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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

In a dispute being watched around the United States, a statewide oil and gas association and three Mora County landowners
In response to the Mora County Commission's ordinance banning all oil and gas operations in that county, IPANM has joined
In early August 2011, the US District Court ruled in IPANM and the BLM's favor and dismissed all claims by
This guide was compiled by IPAA. You will recall that depending on the date of construction, modification or reconstruction, the
The NM Regulation and Licensing Department, Construction Industries Division, released a template, a bullet point list and a letter to
During the September 26th meeting of the State Land Office Oil & Gas Advisory Board, representatives of the State Land
As promised, the NMOCD is doing a training session for the Pit Rule (Rule 17) in Southeast NM. They have
Last week the SLO Staff presented an excellent workshop. The topics of discussion included units industry training; State Land Office
Click here for he FINAL rule from EPA on the NSPS subpart OOOO. Also available is the DRAFT GCP-6 document
Today, September 23rd, the Office of Natural Resources Revenue Asset Valuation Unbundling Team (AVUT) updated the Unbundling Cost Allocations for

This content is for members only.

Please login here! If you have any questions about your membership, please email megan@ipanm.org.

This content is for members only.

Please login here! If you have any questions about your membership, please email megan@ipanm.org.

This content is for members only.

Please login here! If you have any questions about your membership, please email megan@ipanm.org.

Click here for a very useful guide on Compliance for Subpart OOOO requirements for storage vessels. This guide was compiled by IPAA. You will recall that depending on the date of construction, modification or reconstruction, the applicability determination for the vessel must have been determined by October 15, 2013.

We recognize that the actual calculation methods involve field work and technical assistance, whether performed in-house or through hired consultants. With respect to emission calculating methodologies, Trinity Consulting has done several presentations to IPANM members and IPAA. Their web presentation is attached here. In addition, here are links to three different tools that can be used to calculate a tank’s potential to emit:

A Tool on EPA’s website:
http://www.epa.gov/ttnchie1/software/tanks/ (Free)

A Tool through API – API Publication 4697:
http://global.ihs.com/search_res.cfm?MID=W097&input_doc_number=API%204697 ($548)

Vasquez-Beggs (Free on several state websites):

http://www.nmenv.state.nm.us/aqb/permit/aqb_pol.html
www.deq.state.ok.us/AQDnew/resources/Calculations11.xls

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.

Last week the SLO Staff presented an excellent workshop. The topics of discussion included units industry training; State Land Office 101; miscellaneous instruments; nomination of parcels; rentals, cancellations and expirations; oil stripper well rate royalty reduction program; new leases and assignments and Oil and Gas remitter identification. There are power points for each subject matter on the State Land office website at :

If you have any questions, please contact Greg Bloom, Deputy Commissioner for Oil and Gas at gbloom@slo.state.nm.us.
Karin Foster

A few takeaways:

1. The State Land Office is looking to do a land swap with the BLM in the Prairie Chicken Area. The exact amount of acreage is unclear, however, it looks like 15,000 acres will be swapped. A remaining 50,000 acres will also be ‘enrolled’ by the SLO which means that when that tract goes to bid the lessee will be encouraged to sign a Conservation Agreement with Assurances with the BLM/USFWS for the Lizard and Chicken. Apparently, the sign up of these leases will occur even after the potential listing date of the Chicken since these lands are ‘enrolled’ by the SLO.

2. The SLO intends to roll out a mobile site within the next few weeks.

3. Tract nominations – the company nominating leases MUST appear at the lease sale when that tract is offered; to bid a party must have an OGRID number and the Deadline for nomination is two fridays before the sale before the lease sale of the tract (or at least 6 weeks)

4. OGRID numbers: Please make sure you submit change of address forms and include current phone numbers of currently employed contacts. This has been a problem for the agency. Note that if your OGRID address does not match your royalty check payments, the check will NOT be deposited and it will be returned.

5. Please make sure your company files the necessary paperwork disclosing composition of Hydraulic Fracturing fluids used with the OCD within 45 days of completion of a well.

Click here for he FINAL rule from EPA on the NSPS subpart OOOO.

Also available is the DRAFT GCP-6 document (expect a revised document to be released soon)

Handouts from the NMED open house on the GCP-6 issue held on Sept 23rd. Note the very short deadline under subpart OOOO for determining emissions for Group 1 sources.

Overview: Please note, this is based on my read of the new regulation.

1. This final rule affects all oil and gas producers under NAICS code 211111.

2. A facility under this rule is a single storage vessel located in the oil and gas production segment… that has the potential for VOC emissions equal to or greater than 6 tons per year (TPY) as determined by October 15, 2013. This rule only applies to vessels containing crude oil, condensate, intermediate hydrocarbon liquids or produced water.

