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BP’s $4 million donation 8San Juan College Schoolof Energy has bright future

Museum expansion 10New wing will create a one-stopshop for energy education

The Mancos Shale 20Sharpe: There’s a lot of wells to be drilled

Five Mile Bridge 24Road to Largo Canyon a complicationfor Mancos shale development

Mock rig disaster 30WPX, Hurricane Swabbing hopefor the best and plan for the worst

Saying thanks 40Tom Dugan recongized by IPANMfor a lifetime of achievements

Gross GAS Production 38

Photo contest 44

Advertising directory 46

BASIN RESOURCES4

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Editor’s noteIt’s no secret the oil and gas industry has hit a rough

patch over the last couple of years.When the cost for dry natural gas dropped to a

decades-low price, producers in the Basin were hithard. However, as always, the ingenuity and persist-ence of people in the San Juan Basin continues findinginnovative ways to move forward.

The Mancos Shale, resting roughly 5,000 to 12,000feet below the Basin is said to be rich in oil and otherliquid fuels.

It has the possibility to revive the Basin, andGeorge Sharpe, investment manager for Merrion Oiland Gas, says that the oil and gas is out there and willbe for many years to come. Merrion recently enteredinto a lease agreement with Bill Barrett Corporation ofDenver, Colo., to come into the area, construct hori-zontal wells, and drill on Merrion-leased land in theMancos Shale. Sharpe said there are 125,000 acresMerrion has leased to Barrett and, with the properspacing of one well for every 160 acres, there could be156 wells.

In this issue, we also look at getting the MancosShale payload out of Largo Canyon and across theLargo wash.

San Juan County has been looking at upgrades tothe Five Mile Bridge. The one-lane bridge is one of

only two roads leading into and out of the area.The bridge needs some work to keep the heavy

equipment and trucks moving in and out of the area.There is also a possibility that the area may see a

compressed natural gas station here before too long.City and county government has discussed convert-

ing vehicles to run on natural gas.Encana and the New Mexico Natural Gas Vehicle

Coalition came to Farmington to discuss the feasibilityof building a natural gas station here for fueling

personal vehicles, buses and trucks.Recently, BP American Production Company gave

the School of Energy at San Juan College $4 millionto go toward building a new School of Energy facility.

Tim Harrington, BP North American Gas regionalpresident, feels this investment is about transformingenergy, and that starts with the individual training.

“This is about legacy and how we can keep thatlegacy,” Harrington said.

The Farmington Museum is also interested in con-tinuing the legacy of our oil and gas development byexpanding the energy wing of the museum to 7,500square feet.

Looks like the boom and bust cycle is turning againto the positive for the Basin.

BASIN RESOURCES8


During the summer of 2012, theIndependent Petroleum Associa-tion of New Mexico was involvedin the hearings before the Oil Con-servation Division, or OCD, toamend the pit rule (Rule 17).IPANM had filed a separate peti-tion from the New Mexico Oiland Gas Association, or NMOGA,in order to best represent the inter-ests of our membership.

We initially only differed on thetheory of applying Rule 17statewide. Our Board voted in Oc-tober 2011 also to include anamendment to require applicationof Rule 17 to all counties in thestate, including Otero and Sierracounties. In January, however, thecommission ordered a severanceof the IPANM case in order to liti-gate the Otero Mesa issue after theconclusion of the pit rule hearing.

The three main goals for theIPANM petition to the pit rulewere:

1. To simplify Rule 172. To eliminate the require-

ments for closed loop systems3. To allow for more on-site

burials With these three goals in mind,

IPANM presented its case throughthe detailed testimony of TomMullins, principal of SynergyConsulting, and Larry Scott,founder of Lynx Petroleum. Scotttestified to the negative economicimpact of Rule 17 on the state toprovide the commission with a ra-tionale for amending the rule.

To simplify the rule, IPANMfelt that the notification require-ments to the Santa Fe office had tobe changed, notification to surfaceowners had to be eliminated andthe application, closure and vari-

ance process had to be stream-lined.

IPANM opposed any increasedregulatory burdens in the protec-tion of livestock and public safety,which were two additional protec-tions added to the last NMOGApetition at the request of the NewMexico Cattlegrowers Assoc.

Scott testified that requesting avariance did not need to become ahearing process or a popularitycontest based on the number ofregulatory folks on staff.

Instead, Scott advocated for in-creased communication and cer-tainty in the rule, with setextension provisions and set timelimits for the regulators to deter-mine the validity of a permit ap-plication or face automaticapproval, rather than the indefinitedenial, as is the current standard.

Elimination of the permitting orregistration of closed loop systemsalso required significant discus-sion of the industry understandingof what a closed loop system re-ally was used for, which is solidscontrol equipment that will varyfrom well to well. Therefore, re-quiring notification of use forworkover operations was irrele-vant to this rule, and requiring thatthe operation meet “engineeringprinciples” also would set opera-tors up for potential violationsbased on some subjective determi-nation by a regulator.

Finally, IPANM felt that ourscience would demonstrate there

would be no impact on groundwater with the use of earthen pitlocations at a prescribed distancefrom water. Since that science in-dicated little or no migration ofharmful contaminants, therewould be no need to test or haulthose cuttings when the depth togroundwater was greater than 100feet from the bottom of the pit.

Scott completed extensive re-views of rig counts in severalstates including New Mexico,Oklahoma, Wyoming and Texas.He estimated if production levelsremained flat for the time periodssubsequent to Rule 17, as they hadin Texas, instead of the declinethat occurred, this represented aloss of $6 billion in economic ac-tivity to New Mexico and $600million in direct lost tax revenue.

Mullins testified for IPANM asan expert in the field of petroleumengineering. He completed an ex-tensive review of prior modelingdone for the 2007 and 2009 pitrule hearings by the OCD, andDaniel B. Stephens on behalf ofNMOGA. He also reviewed eachcase of alleged ground water con-

tamination claimed by the OCDand found not one case was actualcontamination of ground waterduring the operation of a drillingreserve pit.

Mullins did modeling for the25-foot to ground water sittingand the 100-foot to ground waterfor deep trench burials requestedin the IPANM petition and foundthe impact to ground water fromthe chlorides on a pit was so mini-mal that levels were below de-tectable limits in several instancesand in all cases the level of chlo-rides in ground water was lessthan clean water drinking stan-dards.

Mullins concluded by sayinghis modeling showed scientificproof the IPANM proposed Rule17 amendments, if implemented,would be protective of humanhealth, the environment and freshwater as designated by the stateengineer.

On Aug. 28, the Oil and GasAccountability Project put on a re-buttal witness to contraveneMullins’ testimony on modeling.

They were “uncomfortable”with the inputs Mullins had usedin the model, but would not ex-plain why or present a valid alter-native. Similarly, they discussedseveral cases in the OCD files ofalleged instances of soil impactsas the result of an unlined earthenpit.

All the cases were prior to 2009when the current version of Rule17 was implemented. None ofOCD’s testimony contravened anyof the professional opinions ren-dered by Mullins that the IPANMproposal was protective of humanhealth and the environment.

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BASIN RESOURCES10

www.basinresourcesusa.com •Fall 2012

Lauren Duff

For Basin Resources

The Farmington Museum

has worked tirelessly to

record the San Juan Basin’s

deep-rooted history in energy

production, and they’ve run

out of space.

To encourage the public to

learn more about the impact

of oil and gas production in

the area, the Farmington

Museum at Gateway Park is

expanding its energy wing.

This expansion will supply

more room for existing

exhibits and new additions.

“We have been working on

this a very long time and one

of the things that is very

timely about the project is

energy has become such a hot

topic,” said Bart Wilsey, mu-

seum director.

