American Oil and Gas Reporter - September 2016 - 94

ConventionSection: New Mexico Oil & Gas Association
OOOO New Source Performance Standard
emissions rule, NMOGA insists. EPA
data reveal that existing measures have
reduced oil and gas industry emissions
23 percent, the association points out.
"We have looked at compliance for
venting and flaring independently of commingling, and feel the cost of compliance
and monitoring at current prices will
make about 10 percent of the production
out of the San Juan Basin-a dry gas
basin-uneconomical, and will lead to
premature plugging and abandonment,"
Henke stresses.
He cites HR 5538, the Department of
Interior, Environment, and Related Agencies Appropriations Act, as the latest
effort by pro-industry Republicans in
Congress-including New Mexico's Steve
Pearce-to push back against excessive
regulation and promote U.S. energy production.
The bill, which passed the House in
mid-July, "includes provisions that would
block both BLM's venting and flaring
rule, and its hydraulic fracturing rule,
which would endanger New Mexico jobs
and the economy," Henke says. "It still
has to go through the Senate and be
signed by the president, but at least it's a
push back on DOI overreach and would
reduce spending below the president's
budget request."
Public Lands
In early August, NMOGA was awaiting

release of a study by the National Aeronautics and Space Administration on
methane leaks in the Four Corners area,
Henke says. Some insist the oil and gas
industry is the primary contributor to a
"hot spot" over the San Juan Basin, he
says.
"We are going to take a hard look at
the science behind that study, because
while oil and gas do play a part in methane
emissions in the San Juan Basin, there
certainly are many other sources that include huge outcroppings," Henke promises.
For NMOGA members operating in
the Permian Basin, the BLM's updated
Carlsbad Resource Management Plan for
southeastern New Mexico, which will
govern drilling and production in New
Mexico's portion of the basin, is likely
due out in September, Drangmeister says.
The RMP sets the overall guidance
for where new leases will be let, which
lands can be treated as areas of critical
environmental concern, and how the areas
are to be managed, he reviews.
"This is NMOGA's number one strategic item this year because it will set the
stage for the next decade of production
rules on federal lands in New Mexico,"
Drangmeister says. "The RMP will set
the direction of future leasing and development, but we also want to be very
mindful of the potential impact on current
leases and operations. We are preparing
to provide detailed comments on BLM's

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proposal."
The potential for additional environmental protection alternatives and designations are a concern to NMOGA, he
says.
"We have seen some proposals from
nongovernmental organizations advocating
significant acreage going into areas of
critical environmental concern, and those
alternatives are a concern," Drangmeister
elaborates. "We will have to see what
constraints they propose for modifying,
or in some way influencing or changing
existing leases as a result of special designations. That is something BLM will
consider.
"We don't know if it's going to wind
up as a preferred alternative, but BLM is
looking at a full range of issues, from
full field development to considerable
environmental constraints," he says. "We
are hopeful leases held by production
will limit the damage, so to speak, in
terms of additional costs or limiting access
to leases."
Species, MIT, Archeology
NMOGA also is keeping an eye on
species developments, including the Texas
hornshell mussel, a small aquatic animal
that is the latest in a long list of species
that will be considered for protection by
the U.S. Fish & Wildlife Service, Drangmeister says.
In the meantime, he says NMOGA
was encouraged by a federal judge's
ruling to set aside endangered species
protections for the lesser prairie chicken.
"There was some good news in that,
led by the Permian Basin Petroleum Association, the lesser prairie chicken was
delisted," Drangmeister says of the February decision by the U.S. District Court
in Midland to reaffirm its initial September
2015 ruling. "This probably is not the
last salvo in that saga, but it was a significant victory.
"Now we are working on the Texas
hornshell mussel in the Permian Basin
Black River area. It's a candidate species,
and we are trying to demonstrate conservation measures and preclude the need
for listing," he continues. "We will see
whether we are successful."
NMOGA continues to monitor the latest BLM draft policy for shut-in and temporarily abandoned wells, where the latest
positive change has been the BLM backing
away from requiring mechanical integrity
tests for shut-in wells, according to a
NMOGA summary. Instead, the agency

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American Oil and Gas Reporter - September 2016

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