July 4, 2008

Agency Looks to Extend Galisteo Basin Drilling Ban: Reports Indicate More Time Needed to Study Possible Impact

By Phaedra Haywood, The Santa Fe New Mexican

Jul. 4--The New Mexico Department of Energy Minerals and Natural Resources wants to extend the state moratorium on oil and gas drilling in the Galisteo Basin at least six months to equip enforcement regulations with more teeth.

When Gov. Bill Richardson issued an executive order in January banning oil and gas drilling in the Galisteo Basin for six months, he also ordered relevant state agencies to study the issue and prepare reports for him to review the topic.

Those reports were released late Thursday afternoon by the EMNRD, which oversees the Oil Conservation Division, the agency that regulates oil and gas production in New Mexico.

That agency -- and several others, including the Indian Affairs Department and the Department of Cultural Affairs -- recommended in their reports that no oil and gas drilling be allowed in the Galisteo Basin for a least six months, preferably longer. The agencies say more time is needed to evaluate and prepare for possible impacts of hydrocarbon extraction.

The EMNRD listed six other recommendations, some of which would constitute major changes in the way the oil and gas industry is regulated in New Mexico.

One recommendation would amend the Oil and Gas Act to give the Oil Conservation Division and the Oil Conservation Commission authority to impose more serious penalties on hydrocarbon producers who violate existing state laws.

"It's meaningless to talk about the requirements the OCD/OCC could impose on oil and gas operations if OCD/OCC does not have an efficient and practical way of enforcing those requirements," the report says.

Penalty amounts should be raised so they are in line with penalties in other industries, and the agency should not have to prove violations were "knowing and willful" to impose fines, the report further states.

Amendments should also be made to the duties of the two agencies that would allow them to consider a broader range of factors when issuing drilling permits, according to the recommendations.

"At a minimum ... statutory mandates to protect the environment should be expanded to expressly include the authority to protect surface water and ground water," the report reads.

Richardson enacted the six-month moratorium and ordered the studies after public backlash against a proposed oil drilling project in the Galisteo Basin. The state moratorium on oil and gas drilling in the basin expires at the end of this month, although a county moratorium is in effect until February.

Johnny Micou, founder of Drilling Santa Fe, one of several grassroots organizations that sprung up to protest oil development in the basin, said he is pleased with the recommendations made in the reports. "There is some really, really good stuff in there," Micou said. "We are thrilled that they are recommending to extend the moratorium."

Micou said he is also excited about the portions of the report that request more money and authority for regulation and encourage Santa Fe County to exercise some controls as well. "The OCD is recognizing county authority to regulate, and that is very important and wonderful," Micou said.

Other state agencies that issued reports and recommendations include the departments of Cultural Affairs, Tourism, Indian Affairs, Game and Fish, State Engineer, Agriculture, Environment and Health.

The New Mexico Department of Health said studies it conducted in oil and gas development areas in northwestern and southeastern New Mexico "indicate significantly elevated rates of asthma, respiratory illness and cardiovascular disease." The DOH report also includes a list of chemicals used in oil and gas extraction and their corresponding effects on health.

Bill Dirks, president of Tecton Energy, the company that sparked Richardson's moratorium by seeking permits to drill for oil in Galisteo last December, couldn't be reached for comment Thursday.

Bob Gallagher, president of the New Mexico Oil and Gas Association, a trade group that supports oil and gas production, was also unavailable.

Richardson's office did not return phone calls seeking his reaction to the reports and the requests for an extension of the moratorium.

A yearlong moratorium imposed by Santa Fe County in February is still in effect and could be extended six more months if needed. The county has hired a panel of experts to help them create policies to meet the wave of energy production activity currently sweeping the western United States.

The complete text of the reports created by state agencies on this topic is available on the EMNRD Web site: www.emnrd.state.us.

Contact Phaedra Haywood at 986-3068 or [email protected]

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