This project has been on-

going for about 10 years, he

explained. “We were

fundraising for an expanded

exhibit, so it has taken a little

time.”

Existing exhibits, such as

the Dinosaurs to Drill Bits

exhibit, will be moved to the

new wing, said Tom Cun-

ningham, curator of exhibits.

The popular geovator will

also be revamped and moved.

New wing willcreate a one-stopshop for energy education

BASIN RESOURCES 11

Fall 2012 • www.basinresourcesusa.com

During the Feb. 28 Farmington City Council

meeting councilors approved a $13 million bond

issue, and $2.5 million is going towards the energy

wing expansion, Cunningham said. Right now, the

wing is 1,500 square feet and the new wing is esti-

mated to be 7,500 square feet. Conron & Woods

Architect firm in Santa Fe was selected to develop the

conceptual plans.

“We talked to the architect firm and showed them

Farmington museum

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what we were thinking and the views we were envisioning.

They just took the next step,” Wilsey said.

Along with the $2.5 million bond, the community and

energy-based businesses have donated $650,000 for the

expansion.

The new wing will revolve around energy resources

found in the San Juan Basin – such as oil, gas, and coal.

Renewable energy such as wind, solar, and hydroelectric

also will be a central focus.

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“The oil, gas, and coal

producers have already been

represented. We will take it

one step further and talk

about the future of energy-

production and the research

that has been done to make

energy more environmen-

tally friendly,” Wilsey said.

He said he believes there

is no other museum of

which he is aware that is

doing an energy exhibit like

this. “This will be a one-stop

shop for energy education.”

For museum visitors who

enjoy the geovator, a simu-

lated elevator that shows

people what it is like to drill

an oil-well, the museum is

adding a simulated trip into

the coal mine. “It’s going to


be very similar to the

geovator,” said Cunningham.

“There will be some motion

so people can get the idea of

coal mining.”

Interactive, hands-on

exhibits will also be available

for the public to experience.

“Not only will there be

hands on technology, and very

interactive, it will also be

theatrical, so hold on to your

hats,” Wilsey explained.

Cunningham said once the

architect firm has finished a

definite plan and a construc-

tion contractor is selected

through a bidding process,

they hope to break ground and

begin to build the wing exten-

sion by the end of this year.

“There will be some real

cutting edge exhibits in there

and we are looking forward to

it,” Wilsey said.

Once the existing exhibits

are moved into the new wing,

the current energy wing will

provide more room for per-

manent artifacts relating to

the early settlement of

Farmington and its culture,

said Cunningham. The current

wing will also expand the

American Indian rug collec-

tion, and give space to

traveling exhibits and various

art shows.

“We are excited about

getting this going and I think

people will be blown away,

because they will be looking

at a world class exhibit,”

Cunningham said.

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BASIN RESOURCES16


San Juan College’s School

of Energy, or SOE, had a

vision to create a work-

friendly certificate/degree

program. The result is a new

program called Advanced

Petroleum Production

Operation, which the SOE

will offer this fall.

It’s the next level of

training from what previ-

ously was offered in the

Natural Gas Compression

and Lease Operator pro-

grams. (The latter is

now known as

Fundamentals of

Petroleum Produc-

tion Operations.)

“This new certificate/de-

gree is for the working em-

ployee who already has time

invested with a company and

can’t afford to quit and go

back to school,” explains

Randy Pacheco, SJC

dean of the School

of Energy. “The

program is flexible

but achievable for

workers who want to take

the next step in their career.”

“Making time for that next

step pays off,” continues

Lisa Martin, BP project

director for the School of

Energy. “Energy companies

whose employees participate

in School of Energy

programs find their

workforce expands their skill

base, while preparing them

for the next level.”

San Juan College School of Energy offers new program this fall

Class

schedule on

Page 42

Lauren Duff

For Basin Resources

Everyone in the state understands how

important the oil and gas industry is to

New Mexico. What makes this industry

continue to thrive is the expertise of the

workforce that continues to grow through

training programs.

BP America Production Company, the

third largest producer of natural gas in the

state, announced a $4 million donation to

the School of Energy at San Juan College.

The announcement was made during a

reception at San Juan College Henderson

Fine Arts Center.

This investment will go towards a new

School of Energy building on the Farm-

ington campus which will increase capac-

ity and also enhance the curriculum and

training courses offered by the program.

“The demand for the energy program

has grown substantially over the past five

years. We have had to limit enrollment in

some of our programs in the energy

program,” said Dr. Toni Pendergrass, San

Juan College president.

She added that this investment is an

“extraordinary opportunity” for San Juan

College to expand training for the energy

workforce.

Approximately 250 students from the

School of Energy graduate every year with

an associate degree. The school trains

7,000 individuals in industry curricula

every year for the workforce.

“We simply cannot thank BP enough for

their dedication and commitment to higher

education, the state of New Mexico, and to

this marvelous community.”

Pendergrass said this opportunity goes

beyond upgrading skills. “It is about

helping students realize their dreams.”

Randy Pacheco, School of Energy dean,

BP’s $4 million donationSan Juan CollegeSchool of Energyhas bright future

* donation 17

* college 18

BASIN RESOURCES 17


donationsaid this investment will

enable San Juan College and

Farmington to be recognized

as a global training leader.

“We are hoping to

develop that and get people

from all over the United

States and the world to

come here and learn about

how to produce hydro-car-

bon safely and efficiently

with an environment-con-

scious mind,” he said.

The School of Energy has

one of the best technical

training programs in the

nation. New Mexico

Governor Susana Martinez

said the school is one of the

top recruiting destinations

for BP America. She added

that over the last five years,

it also has trained an esti-

mated 10,000 individuals

who work directly or

indirectly with BP America.

“The San Juan School of

Energy is recognized as the

best, but because of space

limitations many eligible

candidates are forced to sit

on the waiting list. Today

we hope to change that.”

She added that this

investment will benefit San

Juan County because it will

allow students from all over

the world to be trained in

the industry and bring direct

and indirect jobs into the

county.

“Not only has this

investment in the commu-

nity been realized in the

form of good paying jobs,

BP’s partnership with San

Juan College and the School

of Energy continues to train

a highly skilled workforce,”

Martinez said.

Tim Harrington, BP North

American Gas regional

president, feels this invest-

ment is about transforming

energy, and that starts with

the individual training.

“This is about legacy and

how we can keep that

legacy,” Harrington said.

Along with BP America’s

$4 million donation, the

governing board of San Juan

College will provide an

additional $2 million for the

project. San Juan College

Foundation will also begin a

capital campaign in an effort

to raise $3 million and, once

the money is raised, BP has

agreed to match another $1

million, according to a San

Juan College press release.

Martinez said it is now up

to the community and the

state to bring in the rest of

the investment “so that we

can allow more students to

have options in this field.”

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The energy industry is changing, and

employers are looking at ways to invest

not only in their employees, but in their

companies’ future. That means partner-

ing with colleges, such as SJC’s School

of Energy, where potential employees

have been well trained, or where cur-

rent employees can receive professional

development to become more pro-

motable, knowledgeable and safer

workers.

The new program offers some of the

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* college 42

BASIN RESOURCES20


Debra Mayeux

For Basin Resources

Oil and gas is prevalent in the San Juan

Basin and will be for many years to come.

“We’ve got years and years and years of

oil and gas,” said George Sharpe, invest-

ment manager for Merrion Oil and Gas.

Sharpe recently negotiated a lease

agreement with Bill Barrett Corporation of

Denver, Colo., to come into the area

construct horizontal wells and drill on

Merrion-leased land in the Mancos Shale.

