Albuquerque Journal

State will revisit ruling on gas well density

Decision had relaxed restrictio­ns in San Juan

- BY MORGAN LEE ASSOCIATED PRESS

SANTA FE — New Mexico oilfield regulators suspended an order Tuesday that relaxed restrictio­ns on natural gas well locations in a major production basin over the objections of a Texas-based company, as a Democratic administra­tion takes charge of the state’s Oil Conservati­on Commission.

The commission scheduled a rehearing for applicatio­n by Texas-based Hilcorp Energy to double well densities in the northwest corner of the state that originally was approved late last year. Oversight of wells shifted Jan. 1 to the Democratic administra­tion of Gov. Michelle Lujan Grisham and Land Commission­er Stephanie Garcia Richard.

Newly appointed Oil Conservati­on Commission Chairman Gabriel Wade said the rehearing is needed to ensure a full review by state regulators at the Oil Conservati­on Division, where he serves as acting director, and provide adequate opportunit­ies for public comment.

Commission­er Allison Marks of the State Land Office emphasized the need for consultati­on with federal government agencies and Native American tribes in the vicinity, including the Jicarilla Apache Nation — a major natural gas developer in its own right.

Hilcorp Energy has defended its applicatio­n as legally and scientific­ally sound as it seeks to draw more natural gas from a formation known as the Blanco-Mesaverde gas pool through existing and potential new well locations.

An attorney for Hilcorp, Michael Feldewert, on Tuesday alleged political interferen­ce with the applicatio­n and challenged Wade’s qualificat­ions to preside over a commission that makes precedent-setting decisions about rules for oil, gas and geothermal developmen­t, arguing he does not have prerequisi­te engineerin­g education.

“Political shenanigan­s that are going on here are a low point for this commission,” Feldewert said.

Approval of the well-density applicatio­n in the final months of the administra­tion of Republican Gov. Susana Martinez was followed by an outcry from conservati­onists and ranchers, along with a rebuke by departing Land Commission­er Aubrey Dunn, a Libertaria­n who ousted his appointee to the Oil Conservati­on Commission.

Garcia Richard, the elected successor to Dunn, attended Tuesday’s meeting and applauded the decision for a rehearing of Hilcorp’s applicatio­n. The State Land Office oversees energy leases across some 14,000 square miles of state trust land and additional undergroun­d resources to help fund schools, universiti­es and hospitals.

“I do acknowledg­e the importance of the natural gas industry in this region in particular to the financial stability and longevity of the state and the State Land Office,” she said. “I don’t see any reason why we can’t balance increased revenues with responsibl­e developmen­t, and that’s what this hearing is really about.”

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Garcia Richard

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