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All but one county in New Mexico relies on state rules to regulate oil and gas drilling. That county? None other than Santa Fe County. Neighboring Rio Arriba County is considering an ordinance to further restrict oil and gas drilling. Here’s a little history on the stricter local regulations. Houston-based Tecton Energy bought 65,000 acres of mineral rights in the Galisteo basin from which to pull oil and gas. When Tecton started drilling for oil and gasoline in the fall of 2007, Santa Fe County officials put the kibosh on the idea. County commissioners enacted a three-month moratorium on drilling until they could figure out how to control it.
After the moratorium passed, Tecton pulled out and its lease expired. “It was an unusual event,” said Chris Fling, a partner in Tecton. “The citizens lost a lot: job opportunities, revenue.” He described the state and Santa Fe County as “politicized” regulators. Fling said he wishes Santa Fe County and the state would base their actions about oil and gas drilling on data, not emotion. Because they do not, he said, Tecton will not return to New Mexico anytime soon to drill.
Oil and gas ordinance
After the moratorium, commissioners passed an oil and gas ordinance in December 2008. “The county ordinance has (a) comprehensive set of environmental regulations which should render drilling as safe as it can be, given the tremendous forces inherent in the activity,” County Attorney Stephen Ross said. “That being said, we believe that drilling can be accomplished economically even given the requirements of the ordinance.” Commissioner Mike Anaya, who initiated the idea for the moratorium, did not reply to two e-mailed requests for comments for this article. His legislative liaison referred the questions to county spokesman Stephen Ulibarri. Commissioners wanted to regulate — not ban — oil and gas drilling, Ulibarri said. “You cannot prohibit oil and gas drilling,” he said. But you can make it difficult. The county’s ordinance requires eight reports or assessments be done by companies that want to drill here: A report that shows that what you’re planning to do is consistent with the county’s general plan. An environmental impact report. A fiscal impact report. A report that shows county facilities are sufficient to service oil and gas projects. Water availability assessment. In other words, how is the oil and gas drilling going to affect fresh water and subsurface water. A report that shows how easily your drilling might cause an emergency. Traffic report. Geohydrologic report.
Bob Gallagher, president of the New Mexico Oil and Gas Association, sees the county’s ordinance as a virtual ban on drilling. “The Santa Fe County ordinance, which I refer to as a moratorium, is by design, and with its $1 million price tag, the toughest in the United States,” he said. “It has assured that Santa Fe County, its residents, hospitals, schools and governments will never see a penny of income from oil and gas.” At the same time, it has stripped the property rights of private individuals, which ought to open up the eyes of others who have non-oil and gas property rights, once the nose of the camel is under the tent, he said. “There is no comparison to other New Mexico counties or even to the state regs,” Gallagher said. “The very few who have them were completed utilizing sound science and common sense.”
No one tries to drill here
Before Tecton came along, no one had tried to drill for oil or gas in Santa Fe County, and no one has applied for a permit since the ordinance took effect. The county ordinance does not and cannot supersede federal regulations, Ross said. Drilling activities on federal land where the surface and subsurface rights are unified are “probably unaffected” by the county ordinance, Ross said. The question of drilling becomes more complex when the estate is split. Very little of the land at the Galisteo Basin is federally owned. What is there has been withdrawn from oil and gas leasing for the time being, Ross said. Jodi McGinnis Porter, spokeswoman for the state’s Energy, Minerals and Natural Resources Department, said all New Mexico counties except for Santa Fe rely on the state’s oil and gas laws, which are voluminous.
The pit rule
New Mexico agreed in 2008 to stiffen its oil and gas regulations with the so-called “pit rule.” The law requires operators to use heavy-duty liners in all pits to protect against seepage of contaminated materials. It also prohibits pits that are too close to water wells and requires operators to haul much of the contaminated water, soil and other materials to permanent disposal sites. Last month, according to an article in the Hobbs News-Sun, Gallagher, released rig numbers in New Mexico, Colorado, Oklahoma and Texas. “If the pit rule went away today, we would see new rig activity in southeast New Mexico, but not in northwest New Mexico,” Gallagher said. Rig numbers come from Baker Hughes Inc. which announced Nov. 9 that the U.S. rig count for October 2009 was 1,044, up 35 from 1,009 in September and down 932 from the 1,976 counted in October 2008. Rig counts reflect the number of drilling rigs actively exploring for, or developing, oil or natural gas in the United States, Canada and international markets. Fling, of Tecton, decries the pit rules. He said he goes to regulators and presents a plethora of data, only to see them make decisions based on emotion. “Texas, Oklahoma, Wyoming — they know what they’re doing,” he said. New Mexico and New York are at the bottom of places where Tecton would want to do business. Contact Brad Buck at (505) 629-4408 or
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