Sharpe said there is 125,000 acres leased

to Barrett and, with the proper spacing of

one well for every 160 acres, there could

be 156 wells.

“There’s a lot of wells to be drilled,” he

said. There is 3,400 square miles to the

Mancos Shale, which includes San Juan,

Rio Arriba and Sandoval counties. There

are multiple oil and gas players on that

land producing oil and gas. Those players

include Encana and ConocoPhillips.

Merrion Oil and Gas estimates that 30

billion barrels of oil are in place with a

potential for recovering 1.5 billion barrels

from this one oil and gas rich area.

While Merrion holds some of the

land, Sharpe said it would be difficult

for the relatively small independent

energy company to make money on the

proposition, if it was working alone.

“We put most of the money back into the

ground,” he said. Instead Merrion has

“farmed-out” the land. “They pay us for

an opportunity to sublease.”

The sublease includes an agreement to

do land improvements, invest in capital to

drill, and remove the oil and gas. “They’ve

got to perform,” Sharpe explained.

Barrett has a good track record in per-

forming. “Barrett has the technical expert-

ise to drill a horizontal well,” Sharpe said.

Drilling a horizontal well is a difficult

endeavor. It includes drilling down more

than a mile and then setting pipe and creat-

ing a zipper-type lateral line that allows for

fracking. Sharpe said some of the zipper

The Mancos Oil Play Size?

n Oil Fairway – 3,400 square miles (San

Juan, Rio Arriba, Sandoval Counties)

n Oil-in-Place – Up to 30-billion barrels

n Recovery – Up to 1.5-billion barrels

potential

Sharpe: There’sa lot of wells to be drilled

BASIN RESOURCES 21


fracks have 50 stages.

“Designing those fracks –

supervising that – it takes a lot

of equipment,” Sharpe said.

Encana is doing 15- to 18-

stage fracks.

The practice of fracking

was developed more than 60

years ago. It is the process of

using fresh water to break up

the rock and release the oil

and gas. Sharpe said it is safe,

because there are thousands of

feet of rock between the

productive zone and the fresh

water. “Fractures are limited

to the shale zone, and do not

penetrate through a mile of

rock into water sands,”

according to a report produced

by Merrion Oil and Gas on the

reality of the energy industry

in the basin.

“If properly drilled, the

fresh water sands near the

surface are fully protected by

two and sometimes three

strings of pipe cemented in the

hole,” the report stated.

Sharpe explained that

Barrett has drilled several hor-

izontal wells in other basins

and understands the practice

of fracking in shales. “They

are able to take the cores and

analyze them,” Sharpe said.

Their experts then tell them

where it is best to drill.

They drill and they use

fracking technology, which is

prevalent in most oil and gas

production. Some 90 percent

of all wells and 100 percent of

shale wells drilled in the U.S.

are fracked. “Shut down

fracking, and you can park the

car and turn off the furnace,”

the report said.

Barrett will use this tech-

nology to access the oil and

gas in the 200-foot deep Man-

cos Shale. The company will

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“We could drill horizontalwells, but not for the money itwould cost to drill a lot ofthem,” Sharpe said. It takes

about $5 million to drill onehorizontal well. The cost doesnot match the rate of return,where they would need to getat least 150,000 barrels of oilat $33 per barrel out of onewell to have a positive rate ofreturn.

The oil and gas is out there,according to Sharpe, and the

investors will come as theU.S. becomes less dependenton foreign oil and continues todrill at home. The Mancos

Shale will be a part of that reality, with Barrett alreadyplanning to drill two wells thisfall.

BASIN RESOURCES22


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Debra Mayeux

For Basin Resources

A 2,000-foot wide wash that is

said to be 200 feet deep has been

wreaking havoc on wagons, cars

and oil and gas trucks and

equipment for the past 50 or more

years. It is the Largo Wash that has

caused problems for people

traveling south of U.S. 64 east

attempting to get from Blanco into

Largo Canyon to access homes,

ranches and the numerous oil and

gas sites in the region.

The Largo Wash is part of the

Mancos Shale, an area rich in oil

and gas that essentially could turn

around the economy in this region.

There is one complication, how-

ever; it is getting in and out of the

canyon without having to navigate

the sometimes treacherous wash.

“There’s only a couple of ways

in,” said Dave Keck, public works

director for San Juan County.

Drivers can go through Blanco to

County Road 4550 and cross over

the Five Mile Bridge into Largo, or

Road to LargoCanyon complication for Mancos Shale development

BASIN RESOURCES 25


drivers can go through the

residential district along

Sullivan Road.

The Five Mile Bridge is a

narrow one-lane bridge that

once was used on a New

Mexico Highway, but in the

1960s was moved to the

intersection of County Road

4550 and U.S. 64 east of

Blanco. In 1966, San Juan

County and El Paso Natural

Gas partnered to move the

bridge again to the narrowest

point in Largo Wash.

“It’s up to 2,000 feet wide

at some points. This area is

only 300 feet wide,” Keck

said. “I wish I would have

been there to see them move

that bridge.”

Keck also is trying to find

out how the abutments were

built, because they need to be

“heavy duty” in that wash,

where the water over the

years has not only tried to

erode around the bridge, but

also is dangerous and, when it

is running, swallows large

machinery.

Prior to the bridge being

placed to assist traffic in

crossing the wash, there were

legends about Largo Wash

and its similarity to quick-

sand. “It’s notorious for swal-

lowing heavy equipment –

sunk in the wash and never

retrieved,” Keck said.


Above: A Schlumberger truck became stuck

in the Largo Wash in this photo from Feb.

1985. (Courtesy of the book Gas: Adven-

tures into the history of one of the world’s

largest gas fields – the San Juan Basin of

New Mexico, by Tom Dugan.)

Right: This August of 1954 photo shows a

vehicle stuck and sinking in Largo Wash. It

was provided by Virginia Copeland-Smith to

Tom Dugan for his book. (Courtesy of the

book Gas: Adventures into the history of one

of the world’s largest gas fields – the San

Juan Basin of New Mexico, by Tom Dugan.)

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Oil and gas man Tom

Dugan dedicated 10 pages of

stories and photos to the Largo

Canyon legend in his book

“Gas: Adventures into the

History of one of the World’s

Largest Gas Fields – the San

Juan Basin of New Mexico.”

Chapter 12 begins with the

subhead “Largo Canyon –

Drivers Beware.”

“The canyon is the longest

and largest intermittent stream

drainage in the San Juan

Basin,” Dugan wrote. It is 65

miles long beginning just east

of Blanco and traveling all the

way to Cuba. The Wash was a

main roadway in the 1920s for

people traveling to San Juan

County from Cuba, Albu-

querque and Santa Fe.

In the 1950s when oil and

gas development became

prevalent in the basin, Largo

was traveled even more than in

prior years.

Keck characterized it as

being “unreliable,” explaining,

“If the surface gets hard-

packed sand, you can cross it.

If it’s not or if it was running

with water and you tried to

cross it, it would undermine

the vehicle and it would start

to sink,” he said.

Dugan shares several stories

of first-hand accounts of

people who lost their cars,

farming equipment and oil and

gas trucks in the canyon.

“Many a vehicle has lost its

footing and been filled with

sand while trying to cross the

infamous wash,” he said in a

section about a Schlumberger

Truck getting stuck in the

wash late one night in 1985.

The book also shows

several photos of vehicles

stuck in Largo Wash, which is

why the bridge became such

an interest to Keck who took

over the county’s public works

department in 1994. At that

time the Five Mile Bridge was

rated for 10 tons, but no one

paid attention to the rating.

