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Vol. 7 No. 6 |
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Members,
In this version of The Standard, we provide several updates including official comments PBPA has submitted to ERCOT, a recap of New Mexico's recent Legislative FInance Committee meeting, and more. Additionally, PBPA has received notice from Western Environmental Law Center (WELC) of their intention to file an application for rulemaking with the New Mexico Oil Conservation Department (NMOCD) on June 24th, 2024.
WELC is seeking amendment to rules 19.15.2 (general provisions for oil and gas operations), 19.15.5 (enforcement and compliance), 19.15.8 (financial assurance), 19.15.9 (well operator provisions), and 19.15.25 (well plugging and abandonment). WELC and others have sought dramatic legislative changes in these areas during the last several sessions. It appears they are attempting another approach with this application for rulemaking.
PBPA is working with NMOGA and IPANM and we have agreed to jointly meet with WELC this week in an attempt to better understand WELC’s concerns and see if we can find any common ground. The associations will have a broader discussion together at next week’s Hobbs Energyplex Conference where I will serve on a panel with the other association heads.
Below, you will also find information on our Annual Meeting, the 2024 Membership Survey, and other important information. As always, we also provide details on upcoming PBPA events and other relevant community activities:
Important Updates
Community Events
Regards, Ben Shepperd PBPA President |
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2024 Annual Meeting |
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Join us for the 62nd Annual Meeting featuring an evening reception on the 11th followed by a full day of informational speakers, panels, and networking on the 12th. Event Schedule:
A detailed agenda will be made available at a later date. |
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New Mexico Updates |
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New Mexico LFC Meeting Recap
During the week starting June 11, 2024, the New Mexico Legislative Finance Committee (LFC), which is a interim joint committee that includes members of both the New Mexico House of Representatives and the New Mexico Senate, held three days worth of meetings using the Pecos River Village Conference Center in Carlsbad, New Mexico as their base of operations. While panels hosted during the hearing covered topics such as education, health care, transportation, economic development, and certain oil and gas operations, which we will discuss further herein, LFC members also had opportunities for hands on education. PBPA member Infinity Water Solutions took LFC members on a tour of a water treatment asset and PBPA member Mewbourne Oil Company took committee members on a field tour of oil and gas facilities. We greatly appreciate both Infinity and Mewbourne’s commitment to helping educate the members of the LFC on important aspects of our industry’s operations in Southeast New Mexico.
As for the hearings themselves, on the first day of the LFC meeting, representatives of Infinity Water Solutions, including CEO Mike Dyson, CCO Ashley Kegley-Whitehead, and Chief Scientific Officer Dr. Zacariah Hildenbrand, participated in a presentation, and then fielded questions, on produced water reuse opportunities and challenges in the Delaware Basin. They did a fantastic job of discussing the current state of intra-industry produced water reuse as well as the hurdles to produced water reuse outside of the industry. Members of the LFC now have a well painted picture of why it is important for the industry, for the economy, and for the environment in New Mexico to have a proper regulatory framework in existence to facilitate the beneficial use of produced water outside the oil and gas industry.
The second panel discussion on the first day of the meeting was a bit more adversarial, as could be evidenced by the title for KRQE’s (Albuquerque’s CBS affiliate) coverage of the panel discussion, New Mexico lawmakers frustrated as they debate oil and gas setbacks. During this panel, understandably titled “Oil and Gas Setbacks”, Gunnar Schade, Associate Professor of Atmospheric Sciences at Texas A&M University, and Tami McMullin, Senior Toxicologist for the Center for Toxicology and Environmental Health, presented data and discussed the science that could be referenced or relied upon in any scientifically based setback for oil and gas operations in the state.
During the panel discussion, Professor Schade attempted to argue that his research, which has yet to be pier reviewed or published and is based on monitoring directly at oil and gas locations where, admittedly, atmospheric levels of hydrocarbons are going to be the highest, shows there are high levels of volatile organic compounds (VOCs) in the atmosphere as a result of oil and gas operations. He attempted to link these high levels of VOCs to health concerns, without any studies or statistics to support these links, except that he did mention that people he had talked to had nose bleeds. He also discussed the creation of ozone and concerns regarding the health impacts of high levels of ozone. However, he admitted that ozone does not occur in the same area where the VOCs that are the building blocks for ozone are usually produced because ozone is the result of a chemical process that occurs in the atmosphere as those VOCs migrate and interact with sunlight. With this admission, it was unclear why ozone would be important in a conversation about setbacks and, instead, revealed at least a bit of bias as to the purpose of his presentation, being anti-oil and gas production in general versus providing any information as to the impact of setbacks on ozone creation.
