Decision on natural gas drilling hits legal snag
After hearing several hours of sometimes emotional testimony, the state Oil Conservation Commission on Thursday was forced by a legal problem to delay any decision on an application by one of the state’s largest natural gas producers to increase well density in northwestern New Mexico’s San Juan Basin.
Rules required Texas-based applicant Hilcorp to give advance notice of Thursday’s hearing to all other gas and oil operators that have or can drill wells in the large area of mostly federal land in San Juan and Rio Arriba counties, commission general counsel Bill Brancard said after the meeting.
“They notified them, but they gave them the wrong date, so that was the flaw,” Brancard said.
After an almost 40-minute closed-door session, the commission announced the hearing would reconvene Nov. 19 and that all testimony taken on Thursday would be part of the record.
Hilcorp wants regulations changed to allow the company to drill eight wells within a 320-acre tract, instead of the current four, in an area called the San Juan-Mesa Verde Blanco Pool. That name refers not just to the geographic area but also the underground shale formation within the area where fracking for natural gas takes place.
Fracking, or hydraulic fracturing, is an oil and gas extraction method in which fluids are injected into a well to break up shale and extract gas.
Hilcorp’s senior reservoir engineer, Michelle Sivadon, testified that while additional wells are needed in the area, Hilcorp doesn’t always drill new wells when there are existing boreholes.
Under questioning from Hilcorp attorney Jim Bruce, Sivadon said it could take years or decades for increased development in the San Juan-Mesa Verde Pool, depending on the economics of individual gas exploration operators.
Several Santa Fe residents spoke against approval of the application or said action should at least be delayed until more public comment can be provided. They cited global warming and water issues in New Mexico.
“It takes 1,000 gallons of water to do fracking, and we have no water,” said Caren Waters of Santa Fe, who identified herself as a farmer. “How do you people sleep at night?” she asked the commissioners.
“This process contributes directly to climate change,” Santa Fe artist Bobbie Besold said in asking for a delay. “Who is benefiting from more drilling? These folks will, not citizens of New Mexico.”
Thirty percent of state revenues are derived from the oil and gas industry, which also helps fund public education in New Mexico, commissioner Robert Balch said in closing remarks. Balch is also director of the Petroleum Recovery Research Center at New Mexico Tech.
The commission heard “a certain degree of evidence here supporting some change” in the rules, Balch said. He added that salt water from other wells is used in fracking as opposed to fresh water.