3. The potential for VOC emissions must be calculated using a generally accepted model based on the maximum average daily throughput determined for a 30 day period of production prior to the applicable emissions determination deadline (October 15, 2013 for Group 1 wells – see below)

4. Note instead of modeling and implementing the 95% emissions reductions processes, an operator may comply with this provision if he can substantiate an uncontrolled actual VOC emission rate of less than 4 tpy based on records of 12 months immediately preceding the demonstration date. If the monthly testing requirement shows a rate of 4 tpy or more, the operator would have 30 days to meet the 95% control requirement unless the increase was associated with fracturing or refracturing of a well feeding the storage vessel affected facility. In that case, the 95% control would be required as soon as the liquids are routed from the fractured well to the storage vessel.

5. A storage vessel affected facility that subsequently has VOC emissions decrease below the 6 tpy threshold shall remain an affected facility under OOOO.

6. For storage vessels constructed, reconstucted or modified after August 23, 2011 and before April 12, 2013,(Group 1) the final rule requires that owner/operators estimate emissions from the storage vessels to determine if an affected facility no later than October 15, 2013, and a notification must be submitted with the facility annual report due by January 15, 2014. These same facilities must install equipment to comply with the 95% emissions reduction standards with a compliance deadline of April 15, 2014. Note that these facilities do not need to track emission increase events, as previously proposed.
7. For storage vessels constructed after April 12, 2013, the final compliance date for the 95% emissions reductions is April 15, 2014 (or 60 days after startup, whichever is later).

8. BUT see section 60.5365(h)(4) “A gas well facility initially constructed after August 23, 2011 is considered an affected facility”. This provision seems to ignore the 6tpy limitation… I will get clarification on this..

Please note that the General Construction Permit 6 (GCP-6) released by the New Mexico Environment on Sept. 20th for public comment, is trying to provide a viable alternative to meeting the requirements of OOOO. This permit was sent to you last friday by IPANM. Note that the NMED permit is not final and it is currently being revised to consider industry comments made last weekend and by industry members who attended the NMED meetings. I will inform our membership of any training opportunities and clarification of the document as soon as I get the information.

I have had long conversations with Secretary Flynn of the NMED regarding this issue. He assures me that NMED is working with industry on this issue. I have been assured by staff that training sessions particularly for smaller producers are being considered by the department.

Today, September 23rd, the Office of Natural Resources Revenue Asset Valuation Unbundling Team (AVUT) updated the Unbundling Cost Allocations for the San Juan Conventional Transportation System and the Ignacio Processing plant. These new numbers are for royalties reporting for these named plants for 2006-2010. The AVUT also calculated new Transportation UCA’s for the Otero, Lybrook and Buena Suerte Transportation systems. New Processing USA’s were published for the Huerfano Gas Plant for royalties reported from 2007 to July 2013. In order to assist operators, the AVUT has placed 4 additional documents relating to unbundling Transportation Systems and Processing Plants on the ONRR Website at onrr.gov/unbundling/methodology. I have attached the four documents to this email and they will also be on our website at ipanm.org.

Please note the following language from the ONRR website. This is their disclaimer:

“ONRR provides the UCAs on this website based on the best information available to ONRR at the time of publication. If ONRR receives more accurate information, then ONRR will update and modify the UCAs. You may use these UCAs as estimates for later time periods until such time as ONRR provides updated information. When ONRR updates or modifies information you may be subject to additional royalty obligations, or a credit, and associated interest under the provisions at 30 CFR §§ 1206.156(d) (for transportation allowances) and 1206.158(e) (for processing allowances). When ONRR updates the UCAs for a specific year you should adjust previously submitted royalty lines only for that specific year. Do not change previously reported data until ONRR publishes actual values. You should use the most recent UCAs as estimates for future reporting months.”
I have added emphasis to certain words here because this statement is unclear and yet the agency continues to believe operators will be able to comply with their unbundling enforcement efforts. IPANM is working closely with Senator Udall’s office to try to remedy the situation. Please consider contacting Jonathan Black at the Senator’s office via email or a letter to describe to him how difficult it is to comply with the ONRR unbundling theory. Jonathan’s email address is : Jonathan_Black@tomudall.senate.gov.

UCA-Calculations: accounting-and-contract-data-needs.pdf (79 kb)
UCA-Calucations: engineering-data-needs.pdf (75 kb)
How to Calculate a Processing – UCA.pdf (439 kb)
How to Calculate a Transportation UCA.pdf (402kb)
Disclaimer ONRR website 092313.pdf