NM Oil Conservation Division Presentation To The Legislative Finance Committee June 15, 2016 • Current Industry Activity • Plugging Activity & the Reclamation Fund • Bankruptcies • FY-16 Inspections & Violations • Spill & Leak Data • Roswell Ground Water Basin Update • New Enforcement Efforts
,,, ., .. NMOCD LFC Presentation Current Activity 24 Applications to Drill: Jan 1, 2015-April 1, 2016 180 160 \ 140 Number of APD's 120 [> ,;;,· 100 80 60 • '']55? 25 40 20 0 '<' ·?.· fa.tn 9/18/2014 12/27/2014 4/6/2015 7/15/2015 10/23/2015 1/31/2016 5/10/2016 Date ' 2'5 .5
NMOCD LFC Presentation Current Activity Oil Production: January, 2014-March, 2016 14,000,000 12,000,000 10,000,000 Barrels of Oil 8,000,000 Latest Production: March, 2016 12,482,289 Barrels of Oil 6,000,000 4,000,000 2,000,000 0 Month 2014 2015 2016
NMOCD LFC Presentation Plugging Activity & Reclamation Fund OIL RECLAMATION FUND & FEDERAL GRANT PLUGGING EXPENDITURES FY-14 FY-15 FY-16 NUMBER OF WELLS 25-State 45 23 PLUGGED 10-Federal $1,529,215 $774,891 $778,472-State PLUGGING $318,295-Federal EXPENDITURES
NMOCD LFC Presentation Plugging Activity & Reclamation Fund NUMBER OF ORPHANED/ABANDONED WELLS ON OCD’S ACTIVE PLUGGING PROGRAM (CURRENT LIABILITY) Wells on State Land: 97 • • Wells on Fee Land: 61 • Wells on Federal Land: 43 • Total: 201
NMOCD LFC Presentation Plugging Activity & Reclamation Fund Bureau of Land Management Plugging Grant • OCD Submitted an Application for a BLM Federal Plugging Grant in 2015 • OCD was Awarded Grant on 10/1/2015 Total Grant Award is $5.0 MM • • Grant Duration is 5 Years, with $1.0 MM to be Disbursed to OCD on an Annual Basis • Funds are to be Utilized to Plug and Abandon Orphaned Oil & Gas Wells on Federal land In FY-16, OCD has Plugged 10 Wells and Spent $318, • 295.00
NMOCD LFC Presentation Plugging Activity & Reclamation Fund Bankruptcies • OCD Has an Interest in 10 Active Bankruptcies Across the United States (4 in Texas, 2 in Delaware, 1 in Colorado, 1 in New York, 1 in New Mexico) • OCD Does Not File Any Sort of Claim or Track Bankruptcies in New Mexico in Which an Operator Only has Federal or Tribal Lease Wells (e.g. Priority Energy, LLC Filed for Bankruptcy in May) • OCD has Taken Measures to Reduce Potential Liabilities by Being Proactive in all Bankruptcies • As Noted by State Land Commissioner, Oil Conservation Division, Senator Papen and Others, Increased Federal Regulations Will Result in Additional Costs to Producers.
NMOCD LFC Presentation Plugging Activity & Reclamation Fund Reclamation Fund Monthly Deposit $700,000.00 $600,000.00 Deposit Amount $500,000.00 $400,000.00 $300,000.00 $200,000.00 $100,000.00 $0.00 4/1/2012 10/18/2012 5/6/2013 11/22/2013 6/10/2014 12/27/2014 7/15/2015 1/31/2016 8/18/2016 Date: Month/Year
Inspection Statistics by Inspection Type For the Period from 7/1/2015 thru 5/26/2016 Inspection Type Performed Violations Complaint Response 2 0 Compliance Verification 10 0 Drill / Deepen /Re-Entry 381 0 Final Restoration 238 0 Initial Incident Inspection 517 124 Inactive Well Verification 4 0 Bradenhead 4,269 6 Pressure Test 1,442 2 MIT Witnessed - Other 173 4 File and Compliance 332 0 Plug / Plug Back 746 0 Pit Closure 43 0 Phone call 107 0 Plugging Witnessed 99 1 Rig 12 0 Routine/Periodic 36,713 650 Plugged Well Surface 255 1 Work Over 22 0 State Totals 45,365 788 ___________________________________________________________________ District I District II District II District IV (Hobbs) (Artesia) (Aztec) (Santa Fe) No. of Inspectors: 7 8 7 1
NMOCD LFC Presentation Leak & Spill Data Monthly Reported Releases Statewide 200 180 160 140 120 100 80 60 40 20 0 6/1/2014 9/29/2014 1/27/2015 5/27/2015 9/24/2015 1/22/2016 5/21/2016 Date
NMOCD LFC Presentation Leak & Spill Data Monthly Volume of Spilled Liquids 20,000 Crude Oil Reported Spilled (bbls) Produced Water Reported Spilled (bbls) 18,000 Monthly Volume (bbls) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 6/1/2014 9/29/2014 1/27/2015 5/27/2015 9/24/2015 1/22/2016 5/21/2016 Date
