Less Than 100 Inspectors to Oversee 100K New Mexico Wells

May 8, 2012

The number of oil and gas wells is steadily increasing in New Mexico, but there are still fewer than 100 state and federal inspectors to watch over them.

The Bureau of Land Management and the New Mexico Oil Conservation Division oversee about 100,000 active and abandoned wells and both say their inspectors do a good job.

The Santa Fe New Mexican reports that inspectors are lucky to get to each well every three years.

The Bureau of Land Management has had 69 petroleum engineers and environmental inspectors for at least the last five years, and the state has 12 field compliance officers, down by two from its high in 2007.

While the agencies say the inspectors are doing their jobs well, some New Mexicans are worried that there aren’t enough of them to ensure that the facilities won’t harm the state’s water and land and damage the health of its citizens.

Mike Eisenfeld of the San Juan Citizens Alliance said the public needs to keep pushing for better oversight of inspectors and the industry, because “the message from the agencies is, ‘We’re doing a great job. Trust us.'”

But people living in the San Juan Basin in northwestern New Mexico have complained for years of methane and hydrogen sulfide contaminating wells after coalbed methane development began there.

In recent years, both Santa Fe and Rio Arriba counties passed ordinances restricting oil and gas development, and others are looking to do the same. Last month, the Las Vegas City Council became the first town in the state to approve a community bill of rights that would prevent oil and gas extraction within the city limits and Las Vegas watersheds. In Mora County, commissioners are considering a similar community bill of rights.

Major mishaps at the thousands of oil and gas wells and facilities are rare, but the fallout when things go wrong is big.

Among the incidents in recent years was a 2006 spill of hydraulic fracturing fluid at a Farmington Halliburton facility that created a toxic cloud that caused the evacuation of 200 residents from a nearby neighborhood. A 2004 blowout at a natural gas drilling site in Carlsbad forced 1,200 people to evacuate.

In 2002, two young men backed over a wellhead on recreation land managed by the BLM near Farmington. There was no fence around the natural gas wellhead and it exploded. Both died.

One man’s mother won a $15 million jury award, and the other settled out of court.

Despite the fatal accident, wells are still not required to be fenced.

Herman Lujan, a supervising petroleum engineer technician with the BLM’s Farmington District Office, believes requiring barriers around well sites is a good idea. But that’s not up to him. “We can’t suggest what companies ought to do if it isn’t required in the regulations,” Lujan said.

The state also has largely sheathed its sword when it comes to fining oil and gas companies who violate the rules.

Until 2009, the state Oil Conservation Division was collecting thousands of dollars in fines a year from violators. That year, Marbob Energy paid the state $500,000 to settle dozens of violations, including misreporting well data for 22 years.

Marbob paid the fine but sued the state over its ability to levy direct assessments. In 2009, the New Mexico Supreme Court ruled the state could not directly collect fines but had to ask the state attorney general to take violators to court.

New Mexico’s 12 compliance officers continue finding violations at well sites but can’t levy fines directly against the companies.

Jim Winchester, communications director for agency overseeing the Oil Conservation Division said the $1,000 to $3,000 the state fines operators for violations isn’t worth pursuing in district court.

The New Mexico Attorney General’s Office has received no referrals for oil and gas violations from the Oil Conservation Division since the 2009 court decision.

Bill Brancard, general counsel for the Energy, Minerals and Natural Resources Department overseeing the agency, said the state still has a powerful compliance tool because it can withhold or take away drilling and production approvals from companies that fail to fix violations in a timely manner.

“In some instances, fines aren’t enough to make a company come into compliance. They would rather pay the fine and keep doing what they’re doing,” Brancard said.

Another department attorney, Sonny Swazo, said most violations are resolved quickly at the site after inspectors alert drillers or producers.

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