NM Oil Conservation Division
IPANM Presentation
August 3, 2016
David Catanach, Director
Oil Conservation Division
PRESENTATION OUTLINE
• Roswell Ground Water Basin Update
• Marginal Well Shut-In Relief Program
• Spill & Leak Delineation & Remediation
Standards Workgroup
• Focused Enforcement Efforts
• Upcoming Issues
NMOCD IPANM Presentation 8-3-16
ROSWELL GROUND WATER BASIN
• Large area defined by the State Engineer
• Approximate area: 105 Miles North to South
33 Miles East to West
• Within a portion of the RGWB there exists two fresh water
aquifers. Shallow Aquifer: 450’ &
Deeper Artesian Aquifer: 1200’-1400’
• Remaining portion of RGWB: Deeper Aquifer only
• OCD initially contacted by Representative Townsend
• Initial reports indicated possible water contamination
• OCD attended 2 public meetings with Pecos Valley
Conservancy District, Office of the State Engineer &
Various legislative members
• At issue is whether a single casing string set through both
aquifers provides adequate protection
NMOCD IPANM Presentation 8-3-16
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NMOCD IPANM Presentation 8-3-16
T-5S to T-23S
R-21E to R-27E
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Ground Water
Basin
ACTIONS TAKEN BY OCD
• OCD’s primary concern: Protection of fresh water
while not hindering oil & gas drilling activities
• All APD’s within the RGWB are currently suspended
by emergency order
• Drilling is allowed within the RGWB provided that
OCD approves revised casing programs
• OCC hearing will establish:
• A clearly defined area for the RGWB
• A definitive casing/cementing program for oil &
gas wells that will continue to provide protection
of both aquifers & prevent communication
between these water zones
RGWB PUBLIC HEARING
• Case will be presented to the Oil
Conservation Commission
• Parties to the case include the OCD,
Pecos Valley Conservancy District,
COG Operating, Fasken Oil & Ranch,
Oxy USA, Inc., Yates Petroleum, Mack
Energy, Devon Energy & IPANM
• August 8: Meeting to schedule hearing
• Hearing in September or October
OCD MARGINAL WELL
SHUT-IN PROGRAM
• New OCD program allows operators to
shut-in marginal producing wells during
times of low oil & gas prices
• Program commenced early 2016
• Will reduce premature plugging of marginal
producing wells
• Must be conducted in a manner that will
protect fresh water resources
• 12 Operators; 400-500 Wells
NMOCD IPANM Presentation 8-3-16
Requirements/Parameters
• Applicable to wells that are planned to be shut-in
or have recently been shut-in due to low prices
• Must execute an agreed compliance order
• Must demonstrate economic need
• After a shut-in period of 15 months (currently
allowed by OCD rules) wells can remain shut-in
for an additional 3-year period
• Wells must demonstrate mechanical integrity by
Bradenhead Test at month 27 and annually
thereafter
• Additional financial assurance may be required
• Check with BLM & SLO NMOCD IPANM Presentation 8-3-16
SHUT-IN WELL PROGRAM
OCD CONTACT PERSON
DANIEL SANCHEZ
OCD Compliance &
Enforcement Manager
505-476-3493
NMOCD IPANM Presentation 8-3-16
Spill & Leak Delineation &
Remediation
• Standards for delineating & remediating
spills & leaks are currently contained
within an OCD guidance document
• Industry is concerned that standards are
not established by rule & are not uniformly
enforced within OCD
• Industry recommendation: Form an
OCD/Industry committee to establish a
rule for spill & leak delineation &
remediation standards
SPILL & LEAK DELINIATION &
REMEDICATION WORKGROUP
OBJECTIVES
• Develop a rule to replace guidelines
• Establish delineation protocals for leaks
& spills
• Establish characterization values
• Develop timelines for compliance
OCD is in the early stages of identifying
workgroup participants
NMOCD IPANM Presentation 8-3-16
200
180
160
140
120
100
80
60
40
20
0 6/1/2014 9/29/2014 1/27/2015 5/27/2015
Date
9/24/2015 1/22/2016 5/21/2016
Monthly Reported Releases Statewide
NMOCD IPANM Presentation
Leak & Spill Data
Recent Data Indicates Spills/Leaks
Occurring at a Rate of 4.4 Per Day
FOCUSED ENFORCEMENT
EFFORTS
• Inactive wells: Rule 19.15.5.9
• 2,331 Non-compliant wells
• Letters have been sent to 150 operators
currently out of compliance
• OCD is requesting operators submit a
plan to bring wells into compliance
• Enforcement action may be taken
against non-responsive operators
NMOCD IPANM Presentation 8-3-16
FOCUSED ENFORCEMENT
EFFORTS
• Financial Assurance: Rule 19.15.8.9
• OCD audit revealed that 151 operators
were in violation of FA
• OCD has sent out 124 letters to operators
• Industry response has been outstanding
• Additional FA in the amount of $472K has
been furnished to OCD by industry as a
result of this program
NMOCD IPANM Presentation 8-3-16
FOCUSED ENFORCEMENT
EFFORTS
• Administrative & Hearing Orders
• Many administrative & hearing orders
issued by OCD contain certain
requirements necessary for approval
• Issue: Non-compliance with provisions
contained within OCD orders
• OCD will track order for compliance
• OCD will send letters to operators for non-
compliance
NMOCD IPANM Presentation 8-3-16
FOCUSED ENFORCEMENT
EFFORTS
• Illegal dumping of oil field waste
• OCD & New Mexico Junior College
working to educate industry, public, law
enforcement agencies, & district
attorneys on issue of illegal dumping of
produced water & oilfield waste
• OCD is establishing relationships with
law enforcement & district attorneys to
criminally prosecute cases
NMOCD IPANM Presentation 8-3-16
UPCOMING ISSUES
• Delaware Formation Injection (Over
Pressured & Injection into Potentially
Productive Horizons)
• Horizontal Well Rule Revision
• Streamline Regulations
• Drilling Activity Across State Lines
• OCD Proposed Legislation
OCD IPANM Presentation 8-3-16
David Catanach Director, NMOCD
Energy, Minerals and Natural Resources Department
(505) 476-3468
OCD Website:
http://www.emnrd.state.nm.us/ocd
OCD Well Information and Operator Data:
https://wwwapps.emnrd.state.nm.us/ocd/ocdpermitting/Data/Wells.aspx