New Plans for the NM Oil Conservation Division. Scott Dawson-Deputy Director IPANM s 37 th Annual Meeting 8/7/2015

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1 New Plans for the NM Oil Conservation Division Scott Dawson-Deputy Director IPANM s 37 th Annual Meeting 8/7/2015

2 Since Statehood (January 12, 1912) various laws regarding oil and gas development existed. The evolution of Ft. Worth spudders and cable tools prompted changes in industry and regulations. In 1935, the legislature created the Oil Conservation Commission and subsequentaly the Oil Conservation Division (OCD). Prior to the OCD, the State Geologist Regulated Oil and Gas In New Mexico.

3 OCD Functions Prevent waste & protect correlative rights Permit new wells and recompletions Regulate oil, gas and geothermal activity Enforce OCD rules and state statutes Gather and post well production data Protect groundwater & environment Ensure that the land is responsibly restored

4 OCD Goals and Objectives: Fair treatment of stakeholders Enforce rules in a uniform manner Timely review & approval of applications Maintain an effective well inspection program Protect fresh water resources & the environment Update existing rules that may be required by changes in technology and oil and gas business practices

5 Partnerships & Collaboration Interstate Oil & Gas Compact Commission Ground Water Protection Council Bureau of Land Management Environmental Protection Agency New Mexico Oil & Gas Association (NMOGA) Independent Petroleum Assoc. of NM (IPANM) Permian Basin Petroleum Association (PBPA) New Mexico Tech

6 Partnerships & Collaboration IOGCC s State s First IOGCC s States First is an exciting STATE led initiative aimed at facilitating multi-state collaboration and innovative regulatory solutions for oil and natural gas producing states. IOGCC s TOPCORP IOGCC s TOPCORP Training Program is being utilized by OCD to provide advanced training to oil and gas field inspectors. This training will enable OCD field staff to keep up with current technology.

7 Industry Advisory Group (IAG) Formed in May, 2015 IAG includes eight industry representatives First meeting w/ocd held July 13 th IAG will meet quarterly with OCD NMOGA, IPANM & PBPA represented Purpose of the IAG: Provide a forum for discussion of issues of mutual interest, including new industry technology & OCD rule changes

8 OCD Recent Actions Amended Financial Assurance Rule to allow operators to post a blanket financial assurance for wells held in TA status Amended Rule 34 for Recycling of Produced Water Established procedures within the Engineering Bureau to speed up the processing of administrative applications Obtained FY-16 legislative funding to purchase land and design a new office building in Artesia Currently in the process of hiring additional staff in all three district offices and Santa Fe

9 Large recycling pit

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11 Above Ground Storage Tanks (AST) Setup Each tank can be delivered by just three trucks and erected in seven hours. A.25% grade is recommended at the setup location to allow maximum draining of the AST. Rockwater operators have experience with tank set-up in extreme heat and freezing weather conditions. 41,000 BW

12 OCD Rule Changes: Stakeholder Participation OCD and/or Industry may propose an amendment to a Division statewide rule OCD will form joint OCD/Industry Committees comprised of OCD personnel and representatives from the oil and gas industry, including NMOGA, IPANM and PBPA, as well as other stakeholders when necessary Goal is to build consensus Proposed rule changes will be presented by the Committee to the Oil Conservation Commission

13 Ongoing Activities: Joint OCD/BLM Actions OCD and BLM meeting quarterly Discussion of potash drilling islands Working towards developing a Memorandum of Understanding (MOU) for compliance & enforcement Preliminary discussions on developing an MOU for injection/disposal wells

14 Ongoing Activities OCD-Online OCD is currently expanding its OCD-Online system to increase publically available information, including: Inspection Information Violations Enforcement Actions Resolution of Enforcement Actions Fines and/or Penalties

15 Ongoing Activities: GIS Capability OCD is developing a GIS module GIS module will be publicly available on OCD Online later this year Module will initially contain a well layer linked to OCD Online, & land ownership and spacing unit layers

16 Ongoing Activities Tracking Order Requirements Non-compliance by operators with the provisions of hearing and/or administrative orders is an ongoing problem OCD is developing a tracking system to assure compliance OCD may take compliance action against those operators who fail to comply with the terms of a order To ensure compliance, please review all administrative and hearing orders issued by the OCD to note all order requirements and deadlines

17 POSSIBLE RULE CHANGES Rule : Special Rules for Horizontal Wells Rule was established in 2012 Horizontal drilling techniques & operator business practices have greatly advanced since that time OCD needs to keep pace with changing technology OCD anticipates that the horizontal well rule will be revised and updated in the near future

18 POSSIBLE RULE CHANGES Rule Surface Waste Management Facilities Rule was last updated in 2008 Permitting process for landfarms and landfills under Rule 36 is unduly burdensome for the OCD and the applicant OCD is currently revising Rule 36 internally for the purpose of streamlining the permitting process. OCD will subsequently work with an industry committee to finalize the proposed rule changes

19 POSSIBLE RULE CHANGES Special Rules and Regulations for the Basin-Mancos Gas Pool: Order No. R The special rules for the Basin-Mancos Gas Pool were established in 2008 by Order R Subsequent development indicates this pool, or a portion thereof, should be reclassified as an oil pool OCD is currently reviewing the existing rules to determine what changes are necessary OCD/Industry Committee will be formed to recommend changes to the existing rules

20 Future OCD Revision Guidelines for Remediation of Leaks, Spills and Releases The OCD s Environmental Bureau is planning to revise and update the guidance document that outlines actions to be taken by operators in the event of leaks, spills and releases. It is necessary to update this document to reflect changes in technology and procedures

21 We encourage you to utilize our website:

22 Thank You Scott Dawson Deputy Director, OCD Energy, Minerals and Natural Resources Department (505) OCD Website: OCD Well Information and Operator Data: