A New Day at IPANM

 

 

information & issues

Welcome to IPANM’s Information & Issues webpage!

IPANM is not afraid to take strong stances on many current issues threatening our industry. We have to! Seemingly minor changes to regulations or rules can have a major impact on the financial solvency of our small oil & gas producers. While we will never compromise on our duties to protect human health, fresh water and the environment in our daily activities, we will fight unnecessary government overreach when new regulatory proposals are not based on sound science and do little to protect the environment.

Below, we’ve identified serious issues facing our producers. Please click on the corresponding button to learn more about each issue and IPANM’s stance on the issue. (Note: Some of this content may be restricted for members only. To access this exclusive content, please join our association!)

RECENT NEWS: All Issues

This spring, operators had to report their emissions from storage tanks and various other facilities to the EPA under SubPart
SLO Commissioner Ray Powell announce that on March 25th, his office enrolled an additional 150,000 acres in a Candidate Conservation
Last week, Congressman Pearce's office drafted, and got the entire New Mexico delegation to sign, a letter to Secretary Sally
On April 7th in the Federal Register, the USFWS filed a reopening of the comment period on the designation of
Today the White House released a report outlining the administration's interagency Strategy to Reduce Methane Emissions. A link to the
U.S.F.W. Lists Lesser Prairie-Chicken as Threatened Species and Finalizes Special Rule Endorsing Landmark State Conservation Plan Special Rule Establishes Unprecedented
On March 26th from 10:30 - 12:00 there will be a very important meeting with the New Mexico Environment Department
This morning Representative Tom Taylor announced that after 16 years of public service he is resigning from the New Mexico
On January 16, 2014, the San Miguel County Commission received a copy of the proposed Oil and Gas Ordinance from
On January 21, 2014, the Asset Valuation Unbundling Team (AVUT) added an example on how to apply the Unbundling Cost

This spring, operators had to report their emissions from storage tanks and various other facilities to the EPA under SubPart OOOO. The BLM is asking for comments to their venting and flaring proposed policy. The EPA released five white papers on reducing methane emissions from various facilities in the oil patch with comments due in June. The NMED has also asked for comment on their voluntary disclosure policy, and they finalized the GCP-6.

Are you confused and frustrated with the reporting requirements for operators when it comes to air quality issues?

On June 2 – 3rd, IPANM will be holding an educational workshop on federal and state air quality regulations, policies and proposals affecting oil and gas producers in New Mexico. The event will be held at Sandia Resort & Casino from 1pm June 2 to 4pm June 3.

On June 2, Trinity Consulting will present and educate members on quantifying and reporting air emissions under SubPart OOOO, Part W (greenhouse gases) and Indian lands. There will be discussion on the proposed venting policies from both EPA and BLM. June 2nd will be an industry-only day to openly learn, discuss and question the industry experts about the air issues.

On June 3rd, the government representatives have been invited to speak on their respective agency proposals. There will be opportunity for questions and discussions. NMED will discuss the development and use of the GCP-6 permit, the requirements for an NOI permit and the use of the current voluntary disclosure policy. The BLM will speak about their proposed venting policy, which they are currently shopping around the country in stakeholder meetings. Finally, the EPA (invited) representative will speak to the development and implementation of the policies in the recently released white papers on reduction of methane emissions pursuant to the President’s newest Climate Change policy.

We will also be sending all meeting registrants the seminar materials digitally prior to the event to print out. After the event, IPANM will have a link on our website much like we have for the ONRR issues.

In discussions with our Board members, this issue has been one of the most frustrating for operators. Don’t miss this workshop and find out that you later missed a deadline with the NMED or the EPA.

Registration Form

SLO Commissioner Ray Powell announce that on March 25th, his office enrolled an additional 150,000 acres in a Candidate Conservation Agreement with Assurances (CCAA). This brings the total enrolled acreage with the New Mexico State Land Office to 404,000 acres in the Lesser Prairie Chicken Area. Link to the letter.

In addition, effective May 12, 2014, the USFWS filed a final rule determining that the Lesser Prairie Chicken is a ‘threatened’ species. This is a link to the full 99 page rule for your reading pleasure. Using its authority under Rule 4(d), the agency decided that CCAA efforts under the Western Association of Fish and Wildlife Agencies (WAFWA) were appropriate for management of the species. However, note Director Dan Ashe’s statement, “Working through the WAFWA range-wide conservation plan, the states remain in the driver’s seat for managing the species – more than has ever been done before – and participating landowners and developers are not impacted with additional regulatory requirements.” From a legal perspective, this means that operators who are not participating in the WAFWA CCAA scheme might not be “protected” and will have to do additional conservation efforts for the species.

