Green Guide

New Mexico oil well regulator defends oversight of cleanup

Posted November 22

— The New Mexico Oil Conservation Division is defending its management of cleanup efforts by an out-of-state petroleum driller at an oil waste disposal well on state trust land, in response to criticism from an another state agency that claims the division isn't doing a good enough job.

The Oil Conservation Division that oversees oil and natural gas well permits and decommissioning said Monday that it has been working with Midland, Texas-based Siana Operating LLC to address alleged violations and hold the company accountable for spills of oily salt water at well sites in southeastern New Mexico.

The New Mexico State Land Office that oversees state trust lands says it will prevent Siana from gaining access to a major disposal well on trust lands in the desert outside the town of Eunice until the company agrees to the land office's own stringent cleanup requirements.

Oil Conservation Division Director David Catanach said that move is obstructing responsible cleanup efforts by Siana Operating and could cost taxpayers more in the long run.

"We've been working with them every step of the way to hold them accountable and clean up the site," Catanach said in a statement about Siana. "We believe they've been complying in good faith so far. It's unfortunate that the State Land Office is preventing access to the contaminated land because they're obstructing responsible cleanup."

Wastewater from oil and natural gas drilling operations is typically delivered by truck to disposal sites like Siana's, where most oil is skimmed off before water is injected deep underground. As they reach underground for oil and natural gas, rigs in southern New Mexico also often draw up salt water from an ancient aquifer.

Siana is a major provider of well-water disposal services in New Mexico, operating two disposal wells that injected over 13 million gallons underground in 2014. It has relatively small-scale oil and natural gas extraction operations at nine wells.

The State Land Office has been in litigation with Siana for months over accusations the company trespassed and spilled waste on state trust lands where it stopped making lease payments years ago. The State Land Office has said it is owed $284,000 in fees, cleanup costs and penalties.

State Land Commissioner Aubrey Dunn says Siana reached a cleanup agreement with the state Oil Conservation Division that does not address the possibility of groundwater contamination, while ignoring requirements issued by his office. Dunn said those requirements include the removal of waste storage tanks to determine the extent of pollution underneath.

"Our concerns weren't taken into account by the Oil Conservation Division," Dunn said Tuesday.

Dunn said Siana will be barred from operating the disposal well on state trust lands because it flouted lease requirements and environmental regulations.

Robert Stranahan, a lawyer for Siana's New Mexico operations, said some of the State Land Office requirements may not help remediate the site and that Siana is willing to hold further discussions.

"Some of the requests will not help delineate the site" for cleanup, he said. "To do them is just to inflict the cost."

He added: "We're not a bad actor here, we're actually doing what a proper actor is supposed to do."

Dunn has urged state lawmakers create a new fund that would help restore state trust lands from damage by oil-industry spills along with illegal dumping, wildfires and even invasive plant species.

As initially proposed, the restoration and remediation fund would divert 1 percent of revenues from the state's land maintenance fund, or about $700,000 a year.

The maintenance fund receives money from renewable revenue charges paid by the private sector — such as grazing, rights of way and business leases — plus from rental payments from oil and natural gas developers with operations on state-owned holdings. It is the source of the State Land Office's operating budget.

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