“It was always a concern of

mine that I had this bridge

marked as 10 tons, but nobody

was paying attention to it,” he

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BASIN RESOURCES 29


said. He decided to have the bridge ana-

lyzed, and that showed the 10-ton rating to

be accurate. “But heavy vehicles were

continuing to use it.”

Keck knew the weight limit would be

difficult to enforce, so the county put a

weight bar on the bridge to enforce the

weight limit. He continues to inspect the

bridge once each month, and knows that

with the predicted Mancos Shale boom,

the county needs to plan for increased oil-

field traffic in and out of Largo Canyon.

In addition to increase traffic, there have

been problems with a “meandering” wash,

Keck said. That means the wash has begun

cutting into and jumping the road. “The

wash has been trying to go around the

bridge.”

He permitted a BLM rock pit and

placed the rocks in front of the road,

forcing the water back under the bridge, so

the potential erosion problem is being

managed, but still there is the access issue

for large heavy trucks.

Keck looked at replacing the old Five

Mile Bridge with a larger modern bridge

that would span the entire wash. That has

an estimated price tag of $15 million, for

an estimated 250 to 300 vehicles traveling

across the bridge each day.

At a recent County Commission

meeting, Keck brought up another

possibility. “We started thinking out of the

box,” Keck said. He is looking at the

feasibility of welding steel plates onto to

the bridge to strengthen it.

“I’m not 100 percent sure it’s going to

work,” he said. A team is investigating of

the feasibility of the plan, and if they run

into any questions or problems the

investigation will stop.

If the plan is feasible it could solve a lot

of access issues in Largo Canyon. “I’m

confident it could stop erosion around the

bridge and open it up to 40-ton trucks,”

Keck said. The estimated cost of refurbish-

ing the bridge and welding on the steel

reinforcement plates would be about $1

million.

“The county is concerned about getting

people into Largo Canyon,” said Keck,

who points out it could be huge boon for

the oil and gas industry if the Mancos

Shale turns out to do as well as it is

projected to do. “That oil would be

brought out of the field by truck.”

There also is the access to sites for

repairs and maintenance. “The one thing

we do not have control over is where

people drive,” Keck said. “My county

roads are not built like highways.”

And heavy trucks damage county roads,

but the benefit of oil and gas development

outweighs the potential problems. “It’s just

a fact of life around here, that we are going

to be dealing with oil and gas traffic,” said

Keck, who wants to work with area resi-

dents and industry to make the roads safe

and usable while being well-traveled.

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BASIN RESOURCES30


Debra Mayeux

For Basin Resources

WPX Energy and Hurricane

Swabbing partnered in early

September with local and state

officials in New Mexico,

Colorado and Texas to practice

WPX, HurricaneSwabbing hope forthe best and plan

for the worst


emergency preparedness skills in the event of a rig disaster on

a WPX site in Ignacio, Colo.

The drill began shortly after 9 a.m. Sept. 12, when

emergency crews in Ignacio were made aware of a drilling rig

accident on La Plata County Road 319 at a WPX natural gas

well site. Officials from the Southern Ute Police dispatched

Los Pinos Fire Department to the site with one engine

company, one water tender, one medic and rescue unit

assigned. The La Plata County Sheriff’s Office, the Office of

Emergency Management and the Colorado State Patrol, also

were notified.

Then, officials on site notified WPX Energy’s Aztec Office,

which dispatched field technicians and supervisors to the

scene for technical support.

The site was described as an area that produces methane

gas from the Mesa Verde/Dakota formation. The methane gas

has an average pressure from the well at 122 psi. It enters a

pipeline on site and the average pipeline pressure is 65 psi

with daily average gas volume of gas of 285,000 cubic feet

per day.

Water also is produced on site from the gas stream and is

collected and trucked off site for disposal.

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BASIN RESOURCES32


The simulated emergency was done

to give WPX employees first-hand

knowledge of how to react in an

emergency situation.

“The exercise gives everyone an

opportunity to execute long-standing

emergency response plans and agree-

ments and to work together hand-in-hand

to safely resolve emergencies,” said Bill

Roberts, WPX Energy safety specialist.

“The exercise is a cooperative effort with

multiple agencies participating with a

common goal: public safety and

environmental protection.”

Another plan purpose was to identify

hazards and mitigate or reduce those

hazards by overseeing employee reaction

to the situation.

There was a post-exercise evaluation

with all participants in order to identify

any opportunity for joint response

improvement in the unlikely event of a

real emergency, according to a press

release that stated “WPX actively partici-

pates in Local Emergency Planning

Committees in several communities

where it operates.”

WPX Energy, formerly a part of

Williams, is headquartered in Tulsa, Okla.

Its Aztec office employs 55 people who

oversee more than 800 natural gas wells

across 123,000 net acres. The company is

involved in exploration and production of

oil and gas reserves in the U.S.

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BASIN RESOURCES34


Debra Mayeux

For Basin Resources

Imagine fueling up your car

or truck in your garage – or

paying more than half the

price of commercial gasoline.

This could be the future of

transportation in the United

States, if the American

Natural Gas Association has

any input.

Natural gas, currently

powers less than 1 percent of

the vehicles in this country.

The nation is dead last behind

Pakistan, Iran and Europe in

the use of compressed natural

gas as a transportation fuel.

We have about 1,100

compressed natural gas sta-

tions and 180,000 gasoline

stations, according to Sherrie

Merrow, the natural gas

vehicle advocacy lead for

Encana and a member of the

New Mexico Natural Gas

Vehicle Coalition.

This New Mexico group

was formed in 2010 with

various stakeholders, natural

gas producers and govern-

ment agencies coming to the

table to discuss the feasibility

of compressed natural gas as

the new fuel for personal

vehicles, buses and trucks.

Last summer the members

looked at where to place new

compressed natural gas

stations in the state.

The members met in

Farmington in June to further

strategic planning and to get

the “best buy-in” they could

from local governments and

energy producers.

“We are very fortunate to

have the coalition in our

community. There is a strong

interest in developing a com-

pressed natural gas facility in

our community,” said Jim Du-

mont, representative for Sena-

tor Jeff Bingaman. “The

coalition has resources to de-

velop the compressed natural

gas infrastructure.”

The infrastructure includes

plants to compress the gas,

storage facilities and public

stations that can be accessed

by the public to purchase fuel

for their vehicles.

Farmington once had a nat-

ural gas pumping station. It is

defunct, and Merrow ad-

dressed this by saying that

there have two “game chang-

ers” in this industry. The first

being the large quantities of

natural gas, the second being

the producers willingness to

participate in the process.

“We have so much natural

gas we don’t know what to do

with it,” Merrow said. “We as

producers are in the game.

We’re converting our own ve-

hicles and we’re going to

walk the walk.”

The biggest problem the in-

dustry is facing is the low-

cost of natural gas and how to

store it, she explained.

The benefits are numerous

including the creation of

46,000 jobs in New Mexico

billions of dollars coming into

local communities. Other ben-

efits include allowing the U.S.

to become energy independ-

ent and it is environmentally

friendly with lower emissions

Another fuel option

Coalition wants compressed natural gas facility here

AlternAtive fuel

CnG Services owner asks for natural gas vehicle creditsDebra Mayeux

For Basin Resources

Dave Clement, the owner of CNG Serv-

ices of Arizona, will be participating in sev-

eral natural gas vehicle events in the region.

He questioned why the federal tax credit on

natural gas vehicles has expired, while elec-

tric vehicles receive a $7,500 credit?

CNG Services is the distributor for Fuel-

Maker and Bauer products in both New

Mexico and Arizona.

Gas producers in the oil and gas-rich San

* fuel 35

* CNG Services 37


fueland low particulates.