However, on April 10, 2014, the Centers for Biological Diversity, WildEarth Guardians and Defenders of Wildlife filed a 60-day notice of intent to sue with the Department of Interior over violations of Sections 4 and 7 of the Endangered Species Act. They are effectively stating that enrollment and payment in any CCAAs should not be considered a valid exception to the Endangered Species Act. The outcome of this case could have significant impacts on both the Chicken and the Lizard CCAs and future listing decisions. Note that the Centers for Biological Diversity is the NGO that entered in the settlement agreement with the present Administration to force listing decisions for over 250 species by 2016. The Oklahoma Attorney General has filed suit on April 1, 2014 against the USFWS for entering into the settlement with the NGO.

So the net effect of the State Land Office listing is as follows:
1. Operators with leases prior to May 12, 2014 in the area enrolled by the Commissioner had to have enrolled their respective acreage with Center for Excellence for Hazardous Material Management by that date.
2. Acreage leased after May 12, 2014 may be enrolled and the Commissioner, while he cannot place conditions on the leases, will strongly encourage this ‘voluntary’ participation. As listed in the SLO letter, some measures of the CCAA include:
a. Exit ramps for open water sources
b. Minimizing surface disturbances
c. Avoiding Dunes Sagebrush habitat
d. Burying power lines within two miles of LPC lek sites active at least once in the past five years
e. Burying power lines within one mile of historic LPC lek sites.

Link to the full 99-page rule.

Last week, Congressman Pearce’s office drafted, and got the entire New Mexico delegation to sign, a letter to Secretary Sally Jewell regarding the new rotational BLM lease sale schedule. As noted by Congressman Pearce, the prior system of four sales per year did not pose any problems. Since over 31% of New Mexico budget comes from oil and gas revenues, it is imperative that leases continue to be offered so we can maintain the current levels of production in our state. A copy of the letter to Secretary Jewell is attached.

The rotational lease sale issue has been of great concern to IPANM and our membership. Please thank Congressman Pearce for listening to our concerns and for taking action.
Letter to DOI

On April 7th in the Federal Register, the USFWS filed a reopening of the comment period on the designation of critical habitat for the New Mexico Jumping Mouse. The proposed area would cover 14,560 acres in 29 different areas including Bernalillo, Colfax, Mora, Otero, Rio Arriba, Sandoval, and Socorro Counties and La Plata and Animas Counties of Colorado. I expect the area to increase significantly in size as the USFWS continues to be concerned about the species. The designation of critical habitat will require additional study and requirements by the Federal Government for any project on federal lands. As with both the Lesser Prairie Chicken and the Sand Dune Lizard, the first step towards either a threatened or endangered finding is designation of critical habitat.

Comments are due May 8th. The Federal Register notice.

Today the White House released a report outlining the administration’s interagency Strategy to Reduce Methane Emissions. A link to the document can be found below. While this plan also includes strategies to reduce agricultural methane emissions and landfill emissions, the upstream methane emissions are a large part of the report. The report refers to the forthcoming EPA white papers as well as revisions to Onshore Order No. 9 relating to venting and flaring. IPAA, which is working very closely with EPA believes their white papers will impact oil/hybrid wells, liquids unloading, pneumatics, leaks and compressors.

In addition, earlier this week IPANM held a very informative meeting with Sandra Ely, Enforcement Officer for the New Mexico Air Quality Bureau. The purpose of the meeting was to solicit comments from IPANM members on the Voluntary Environmental Self-evaluation policy. The Department is very concerned that with the new EPA SubPart OOOO requirements that companies are discovering that many facilities, particularly in the Permian, may be over the 10 ton per year limit not to have an NOI permit.

As the policy now stands, for a company to self report that a facility is over the limit and therefore needs an NOI, the proposed Voluntary Disclosure requirements. The environmental audit must be:

a. Communicated with the Department prior to commencing so that they can ensure it is systematic, periodic and objective;
b. The audit must be completely voluntary, in other words, not done to meet any other federal reporting requirement. So if you think you might be over, you need to do a parallel investigation which is systematic and objective.
c. The level of due diligence necessary for the audit will be determined at the communication meeting prior to commencing the audit. The time frame for disclosure will also be determined at the meeting prior to the audit.
d. Note that this tool is not available to companies with repeated violations of the same offense. – PLEASE comment on this provision.

