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Potential Sinkhole Near Permian Artery Draws Attention of New Mexico Lawmakers

A nearly decade-old abandoned brine well in a heavily trafficked area that provides people and equipment with access to the Permian Basin in New Mexico is grabbing the state legislature’s attention after years of failed efforts to fund repairs.

State lawmakers earlier this year passed House Bill 319 and Senate Bill 226 to provide $30 million to fix the abandoned, brine-filled cavity in Eddy County, NM, before a sinkhole can develop near Carlsbad, NM, which is considered a critical area for moving supplies to the booming Permian in the southeastern part of the state.

State regulators and the New Mexico Oil and Gas Association (NMOGA) have known about the issues for years, but funds to close the well had been diverted. The well was owned by the now defunct oilfield service provider I&W Trucking Inc. NMOGA officials urged the legislature to pass the two bills earlier this year.

Remediation is expected to be a multi-year process, according to NMOGA. Engineers estimate that a sinkhole could occur in about three years without remediation.

The New Mexico Department of Energy, Minerals and Natural Resources’ Oil Conservation Division (OCD) identified the brine well issue in 2008 after two other brine wells collapsed in rural parts of the state.

Meanwhile, I&W filed for bankruptcy and avoided responsibility for remediating the well, and Carlsbad officials fenced the 3.3-acre site. OCD provided monitoring equipment and studies to estimate the potential sinkhole size. The brine well and related assets were purchased by the state and re-sold to generate money for the well reclamation, but the funds were insufficient to do the work.

NMOGA spokesperson Robert McEntyre told NGI’s Shale Daily that the well has become a poster child for the misuse of oil and gas reclamation funds. The well itself is shallow, running only "a couple of hundred feet below the surface" and a similar well would not be permitted today. McEntyre said. The brine well dates back to the 1970s and has a "pretty sizable" cavity.”

More significantly, he said it is in an area where there is a lot of industrial and commercial traffic. "The combination of factors has contributed to the urgency we see around the issue today," McEntyre said.

"We usually don't see so much oil and gas activity so close to so much commercial activity. What we have seen at the state level is that the funds that industry pays into the state to remediate abandoned wells has continued to be disrupted and money continues to be swept away as legislators have used it as a piggy bank for other purposes."

The brine well is near major arteries to transport people and equipment to the northern part of the Delaware sub-basin.

"It is just over the border from Texas and has been a really prolific the traffic arteries are incredibly important," McEntyre said. "This is a bustling area where we absolutely need to maintain a clear path."

NMOGA has stressed the need for a solution and noted there is money to fix it.

"This year, we had $300 million of added funds available in the upcoming fiscal year from increased oil and gas activity in the Permian," McEntyre said.

The industry association has warned of the potential of a "human and economic disaster" of major proportions if the abandoned well is left unresolved, McEntyre said. "We can get ahead of the problem if we use the funds as intended."

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