New Mexico to Adopt New Oil and Gas Pit Waste Regulations

It's Time To Clean-up! 

Beginning October 22nd, the New Mexico Oil Conservation Commission (OCC) will consider new regulations concerning oil and gas waste pits in New Mexico.  OCC Hearings begin at 9am in Porter Hall in Santa Fe on October 22nd with opening statements.  The hearing will then recess and reconvene on November 5th at 9am.  The hearings will likely extend through mid-December.

See New Mexico OCD notice of pit rule hearing.

See OGAP's Pit Rule Hearing Ad!

View the OCD's proposed pit rule.

The oil and gas industry is lobbying heavily for a rule that would allow for in-place burial of drilling waste that is generated each time an oil or gas well is drilled in New Mexico.  This will eventually amount to tens of thousands of buried waste pits - these wastes contains toxic, hazardous, and carcinogenic materials.  Burying toxic drilling waste threatens our precious groundwater sources, the health of the people living in proximity to the waste pits, and the private and state lands in New Mexico. 

Learn more about the toxic hazards of waste pits.

Covering Up is Not Cleaning Up!

Between the mid-1980s and 2003, the New Mexico Environmental Bureau recorded 6,700 cases of pits causing soil and water contamination in that state.[1]  In 2005, the New Mexico Oil Conservation Division (OCD) released data showing that close to 400 incidents of groundwater contamination had been documented from oil and gas pits.[2]  Find out more about groundwater contamination from oil and gas industry pits in New Mexico.

The City of Lovington, New Mexico, has experienced soil pollution from oil spills and pits. In recognition of the contamination threats posed by oil and gas drilling wastes, and in an effort to protect its municipal water supply, Lovington recently banned the use of drilling pits on the city's water field.  For more information on Lovington, read the OGAP report Pit Pollution.

It is time for the oil and gas industry to clean up their waste.  With fewer than 10 environmental staffers charged with the duty of monitoring waste disposal, New Mexico's OCD simply does not have the staffing power to monitor all these dirty miniature waste dumps.  Furthermore, the oil and gas industry can afford to implement alternatives to on-site burial such as dispose of their toxic waste in a permitted facility and closed loop drilling systems. 

TAKE ACTION NOW!

Alternatives To Pit Disposal

In New Mexico, oil and gas companies can pay on average less than $45 per ton to dispose of pit waste at permitted facilities.  Even with added digging and transportation costs (ranging anywhere between $250- $1,000 depending on the location of the facility and pit) the industry can afford to clean up after itself.[3]

Closed loop drilling fluid systems (sometimes referred to as "closed mud" or "pitless" systems) can greatly reduce or eliminate the discharge of toxic drilling wastes on site. These systems negate the need for drilling reserve pits. Not only is it possible to have pitless drilling operations, it can also be an economic advantage to companies to use closed loop drilling systems.[4]

Many companies are using closed loop drilling systems in Texas, Louisiana, Oklahoma, Alaska and other states. Examples of companies who are using closed loop technologies include: Shell, El Paso, Chevron-Texaco, Exxon, and many others. 

***Update on Hearing***

The oil and gas industry has come out swinging throughout  the hearing with claims that the new pit rule will be economically devastating on the industry and the state of New Mexico.  However, certified petroleum industry accountant Mary Ellen Denomy testified on November 13th that alternative disposal methods, such as closed loop drilling systems, can actually save operators thousands of dollars.

Ms. Denomy's testimony included:

• Industry makes about $2.2 million on each well drilled at 7200 ft that produces 1,000,000 mcf (that's a conservative estimate since many wells are shallower and produce more) once they take out all their costs.  With 49,000 wells producing in the state they are making about $3.6 Billion.
• Earthen pits cost 6.5% of the the total cost to drill one well.
  Centralized waste pits cost 9% of the total cost to drill one well.
  Closed loop systems cost 3.5% of the total cost to drill one well.
• Thus, companies actually save on closed loop systems over earthen pits by 3%.  You will see that closed loop systems cost about $40,000 but companies SAVE on construction, drilling and completion waste and muds when using these drilling systems.[5]

The oil and gas industry is also claiming that closed loop systems are not readily available for New Mexico and that implementing these systems will take many years.  OGAP has confirmed with representatives of closed loop drilling system providers that this statement is simply not true.  While each closed loop system is designed specifically for each well and therefore are not available "off the shelf," there are many companies who provide these systems and one provider can install at least 50 systems within 6 months.

Not only will closed loop systems save the industry money, but the fact remains that allowing for on-site pit burial of industry waste will only amount to tens of thousands of miniture waste dumps across the state of New Mexico.  This will invariably threaten the surface and groundwater resources, health of citizens living in close proximity, and the state property values. 

The oil and gas industry confirms that it is making billions of dollars every year on the natural resources of New Mexico.  Therefore, it is only fair that they be made to clean up after themselves and covering up is NOT cleaning up!

The OCC plans to release its new and improved "pit rule" in April 2008.  Please continue to check back for updates.

[1] Letter from Roger C. Anderson, Environmental Bureau Chief, New Mexico Energy, Minerals and Natural Resrouces Department, to Jennifer Goldman, OGAP. Oct. 23, 2003.

[2] http://www.emnrd.state.nm.us/OCD/Statistics.htm

[3] Argonne National Laboratory, Offsite Commercial Disposal of Oil and Gas Exploration and Production Waste:  Availability, Options, and Costs (August 2006).

[4] http://www.worldoil.com/magazine/MAGAZINE_DETAIL.asp?ART_ID=3053&MONTH_YEAR=Dec-2006

[5] Mary Ellen Denomy's testimony to the New Mexico Oil Conservation Commission on November 13th.  To view the entire power point presention click here.

[6] News Release by The New Mexico Energy, Minerals and Natural Resources Department, March 3, 2008.

For More Information

Publications

OGAP's report:  Pit Pollution - Backgrounder on the Issues with a New Mexico Case Study

Related OGAP Webpages

-Pit Pollution

-Groundwater Contamination from New Mexico Oil and Gas Facilities and Pits