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IPANM (Dec. 8, 2019) - IPANM is reminding operators that New Mexico's Oil Conservation Division (OCD) will have new authority
Dear Members, Best wishes to you, your employees, family and friends this holiday season. I hope you can join us
As everyone should be aware by now the State Land Office is pushing for approval of their new initiatives, including
The Methane Advisory Panel (MAP) has concluded and we anticipate final publications of our technical documents by mid-December. IPANM’s Methane
Global Energy Institute (Dec. 1, 2019) - A recent report from the U.S. Chamber of Commerce’s Global Energy Institute concluded
Western Energy Alliance & U.S. Council of Economic Advisors (Dec. 5, 2019) - Oil and natural gas is saving typical
On behalf of the IPANM Executive Board, we wish safe travels & well wishes to you, your employees, families and
BUSINESS WIRE (Nov. 19, 2019) -The State of New Mexico today became the newest member of Western States and Tribal Nations
George Sharpe, IPANM Member (Nov. 18, 2019) - IPANM Member, Columnist, Energy Instructor and Investment Manager at Merrion Oil & Gas
ABQ Journal (Nov. 17, 2019) - Oil and gas production grew New Mexico’s economic output by the fourth-highest rate in

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IPANM (Dec. 8, 2019) – IPANM is reminding operators that New Mexico’s Oil Conservation Division (OCD) will have new authority to fine operators beginning on Jan. 1, 2020. For that reason, operators need to address lingering violations, or they could face fines in 2020.

UPDATE:  Per a recent meeting between IPANM Board President Kyle Armstrong and Executive Director Jim Winchester, OCD has outlines the main areas they will be looking to enforce compliance. These include, but are not limited to:

  • Spills & Open Spill Remediation Efforts that have not be closed or reported closed
  • Illegal Dumping
  • Venting & Flaring Violations and/or reporting inaccuracies and/or going beyond set venting/flaring deadlines
  • Paperwork Issue: OCD indicated numerous “C-” reports are out of date with operators
  • Unreported or outdated C-115 and C-104 Forms
  • Out of date Financial Assurance Reporting: OCD says operators are responsible for making sure all new bonding is up to date.
  • Don’t wait for notification or warning letters.  New wellsite bonding levels were due last summer.

What you also need to know to prepare for the new authority:

  • New penalty provisions go into effect and maybe enforced effective January 1, 2020. It is IPANM’s understanding that these new authorities will allow OCD to notify operators on January 1st of unresolved past violations and issue a letter instructing compliance within 30 days. If no action is taken to address the violations within 30 days, OCD will have the option to assess daily fines retroactive to the date of notification.
  • This new authority represents a major paradigm shift in regulatory enforcement in New Mexico. IPANM has learned that New Mexico District Offices are reviewing well files and earmarking violators and violations to begin issuing violations at the beginning of the year.
  • It is imperative that operators get their well sites into compliance before January 1, 2020.  Each member should check individual wellsite data using the OCD Online Wellsite search portal.
  • IPANM recommends members be pro-active at your wellsites, as opposed to taking an approach to wait and fight any violations that are are issued after Jan. 1, 2020.
  • IPANM will push for rule clarification of when and how penalties will be enforced. However, the current OCD draft language leaves a great deal of the penalty discretion in the hands of the OCD.

For more information, and to find out how IPANM is representing independents during the upcoming Administrative Penalties rulemaking hearing, please see our recent update to members.

Dear Members,

Best wishes to you, your employees, family and friends this holiday season. I hope you can join us in person at either our Southeast IPANM Christmas Party in Roswell on Dec. 18 or our IPANM New Year’s Happy Hour on Jan. 8, 2020. Feel free to invite prospective members, as these are great recruiting events. Of course, a special thanks to our sponsors for these fun events!

The upcoming year is shaping up to be extremely busy on the regulatory front for the two state agencies that have the most authority over Oil & Gas operations in New Mexico: the New Mexico Energy, Minerals and Natural Resources Department (EMRND) and New Mexico Environment Department (NMED). For that reason, I’ve worked closely with our Executive Board and Executive Director Jim Winchester to meet with both cabinet secretaries and key directors to outline the year ahead. Members need to be aware of many of the upcoming hearings and regulatory changes that are summarized in this newsletter.

