David Catanach, Director Oil Conservation Division PRESENTATION - - PowerPoint PPT Presentation

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David Catanach, Director Oil Conservation Division PRESENTATION - - PowerPoint PPT Presentation

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NM Oil Conservation Division IPANM Presentation August 3, 2016 David Catanach, Director Oil Conservation Division PRESENTATION OUTLINE Roswell Ground Water Basin Update Marginal Well Shut-In Relief Program Spill & Leak

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NM Oil Conservation Division IPANM Presentation August 3, 2016

David Catanach, Director Oil Conservation Division

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PRESENTATION OUTLINE

  • Roswell Ground Water Basin Update
  • Marginal Well Shut-In Relief Program
  • Spill & Leak Delineation & Remediation

Standards Workgroup

  • Focused Enforcement Efforts
  • Upcoming Issues

NMOCD IPANM Presentation 8-3-16

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ROSWELL GROUND WATER BASIN

  • Large area defined by the State Engineer
  • Approximate area: 105 Miles North to South

33 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 RGWB: 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

NMOCD IPANM Presentation 8-3-16

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Figure 1 • Map showing the surf ace drainage, legal boundar y , and aquif er New limits Mexic o.

  • f the Roswell ground-wat er basin, sout heastern
'. - -

NMOCD IPANM Presentation 8-3-16

T-5S to T-23S R-21E to R-27E Map of Roswell Ground Water Basin

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ACTIONS TAKEN BY OCD

  • OCD’s primary concern: Protection of fresh water

while not hindering oil & gas drilling activities

  • All APD’s within the RGWB are currently suspended

by emergency order

  • Drilling is allowed within the RGWB provided that

OCD approves revised casing programs

  • OCC hearing will establish:
  • A clearly defined area for the RGWB
  • A definitive casing/cementing program for oil &

gas wells that will continue to provide protection

  • f both aquifers & prevent communication

between these water zones

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RGWB PUBLIC HEARING

  • Case will be presented to the Oil

Conservation Commission

  • Parties to the case include the OCD,

Pecos Valley Conservancy District, COG Operating, Fasken Oil & Ranch, Oxy USA, Inc., Yates Petroleum, Mack Energy, Devon Energy & IPANM

  • August 8: Meeting to schedule hearing
  • Hearing in September or October
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OCD MARGINAL WELL SHUT-IN PROGRAM

  • New OCD program allows operators to

shut-in marginal producing wells during times of low oil & gas prices

  • Program commenced early 2016
  • Will reduce premature plugging of marginal

producing wells

  • Must be conducted in a manner that will

protect fresh water resources

  • 12 Operators; 400-500 Wells

NMOCD IPANM Presentation 8-3-16

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Requirements/Parameters

  • Applicable to wells that are planned to be shut-in
  • r have recently been shut-in due to low prices
  • Must execute an agreed compliance order
  • Must demonstrate economic need
  • After a shut-in period of 15 months (currently

allowed by OCD rules) wells can remain shut-in for an additional 3-year period

  • Wells must demonstrate mechanical integrity by

Bradenhead Test at month 27 and annually thereafter

  • Additional financial assurance may be required
  • Check with BLM & SLO NMOCD IPANM Presentation 8-3-16
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SLIDE 9

SHUT-IN WELL PROGRAM OCD CONTACT PERSON

DANIEL SANCHEZ OCD Compliance & Enforcement Manager

505-476-3493

NMOCD IPANM Presentation 8-3-16

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Spill & Leak Delineation & Remediation

  • Standards for delineating & remediating

spills & leaks are currently contained within an OCD guidance document

  • Industry is concerned that standards are

not established by rule & are not uniformly enforced within OCD

  • Industry recommendation: Form an

OCD/Industry committee to establish a rule for spill & leak delineation & remediation standards

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SPILL & LEAK DELINIATION & REMEDICATION WORKGROUP OBJECTIVES

  • Develop a rule to replace guidelines
  • Establish delineation protocals for leaks

& spills

  • Establish characterization values
  • Develop timelines for compliance

OCD is in the early stages of identifying workgroup participants

NMOCD IPANM Presentation 8-3-16

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200 180 160 140 120 100 80 60 40 20 6/1/2014 9/29/2014 1/27/2015 5/27/2015

Date

9/24/2015 1/22/2016 5/21/2016

Monthly Reported Releases Statewide

NMOCD IPANM Presentation Leak & Spill Data Recent Data Indicates Spills/Leaks Occurring at a Rate of 4.4 Per Day

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FOCUSED ENFORCEMENT EFFORTS

  • Inactive wells: Rule 19.15.5.9
  • 2,331 Non-compliant wells
  • Letters have been sent to 150 operators

currently out of compliance

  • OCD is requesting operators submit a

plan to bring wells into compliance

  • Enforcement action may be taken

against non-responsive operators

NMOCD IPANM Presentation 8-3-16

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FOCUSED ENFORCEMENT EFFORTS

  • Financial Assurance: Rule 19.15.8.9
  • OCD audit revealed that 151 operators

were in violation of FA

  • OCD has sent out 124 letters to operators
  • Industry response has been outstanding
  • Additional FA in the amount of $472K has

been furnished to OCD by industry as a result of this program

NMOCD IPANM Presentation 8-3-16

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FOCUSED ENFORCEMENT EFFORTS

  • Administrative & Hearing Orders
  • Many administrative & hearing orders

issued by OCD contain certain requirements necessary for approval

  • Issue: Non-compliance with provisions

contained within OCD orders

  • OCD will track order for compliance
  • OCD will send letters to operators for non-

compliance

NMOCD IPANM Presentation 8-3-16

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FOCUSED ENFORCEMENT EFFORTS

  • Illegal dumping of oil field waste
  • OCD & New Mexico Junior College

working to educate industry, public, law enforcement agencies, & district attorneys on issue of illegal dumping of produced water & oilfield waste

  • OCD is establishing relationships with

law enforcement & district attorneys to criminally prosecute cases

NMOCD IPANM Presentation 8-3-16

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UPCOMING ISSUES

  • Delaware Formation Injection (Over

Pressured & Injection into Potentially Productive Horizons)

  • Horizontal Well Rule Revision
  • Streamline Regulations
  • Drilling Activity Across State Lines
  • OCD Proposed Legislation

OCD IPANM Presentation 8-3-16

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SLIDE 18

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