Energy industry-backed changes to New Mexico’s rules for handling natural gas and oil drilling and production waste, the so-called pit rule, have been put on hold by a state judge until a hearing scheduled in June. Until that hearing is held, attempts by the state’s two major industry groups, the Independent Petroleum Association (IPA) and Oil and Gas Association (OGA), may not be able to seek administrative changes.

Industry groups asked the First Judicial District Court of New Mexico last Friday to move up the hearing on a expedited basis so the rule changes could be considered in April by the New Mexico Oil Conservation Commission (OCC). IPA Executive Director Karin Foster told NGI Monday that she expected to hear later this week whether the petition for an expedited hearing is granted by Judge Raymond Ortiz.

“The judge’s finding is only preliminary based on the casework that was filed and is not based on any oral argument,” Foster said. “I am pretty confident that once he reads the case law, specifically a New Mexico Supreme Court decision that came down recently, he will find anybody can petition any agency in the state under the New Mexico EPA [Environmental Protection Agency] for a rulemaking anytime. And we specifically have that rule under the [state] oil and gas act that we can file for a petition at anytime.”

Court challenges are pending by both the industry groups and environmentalists since the state’s OCC established the rules under then-Gov. Bill Richardson’s administration. Earlier this year the OCC was looking at making some changes (see Daily GPI, Jan. 12) but the hearing was postponed.

In a preliminary ruling made public earlier in February, Ortiz issued a writ calling for the two industry associations to stop their attempts to get the OCC to make changes in the rules, noting that as long as there are legal appeals pending no changes in the regulations can be made. As a further complication, under New Mexico law the judge’s ruling cannot be appealed until after he holds a hearing on the matter, which now is scheduled for June 12.

The case is a legal entanglement that could go on for years before the issue reached the New Mexico Supreme Court, said Foster, noting the environmentalists appear committed to dragging out the process. After first mutually agreeing with the IPA and OGA to put off the OCC hearing until April 16, attorneys for the New Mexico Environmental Law Center pulled an end run and went to a second state district judge to get the latest preliminary ruling.

Last fall the industry groups took two steps aimed at revising a regulation established in 2008 to handle waste produced at drilling and production sites. The associations allege that the pit rule drives up costs and chases drilling rigs to other states (see Daily GPI, Oct. 7, 2011).

Environmentalists countered that producers were trying to gut groundwater contamination rules. Association officials contend that by modifying the rules when and if it can be done safely, more wells will be drilled, which means more positive economic stimulus. The Environmental Law Center attorneys further argued that the administrative route ends up in what he thinks is an “endless cycle of rulemakings, appeals and then more rulemaking without ever having any real resolution.”

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