I have also continued to serve as an industry representative on an advisory board to State Land Commissioner Stephanie Garcia-Richard. IPANM has been actively responding to a number of substantive actions directed at our industry on the part of the State Land Office. I continue to ask all members to reach out to me directly to report back on any issues you may be experiencing while conducting business with the State Land Office.

Finally, we are now just weeks away from the 2020 Legislative Session. We are preparing for another important session to protect, defend and promote our industry and independent producers. I encourage you to visit Jim or I while we work the hallways of the Roundhouse in Santa Fe from Jan. 21 to Feb. 20, 2020. Regardless of their party affiliation, we need to constantly remind elected leaders that this second consecutive billion-dollar state budget surplus is owed almost entirely to our industry.

As we wrap up 2019, I thank you for your support of IPANM and our many events and efforts. Please don’t forget to renew your membership and consider donating to our legal fund. I cannot underscore enough that we need your support to vigorously respond to multiple proposed new rules, each of which will disproportionately impact independent operators. Securing the necessary legal representation for these hearings is critical, and we need your support in 2020 to ensure your concerns are heard.

 

Regards,

Kyle
Kyle Armstrong, IPANM President

As everyone should be aware by now the State Land Office is pushing for approval of their new initiatives, including Pore Space Density, Proposed Cultural Properties Rule and the Disposal Wells Bonding amounts. Jim has already given the details for each initiative, I wanted to just touch base on some concerns for Operators in the SE.

 

 

Pore Space Density

  • Questionable legality since the laws about who owns the pore space is not clearly defined.
  • Will create hurdles between Operators and ranchers and private land owners, since they will certainly be interested in receiving payment for “damages” to their pore space as well.
  • SLO is trying (and succeeding) to get Operators to settle on a discounted amount from their valuation table, in return the SLO will not challenge a SWD application at the OCD hearing. This potentially creates a precedent that can be used against objections to this rule later.

Proposed Cultural Properties Rule

  • This can kill industry by extending the time is takes for any action on state lands.
  • Creates incentive for backdoor dealing with tribes.

Disposal Well Bonding amounts

  • Ridiculously high amount for Deep well Reclamation bond ($250,000).
  • Operators will prematurely plug wells that have value.

Don’t forget we will be having the IPANM Southeast Christmas Party on December 18th at the Liberty in Roswell. We will get a chance to meet Spur Energy Partners’ CEO Jay Graham!

I also want to pass along some sad news about a passing of a longtime member and Landman. John Michael Richardson passed away swiftly and unexpectedly on November 6th, 2019 from a sudden cardiac arrest. I hope everyone will keep him and his family in your prayers, he was truly a good man and he will be missed.

The Methane Advisory Panel (MAP) has concluded and we anticipate final publications of our technical documents by mid-December.

IPANM’s Methane Workgroup Committee, made up of both IPANM’s MAP members and at-large members, will hold a conference call in December to take a look at some of the remaining issues that need to be addressed in formal comments to the administration. Please notify me if you’d like to join this important call. Likewise, IPANM MAP members will join NMOGA’s MAP members in mid-December to follow-up on some of our own discussion issues not addressed during our stakeholder meetings with the administration and draft comments to be submitted during the 60 day public comment period.

I’d like to highlight several aspects of the MAP meetings that you might not otherwise be aware of.

  • First, all meetings were closed and conducted under the direction of the Chatham House Rule. Unfortunately, some representatives were not respectful of this process, as illustrated by several news articles that were published in November. Both industry MAP members and our IPANM Executive Board protested these leaks.
  • Second, this process was conducted to provide technical background to the process of the administration’s desire to seek input from all parties involved in the Methane Rule process. From the outset, IPANM and other industry participants were disappointed that some entities chose to fill their representative spots with attorneys vs. technical experts. This ran contrary to the administration’s stated purpose to have a technical discussion related to methane reductions in the state. The administration heard our objections and did not prohibit participation of attorneys but allowed all members to have an alternate and a plus one (legal representation). The alternate could participate in the MAP process in place of the original representative. The plus one could be present at the MAP meetings and be consulted with as needed.
  • Third, the drafting of the technical documents were done in a process that allowed all-inclusive considerations, regardless of technical or economic feasibility. Through the additive process technical context was provided to respond to impractical suggestions, and those responses should be captured in the documents. The hot topics from the MAP process were centered around venting and flaring. I would expect to see the NMOCD and NMED revamp the reporting requirements for oil and gas operations in the state. Throughout the process we highlighted the need for consideration of marginal well impacts and specifically with tanks, liquids unloading and LDAR (Leak Detection and Repair). If you want any specific information on the topics covered please feel to reach out to me or check the NMED website for each topic white paper.
  • Finally, IPANM members should understand that the administration will take the information from these stakeholder meetings and move forward with drafting rules they want to enact. There is no guarantee that any of the technical recommendations suggested by industry will actually be considered. For this reason, IPANM plans to have it’s own legal representation at the upcoming rulemaking hearings in 2020. If a new Methane Rule comes out that fails to account for our unique operating circumstances, IPANM will stand ready to take whatever steps are necessary to fight for our members.