Merrow said U.S. car manu-

facturers are buying in and be-

ginning to produce vehicles

that run on both gasoline and

compressed natural gas. There

also are kits available to con-

vert some pickups, school

buses, transit buses, refuse

trucks and heavy-duty trucks

to compressed natural gas.

Once these vehicles are con-

verted, there has to be facilities

to fill the tanks.

The coalition will start with

“green cities” that can offer fu-

eling stations for their own

fleets and possibly in-home

gas pumps for those private

citizens that want compressed

natural gas cars.

“The ideal is to have a home

fueling unit and that technol-

ogy does exist,” Merrow said.

“We build a market with peo-

ple, who don’t need a station.”

The next step is to map

“green corridors” and begin

developing compressed natural

gas stations along those corri-

dors. In New Mexico, stations

would be located in Albu-

querque, Santa Fe and Las

Cruces, as well as Farmington.

“Then, we really start to get

an infrastructure going,” Mer-

row said. The plan would be to

price it around $2 per gallon.

The coalition wanted to start

planning in New Mexico, be-

cause it is a state that under-

stands the product. New* fuel 36

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fuelMexico creates 1/10 of the

U.S. production of natural gas

and the San Juan Basin is the

largest natural gas preserve in

the country.

“This all about moving natu-

ral gas forward for vehicles in

New Mexico – building sta-

tions, getting vehicles con-

verted,” Merrow said.

The conversion costs around

$12,000 for a pickup truck,

while it costs approximately

$36,000 to convert a bus and

$29,000 to convert a refuse

truck. Waste Management is

making plans to convert its en-

tire fleet to compressed natural

gas. Some states offer incen-

tives for conversions, such as

Louisiana paying back $6,000

of the personal conversion

cost.

“They really believe in natu-

ral gas,” Merrow said.

There are no federal incen-

tives, but 13 governors have

signed a memorandum of un-

derstanding to promote a

switch to natural gas vehicles.

Susana Martinez signed on for

New Mexico.

Merrow encouraged individ-

uals and stakeholders to inves-

tigate the opportunities that

exist in this field by analyzing

fleets and fuel needs, identify-

ing partners, seeking educa-

tional and training

opportunities and joining in the

move to develop this dream

into a reality.

Your Dream. Your Future. Our Focus.SAN JUAN COLLEGE

School of EnergySAN JUAN COLLEGE

Learn more at energy

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BASIN RESOURCES37


Juan Basin know that there

is enough natural gas in this

area to fuel compressed nat-

ural gas, or CNG, vehicles

for many years to come.

“I don’t need tax credits

for my business, but people

who want

to drive

cleaner

on Amer-

ican nat-

ural gas

need help

covering

the addi-

tional up-

front cost

to get

started,

just the

same as

electric

vehicles

do,”

Clement

wrote to

the Tri-

City Tribune. “If more peo-

ple can get natural gas

vehicles, my business pro-

viding fueling equipment

will do just fine and will ex-

pand with the demand.”

He was at the New Mex-

ico State Fair on Sept. 21,

which was alternative fuel

day, presented by the Land

of Enchantment Clean Cities

Coalition.

One month from now, on

Oct. 20,

Clement

will cele-

brate Na-

tional

Alterna-

tive Fuel

Vehicle

Day with

a display

at

Odyssey!,

at the

Pavilions

in Scotts-

dale, as

well as at

the Oro

Valley

project

graduation

extreme car show for alter-

native fuel vehicles.

“Renewing the tax exten-

ders package, which should

include natural gas vehicles,

home and commercial fuel-

ing credits would help, but

getting people into natural

gas vehicles would be the

biggest to help on the na-

tional and state level to drive

cleaner and get off of for-

eign oil in a mass enough to

make a difference,” Clement

wrote.

For more information

about CNG Services visit

www.cngaz.com.

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BASIN RESOURCES38


New Mexico Oil & Gas Association2011 vs 2010 Gross GAS Production in New Mexico by Operator (Production in MCFs of natural gas)

Increase

2011 Production 2010 Rank 2010 Production (Decrease)

1 ConocoPhillips 455,204,989 1 471,643,236 (16,438,247)

2 Oxy USA 130,702,614 10 33,790,435 96,912,179

3 Energen Resources Corp. 69,334,360 4 68,903,167 431,193

4 BP America 67,293,935 3 70,957,250 (3,663,315)

5 Devon Energy Corp., LP 62,266,698 5 67,915,812 (5,649,114)

6 COG Operating LLC 60,139,217 8 51,915,617 8,223,600

7 WPX Energy Production, LLC 50,041,253 6 53,641,164 (3,599,911)

8 Chevron USA, Inc. 47,836,713 7 52,426,243 (4,589,530)

9 Apache Corp. 35,146,632 11 28,943,392 6,203,240

10 Yates Petroleum Co. 31,195,574 9 35,999,806 (4,804,232)

11 El Paso E & P 26,528,332 12 26,195,178 333,154

12 Cimarex Energy 20,472,078 13 20,244,991 227,087

13 Hess Corp. 18,558,201 xxx 18,558,201

14 Mewbourne Oil Co. 16,488,657 14 19,518,668 (3,030,011)

15 Enervest Operating, LLC 15,726,198 15 16,008,137 (281,939)

16 BOPCO, LP 13,526,841 18 14,419,688 (892,847)

17 ExxonMobil (incl XTO Energy) 12,183,451 2 71,213,528 (59,030,077)

18 EOG Resources, Inc. 11,301,058 16 15,302,542 (4,001,484)

19 Chesapeake Operating, Inc. 8,953,635 17 10,762,339 (1,808,704)

20 Dugan Production Corp. 8,840,345 19 9,012,136 (171,791)

21 Four Star Oil & Gas Co. 7,647,001 21 7,019,536 627,465

22 Blackhills Gas Reources, Inc. 6,420,079 22 6,544,500 (124,421)

23 Range Operating NM LLC 5,777,050 20 7,205,518 (1,428,468)

24 Noble Energy, Inc. 5,654,622 23 6,076,553 (421,931)

BASIN RESOURCES 39


25 Lime Rock Resources, LP 5,635,767 24 5,464,824 170,943

26 John H. Hendrix Corp. 4,544,637 27 4,534,093 10,544

27 Three Rivers Operating Co. LLC 4,483,693 xxx 4,483,693

28 McElvain Energy, Inc. 4,405,843 28 4,258,332 147,511

29 Legacy Reserves Operating, LP 4,375,841 xxx 4,375,841

30 Elm Ridge Exploration Co., LLC 3,983,526 29 4,009,896 (26,370)

31 Nadel & Gussman HEYCO, LLC 3,834,791 26 4,609,402 (774,611)

32 Endeavor Energy Resources 3,312,805 30 3,905,912 (593,107)

33 Coleman Oil & Gas, Inc. 3,493,691 31 3,824,981 (331,290)

34 Merrion Oil & Gas Corp. 3,362,542 33 3,635,614 (273,072)

35 Burnett Oil Co 3,060,623 39 2,516,614 544,009

36 Mack Energy 2,899,946 35 2,969,324 (69,378)

37 Parallel Petroleum Corp., LLC 2,812,711 32 3,750,372 (937,661)

38 Huntington Energy, LLC 2,789,393 xxx 2,789,393

39 Murchison Oil & Gas, Inc. 2,719,121 36 2,775,562 (56,441)

40 Fasken Oil & Ranch, Ltd. 2,667,667 34 3,446,461 (778,794)

41 Robert L. Bayless Producer, LLC 2,519,526 37 2,767,947 (248,421)

42 Nearburg Producing Co. 1,946,023 42 2,075,815 (129,792)

43 Armstrong Energy Corp. 1,929,722 47 1,590,159 339,563

44 Stephens & Johnson Operating 1,861,022 44 1,885,067 (24,045)

45 Merit Energy Co, LLC 1,859,990 41 2,106,411 (246,421)

46 Kaiser-Francis Oil Co. 1,783,887 xxx 1,783,887

47 Chi Operating, Inc. 1,731,832 43 2,044,109 (312,277)

48 M & G Drlg Co. 1,716,720 45 1,752,307 (35,587)

49 Read & Stevens, Inc. 1,680,176 40 2,118,375 (438,199)

50 SG Interests LTD 1,626,267 xxx 1,626,267

5/22/12 1,264,277,295 1,231,701,013 32,576,282

xxx = not among top 50 operators in 2010

2010 Operators not in 2011 Top 50:Samson Resources, Rubicon Oil & Gas, BTA Oil Producers, LLC, West Largo

Premier Oil & Gas, RKI E & P, LLC

Statistical information furnished by NMOCD, Compiled for NMOGA by Marie Gutiérrez

