New Mexico reverses San Juan Basin oil stance in controversial move

New Mexico’s new Democratic Gov.  Michelle Lujan Grisham has shaken up the state’s oil and gas industry, not only with new appointees but challenged a move by the previous administration to relax oil and gas drilling restrictions in the San Juan Basin.

Her new regulators moved this week to suspend a previous order that allowed Texas-based HilCorp Energy to double well densities in the northwest corner of the state. The state’s Oil Conservation Commission voted to scheduled a rehearing in May on Hilcorp’s application that had been approved in late 2018.

Responsibility for oversight of well rules and regulation shifted Jan. 1 to the Democratic administration of Gov. Michelle Lujan Grisham and Land Commissioner Stephanie Garcia Richard.

The Associated Press reported newly appointed Oil Conservation Commission Chairman Gabriel Wade said the rehearing is needed to ensure a full review by state government experts at the Oil Conservation Division, where he serves as acting director, and to provide adequate opportunities for public comment.

Wade noted that the division has an obligation to prevent wasted resources, protect the competing rights of adjacent landholders and safeguard health and the environment.

Commissioner Allison Marks of the State Land Office emphasized the need for consultation with federal government agencies and Native American tribes in the vicinity, including the Jicarilla Apache Nation — a major natural gas developer. A third member of the commission has not yet been designated.

Hilcorp Energy has defended its application as legally and scientifically sound as it seeks to draw more natural gas from a formation known as the Blanco-Mesaverde gas pool through existing and potential new well locations.

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