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Industry, Landowners Challenge New Mexico County Ban

New Mexico oil and natural gas operators and landowners are challenging in federal court a ban on any type of hydrocarbon drilling in Mora County, a sparsely populated jurisdiction in the northeastern section of the state (see Shale Daily,May 13).

The Independent Petroleum Association of New Mexico (IPANM) and three landowners in the county filed a civil rights lawsuit in U.S. District Court for the District of New Mexico in Albuquerque last Monday, alleging their civil rights had been violated and challenging the constitutionality of a vote by the Mora County Commission last April.

IPANM President Richard Gilliland called the elected county officials' action "an insult to the U.S. Constitution and every free citizen." While not commenting directly on the lawsuit, Mora County Commissioner John Olivas told local news media he took a position "to protect our resources in Mora County."

Mora is believed to be the first county in the nation to place an outright ban on oil and gas operations, and the industry and landowners are alleging that this violated due process and individual property rights, according to Gilliland. The landowners include Mary Vermillion, who owns less than an acre and its mineral rights, and two major ranch owners, JAY Land Ltd. Co. and Yates Ranch Property, collectively owners of the 125,000-acre Ojo Feliz Ranch.

IPANM members hold valid oil and gas leases within Mora County, including leases covering state public trust lands that were issued by the New Mexico Commissioner of Public Lands, the lawsuit said. It called New Mexico's oil and gas industry -- concentrated in the northwest and southeast areas of the state -- a “linchpin" of the state's economy.

According to the lawsuit, the county lacks authority over oil and gas activities, and the state, under the 1978 New Mexico Oil and Gas Act, has the sole authority to regulate drilling.

"In enacting the ordinance the county acted in excess of any statutory authority conferred under New Mexico law," the lawsuit stated, adding that the county further violated state statutes by enacting an ordinance that is inconsistent with New Mexico's laws.

Named the "Mora County Community Water Rights and Local Self-Government Ordinance," the measure states that "it shall be unlawful for any corporation to engage in the extraction of oil, natural gas or other hydrocarbons within Mora County."

The debate on whether to allow drilling in Mora county takes place against the backdrop that Northeast New Mexico simply has not been much of a contributor to overall statewide production. Not surprisingly, there has been no oil & gas production activity in Mora County so far this year, given the inability to drill there. The most immediate activity in the six counties that surround Mora County is in Colfax county just to the north, but nearly 100% of that production is coal bed methane (CBM). Given that CBM is dry gas, there may not be a rush to increase the development of that resource at the present time.

Only Rio Arriba County, to the northwest of Mora County, has any sizable production, but the majority of that is in the San Juan Basin, which is located more in the northwestern portion of Rio Arriba, meaning that county is probably not representative of any potential future oil and gas activity in Mora County.

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