Ace Hardware

Connecting The Corners with Five Locations – Farmington – Aztec – Cortez.

Courtyard by MarriottJoel and Margie Krueger

Ace Hardware


Keith BarbeauCourtyard by Marriott


John and Brenda SandovalFastLanes Hobbies


Debra Mayeux

For Basin Resources

Farmington Oilman Tom

Dugan recently received hon-

ors from the Independent Pe-

troleum Association of New

Mexico, when the organiza-

tion gave him a lifetime

achievement award.

Dugan has been involved

with the association since it

began as a way for independ-

ent producers to have their

voices heard.

“They’re more or less a lob-

bying group for the independ-

ent and smaller companies,”

Dugan said. There are two or-

ganizations that lobby the

local, state and federal govern-

ment for oil and gas. They are

the Independent Petroleum

Saying thanks

Tom Dugan recognized by IPANMfor a lifetime of achievements

* Dugan 41

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Association and the NewMexico Oil and Gas Associa-tion, or NMOGA.

The latter was formed bymajor oil producers in the re-gion.

“The Independent Petro-leum Association was startedby independents, because wedidn’t think we were gettingour fair share in Santa Fe,”Dugan said. Many years ago,NMOGA was not as quick towelcome independents. Todaythe two organizations work to-gether.

Dugan, who is considered apioneer in production for theFour Corners, served on theIndependent Petroleum Asso-ciation board for a number ofyears, and was the president in1986.

“That’s when things all

went to hell,” Dugan said.

“The economy was bad. The

price of oil dropped from $30

a barrel to $10 a barrel

overnight.”

The IPANM had an office

in Santa Fe with three employ-

ees – all had to be let go. “I

had to fire them,” Dugan re-

called.

He hopes there’s a brighter

future for the industry with the

development of the Mancos

Shale. Dugan said he is work-

ing with Encana, a company

that has drilled nine horizontal

wells on the Mancos.

When asked why he was

recognized by the IPANM,

Dugan said, “I guess it’s be-

cause I’ve got so old, and I’m

still work at 86.”

He will celebrate his 87th

birthday in November.

Dugan


2012 Oil and Gas Industry Training Course(s) Location/TimeOctober 4 ENER 120 Introduction to Dehydration SOE/8:00-3:00

October 5 LSOP 230 Theory of Line Locating SOE/8:00-4:00

October 11 ENER 1211ntroduction to Automation SOE/8:00-3:00

October 18 ENER 122 Introduction to Compression SOE/8:00-3:00

October 19 LSOP 230 Theory of Line Locating SOE/8:00-4:00

October 25 ENER 214 Why We Use Compression (ENER 122 pre) SOE/8:00-3:00

November 1 ENER 130 Introduction to Oil & Gas SOE/8:00-3:00

November 2 LSOP 230 Theory of Line Locating SOE/8:00-4:00

November 8 ENER 217 Introduction to Cathodic Protection SOE/8:00-3:00

November 15 ENER 131Basic Electrical Theory SOE/8:00-3:00

November 16 LSOP 230 Theory of Line Locating SOE/8:00-4:00

November 22 NO CLASS

November 29 ENER 140 Laptop Usage for Technical Careers CWT/8:00-3:00

December 6 ENER 1411ntroduction to Disposal Well Operations SOE/8:00-3:00

December 7 LSOP 230 Theory of Line Locating SOE/8:00-4:00

December 13 ENER 135 Emissions Detection, Analysis, and Control SOE/8:00-3:00

December 20 NO CLASS

December 27 NO CLASS

The graphic displays a listing of remaining Fall classes that are part of the new Advanced Petroleum Production Operation Program offered

through the San Juan College School of Energy. To earn the certificate or associate’s degree, students will also be required to take additional

general education and industry classes. For more information, contact the School of Energy at 327-5705.

schedule. A one-half credit class is offered every Thurs-

day. Those classes, along with required electives, give

students flexibility to achieve their certificate or degree in

their own time frame.

“These programs are really catching the eye of the

energy industry,” Martin says.

For more information about how to apply and register

for the new program, call the San Juan College School of

Energy at 505.327.5705.

college

BASIN RESOURCES42

Daily Flights from FarmingtonBook early for best rates

Denver • Phoenix • Las Vegas

www.flygreatlakes.com • 1-800-554-5111

Free Parking


In New Mexico oil fields, many species of wildlife use

equipment in a productive manner. Birds will use elevated

surfaces as foundations for nests. Deer, such as caribou, use

the equipment for a windbreak and warmth.

There is so much wildlife in the oilfield that in 2004 the In-

dependent Petroleum Association of New Mexico created a

contest where oil field workers and others could win cash

prizes for the best photo or video demonstrating wildlife

adapting to manmade changes in their environment.

The winners for 2012 are listed below.

1st place$1,000 winner

Made in the Shade

2nd place $500 winner

Inspecting the New

Compressor

Independent Petroleum Associationof New Mexico Photo Contest

This photo was taken by Ernest Cardona

at Cedar Hill, nor th of Aztec.

This photo wastaken by Bill Royce ofWalsh Engineering at

Har t Canyon, nor theast of Aztec.

This photo was taken by Fabian Montoya at ChokecherryCanyon in the Glade near Farmington.

3rd place$250

winner

HousingLocal

Wildlife

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��&�!��!!�!��!��&��&�"!

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BASIN RESOURCES 45


The riots, rage, and ruin thathave spread throughout theMiddle East over the past cou-ple of weeks emphasize the ur-gency of opening up andbringing online America’s vastresources — yet, as Congress-man Pete Olson (R-TX) states:“The EPA is the biggest obsta-cle to energy independence.”

Olson’s comment specifi-cally addressed the HydraulicFracturing Study requested byCongress as a part of the FY2010 appropriations bill, whichstates:

“The conferees urge theagency to carry out a study onthe relationship between hy-draulic fracturing and drinkingwater, using a credible ap-proach that relies on the bestavailable science, as well as in-dependent sources of informa-tion. The conferees expect thestudy to be conducted througha transparent, peer-reviewedprocess that will ensure the va-lidity and accuracy of the data.The Agency shall consult withother Federal agencies as wellas appropriate State and inter-state regulatory agencies in car-rying out the study, whichshould be prepared in accor-dance with the Agency's qual-ity assurance principles.”