To conclude my update, please join me in thanking our IPANM MAP members. I can personally attest to the countless hours, weekends and trips to Santa Fe that our IPANM MAP team dedicated to this effort. I truly appreciate the time and effort of our IPANM MAP members in this process. Thank you for the opportunity to serve you all as the northwest vice president for IPANM. As we close out 2019, I would like to wish everyone a Merry Christmas and a Happy New Year.

Global Energy Institute (Dec. 1, 2019) – A recent report from the U.S. Chamber of Commerce’s Global Energy Institute concluded that a ban could cost New Mexico 142,000 jobs and eliminate $86 billion in cumulative gross domestic product through 2025.The state would also lose $8 billion in state and local tax revenues during that time.

The report states, “At a time when national candidates and elected officials are proposing to ban hydraulic fracturing, it is important to highlight both the benefits of the shale energy revolution and the real-world impacts that a ban would have.”

Fracking Ban in NM would kill 142,000 jobs, $86B in GDP & $8B in Tax Revenue

 

 

Western Energy Alliance & U.S. Council of Economic Advisors (Dec. 5, 2019) – Oil and natural gas is saving typical U.S. households of four up to $2,500 annually on electricity bills, according to a recent report from the U.S. Council of Economic Advisors. The federal agency that advises the president on economic policies also found that oil and natural gas lowers “energy-related GHG emissions by 527 million metric tons per year, or 9 percent of GHG emissions in 2005.”

These economic benefits help lower-income families the most, a point that gets lost by several presidential candidates and the media in the political debate on climate change and environmental justice.

The report discusses the benefits of removing regulatory burdens on oil and natural gas development. It draws a sharp contrast between states such as New York that have actively banned fracking and those like New Mexico that are well aware of how important domestic energy is to funding priorities such as education and lowering electricity costs.

On behalf of the IPANM Executive Board, we wish safe travels & well wishes to you, your employees, families and friends this Thanksgiving!

Thank you for your loyalty to IPANM in 2019!

Happy Thanksgiving!

 

BUSINESS WIRE (Nov. 19, 2019) -The State of New Mexico today became the newest member of Western States and Tribal Nations (WSTN) natural gas initiative, adding a strong advocate for the power of responsible, environmentally sound energy production to boost rural economies.

New Mexico’s joining creates the potential for other export avenues for the San Juan and Permian basins, especially after the State of Baja California, Mexico, became part of WSTN in August. Already, WSTN is pursuing export options for the Piceance and Uinta basins in Colorado and Utah, and Wyoming’s Green River basin.

New Mexico Joins Western States and Tribal Nations Natural Gas Initiative

 

George Sharpe, IPANM Member (Nov. 18, 2019) – IPANM Member, Columnist, Energy Instructor and Investment Manager at Merrion Oil & Gas in Farmington recently released his latest educational video entitled Don’t Fear The Frack.

Please take a few minutes to watch this informative video, and then share the link (https://www.youtube.com/watch?v=K-lCr2IWCwo) with your friends and co-workers!

 

ABQ Journal (Nov. 17, 2019) – Oil and gas production grew New Mexico’s economic output by the fourth-highest rate in the country this year, as the extraction industry boomed in the Permian Basin in the southeast corner of the state.

A  report from the Bureau of Economic Analysis, an arm of the U.S. Department of Commerce, showed New Mexico’s gross domestic product grew by 4.1% in the second quarter of 2019, tied with Alaska and behind Texas at 4.7% and Wyoming at 4.2%.

Nationwide, GDP grew by 2%, records show, and New Mexico also grew by 4.1% during the first quarter of 2019.

Major GDP Uptick in New Mexico Linked to Oil & Gas