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OCD Program Summary Overview

Attachment I

Oil Conservation Division
Program Summary Overview

I. Environmental Regulatory Program

Underground Injection Control Program

A. Description:

Federally-mandated EPA Program for regulations of wells which inject fluids to the subsurface. The program classifies wells by function and by location with respect to protectable drinking water. Parts of the New Mexico program predate the federal program 15-20 years. OCD is the lead state agency for administration of this program, with ED administering some well classifications. Federal delegation of the program is to OCD (Class II) and Water Quality Control Commission (WQCC) (Class I, III, IV and V). Some of the WQCC regulated wells are also under OCD jurisdiction pursuant to a signed delegation of responsibility (discussed below). Classification of wells:

Class I:	Industrial and municipal disposal wells: OCD has 4 permitted under WQCC Regulations.
Class II:	Oil and natural gas injection wells: Used for salt water disposal, reservoir pressure 
	maintenance, secondary recovery and natural gas storage. OCD regulates 
	approximately 5300 of these wells.
Class III:	Mineral extraction wells: OCD administers WQCC Regulations for 24 facilities injecting
	water to produce salt brine used in oil and gas operations.
Class IV:	Shallow hazardous waste injection wells: Not authorized in New Mexico and closed when 
	discovered by ED or OCD.
Class V:	Other categories of wells: Examples are commercial septic tank systems, dry wells, geothermal
	wells. OCD administers WQCC rules for these wells at geothermal sites, and the oilfield service
	industry. Because of the potential for serious ground water contamination by oilfield chemicals
	and wastes, OCD is requiring service companies to close these wells when located by OCD staff.

The state requires permits for these wells, and specifies design and performance standards for construction and operation.

B. Statutory Authority:

Federal - Safe Drinking Water Act and regulations codified at 40 CFR, Parts 144 to 148. State - Oil and Gas Act, 70-2-12.B. and Rules 701-708; Water Quality Act and Water Quality Control Commission Regulations.

Production Operations

A. Description:

Environmental considerations begin with the review of a permit application to drill an oil or gas well. Prior to approving well construction, cement and casing appropriate to the well location will be specified; operation will be pursuant to division rules for protection of health safety and environment; and, upon completion of operations, plugging to prevent movement of fluids to zones of fresh ground water.

B. Statutory Authority:

State Oil and Gas Act, 70-2-12.B

Surface Waste Management

A. Description:

Underground injection to below fresh water is the preferred method for disposal of oil and gas waste fluids. However, surface disposal is necessary for solid and in locations where injection is not practical due to subsurface geology. OCD requires both commercial and company centralized surface disposal facilities to receive OCD approval. Commercial facilities are requires to meet stringent siting, design, and operation standards since fluids (and solids) will come from various locations and likely will differ in composition. Public notice is required both by legal advertisement in a newspaper and certified-mail notification of property owners within 1/2 mile of the facility. Centralized facilities are located at or close to preexisting production sites and construction and operation plans are required to be submitted for division review and approval.

B. Statutory Authority:

State Oil and Gas Act 70-2-12.B. and OCD Rule 711 (commercial) and Rule 8 (centralized).

Refineries, Natural Gas Processing Plants, Gas Compressor Stations, and Oilfield Service Companies

A. Description:

These facilities are regulated by OCD for prevention of ground water contamination through control of fluids that are or may be potentially discharged as a result of facility operation. OCD requires safe handling and storage of chemicals used in processing, and proper disposal of waste solid generated at the location. OCD currently regulates five operating refineries, 36 natural gas processing plants, 42 compressor stations, 16 service facilities, and three geothermal facilities. A number of refineries and gas plants (plus several inactive operations) are performing ground water remediation due to contamination from past practices prior to implementation of current regulations.

B. Statutory Authority:

The facilities are regulated for fresh water protection under the State Water Quality Act. Authority to regulate these facilities has been delegated to OCD by the State Water Quality Control Commission. OCD administers Commission regulations at these types of facilities but is prohibited by the Water Quality Act from regulating exploration and production wastes. The latter wastes are regulated, as discussed above, under the Oil and Gas Act.

In addition to the Water Quality Act for ground water protection, OCD also imposes additional environmental requirements pursuant to our authority under Section 70-2-12.B.(22) of the Oil and Gas Act. In practice, the statutory division of authority (Oil and Gas Act vs. Water Quality Act) does not interfere with OCD's environmental efforts because both statues are administered by the same personnel who use the available regulatory tools for maximum environmental effectiveness.

II. Environmental Information and Education Programs

To date, OCD has not developed a specific public information or education program. However, OCD Environmental Bureau staff have developed written guidelines to assist industry and consultants in preparing various types of permit applications. In addition to guidelines, staff have presented papers and spoken before several industry groups. The audience for these talks has included oil and gas operators, petroleum engineers, consultants, and the oilfield service industry.




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