Please note that this policy, although initially drafted 20 years ago, has not been enforced or used often by the department as it is meant to be an agency-wide policy. The Air Bureau is in the process of revamping this policy to apply to their issues in light of the recent discoveries. IPANM will continue to work with the Department to see if there may be a way for operators to report these increased emissions within a specified timeframe to avoid penalties. Please send your comments to this policy to Sandra Ely at Sandra.Ely@state.nm.us. If you would like to add to IPANM’s comments instead, please send them to Karin at Karin@ipanm.org by April 8th. The Department wants the comments by April 10th.

Strategy to Reduce Methane Emissions 2014-03-28
ABQ Voluntary Environmental Self-Evaluation Policy

U.S.F.W. Lists Lesser Prairie-Chicken as Threatened Species and Finalizes Special Rule Endorsing Landmark State Conservation Plan

Special Rule Establishes Unprecedented Conservation Partnership with States to Provide Regulatory Certainty for Landowners and Businesses; Enables States to Maintain Lead Management for Conservation Efforts

In response to the rapid and severe decline of the lesser prairie-chicken, the U.S. Fish and Wildlife Service today announced the final listing of the species as threatened under the Endangered Species Act (ESA), as well as a final special rule under section 4(d) of the ESA that will limit regulatory impacts on landowners and businesses from this listing. Under the law, a “threatened” listing means the species is likely to become in danger of extinction within the foreseeable future; it is a step below “endangered” under the ESA and allows for more flexibility in how the Act’s protections are implemented.

In recognition of the significant and ongoing efforts of states and landowners to conserve the lesser prairie-chicken, this unprecedented use of a special 4(d) rule will allow the five range states to continue to manage conservation efforts for the species and avoid further regulation of activities such as oil and gas development and utility line maintenance that are covered under the Western Association of Fish and Wildlife Agencies’ (WAFWA) range-wide conservation plan. This range-wide conservation plan was developed by state wildlife agency experts in 2013 with input from a wide variety of stakeholders. The special rule also establishes that conservation practices carried out through the USDA’s Natural Resources Conservation Service’s Lesser Prairie-Chicken Initiative and through ongoing normal agricultural practices on existing cultivated land are all in compliance with the ESA and not subject to further regulation.

“The lesser prairie-chicken is in dire straits,” said U.S. Fish and Wildlife Service Director Dan Ashe. “Our determination that it warrants listing as a threatened species with a special rule acknowledges the unprecedented partnership efforts and leadership of the five range states for management of the species. Working through the WAFWA range-wide conservation plan, the states remain in the driver’s seat for managing the species – more than has ever been done before – and participating landowners and developers are not impacted with additional regulatory requirements.”

The Service has considered the lesser prairie-chicken, a species of prairie grouse commonly recognized for its colorful spring mating display and stout build, to be a species in trouble for the past 15 years. Its population is in rapid decline, due largely to habitat loss and fragmentation and the ongoing drought in the southern Great Plains. Once abundant across much of the five range states of Texas, New Mexico, Oklahoma, Kansas and Colorado, the lesser prairie-chicken’s historical range of native grasslands and prairies has been reduced by an estimated 84 percent. Last year, the range-wide population declined to a record low of 17,616 birds, an almost 50 percent reduction from the 2012 population estimate. The states’ conservation plan has a population goal of 67,000 birds range-wide.

“To date, we understand that oil and gas companies, ranchers and other landowners have signed up over 3 million acres of land for participation in the states’ range-wide conservation plan and the NRCS’ Lesser Prairie Chicken Initiative,” said Ashe. “We expect these plans to work for business, landowners and the conservation of prairie-chickens.”

In addition to the range-wide conservation plan and the Lesser Prairie Chicken Initiative, a number of other on-the-ground programs have been implemented over the last decade across the bird’s five-state range to conserve and restore its habitat and improve its status. Key programs such as the USDA’s Farm Service Agency’s Conservation Reserve Program, the Bureau of Land Management’s New Mexico Candidate Conservation Agreement, the Service’s Partners for Fish and Wildlife Program and Candidate Conservation Agreements with Assurances in Oklahoma, Texas and New Mexico, are engaging state and federal agencies, landowners and industry in these efforts.

