a full review by state regulators at the Oil Conservation Division, where he serves as acting director, and provide adequate opportunities for public comment.

Commissioner Allison Marks of the State Land Office emphasized the need for consultation with federal government agencies and Native American tribes in the vicinity, including the Jicarilla Apache Nation – a major natural gas developer in its own right.

Hilcorp Energy has defended its application as legally and scientifically sound as it seeks to draw more natural gas from a formation known as the Blanco-Mesaverde gas pool through existing and potential new well locations.

An attorney for Hilcorp, Michael Feldewert, on Tuesday alleged political interference with the application and challenged Wade’s qualifications to preside over a commission that makes precedent-setting decisions about rules for oil, gas and geothermal development, arguing he does not have prerequisite engineering education.

“Political shenanigans that are going on here are a low point for this commission,” Feldewert said.

Approval of the well-density application in the final months of the administration of Republican Gov. Susana Martinez was followed by an outcry from conservationists and ranchers, along with a rebuke by departing Land Commissioner Aubrey Dunn, a Libertarian who ousted his appointee to the Oil Conservation Commission.

Garcia Richard, the elected successor to Dunn, attended Tuesday’s meeting and applauded the decision for a rehearing of Hilcorp’s application. The State Land Office oversees energy leases across some 14,000 square miles of state trust land and additional underground resources to help fund schools, universities and hospitals.

“I do acknowledge the importance of the natural gas industry in this region in particular to the financial stability and longevity of the state and the State Land Office,” she said. “I don’t see any reason why we can’t balance increased revenues with responsible development, and that’s what this hearing is really about.”

When the Los Alamos Monitor asked what Garcia Richard considered “responsible development,” a spokeswoman for Garcia Richard said,“Wells come with their own health risks and doubling their capacity increases not only potential health complications but the potential for larger ecological disasters.”

The Los Alamos Monitor contributed to this report.