State of New Mexico NMOCD LFC Presentation Energy, Minerals and Natural Resources Department Leak & Spill Data Oil Conservation Division 1220 South St. Francis Dr. Quarterly Report Posted on Santa Fe, NM 87505 OCD Website UNAUTHORIZED RELEASE Statistics Summary Report 1/1/2016 thru 3/31/2016 (1 st Quarter of 2016) Release Totals and District Breakdown Releases per day Month Days Releases District 1 District 2 District 3 District 4 January 31 128 4.1 53 54 20 1 February 29 185 6.4 112 50 23 0 March 31 89 2.9 42 27 20 0 Total 91 402 4.4 207 131 63 1 Volumes of Material Involved Crude Crude Oil Crude Produced Produced Produced Natural Month NGLs NGLs NGLs Oil Reported Oil Water Water Water Gas Reported Reported Reported Reported Recovered Reported Reported Reported Reported Reported Spilled Recovered Lost Spilled (bbls) Lost Spilled Recovered Lost Released (bbls) (bbls) (bbls) (bbls) (bbls) (bbls) (bbls) (bbls) (mcf) January 157 0 157 1406 1014 392 4666 3694 972 67933 February 468 75 393 2405 1284 1121 18375 5763 12612 208282 March 222 10 212 1100 814 286 3495 2571 924 233609 Total 847 85 762 4911 3112 1799 26536 12028 14508 509824
ROSWELL GROUND WATER BASIN (RGWB) • Large Area Defined by the Office of the State Engineer • Approximate Area: 120 Miles North to South 66 Miles East to West • Within a Portion of the RGWB There Exists Two Fresh Water Aquifers. Shallow Aquifer: 450’ & Deeper Artesian Aquifer: 1200’-1400’ • Remaining Portion of RGWP: Deeper Aquifer Only • OCD Initially Contacted by Representative Townsend • Initial Reports Indicated Possible Water Contamination • OCD Attended 2 Public Meetings with Pecos Valley Conservancy District, Office of the State Engineer & Various Legislative Members • At Issue is Whether a Single Casing String Set Through Both Aquifers Provides Adequate Protection
. . . _ ·- ' ' i 2 .« t..--.c..., ,c· C : - ·, : P R E P A R E D I N C O O P E R A T I O N W I T H T E C H N I C A L R E P O R T 4 2 N E W M E X I C O S T A T E E N G I N E E R S T A T E S G E O L O G I C A L S U R V E Y B A S I N T H E U N I T E D R O S W E L L S A N T A F E , N E W M E X I C O N E W M E X I C O 1 0 6 ° 10 ° 1 0 4" T 3 NMOCD LFC Presentation N 2 T I · · . Roswell Ground Water Basin Map l ' , I · ' 1 I w I ' : I : i _ ..,.... I ' N ' ,••• " i '" : .!. " 2. _., ·- - , 1 -- -n- ..... : c: .l - -" '''-··--'·- · ·--·"-''·'-·-',---:, , .. ... . -t " - - - - ' ,,; 't,..- - - T - : -·• - • ' ! - s i N - - . 1 8 f • .. -, I . .2 i./"· L! ( 3 5 6 7 !3 9 1 0 1 1 \ - ,.,,... 1 2 - ---- --- - - ---' ----·· · - ' ' i 3 ---- ! 1 4 5 1 6 1 7 ( 18 1 9 20 2 1 +-·• ····- - - + - - , - - - - ··-· •·- - , s . ;::, .... . . j - - -· - · - - ··-- ,,, ., .. 24 \ [> , ;;,· • ' ' ] 5 5? 25 i '< ' ' 2'5 .5 - 6 ·?. · ) i fa .tn Mtxr co ,,, .. . - / E W ' v ,i 6 • 1 T E X AS " t, R 9 E 1 0 11 1 2 1 3 1 4 16 17 18 1 9 2 0 2 1 22 23 2 4 25 2 6 27 R 2 8 E 1 5 Base from U. S. Geolog i ca l 10 20 30 0 40 MILE Su rv ey State base map, - - - - - - - - - - - - - - - S - - - · J 1 : 500 , 000 E XP LANAT I ON .,,.--·-- -- Surface-water d ra i nage d i v i de ---··- - -··- Lega l boundary of Roswe l U l nd erg round Water Bas i n i n 1 979 Approxi mate l i m i t of a rte s i an aqu i fer Ap p rox i m a te 1 i m i t of s ha l l oe1 aq u i f e r ace drainage, legal boundar y , and aquif er Figure 1 • Map showing the surf limits of the Roswell ground-wat er basin, sout heastern New Mexic o. '. - -
NMOCD LFC Presentation Roswell Ground Water Basin ACTIONS TAKEN BY OCD • OCD’s Primary Concern: Protection of Fresh Water • All Approved Applications To Drill Within the RGWB Suspended by Emergency Order E-42 dated 4/25/16. Extended by E-42-A dated 5/4/2016 • Hearing to Extend APD Suspension Held May 10 th . • Drilling is Allowed Within the RGWB Provided that OCD Approves Revised Casing Programs • OCD is Conducting a Hearing in August to Establish: • A Clearly Defined Area for the RGWB • A Casing/Cementing Program for Oil & Gas Wells That Will Provide Protection of the Shallow Aquifer & Deeper Artesian Aquifer & Prevent Communication Between These Aquifers
NMOCD LFC Presentation Enforcement New Enforcement Efforts • Working to Train Law Enforcement • Work with District Attorneys • Financial Assurance Compliance Enforcement • Prioritizing Enforcement Cases • Working with Operators out of Inactive Well Compliance
David Catanach Director, NMOCD Energy, Minerals and Natural Resources Department David.Catanach@state.nm.us (505) 476-3468 OCD Website: http://www.emnrd.state.nm.us/ocd OCD Well Information and Operator Data: https://wwwapps.emnrd.state.nm.us/ocd/ocdpermitting/Data/Wells.aspx
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