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More Legal Action on New Mexico County Drill Ban

An oil/gas western field operations unit of Royal Dutch Shell PLC recently filed a lawsuit in federal court in New Mexico challenging a drilling ban imposed last year by officials in Mora County. The action dovetails with a similar lawsuit filed in November by the Independent Petroleum Association of New Mexico (IPANM) and several landowners (see Shale Daily, Nov. 19, 2013).

SWEPI LP, formerly Shell Western E&P Inc, asserted in its lawsuit in U.S. District Court for the District of New Mexico in Albuquerque Jan. 10 that Mora County's anti-drilling ordinance, which includes hydraulic fracturing (fracking), violates state law and the U.S. Constitution.

IPANM Executive Director Karin Foster told NGI's Shale Daily the two lawsuits will likely be consolidated before one judge. For now, the industry association's legal action is in "limbo land," waiting for a judge to be assigned, said Foster, noting that the association's case is before a magistrate judge and SWEPI's filing is before a district court judge.

In a 2-1 vote last year, Mora County enacted a total ban on oil and gas drilling. It passed the "Mora County Community Water Rights and Local Self-Government Ordinance" in late April (see Shale Daily, May 13, 2013).

The measure declared that "it shall be unlawful for any corporation to engage in the extraction of oil, natural gas or other hydrocarbons within Mora County."

SWEPI reportedly leased some land in the county in 2010 with the intention of exploring for oil and natural gas. The company’s lawsuit contends that the Mora County ordinance violates the constitutional equal protection and commerce clauses by amounting to the "taking of property without compensation."

NGI's Shale Daily sought comments from a SWEPI attorney in Houston but got no immediate response. The county's attorney, Eric Jantz, who works in the New Mexico Environmental Law Center, told local news media he has not reviewed the latest lawsuit.

At the time of its action last year, Mora was believed to be the first county in the nation to place an outright ban on oil and gas operations, and the industry and landowners have pushed back, alleging that this violates due process and individual property rights.

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.

The debate about drilling in Mora County is based more on what could potentially come than on what the county has been. The New Mexico Oil Conservation Division website, which contains production data compiled since1994, shows that there has been no recorded oil and gas production in Mora County during the last 20 years.

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