A rule change passed in November amid protests from the public, tribal representatives and other leaders was undone Tuesday morning in a hearing the energy company's attorney labeled "political shenanigans."
Two new members of the Oil Conservation Commission suspended a decision made by their predecessors under former Gov. Susana Martinez's leadership. That ruling allowed Hilcorp Energy to double the density of oil and gas wells in 1.3 million acres of the San Juan Basin in northwestern New Mexico and was issued despite objections from recently elected and re-elected officials, without notice to tribes or federal land managers, and without formal participation by the San Juan Citizens Alliance or the State Land Office.
Already, 40,000 oil and gas wells have been drilled in the basin. Hilcorp's rule change allowed eight wells, instead of four, every 320 acres.
"I'm going to say exactly what I said back in November at this hearing—that there is an opportunity to do this process right," Erik Schlenker-Goodrich, a Western Environmental Law Center attorney representing the citizens alliance, told commissioners at the Jan. 8 hearing. "We need to make sure we work together as New Mexicans to bring all stakeholders to the table to ensure that when we make these decisions, these decisions are in fact in the public's interest, not the corporate oil and gas interests."
The San Juan Citizens Alliance and State Land Office had both filed motions for re-hearing, and the previous division director ignored their request on the basis that they had no standing in the case. Gabriel Wade, the acting director of the Oil Conservation Division under Gov. Michelle Lujan Grisham and who was elected commission chair as the meeting commenced, shortcut that debate by moving that the commission "exercise its own powers" in deciding to rehear the case. He cited concerns over wasted natural gas, human health, the environment and transparency, and listed the letters from state senators, members of Congress, and representatives of the Navajo Nation, as well as a missing input from the division's experts. Allison Marks, newly assigned to the commission by State Land Commissioner Stephanie Garcia Richard, seconded the move.
Hilcorp representative Michael Feldewert was ready with photocopies of the Oil and Gas Act and an argument challenging Wade's appointment to the commission, pointing out that statute requires the commission be comprised of experts in oil and gas production.
"Mr. Wade, I know you're a very good attorney, but I don't believe you're an engineer," he said, and moved to have Wade removed, a motion Wade denied.
Marks intervened before Wade's reply: "This statute was actually brought to my attention over the weekend, and the first part is pretty interesting as well."
The first clause states that the commission director must be a New Mexico resident.
"I don't know if we should get into this conversation or not, discussing the former director and whether she was a resident of this state," she said, suggesting that failure to meet that criteria could invalidate the former director's decisions.
La Plata County, Colorado, staff confirm to SFR that former Oil Conservation Division Director Heather Riley is registered to vote there. Riley, a former WPX regulatory specialist, had also previously been compelled to address questions over conflict of interest for this case. Those concerns reappeared in a December press release from then-State Land Commissioner Aubrey Dunn calling for further investigation into Hilcorp case.
WPX Energy sold its assets to Logos Operating, a party to the Hilcorp case, in 2018. Former Energy, Minerals and Natural Resources Department Secretary Ken McQueen, Riley's boss, listed salary and "deferred comp" from WPX Energy in 2017 and 2018 disclosures, available in the secretary of state's online database. No financial disclosure statements, which would include a residence address, appear in those records for Riley.
Feldewert said the procedural moves showed politics overriding expertise.
"It appears to me—and I've been involved in this for a long time—this type of political shenanigans that are going on here is a low point," he said, adding the corporation was "extremely disappointed" with the results.
Marks also pursued the State Land Office's motion for re-hearing on behalf of 65,000 acres of state trust lands affected by the decision, so the re-hearing could be granted both on the grounds of the commission's authority and the land office's interest. She also stipulated that the applicant, Hilcorp, send notice of the re-hearing by certified mail to the Jicarilla Apache Nation, the Bureau of Indian Affairs, the US Bureau of Land Management and the Forest Service. Per request from Schlenker-Goodrich, notice will also be sent to the Navajo Nation and to affected Navajo chapter houses.
"Double density done without any consultation to tribes was kind of concerning for us," says Mario Atencio, tri-chapter liaison for Torreon, Ojo Encino and Counselor chapter houses. In addition to shielding cultural resources on one of their most sacred landscapes, tribal members were uncertain how more drilling would affect water resources and hunting. "This re-hearing seems to open a doorway to better discussion."
The re-hearing is scheduled for May 9.