A study “on the relationshipbetween hydraulic fracturingand drinking water” soundslike a great idea. No one wantstheir drinking water filled withtoxic elements, and, if the EPAfollowed the mandate, a workof global importance could re-sult. American private enter-

prise and initiative has lead theworld in developing and imple-menting horizontal drilling andhydraulic fracturing techniquesthat are safe and are uniquelyresponsible for totally trans-forming the energy landscape— making previously unrecov-erable resources, recoverable.Therefore, the final study fromthe EPA has worldwide impli-cations for oil and natural gassupplies. It must be done right.

Instead of moving forwardwith a “Hydraulic FracturingStudy” as requested by Con-gress, the EPA has done what ischaracteristic of this adminis-tration; they’ve blown it out ofproportion—making it some-thing bigger, requiring addi-tional personnel, and creatingmore management, at greaterexpense. Final results are notdue until 2014—four yearsafter Congress requested a sim-ple study. Lisa Jackson’s EPAhas expanded the study’s scopeto encompass numerous pe-ripheral elements related to oiland gas exploration and pro-duction activities; a full lifecy-cle analysis of everythingremotely associated with un-conventional recovery.

Congress requested a reportbased on “best available sci-ence,” not opinion, yet the EPAhas included items such as “en-vironmental justice”—whichhas nothing to do with science,and “discharges to publiclyowned water treatmentplants”—which are no longer apart of the hydraulic fracturingprocess.

The additional elements ex-ponentially exacerbate thestudy’s potential complica-tions.

Meanwhile, America couldbe undergoing a robust devel-opment of our resources. In-stead, as Congressman MikeConaway (R-TX) explained,“Industry is holding back be-cause it is not sure what theregulatory future holds.” Hecalled the study’s evolution be-yond the scope of what was re-quested: “mission creep.” Untila definitive answer on “the re-lationship between hydraulicfracturing and drinking water”is produced, a constant cloudof legal threat hangs over pos-sible development, and poten-tial jobs, such as in New York’sMarcellus Shale, are deferred.

These concerns, plus manyothers, prompted industry toindependently engage, at theirown expense, Battelle Memo-rial Institute to conduct a col-laborative, side-by-side studywith the EPA. CongressmanAndy Harris (R-MD), Chair-man of the House Science,Space, and Technology Com-mittee Subcommittee on En-ergy and Environment, says

that Battelle is “a highly re-spected independent scienceand technology organization.”(It is important to note that Bat-telle’s business is heavily de-pendent on governmentcontracts, so accepting the re-sponsibility of doing a collabo-rative study held risks for thecompany—coming out with adifferent result from that of theEPA could mean the loss of fu-ture contracts. Additionally,they do a lot of work with theEPA, so their opinions shouldbe trusted by the EPA.) Despitethe EPA’s rejection of indus-try’s offer, Battelle moved for-ward with a scientific reviewof the EPA’s study plan to en-sure that the EPA is taking arigorous and adequate ap-proach, as quality cannot bebuilt into the back end of a sci-ence-based project.

Battelle’s report is complete.On Thursday, Battelle’s teamprovided a briefing on CapitolHill that was attended by morethan 30 Representatives and/orstaffers from the Natural Gasand Marcellus Shale Caucuses.Numerous concerns were pre-sented. The EPA’s study planreflects a deadly combination

MARitA k. noon

ExEcutivE DiREctoR -

EnERgy MAkEs AMERicA gREAt inc.

Rage and ruin in the reign of the EPA

BASIN RESOURCES46


of arrogance and incompe-tence. Arrogance

Hydraulic Fracturing is ahighly technical process thathas evolved since its initial usemore than 60 years ago — con-tinuously undergoing improve-ments. Hundreds of thousandsof wells have been drilled. Theexpertise and experience lieswithin the industry, yet the EPAhas specially rejected indus-try’s attempts to collaborate —despite the fact that the originalmandate requires: “a transpar-ent, peer-reviewed process thatwill ensure the validity and ac-curacy of the data.” In a letterto the EPA, Marty Durbin, Ex-ecutive Vice President, Ameri-can Petroleum Institute (API),says: “We have repeatedly of-fered the expertise of our mem-bers to both the agency and theScientific Advisory Board(SAB) peer review processand, unfortunately, have beendisappointed by the lack of fol-low through and acceptance.”Battelle’s report states: “Indus-try collaboration is not envi-sioned.”

Additionally, the require-ments, published in the FederalRegister calling for nomina-tions, for the SAB, are set sothey specifically exclude ex-perts from industry. “Selectioncriteria” includes “absence offinancial conflicts of interest.”The call for SAB nominationscontinues: “government offi-cials” will “determine whetherthere is a statutory conflict be-tween a person’s public re-sponsibilities and privateinterests and activities, or theappearance of a lack of impar-tiality.” Presumably those fromacademia and NGO’s would beacceptable. However, as theAPI letter points out, the “EPAshould recognize most individ-uals nominating themselves forpotential SAB membershiphave some financial stake inthe business — academics seek

grants, NGOs seek donations,regulators seek programmaticfunding, consultants seek con-tracts from government, aswell as industry.”

Industry representatives withdirect history of working in themodern oil and gas industryhave a long record of valuable,unbiased participation in manyother SAB committees andpanels, yet for this watershedstudy, they have been ex-cluded.

Additionally, the Congres-sional study request calls forconsultation “with other Fed-eral agencies as well as appro-priate State and interstateregulatory agencies.” To date,there is no evidence of workingwith Pennsylvania, Texas, Col-orado — or any other statewith extensive hydraulic frac-turing experience. Numerousstudies have been done, but theEPA doesn’t appear to be in-corporating their discoveries.For example, in August 2011,the Groundwater ProtectionCouncil published its ownstudy of “state determinationsregarding causes of groundwa-ter contamination resultingfrom oil and gas industry E&Pactivities,” examining nearly400 contamination incidentsover 25 years in Ohio andTexas, and concluding that“[n]either state has docu-mented a single occurrence ofgroundwater pollution duringsite preparation or well stimu-lation.”

Obviously, the arrogance ofthe EPA believes they knowbest and they don’t want inputfrom anyone who might dis-agree with their preconceivedbias.Incompetence

According to Battelle’s re-port, the EPA has a rigorousData Quality Assessmentprocess established for internalstudies, but is not using it whensetting up this study—whichcan impact the data quality and

scientific rigor. If strict stan-dards are not met, the entire re-port can be brought intoquestion, as was the case withthe Pavillion, Wyoming, studyreleased a year ago. The resultsmust be defensible to achievethe study’s goals.

The sites selected for studyshow a bias with the potentialto skew the data and thereforethe study. Instead of using arepresentative sampling of wellsites from the hundreds ofthousands of wells that havebeen drilled, the EPA has cho-sen to focus on only seven sites— a statistically insignificantnumber. Of the seven, fivehave known contaminationproblems, but no baseline data.Therefore, there is no way totell whether the complaints arein any way related to hydraulicfracturing or to any specificthing. There are known exam-ples of naturally occurringdrinking water contamination— as was found with thewidely publicized Dimock,Pennsylvania, case. The fiveretrospective sites are the sub-ject of complaints by individu-als who may now bestakeholders in potentially lu-crative litigation against opera-tors. The concern is that the “ithas problems, so let’s study itto see if it has problems” ap-proach will limit the scientificvalidity and usefulness of casestudy findings. At Thursday’sbriefing, the limited samplingwas likened to using five trafficaccidents in some parts ofAmerica to draw conclusionsabout how to construct andregulate traffic and road safetyin all of the country to avoidfuture accidents.

Instead, the study shouldfocus more heavily on prospec-tive sites where baseline data isgathered before drilling and be-fore the use of hydraulic frac-turing. The Battelle reportstates: “Two prospective sitescannot deliver the range of data

required for scientifically rigor-ous treatment of all the re-search questions asked.”

