The New Mexico Construction Industries Division (CID) will continue electrical connections in the oilfield through December 28, 2019. Recall that earlier this year, the CID notified Utility companies that the CID would end its practice of inspecting oil and gas well customer-owned electrical facilities, including meter loops and primary distribution power lines serving oil and gas wells.  As a result, the utilities notified operators that they would not install and energize wells that have not been inspected. As result, New Mexico Oil and Gas producers have been caught in the middle of this dispute, facing uncertainty of whether electrical connections would be approved and energized.

As result of this dispute, it has now been decided through a recent Public Regulations Commission(PRC) ruling that the PRC will not require formal inspection paperwork for electrical connections, as the CID contends. For this reason, beginning after Dec. 28, Utility companies will now require a New Mexico licensed electrician to make the electrical connection with an International Code Council (ICC) certified inspector giving final sign-off approval on the connection. The key required paperwork is attached.

Thus, moving forward, producers will need to contract with third-party inspectors certified by the ICC. Please use this search engine to find available ICC certified inspectors that producers can use that will satisfy your utility company to complete the connection. Be aware that third-party inspectors will likely charge a fee for service.

IPANM is recommending that all producers contact their utility providers to confirm their procedures. We also recommend that producers DOCUMENT EVERYTHING related to your new or needed re-energized connections.

Directive from Construction Industries Division about the future of Inspections
Connection Form Required

IPANM – IPANM was notified by the New Mexico Oil Conservation Division (ODC) Director that the State Land Office (SLO) is putting both public and behind-the-scenes pressure on the outgoing administration to take action on out of compliance wells, whether that be for spills needing to be cleaned up or overdue well plugging.

Attached is a letter from the State Land Commissioner urging OCD to take immediate action. Also attached is OCD Director Heather Riley’s letter to IPANM (and other industry groups). BOTH the SLO and OCD have forwarded lists of specific wells to industry that indicate which wells they consider out-of-compliance in their records. While other industry groups have forwarded these lists to members, IPANM will not release these lists to all members. Instead, IPANM is reaching out individually to member companies on the list, and offering any support for clearing up any ongoing disputes over well compliance with OCD. Likewise, we are urging those members to proceed with plugging or remediation efforts if non-compliance issues are legitimate.

In regards to the Non-Compliance lists, IPANM believes that for every well on these lists, there are potential extenuating circumstances that may, in fact, be due to a government regulatory error, a government record keeping error, or an ongoing dispute over well status (especially wells involved in recent transactions). We believe that releasing these lists to all members or the general public does not best serve the interests of our members. We are wary that releasing these lists is a political tactic used by regulators to intimidate, embarrass or shame a producer into paying large sums of money for remediation or plugging efforts that they might not be liable for. IPANM will not legitimize “guilt until proven innocent” regulatory tactics at any level of government.

That being said, if regulators have legitimate grounds for a well to be out of compliance, IPANM does strongly urge members to proceed quickly with efforts to remediate or plug that well. Be aware that a new state administration takes power next month, and we are expecting stronger efforts and more political tactics (such as negative publicity for individual operators) to ramp up in the months ahead.

Letter from State Land Commissioner  RE: Out of Compliance Wells
Letter from NMOCD to IPANN/Industry  RE: Out of Compliance Wells

IPANM (Injection Wells) – On November 15, 2018, IPANM Executive Director attended the Oil Conservation Commission’s proposed amendment hearings for NMAC 19.15.26. The Oil Conservation Commission accepted language changes whereby a “water flood project” infers that such projects include all types of injection projects, including enhanced oil recovery injection, secondary recovery and pressure maintenance projects. Likewise, a language change in the rule now allows any allowable for any injection project as long as the allowable be whatever the well is capable of producing. See the attached OCC Order which will go into effect on December 5, 2018:

Injection Well Order:  Updates to Injection Well Guidelines for New Mexico

In the meantime, Phil Goetz of the Oil Conservation Division continues to serve as the lead on a re-write guide for Injection Wells.  This guide could be complete by the end of the year. IPANM will keep members updated. Keep in mind, the guide will overview some of the aspects that we have already previously updated members on. Please review the following IPANM update from late summer:

“Attached is a Final Summary of the outcomes and likely changes that will evolve out of the state as result of the Industry-NMOCD Injection Well Workgroup. Please recall that IPANM was represented on this group by IPANM member Kevin Burns of 3Bear Energy LLC.”

IPANM Final Summary from Industry-NMOCD Injection Well Workgroup released