American Oil and Gas Reporter - December 2018 - 98

ConventionCoverage: Permian Basin Petroleum Association
of diverting funds from so-called property-tax rich school districts to those with
lower taxable values, but a wholesale
scrapping of the system is unlikely during
the session, Seliger related. Since the
Robin Hood system began, half a billion
dollars had been siphoned from Midland
County alone, he noted.
Representative Dustin Burrows, RLubbock, whose district includes northern
portions of the Permian Basin, indicated
lawmakers must consider how to rely less
on property taxes for public school funding,
but said questions remained about how to
raise and spend other sources of revenue.
New Mexico News
Larry Scott, New Mexico State Representative, R-Hobbs, and a petroleum
engineer at Lynx Petroleum Consultants,
told PBPA that elections would spell
change in New Mexico, and would include
political leaders that failed to fully appreciate the oil and gas industry's contribution to the state.
During the upcoming legislative session scheduled to begin Jan. 15, 2019 in
Santa Fe, lawmakers could consider a
statewide methane rule, water limits for
hydraulic fracturing and setback restrictions, Scott said.
Potential election ramifications, continual concerns over industry water consumption, growing issues with produced
water and related disposal, and federal
actions related to the Endangered Species
Act could affect Permian producers in

the coming months and years in New
Mexico, predicted Laura Riley, a consultant
with Gavilan Solutions and a former
deputy commissioner at the New Mexico
State Land Office.
"The use of freshwater, the development
and disposal of produced water and recycling water quickly are going to become
limiting factors to development in the industry, especially in New Mexico, given
our regulatory environment," Riley forecast
during a water issues panel discussion.
A new injection rule from the New
Mexico Oil Conservation Division is possible, while Permian Basin operators may
face additional restrictions on land under
U.S. Bureau of Land Management jurisdiction in the Carlsbad region if BLM
classifies more than 500,000 additional
acres there as wilderness, she said.
Every Drop
According to Greg Perrin, general
manager of the Reeves County, Tx.,
Groundwater Conservation District, the
board that oversees the agency generally
supports reasonable water consumption
in the county, which includes a large portion of the Delaware Basin and the city
of Pecos.
In October, the district was continuing
work on rules for annual groundwater
withdrawals from the Pecos Valley, Rustler,
and Dockum aquifers as part of required
planning expected to be complete by Jan.
1, 2019, Perrin reported.
"We want to structure rules that balance

From left, Senator Dawn Buckingham, R-Lakeway, and Senator Kel Seliger, R-Amarillo,
pause before the Texas legislative panel during the second day of PBPA's annual
meeting, Oct. 24-25 in Midland. The lawmakers' discussion included how infrastructure
funding, public education and budget deliberations will dominate the upcoming
legislative session in Austin.

98 THE AMERICAN OIL & GAS REPORTER

Representative Larry Scott, R-Hobbs,
tells PBPA that a statewide methane
rule, water limits for hydraulic fracturing
and setback restrictions are likely to be
considered by New Mexico lawmakers
during the 2019 session.

the use of every drop that we can in this
area with long-term sustainability," he
said. "Our board includes property rightsminded people and wants to minimize
restrictions on the use of water, to an
extent where it is available."
While the Permian Basin has been a
hotbed of industry activity, many market
watchers expect more initial public offerings as investors look to take advantage
of water demand in the region, advised
Gabriel Collins, Baker Botts fellow in
energy and environmental regulatory affairs at Rice University's Baker Institute
for Public Policy.
Within 12 months of August 2018,
Collins projected, a major Permian-focused
water midstream firm will go public or
have a similarly large liquidity event, at
least three additional large private equity
companies will enter the industry space,
and at least three water-handling midstream
companies in the Permian may be acquired
by larger players.
Within two years, he continued, the
Permian will see a billion-dollar oil field
water transaction. Within three years, at
least 4 million barrels a day of incremental
produced water must be handled, he said.
Federal Lands
During an afternoon regulatory panel,
Ethan Lane, executive director for the
Public Lands Council and the National
Cattlemen's Beef Association Federal
Lands, detailed three changes in a Trump
administration rule making for ESA reg-
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