Focusing primarily on siteswith known issues also ignoresthe current state of the technol-ogy. Chemicals used now arevery different from what wasused five years ago. Analysisfrom these sites will be virtu-ally useless in making a mean-ingful recommendationregarding current or future hy-draulic fracturing activities.Battelle’s report points out that“the site data collected fromthe companies are from 2006-2010, and the final report willbe in 2014. The changes occur-ring at these sites in the inter-vening years will likely renderthe data obsolete for purposesof the study.”

All of this may seem of littlerelevance to the person strug-gling to fill up their tank attoday’s high gas prices. How-ever, it is of utmost impor-tance. All sides benefit from astudy that can withstandscrutiny. If there are founda-tional problems and the overallstudy results prove hydraulicfracturing is safe and doesn’tcontaminate drinking water, asthe industry believes they will,the environmentalists, who op-pose hydraulic fracturing, willappeal it. If the reverse isproven, industry will seek anappeal. In either case, appealswill delay the much-needed ro-bust development of Americanresources — not to mention thewaste of time and taxpayer dol-lars spent on the study.

If the events that haveerupted in the Middle Eastshow us anything, it is the U.S.dependence on Middle Easternoil must come to an expedi-tious end. With America’s newfound oil and gas reserves, re-covered through hydraulicfracturing, we now know thatenergy independence is possi-ble, if, as Congressman Olsontold me, “We rein in the EPA.”

Keystone Energy

M

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advertisers directoryAdver tising Specialties............................40

1013 Schofield

Farmington, NM

505-326-1710

Andrea Kristina’s ....................................28

218 W. Main St.

Farmington, NM

505-327-3313

Animas Valley Insurance ...........................7

2890 Pinon Frontage Rd.

Farmington, NM

505-327-4441

www.aviagency.com

Antelope Sales & Service Inc. ....................5

5637 US Hwy 64

Farmington, NM

505-327-0918

www.NMASSI.com

Aztec Machine ........................................52

1715 N. 1st St.

Bloomfield, NM

505-632-3113 • 800-699-3392

www.aztecmachinenm.com

Bank of the Southwest ............................18

320 W. Main

Farmington, NM

505-325-1917

6570 E. Main

Farmington, NM

505-326-6204

2 CR 6500

Kirtland, NM

505-598-5823

920 N. First

Bloomfield, NM

505-632-0450

Basin Well Logging .................................14

2345 E. Main

Farmington, NM

505-327-5244

Big Red Tool, Inc.....................................36

2010 San Juan Blvd.

Farmington, NM

505-325-5045

Browns Shoe ..........................................41

124 W. Main St.

Farmington, NM

Calder Services.......................................37

#7 RD 5859

Farmington, NM

505-325-8771

Cascade Bottled Water & Coffee Service ...12

214 S. Fairview

Farmington, NM

505-325-1859 • 800-416-1859

City of Farmington..................................43

www.flygreatlakes.com

1-800-554-5111

ConocoPhillips..........................................3

PowerinCooperation.com

Corrpro ..................................................35

3900 Monrow Rd.

Farmington, NM

505-325-1946

www.corrpro.com

D&M’s Big & Tall .....................................14

30th & Main St.

Farmington, NM

505-326-4772

Defined Fitness ......................................51

1700 E. 20th St.

Farmington, NM

505-325-3565

Dirt Bandits............................................23

101 E. Pion

Farmington, NM

505-326-0111

www.dirt-bandit.com

Edward Jones - Marcia Phillips.................22

4801 N. Butler, Suite 7101

Farmington, NM 87401

505-326-7200

www.edwardjones.com

Energy Pump & Supply ...........................29

2010 Troy King Rd.

Farmington, NM

505-564-2874

Farmington CVB......................................44

505-326-7602

www.farmingtonnm.org

Farmington Fire Equipment .....................17

6007 E. Main

Farmington, NM

505-327-1933

www.f-fire.com

First Financial Credit Union .....................21

3024 E. Main St.

Farmington, NM

505-327-4478

www.ffnm.org

Four Corners Community Bank.................39

505-327-3222 New Mexico

970-565-2779 Colorado

www.TheBankForMe.com

Foutz-Hanon ..........................................21

2401 San Juan Blvd.

Farmington NM

505-326-6644

Hands on Safety Service .........................37

1901 E. 20th St.

Farmington, NM

505-325-4218

Halliburton.............................................31

www.halliburton.com

Henry Production, Inc. ............................41

601 S. Carlton Avenue

Farmington, NM

505-327-0422

IEI Industrial Ecosystems, Inc. .................32

49 CR 3150

Aztec, NM

505-632-1782

www.industrialecosystems.com

KB Dillons...............................................11

101 W. Broadway

Farmington, NM

505-325-0222

LT Environmental, Inc..............................26

2243 Main AVe, Suite 3

Durango, CO

970-385-1096

401 West Broadway

Farmington, NM

505-326-2107

Mechanical Solutions, Inc. .........................2

1910 Rustic Place

Farmington, NM

505-327-1132

Metal Depot..............................................6

www.lterv.com

Millennium Insurance Agency ..................42

2700 Farmington Ave., Building A

Farmington, NM

505-325-1849 • 800-452-9703

www.millnm.com

Miller & Sons Trucking ..............................9

1110 W. Sategna Ln.

Bloomfield NM 87413

505-632-8041

www.powerinnovations.com

My Big Fat Greek Restaurant ...................31

3500 E. Main St.

Farmington, NM

505-326-2000

www.eatmoregreek.com

Natalie’s for Her, Him, Home ...................19

4301 Largo, Suite H

Farmington, NM

505-327-2215

www.nataliesonline.com

Next Level Home & Audio........................15

505-327-NEXT

www.327NEXT.com

Nightlight Electric ...................................27

2405 Southside River Rd. Suite A

Farmington NM 87401

505-327-6565

www.nightlightelectric.com

Oil and Gas Equipment Corp. ...................38

8 Road 350

Flora Vista, NM

505-333-2300

www.ogequip.com

Parkers Office Products ..........................25

Farmington NM

505-325-8852

www.ParkersInc.com

Reliable Truck Repair ..............................22

505-327-7577

Riley Industrial .......................................49

505-327-4947

San Juan Casing Service ............................8

601 E. Main St.

Farmington, NM

505-325-5835

San Juan United Way ...............................40

505-326-1195

www.sjunitedway.org

San Juan College School of Energy..........36

800 S. Hutton

Farmington, NM

505-327-5705

www.sanjuancollege.edu

Serious Texas BBQ ..................................21

3475 E. Main St.

Farmington, NM

505-327-9889

Society of Petroleum Engineers ..............26

www.spe.org

South West Concrete Supply ....................28

2420 E. Main

Farmington, NM

505-325-2333

www.southwestconcretesupply.com

Sundance Dental Care .............................13

505-407-087

www.sundancesmiles.com

SureFire Burner Management ..................35

www.surefire-controls.com

Towne Place Suites .................................33

4200 Sierra Vista Dr.

Farmington, NM

505-327-2442

www.marriott.com/fmnts

Ziems Ford Corners ................................17

5700 East Main

Farmington, NM

505-325-8826

Ho

ose &

& Fit

tting

s

Industrial Hose & Hydraulics



draulics




draulics

TD, Lberr, Lubhanan RBuc

and more

Hydraulics, Industrial Repairs & MachiningAztec M

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Hydraulics, Industrial Repairs & MachiningachineAztec M

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basin resources fall 2012

Documents

san juan basin

gas industry

merrion oiland gas

dry natural gas

san juan county

mile bridge

themancos shale

lane bridge