Proposed pool rule change is good for Farmington
Last week, the Farmington City Council passed a resolution in support of the proposed amendment to the Blanco-Mesaverde Pool Rule. Over the past several weeks, there has been a lot of discussion about this ordinarily innocuous provision before the Oil Conservation Commission in Santa Fe. With all the rhetoric and hyperbole surrounding the pool rule, I want to set a few things straight.
The city of Farmington, more than anyone, wants to protect our environment and our cultural heritage. It is our home, and we have created economic strategies to promote this region as a premier location where outdoor lovers of all ages and retirees can thrive. However, none of these strategies to diversify our local or state economy can exist without the long-standing economic benefits that oil and gas production bring to us.
I make mention of this as there are those in our state who would have you believe this proposed rule will allow oil and gas operators in the Blanco-Mesaverde Pool to drill thousands of new wells, destroying our beautiful vistas and creating more carbon emissions, or that this rule is just another way that the oil and gas companies can take advantage of us and destroy our environment. This simply is not true. Here are the facts:
A pool rule is an administrative tool used by the Oil Conservation Division to put in place basic operating parameters for operators for known pools of oil or gas. In the San Juan Basin, we have five major pools.
The rule lets every operator know how many wells they can apply for permission to drill; however, it does not give permission to drill.
Drilling applications go through other jurisdictions based on whether the well site is located on local, state, federal or private land. In most cases, the drilling application process can take as long as nine months as environmental studies, archeological studies, public input, etc. are all done.
If approved, the pool rule does not allow anyone to circumvent the environmental and archeological laws and regulations.
It is said that the approval of this pool rule change will result in almost 8,000 new wells. This is false. Hundreds of wells that are allowable under the current pool rule have not been drilled. That is partly because of our terrain, but also because of economics. If a company can spend a few hundred thousand dollars to use an existing well, they won’t spend millions of dollars to drill a new well.
If Hilcorp is able to pursue its strategy of recompletions, it achieves a goal that both the environmental groups and I should be able to support: When a recompletion is done, it reduces the number of new wells that would need to be drilled and the recompletion process means retrofitting old, decaying wells with modern equipment that reduces the likelihood of leaks or other environmental accidents. Fewer wells. Less environmental impact. More production. We should all be on board with that.
As mayor of Farmington, I believe we can achieve a balance between promoting the industry that has built this city and drives the economy in our state, while protecting our environment, the scenic vistas, and tremendous outdoor recreation and industry opportunities.
Hilcorp and other operators are stepping up and investing millions into the San Juan Basin, stopping the year-after-year declines in production that we have seen, and are prepared to spend millions more in the future. That means jobs, and jobs mean money to feed families, fund schools and promote local businesses. It means less crime. It means better outcomes for our kids. These are all things New Mexicans care about. The pool rule change will open up this responsible, environmentally sound, economic opportunity, which is why I support the rule change and believe the Oil Conservation Commission should as well. In short, as we have made clear in our unanimous support of our resolution for the Pool Rule Amendment, this is a win-win for our community and the region.