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Commission begins deliberations on NM pit rule

Associated Press Modified: September 24, 2012 at 7:15 pm •  Published: September 24, 2012
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SANTA FE, N.M. (AP) — After hearing weeks of testimony, New Mexico regulators on Monday began the arduous task of determining how to best regulate certain wastes produced by oil and natural gas drilling.

The Oil Conservation Commission started deliberating a request by the industry to revamp the state's so-called pit rule. The set of regulations governs how producers handle drilling mud and other waste in pits, buried tanks, sumps and closed-loop systems.

The commission spent much of the afternoon deciding on the exact wording of definitions contained in the rule, such as what constitutes a temporary pit and whether an area can be considered a wetland.

Commissioners said they were trying to avoid any unintended consequences by revamping the rule's language.

They also discussed how any changes could affect future development in New Mexico, including shale gas drilling, which has boomed in North Dakota, Pennsylvania and other states.

The deliberations could last a week.

The challenge for the commission is finding a way to allow oil and gas development to continue in New Mexico while ensuring the arid state's water sources and soil are not contaminated.

The industry and some state lawmakers contend existing regulations have pushed producers from the state, costing New Mexico jobs and revenue. However, environmentalists argue relaxing the rules could lead to contamination.

A coalition of groups delivered more than 8,900 petition signatures to Republican Gov. Susana Martinez ahead of the deliberations. They asked that the pit rule be kept intact.

The commission adopted the rule in 2008 after dozens of hours of testimony from engineers, economists, environmentalists and ranchers.

Legal challenges by an industry group and environmentalists followed. Those cases are stalled pending the outcome of the commission's deliberations.

Critics have called the rule a "job-killer," saying it has cost New Mexico about $1 billion in lost tax revenues.

Environmentalists, on the other hand, are concerned oil and gas producers will want to develop enormous pits for the water and chemicals needed for drilling if the shale boom makes its way to New Mexico.

Gwen Lachelt, director of Earthworks' Oil and Gas Accountability Project, said the odor from these pits have driven people from their homes in other states. She also has concerns about livestock and wildlife drinking from the pits.

Aside from changing the siting requirements for temporary lined pits, the industry wants to be able to bury drilling mud wastes on-site as long as the level of salts and other contaminants are low enough and the distance to groundwater is adequate. The industry also wants the state to allow one large pit to be used for multiple wells.