The NM Construction Industries Division will be holding a meeting tomorrow, Thursday, December 5, from 9 to 11 a.m. at the Devon facility in Artesia, located at 6488 Seven Rivers Hwy. The meeting is to address the information on oil and gas locations that have come on line since January 1, 2011. The Division is concerned about the lack of information provided and questions that have arisen. Kelly Hunt, Head Electrician for CID, will be conducting the meeting. For more information, see “NM Operators to Provide Electrical Info” below.

The NM Regulation and Licensing Department, Construction Industries Division, released a template, a bullet point list and a letter to industry. They are requesting information from operators with active wells that came on line on or after January 1, 2011. Their belief is that work has been done on these well sites without adequate permitting or review. While work done by an employee does not require permits, an operator must notify the Bureau within two days of completion of the work so that the Bureau can inspect the location to ensure the electrical work meets construction code standards.

Thus, the CID is asking for all operators to complete the attached spread sheet with the names or every electrical, controls and Scada contractor that performed electrical work on each site that came on line after January 1, 2011.

Please send the information to Kelly Hunt, Electrical Bureau Chief at james.hunt@state.nm.us. He can be reached at (505) 476-4679. Please provide the information within 30 days, or November 15th.

During the September 26th meeting of the State Land Office Oil & Gas Advisory Board, representatives of the State Land Office informed the board members about an upcoming change to their policy regarding purchases of caliche from State Trust lands.

Currently, the rate for caliche purchased from pits on State Trust lands ranges from $1.25 to $3.00 per loose cubic yard. According to the State Land Office, BLM currently charges $3.75 per loose cubic yard. Therefore, in order to achieve parity with BLM, the State Land Office will begin charging a fixed rate of $3.50 per loose cubic yard for caliche purchased from state-owned pits effective November 1, 2013.

Area operators need to be aware of this policy change since, in certain circumstances, this change will represent a substantial increase (up to 180%) in the cost typically passed through to the operator by the vendor for road and location building materials.

As promised, the NMOCD is doing a training session for the Pit Rule (Rule 17) in Southeast NM. They have decided to hold the meeting on Oct 1st from 8 to 12 at the Lea County Event Center, 5101 N. Lovington Hwy in Hobbs. Similar to the presentation given in Farmington, the subject matter of discussion will include:

1. Definitions expansion and clarification
2. New Concepts and Changes

Low-chloride fluids
Multi-well fluid management pits
No permit required for use of below-grade tanks o No permit required for use of closed-loop systems o New chloride standards
Change in Pit Siting Criteria
Change in Closing Requirements
District offices may now grant variances

Final Rule 19.15.17.
Please note that there is an appeal pending on the new rule. BUT, it is in effect as of June 26, 2013 as no party has asked for a stay.