HOUSE BILL 32

56th legislature - STATE OF NEW MEXICO - second session, 2024

INTRODUCED BY

Debra M. Sari ana and Harold Pope and Kathleen Cates and Antoinette Sedillo Lopez

 

 

 

 

AN ACT

RELATING TO THE ENVIRONMENT; ALPHABETIZING THE DEFINITIONS OF AND ADDING DEFINITIONS FOR "CHILDREN'S HEALTH PROTECTION ZONE", "OPERATOR" AND "SCHOOL" TO THE OIL AND GAS ACT; RESTRICTING OIL AND GAS OPERATIONS IN CHILDREN'S HEALTH PROTECTION ZONES; REQUIRING THE CESSATION OF OIL AND GAS OPERATIONS IN CHILDREN'S HEALTH PROTECTION ZONES AFTER JANUARY 1, 2028; REQUIRING OIL AND GAS OPERATORS TO CREATE A PROTECTION ZONE INVENTORY AND MAP; REQUIRING OIL AND GAS OPERATORS LOCATED IN A CHILDREN'S HEALTH PROTECTION ZONE TO DEVELOP AND IMPLEMENT A LEAK RESPONSE AND DETECTION PLAN AND ALARM RESPONSE PROTOCOL AND CONDUCT WATER QUALITY SAMPLING AND TESTING; PROVIDING PENALTIES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 70-2-33 NMSA 1978 (being Laws 1935, Chapter 72, Section 24, as amended) is recompiled as Section 70-2-1.1 NMSA 1978 and is amended to read:

     "70-2-1.1. DEFINITIONS.--As used in the Oil and Gas Act:

          [A. "person" means:

                (1) any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate or other entity; or

                (2) the United States or any agency or instrumentality thereof or the state or any political subdivision thereof;

          B. "pool" means an underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both. Each zone of a general structure, which zone is completely separate from any other zone in the structure, is covered by the word "pool" as used in the Oil and Gas Act. "Pool" is synonymous with "common source of supply" and with "common reservoir";

          C. "field" means the general area that is underlaid or appears to be underlaid by at least one pool and also includes the underground reservoir or reservoirs containing the crude petroleum oil or natural gas or both. The words "field" and "pool" mean the same thing when only one underground reservoir is involved; however, "field", unlike "pool", may relate to two or more pools;

          D. "product" means any commodity or thing made or manufactured from crude petroleum oil or natural gas and all derivatives of crude petroleum oil or natural gas, including refined crude oil, crude tops, topped crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, treated crude oil, fuel oil, residuum, gas oil, naphtha, distillate, gasoline, kerosene, benzine, wash oil, waste oil, lubricating oil and blends or mixtures of crude petroleum oil or natural gas or any derivative thereof;

          E. "owner" means the person who has the right to drill into and to produce from any pool and to appropriate the production either for the person or for the person and another;

          F. "producer" means the owner of a well capable of producing oil or natural gas or both in paying quantities;

          G. "gas transportation facility" means a pipeline in operation serving gas wells for the transportation of natural gas or some other device or equipment in like operation whereby natural gas produced from gas wells connected therewith can be transported or used for consumption;

          H. "correlative rights" means the opportunity afforded, so far as it is practicable to do so, to the owner of each property in a pool to produce without waste the owner's just and equitable share of the oil or gas or both in the pool, being an amount, so far as can be practicably determined and so far as can be practicably obtained without waste, substantially in the proportion that the quantity of recoverable oil or gas or both under the property bears to the total recoverable oil or gas or both in the pool and, for such purpose, to use the owner's just and equitable share of the reservoir energy;

          I. "potash" means the naturally occurring bedded deposits of the salts of the element potassium;

          J.] A. "casinghead gas" means [any] a gas or vapor or both, indigenous to an oil stratum and produced from such stratum with oil, including [any] a residue gas remaining after the processing of casinghead gas to remove its liquid components;

          [K. "produced water" means a fluid that is an incidental byproduct from drilling for or the production of oil and gas;

          L. "commission" means the oil conservation commission; and

          M. "division" means the oil conservation division of the energy, minerals and natural resources department]

          B. "children's health protection zone" means an area extending five thousand two hundred eighty feet from the property line of a school;

          C. "commission" means the oil conservation commission;

          D. "correlative rights" means the opportunity afforded, so far as it is practicable to do so, to the owner of each property in a pool to produce without waste the owner's just and equitable share of the oil or gas or both in the pool, being an amount, so far as can be practicably determined and so far as can be practicably obtained without waste, substantially in the proportion that the quantity of recoverable oil or gas or both under the property bears to the total recoverable oil or gas or both in the pool and, for such purpose, to use the owner's just and equitable share of the reservoir energy;