Collectively, these programs – and in particular, the range-wide conservation plan – serve as a comprehensive framework within which conservation of the lesser prairie-chicken can be achieved. The various efforts are similar to a recovery plan, something that the Service normally prepares after a species’ listing. This early identification of a strategy to conserve the lesser prairie-chicken is likely to speed its eventual delisting.

However, threats impacting the species remain and are expected to continue into the future. After reviewing the best available science and on-the-ground conservation efforts focused on the species, the Service determined that the lesser prairie-chicken is likely to become endangered in the foreseeable future and warrants listing as threatened under the ESA. The agency is under a court-ordered deadline to make a listing determination on the species by March 31.

The final rule to list the lesser prairie-chicken as threatened and the final special rule will publish in the Federal Register and will be effective 30 days after publication. Copies of the final rules may be found at the Service’s website at http://www.fws.gov/southwest.

The U.S. Fish and Wildlife Service works with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people. For more information, visit www.fws.gov.

-FWS-

On March 26th from 10:30 – 12:00 there will be a very important meeting with the New Mexico Environment Department to discuss their Voluntary Environmental Self-Evaluation Policy. The meeting will be held at the Air Quality Bureau located at 525 Camino de los Marquez in Santa Fe. The call in number for members who can not make the meeting in person is 1-888-850-4523 and the passcode is 116515. The policy is linked below.

The Department seeks to talk to our group about the policy and is soliciting comments on how the policy could be better for industry compliance. If you are able to come to the meeting, please let Karin Foster know so we can give the agency an accurate head count. If you are not able to make the meeting, please consider sending me your comments so we can provide the agency with feedback.

AQB Voluntary Environmental Self-Evaluation Policy

Final Report

This morning Representative Tom Taylor announced that after 16 years of public service he is resigning from the New Mexico Legislature. Tom was also on the city council in Farmington for 16 years prior. Tom was always a leader, a supporter and most importantly an unbelievably strong friend to our industry. Tom will be missed.

Yesterday evening Rep. Strickler and Rep. Bratton presented a bill to the House Business & Industry Committee that would allow operators of marginal natural gas wells on SLO lands to ask for a royalty rate reduction from 12.5% to 5%. The bill was drafted at the request of IPANM, and we testified as the expert witness for the bill. The bill was well received by the committee and it passed 9 to 3. I look forward to continuing our work on this bill during the interim and next sessions.

The Session ends tomorrow at noon. The bills we were concerned about are dead. Thank you for the opportunity to represent our industry as the voice of the independent oil and gas producer in New Mexico.

On January 16, 2014, the San Miguel County Commission received a copy of the proposed Oil and Gas Ordinance from their consultant, Dr. Robert Freilich. The Ordinance is now available on their website and the County Manager and Planning and Zoning Manager are accepting comments. www.smcounty.net. We have also linked it here.

This week, I had several communications with the Planning and Zoning Director of San Miguel County and the Chairman of the County Commission. The Chair, P&Z and the County Attorney are working on comments received to their proposed ordinance. It was heavily stressed that the oil and gas industry needs to comment on their ordinance. They are seeking comments by February 11, 2014. You can either red line the proposal, which is attached to this email, or send a letter with specific concerns and constructive alternatives. Please send the comments to:

Les Montoya
County Manager
or
Alex Tafoya
Planning & Zoning Director, Suite 203
San Miguel County
500 National Street
Las Vegas, NM 87701

If you send comments, I would also appreciate a copy so that I can include an overall industry view in the IPANM comments and my verbal comments at the meetings.

In addition, The Planning & Zoning Board will meet on March 7th from 3 to 7pm to accept comments to the proposed ordinance. Again, it was stressed that representatives from the industry, businesses and agriculture need to be present to comment. After the Planning & Zoning Meeting, the matter will go before the full County Commission. However, if there is not industry comment at the P&Z level, the Board may not have a full meeting allowing repetitive comments from those presented at the P&Z meeting and the many meetings the Commission has already had on this issue.

The San Miguel Planning & Zoning meeting will be held at:
500 National Street,
County Commission Hearing Room
Las Vegas, NM

On January 21, 2014, the Asset Valuation Unbundling Team (AVUT) added an example on how to apply the Unbundling Cost Allocations (UCAs) for the San Juan Conventional Transportation System and Ignacio Processing Plant for 2006-2010. According to the ONRR informational email, the UCAs have not changed. The UCAs and example are available on the Office of Natural Resources Revenue (ONRR) website, www.onrr.gov/unbundling. If you have any questions, please direct these inquiries to mail box onrrunbundling@onrr.gov