American Oil and Gas Reporter - September 2015 - 146

ConventionCoverage: Independent Petroleum Association of New Mexico

Oilmen Record Public Policy
Victories And Defeats
By Danny Boyd
Special Correspondent

ALBUQUERQUE, N.M.-The Independent Petroleum Association of New
Mexico has experienced public policy
and legal victories over the past year, but
continues to face uncertainty in the form
of lawsuits from environmentalists, legal
wrangling over federal rules for hydraulic
fracturing, and a proposal to raise royalty
rates on federal lands. Members were
updated on these issues and more at
IPANM's annual convention, Aug. 5-7
at the Sandia Resort and Casino in Albuquerque.
New Mexico oilmen are benefitting
from a new GOP majority in the New
Mexico House of Representatives and
from pro-industry sentiments in the state's
executive branch, including support from
Governor Susana Martinez, but a Democratic Senate in Santa Fe, and legal and
regulatory moves on the federal and state
levels continue to hamper members, outgoing IPANM President Glen Papp remarked as the meeting adjourned.
"We continue to hear a lot about the
need for more science in regulations and

in proposals by environmentalists that
really are meant to hurt us, but unfortunately, the science never gets to the forefront in a lot of these political discussions,"
said Papp, principal and operations manager at Synergy Operating LLC in Farmington, N.M. "There is so much coming
down the pike anymore."
On the legal front, an opinion issued
July 28 by the New Mexico Court of Appeals contains confusing provisions,
IPANM Executive Director Karin Foster
told members.
IPANM filed a brief in the case, Woody
Investment LLC and Pipkin Corporation
v. Sovereign Eagle LLC and Dawson
Geophysical Company, which was brought
under the state's Surface Owner Protection
Act (SOPA), she reviewed.
While the oil and gas companies offered a surface use agreement prior to
surveying, the landowner declined. As
allowed by the law, Foster said, the companies posted bond and began seismic
surveys. Several months later, the surface
owner sued, claiming ruts from seismic
trucks damaged the surface and impacted
grazing, she detailed.
SOPA provides for paying surface

IPANM immediate past-President Richard Gilliland (left) joins 2015-16 President Mitch
Krakauskas (center) and 2014-15 President Glen Papp during the association's annual
meeting, held Aug. 5-7 at the Sandia Resort and Casino in Albuquerque. Gilliland was presented IPANM's Member of the Year Award for 2015 at the meeting.

146 THE AMERICAN OIL & GAS REPORTER

owners damages caused by operations,
but the appeals court also determined
that grazing lessees were entitled to damages as well, Foster said.
The court also deemed seismic work
was an oil and gas operation, instead of a
preliminary survey, she said. However,
the court muddied the waters by requiring
only five days' notice for seismic work
instead of the 30 days required for oil
and gas operations.
"The decision is not good in that seismic activity is considered an oil and gas
operation that affects the surface," Foster
told IPANM. "It's the first time we have
had a case make that statement, which I
find disserving."
Fracture Regulations
On another legal front, Foster continued, at the time of its convention, IPANM
still was awaiting a ruling from the U.S.
District Court for the District of Wyoming,
which enjoined the U.S. Bureau of Land
Management from implementing its new
hydraulic fracturing rule. The Independent
Petroleum Association of America, the
Western Energy Alliance, and several
states obtained a preliminary stay of the
rule, which was set to take affect June
24. Judge Scott Skavdahl gave BLM until
Aug. 28 to file its administrative record
with the court, and the judge was expected
to rule around mid-September, Foster recounted.
Challenges in BLM's rule include a
requirement that operators monitor pressure throughout a fracturing operation
and shut down if they experience a pressure kick of more than 500 psi, Foster
detailed. Fluids recovered from the start
of a frac job until approval of a produced
water disposal plan must be stored in
500-barrel steel tanks, she continued, but
the rule allows for only one tank on a location, and applications have to include
information on the necessity for more.
"What we ultimately are moving toward is BLM not allowing the industry
to use freshwater," Foster predicted. "It
will want us to use as much recycled
water as possible."
The state of New Mexico already pro-

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