Panel gives green light to drilling ordinance

County's oil and gas regulations called a 'progressive approach'

Phaedra Haywood | The New Mexican

12/9/2008 - 12/10/08

Santa Fe County now has an ordinance aimed specifically at regulating the activities of the oil and gas industry. After more than a year of planning and countless public hearings, the County Commission voted unanimously Tuesday to approve an ordinance that appears to have soothed county residents anxious about energy-development impacts and excited the ire of the regulation-phobic oil and gas industry.

Santa Fe County began writing new oil and gas regulations in 2007 after a company called Tecton Energy announced plans to explore for oil in the Galisteo Basin area of Santa Fe County.

Since then, the rules have gone through dozens of revisions and had several authors, including county attorney Steve Ross, who set out to write the rules himself in three months.

The draft approved Tuesday is a massive document that takes a multipronged approach to balancing the rights of oil and gas developers with environmental concerns and capital infrastructure needs. It requires potential oil and gas operators to submit numerous studies on animal habitats and proximity to water sources and to be financially responsible for such needs as new roads and increased emergency medical services.

The oil and gas industry is the largest civilian employer in the in the northwestern and southeastern parts of New Mexico. The industry generates several billion dollars worth of tax revenue annually. But until recently, Santa Fe residents had not had to face its impacts firsthand. When the possibility of energy development here became an issue last fall, the residents of the Galisteo Basin recoiled in fear and concern. They demanded, sometimes rudely and loudly, that Santa Fe County pen an ordinance that would protect the view sheds, water sources and archaeological sites of the basin in no uncertain terms. They wanted something that would set precedent and be visionary.

In some aspects they've gotten it. The ordinance approved Tuesday — which was written primarily by Los Angeles-based attorney Robert Freilich and has cost the county more than $600,000 — has attracted attention from national experts on both sides of the issue.

"I do believe it is a very progressive set of oil and gas rules, certainly for a local government," said Gwen Lachelt, director of the national Oil and Gas Accountability Project. Lachelt said she'd like to see changes in the provisions related to noise; the county ordinance allows noise levels of up to 75 decibels at the same distances where Colorado limited has limited it to 50 decibels. But Lachelt said the way that the ordinance delineates areas of high, low and moderate sensitivity through the use of modeling is "a very progressive approach.

"That will truly minimize the impact of oil and gas development on the landscape and public health," Lachelt said.

Another aspect of the Santa Fe County ordinance that is unusual is its attempt to monitor the types of chemicals used in a practice called hydraulic fracturing, in which fluids are pumped into underground rock formations to help bring fossil fuels to the surface. This drew criticism Tuesday from Matthew Droz, an attorney sent to Santa Fe on behalf of industry giant Halliburton.

Droz said the requirement that operators must use fresh water for fracturing or choose off a county-approved list of nontoxic chemical aids is highly irregular in a world were drilling fluids are closely guarded recipes defined as proprietary by federal law.

"There is a significant possibility that most of the fluids we use won't be on that list," Droz said. He added that limiting the type of chemicals that could be used in the process would likely make the fracturing less effective and each well less productive, which could lead to more wells.

"We are concerned that our trade secrets wouldn't be adequately protected," Droz said, and suggested Santa Fe County look at less restrictive ways that other jurisdictions have proposed to guard against the potentially harmful effects of unknown chemical use.

Lachelt said the state of Colorado is considering a rule that would require limited disclosure of fracturing fluid within three days of an emergency "incident." But she said that to her knowledge, no other entity has passed rules regulating fracturing fluids.

"Fracking" was exempted from the standards of Safe Drinking Water Act during the administration of outgoing President George W. Bush. But some forecasters are predicting that President-elect Barack Obama may reverse that decision, making the county's regulation a moot point.

New Mexico Oil and Gas Association president Bob Gallagher blasted the ordinance for treading on the territory of the state Oil Conservation Division, the entity charged with regulating the industry, and said the complex requirements amount to a "drilling moratorium."

But Oil Conservation Division director Mark Fesmire said Monday that ordinance authors consulted him on sticky jurisdictional issues. "They wanted to make sure the things they were proposing were not contrary the law as we saw it and as we were enforcing it," he said. "I don't see any overt conflicts that we would have to address."

Kim Sorvig, a landscape architect and university professor who devoted hours of personal time to tweaking the ordinance through written comments and meetings with consultants, said the ordinance is good, but will need to be reviewed annually to make sure it doesn't become obsolete.

Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com.