American Oil and Gas Reporter - March 2018 - 33

in 2008 (AOGR, May 2017, pg. 34).
McEntyre says the Carlsbad brine well
was decommissioned in 2008 and its operator has declared bankruptcy. The cavern
is 350 feet wide, 700 feet long and 150
feet deep, and threatens a mobile home
park, businesses, highways, railroads and
the Carlsbad Irrigation District's Southern
Main Canal.
McEntyre describes it as a lingering
issue. Last year lawmakers passed HB
30, which appropriated $500,000 from
the state general fund to prepare remediation plans.
Part of the reason the cavern hadn't
been dealt with previously goes back to
the industry's role in underwriting state
finances, McEntyre suggests. "Traditionally, we would use the OCD reclamation
fund paid by the oil and gas industry," he
observes. "But the division has not had
the funds available because the reclamation
fund has been swept into the state's
general fund the past couple years or
used for other department expenses."
Consequently, he says, NMOGA
worked with lawmakers to cobble together
SB 226, which provides $45 million during
the next several years to fill the cavern.
The lion's share, McEntyre says, comes
from redirecting 4.5 percent of the state's
vehicle excise tax from the general fund
to the state road fund, which is expected
to generate $10 million a year for the
next three years for the brine well fund.
Additionally, he says, the city of Carlsbad and Eddy County have committed
$4 million each, $3 million was appropriated from the general fund, $2 million
came from the state's corrective action
fund, and $1.9 million in oil and gas severance taxes have been earmarked for
the brine well fund.
A second bill, HB 319, authorizes the
Carlsbad Brine Well Remediation Authority to issue bonds to pay for the reconstruction, condemn properties near
the well site, and appoints New Mexico
Energy, Minerals and Natural Resources
Secretary Ken McQueen to chair the
Brine Well Authority.
Although he says backfilling the brine
cavern was not controversial, McEntyre
nevertheless praises it as a great example
of lawmakers from producing and nonproducing areas working across party
lines to solve a pressing and significant
problem. He particularly singles out state
Senators John Arthur Smith, D-Deming,
Carroll Leavell, R-Jal, and Representative
Cathrynn Brown, R-Carlsbad.
Other Legislation
Other than the Carlsbad brine well,
McEntyre says, NMOGA didn't have any
particular legislative goals for the 2018

session, although lawmakers did address
a couple oil and gas regulatory issues.
SB 189, which passed the Senate 40-0
and the House 54-11, and was sent to
Governor Susana Martinez, raises from
$50,000 to $250,000 the maximum blanket
plugging bond the OCD may require an
operator to post. And companion bills, HB
90 and SB 28 dealing with storage tanks,
both passed without a single nay vote.
The latter two bills amend the definitions of above- and below-ground storage
tanks in New Mexico's Hazardous Waste
and Groundwater Protection acts, and
provide for certifying tank testers.
According to the text of HB 90, both
an above- and below-ground storage tank
is "a single tank or combination of tanks,
including underground pipes connected
thereto, that are used to contain petroleum,
including crude oil or any fraction thereof."
However, the definitions exclude any
"pipeline facility, including gathering
lines regulated under 49 U.S.C. 601" as
well as intrastate pipelines regulated under
state laws.
McEntyre says NMOGA supported
both laws. He reflects that New Mexico
financial assurance requirements had not
been updated since the 1980s, "so we
can appreciate that there have been significant changes in values and costs that
necessitated increasing that number."
Another successful bill McEntyre mentions that NMOGA supported is HB 182,
which lowers the time that convictions
are kept on the records of commercial driver's license holders from 55 to six years.
On the other side of the ledger, he
says, NMOGA opposed House and Senate
memorials dealing with leasing and drilling
within the Greater Chaco Canyon area in
northwest New Mexico.
SM 43 by Senator George Munoz, DGallup, would have encouraged the U.S.
Bureau of Land Management and Bureau
of Indian Affairs to "desist from any leasing or issuance of permits without prior
tribal consultation in the greater Chaco
landscape . . . and that there be no
hydraulic fracturing within a 30-mile
radius of Chaco Culture National Historic
Park." HM 85 by Representative Derrick
Lente, D-Sandia Pueblo, would have
asked BLM and BIA to defer all leases
planned for the March 2018 Farmington,
N.M., lease sale, and to "provide lasting
conservation management prescriptions
to cultural and historical areas within the
greater Chaco region."
While memorials don't carry the
force of law, McEntyre says NMOGA
monitors them closely because "they
can give the public a false sense of
what these issues are about and how
they are being dealt with."
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American Oil and Gas Reporter - March 2018

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