Ms. McMullin discussed her experience in both the private sector and as the state toxicologist for Colorado, during which time she led teams to evaluate health risks related to chemical exposures from a variety of generating sources, including oil and gas exploration and development. In a nut shell, Ms. McMullin presented that the scientific data and analysis available was too inconsistent or completely unavailable to justify any specific level of setback. She recommended that New Mexico do its own data analysis of information gathered from locations in the state and diligently review that information before making any such determination regarding setbacks. Further, she recommended that if New Mexico were to consider a statewide setback, it should also be after an analysis of the full suite of regulations currently in place that may be addressing, or intended to address, the same concerns being expressed regarding the need for setbacks. Further, in Ms. McMullin’s experience, she provided that the science did not justify any statewide setback requirement, and instead other factors (it was not said, but if you aren’t basing such a decision on facts and science, you’re basing it on politics) would likely be a determining factor in such a final determination. During questioning from members of the LFC, Ms. McMullin clarified that the team on which she served as state toxicologist for Colorado did not recommend a statewide setback be put in place in that state, yet the legislature chose to put one in place anyway.
Discussion on the topic of setbacks is planned to continue at the next meeting of the LFC in September. We will continue to engage with members of the committee as well as other stakeholders on this and the variety of other issues discussed during the interim in New Mexico. If you have any questions on the LFC hearing or any other legislative issues in New Mexico, please let us know.
Please reach out to Stephen Robertson (stephen@pbpa.info) for more information. |
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NMED Air Quality Bureau Comments
The New Mexico Environment Department (NMED) has petitioned for the ability to increase various fees including the following:
PBPA has several concerns with these requested fee increases and after working with our members, we compiled a comment letter and submitted that letter to NMED through the public comment portal on 6/19/2024. We thank all of you that contributed to the letter and will continue to advocate for the positions laid out in the letter in our conversations with the agency. Please let us know if you would like a copy of the letter, or have additional thoughts or feedback. We will apprise membership of any response to our letter or action taken by NMED in the coming weeks.
Please reach out to Stephen Robertson (stephen@pbpa.info) for more information. |
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Ruidoso, NM Wildfire Resources
Residents of the southern New Mexico village of Ruidoso were ordered to flee their homes Monday, June 17th due to dangerous wildfires. The South Fork Fire is reported to have started Monday morning and was able to spread quickly because of the combination of heat, strong winds and the trees and vegetation in the area.
While central New Mexico and the town of Ruidoso are located just outside of the Permian Basin, we know that many PBPA members are close by or frequent the area. If you or anyone you know is impacted by the wildfires, please head the instruction of local authorities. Updates are posted regularly to the Ruidoso, NM website along with resources available in the area.
Other Resources & Information: |
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Texas Updates |
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Texas Legislative Update
PBPA had the opportunity to cover three very important Texas Legislative meetings in Austin last week. These included important conversations on electric transmission and generation projects by the House Committee on State Affairs and the Senate Committee on Business and Commerce, as well as a discussion on federal initiatives in the Senate Committee on Natural Resources.
As many of you know, PBPA has been aggressively working on the electric transmission issues that exist in the Permian Basin and this includes the implementation of the Permian Basin Reliability Plan that ERCOT has been developing since December pursuant to the passage of House Bill 5066 passed by the Legislature in 2023.
This plan has included many meetings with PUC Commissioners, ERCOT Staff and members of House State Affairs and Senate Business and Commerce. During testimony to both Committees, leadership of both PUC and ERCOT discussed the growth of load and the need for additional generation and transmission across the state of Texas that is needed to meet existing and future demand.
Additionally, with regard to the Permian Basin, it is clear that the Legislative leaders of both Committees are concerned with the growth of the non-oil and gas load, particularly the growth of crypto mining load demand, that has been forecasted in the region. While the ERCOT report forecasts oil and gas load to be 11,964 mw by 2030 and 14,705 mw by 2038, there is additional regional load that is not oil and gas expected to be double the previously forecasted load.
We understand the concern that these non-oil and gas loads could present to the region that already has existing infrastructure deficits, but are focused on ensuring that the oil and gas industry in the Permian Basin and this reliability project continue to move forward with the robust plan that has been presented. Additionally, we are advocating for a single plan that takes into consideration the factors in both the 2030 case and 2038 case.
To that effect, PBPA has led a coalition of trade groups to state our support of this single plan and submitted that to the Chairman of the PUC. We also provided copies to legislative leaders, including those of both the House State Affairs Committee and the Senate Business and Commerce Committee as well as the Office of the Governor. This remains a top priority and the work with these leaders is vital to developing a plan that addresses these transmission infrastructure needs is important for the long-term health of the Permian Basin.
Last week, the Texas Senate Natural Resources Committee also met to discuss an important charge to PBPA members. Stated as “Overcoming Federal Incompetence” the Committee invited the Office of the Attorney General, the General Land Office, the Texas Commission on Environmental Regulation and RRC Commissioner Wayne Christion, among others, to share the challenges that they are seeing in their interactions with the Federal Government.
