HispanicBusiness

Eunice, N.M., rancher Irvin Boyd has made his living off the oil and gas industry for three decades, supervising pipeline construction.

He thinks New Mexico's pit rule is a good thing for ranchers, industry and the environment. The 4-year-old rule governs the disposal of oil and gas well drilling and production wastes. Under the rule, most of the waste now must be removed and taken to a permitted disposal site. "There was a lot of work and planning that went into that rule on the part of industry, the environmental community, the ranching and farming community and nonprofit groups," Boyd said. "It is not 100 percent for anybody, but I believe that it is good."

Some in the oil and gas industry have problems with it. The New Mexico Oil and Gas Association and the Independent Petroleum Association of New Mexico requested revisions of the rule from the Oil Conservation Commission. The hearing was conducted for four days in May. It continues beginning at 9 a.m. Wednesday for at least another three days of testimony and comments.

The pit rule grew out of concerns that thousands of old, unlined drilling waste pits, below-grade tanks and even newer lined pits were leaching contaminants, salts and chemicals onto soil and into water.

The oil and gas industry says several revisions are needed to reduce unnecessary design requirements and paperwork, allow temporary pits for drilling waste in limited circumstances, and increase the level of salt allowed in drilling fluids. Some companies testified that the pit rule has increased the cost of doing business.

More than 500 written comments were filed following the hearing in May. Most urged the commissioners to keep the pit rule in place. Repeatedly, they noted there were 400 cases of groundwater contamination documented prior to the rule and no contamination cases after the rule was implemented.

Tom Shillinglaw, a retired corporate attorney living in Santa Fe, wrote commissioners that industry bears the burden of proving the rule has harmed their businesses. "I don't think that fair-minded people could say that the oil and gas industry can meet this burden -- the industry is not at all suffering in general, or specifically in N.M. in whole or in part because of this rule."

E. Randall Hudson III, of Hudson Oil Co. in Texas, supports an amendment to not require testing of water quality by drillers in areas where groundwater is 100 feet or deeper from the land surface. He also opposed any expansion of the Oil Conservation Division's authority to protect livestock.

The New Mexico Department of Game and Fish said it doesn't object to amendments that would streamline some of the paperwork and permitting requirements for industry. "However, many of the other proposed changes would substantially weaken environmental protection, including wildlife habitats, from potential harmful effects of oilfield pits," wrote the agency in comments.

Boyd, who is running a few head of cattle on the same 2,000 acres his grandfather homesteaded, supports the oil and gas industry. He said a lot of people in the industry care about producing a needed mineral responsibly and protecting their neighbors' land and water.

But not all of them do, he said. The pit rule is a necessary precaution, he said. Boyd knows because pits and wells dot his land, both old and new ones. The land around the old pits is barren; grass won't grow on the salt that's crystallized around them. Drilling trash -- cables off of rigs, buckets, barrels and pallets -- is also in the pits. With his water table 40 feet to 100 feet below the surface, he's worried.

New wells drilled in the last two years under the pit rule "are just super," he said.

Boyd was part of a group of ranchers, industry and agency people who worked on addressing leaking pits and contamination years before the pit rule was finally put in place under former Gov. Bill Richardson. "We met multiple times through months and months. We submitted our recommendations to the Oil Conservation Commission, but they didn't go anywhere," he said.

Boyd said that after the pit rule went into effect, ranchers he met while supervising pipe construction across their land told him it was the best thing that ever happened in New Mexico. "One oil field guy in Aztec told me he hoped they never went back to using pits. The liability of future contamination now is nearly gone with the existing pit rule," Boyd said.

Changing the rules now means companies that are already trying to do right by landowners and drill responsibly will continue to do so. "But it will open the door to companies that want to come in, make some money, ruin things and leave," Boyd said. "They need to be liable for the damages they create in the production of their minerals."