          E. "division" means the oil conservation division of the energy, minerals and natural resources department;

          F. "field" means the general area that is underlaid or appears to be underlaid by at least one pool and includes the underground reservoir or reservoirs containing the crude petroleum oil or natural gas or both. The words "field" and "pool" mean the same thing when only one underground reservoir is involved; however, "field", unlike "pool", may relate to two or more pools;

          G. "gas transportation facility" means a pipeline, in operation, serving a gas well for the transportation of natural gas, including an associated device or equipment used for the transportation or consumption of natural gas;

          H. "operator" means a person with the legal right to conduct oil and gas operations and includes the agents, employees and contractors of that person;

          I. "owner" means the person who has the right to drill into and to produce from a pool and to appropriate the production either for the person or for the person and another;

          J. "production facility" means facilities or equipment attendant to oil and gas production or injection operations and includes tanks, flowlines, headers, gathering lines, wellheads, heater treaters, pumps, valves, compressors, injection equipment, production safety systems, separators, manifolds and pipelines, but does not include fire suppression equipment;

          K. "person" means:

                (1) an individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate or other entity; or

                (2) the United States or an agency or instrumentality thereof or the state or a political subdivision thereof;

          L. "pool" or "common source of supply" means an underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both, including each zone of a general structure that is completely separate from any other zone in the structure;

          M. "potash" means the naturally occurring bedded deposits of the salts of the element potassium;

          N. "produced water" means a fluid that is an incidental byproduct from drilling for or in the production of oil and gas;

          O. "producer" means the owner of a well capable of producing oil or natural gas or both in paying quantities;

          P. "product" means a commodity or thing made or manufactured from crude petroleum oil or natural gas and all derivatives of crude petroleum oil or natural gas, including refined crude oil, crude tops, topped crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, treated crude oil, fuel oil, residuum, gas oil, naphtha, distillate, gasoline, kerosene, benzine, wash oil, waste oil, lubricating oil and blends or mixtures of crude petroleum oil or natural gas or a derivative thereof; and

          Q. "school" means an elementary, secondary, middle, junior high or high school or any combination of those, including a public school, state-chartered or locally chartered charter school or private school that students attend in person, including a daycare center, and a park, playground or sports or recreation facility associated with a school."

     SECTION 2. Section 70-2-12 NMSA 1978 (being Laws 1978, Chapter 71, Section 1, as amended) is amended to read:

     "70-2-12. ENUMERATION OF POWERS.--

          A. The [oil conservation] division of the energy, minerals and natural resources department may:

                (1) collect data;

                (2) make investigations and inspections;

                (3) examine properties, leases, papers, books and records;

                (4) examine, check, test and gauge oil and gas wells, tanks, plants, refineries and all means and modes of transportation and equipment;

                (5) hold hearings;

                (6) provide for the keeping of records and the making of reports and for the checking of the accuracy of the records and reports;

                (7) limit and prorate production of crude petroleum oil or natural gas or both as provided in the Oil and Gas Act; and

                (8) require either generally or in particular areas certificates of clearance or tenders in connection with the transportation of crude petroleum oil or natural gas or any products of either or both oil and products or both natural gas and products.

          B. The [oil conservation] division may make rules and orders for the purposes and with respect to the subject matter stated in this subsection:

                (1) to require dry or abandoned wells to be plugged in a way so as to confine the crude petroleum oil, natural gas or water in the strata in which it is found and to prevent it from escaping into other strata; pursuant to Section 70-2-14 NMSA 1978, the division shall require financial assurance conditioned for the performance of the rules;

                (2) to prevent crude petroleum oil, natural gas or water from escaping from strata in which it is found into other strata;

                (3) to require reports showing locations of all oil or gas wells and for the filing of logs and drilling records or reports;

                (4) to prevent the drowning by water of any stratum or part thereof capable of producing oil or gas or both oil and gas in paying quantities and to prevent the premature and irregular encroachment of water or any other kind of water encroachment that reduces or tends to reduce the total ultimate recovery of crude petroleum oil or gas or both oil and gas from any pool;

                (5) to prevent fires;

                (6) to prevent "blow-ups" and "caving" in the sense that the conditions indicated by such terms are generally understood in the oil and gas business;

                (7) to require wells to be drilled, operated and produced in such manner as to prevent injury to neighboring leases or properties;

                (8) to identify the ownership of oil or gas producing leases, properties, wells, tanks, refineries, pipelines, plants, structures and all transportation equipment and facilities;

                (9) to require the operation of wells with efficient gas-oil ratios and to fix such ratios;

                (10) to fix the spacing of wells;

                (11) to determine whether a particular well or pool is a gas or oil well or a gas or oil pool, as the case may be, and from time to time to classify and reclassify wells and pools accordingly;

                (12) to determine the limits of any pool producing crude petroleum oil or natural gas or both and from time to time redetermine the limits;

                (13) to regulate the methods and devices employed for storage in this state of oil or natural gas or any product of either, including subsurface storage