As you all know, PBPA has had a long history of challenging these federal issues on the front lines in the legislative and regulatory arenas. Issues range from technical challenges with implementing the Methane Rule, to recent decisions by the SEC to challenge oil and gas investment, the Biden Administration’s freeze on permitting LNG exports, and something PBPA has worked on for years including issues at U.S. Fish and Wildlife related to the designation of species as threatened or endangered.
Senate Natural Resources understood the severity of these decisions and PBPA will continue to meet with the members of this Committee to educate and advocate our positions on the bevy of federal issues that continue to challenge oil and gas development. We appreciate your support in ensuring that the Permian Basin remains the best place to create jobs and raise a family. |
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Comments Submitted to ERCOT |
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One of PBPA’s top priorities is increasing reliable electricity deliverability in our region. Grid connection in the Permian Basin is not happening fast enough to meet current demand, emission reduction targets and load forecasts for oil and gas operations. We have been arguing this for years. While over 12 GW of oil and gas operations are estimated to be on the grid by 2032, only 4.2 GW of oil and gas industrial electricity demand, on average, is being served by the grid today. The current additions in the Permian Basin of 300 – 350 MW additional load annually will not satisfy the estimated demand growth.
The Texas Legislature enacted HB 5066 during the 2023 Legislative Session “to spur a bolder, more proactive approach that better syncs the transmission planning and construction process with the dynamic needs of Texas customers by requiring ERCOT, the Public Utility Commission of Texas, and utilities to plan the grid more proactively based on the information utilities have about load growth in their area.”
As a result of HB 5066, ERCOT has been developing the Permian Basin Reliability Plan (the “Plan”) meant to address these transmission shortfalls. PBPA has been actively participating in the Plan development meetings and meeting with PUC Commissioners since HB 5066 was passed. ERCOT is expected to finalize the Plan report in July 2024.
We are encouraged by what we have seen in the drafts and submitted the below linked letter this week to urge passage of the comprehensive Plan. |
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RRC Notice to Operators: Tropical Weather Outlook |
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On Tuesday, June 16th, the Railroad Commission of Texas released a notice regarding "Tropical Weather Outlook". While this might not directly impact operations in the Permian Basin, we know many of you have operations in other parts of Texas, and wanted to make sure that you are aware. The notice is copied below.
The National Weather Service is projecting a tropical weather system to affect several parts of Texas with heavy rainfall over the next several days. The potential for heavy rainfall or flooding could impact coastal and South Texas counties, and counties in the Eagle Ford into Central Texas.
The Railroad Commission of Texas (RRC) advises all operators under the RRC’s jurisdiction in areas of potential impact to take the following actions:
The RRC maintains a 24-hour, toll-free emergency line, 844-773-0305, to report emergencies, including leaks or spills and damage to gas pipelines.
In addition, operators can monitor Texas highway conditions during potential flooding on the Drive Texas website at www.DriveTexas.org.
To view the full notice, visit the RRC website at https://www.rrc.texas.gov/announcements/061824-nto-tropical-weather-outlook/. |
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Federal Updates |
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Lizard Listed Under the ESA
Effective June 20, 2024, the dunes sagebrush lizard (DSL) will officially be a listed species under the Endangered Species Act (ESA). For anyone with acreage that could be impacted by this listing, to enroll that acreage in any of the available Candidate Conservation Agreements with Assurances (CCAA) you must initiate that enrollment before tomorrow, June 20, 2024. As a reminder, a designation of critical habitat was found to be prudent in the U.S. Fish and Wildlife Service (the “Service”) listing determination for the DSL, but not determinable at this time, giving the agency up to one year from the time of listing to propose critical habitat. There are three conservation agreements which can be utilized for the DSL, two of these are available for acreage in Texas and one in New Mexico:
While PBPA continued to stay engaged with other stakeholders on this issue prior to the announcement by the Service, on hearing about the decision to list last month, PBPA ramped up our communication with state leaders, members of Congress, the media, and other trade associations on this action and on possible next steps. Legal actions challenging the listing decision are being considered. If you are interested in learning more about the option of a legal challenge, or if you are interesting in supporting a legal challenge, please let us know. |
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Membership News |
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Q2 New Members |
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The PBPA strives to serve its members effectively and provide relevant member benefits. This can be done increasingly better by receiving member feedback.
Please complete this short survey to help us provide the most value for your membership.
The survey will close on June 28th at 5 PM. It can also be accessed from the Member Center at any time. If you have any questions, please contact our staff. |
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The Whitney Smith Company is conducting the seventh annual Permian Basin Oil & Gas Compensation Survey, sponsored by the PBPA, to give locally operating businesses data you can use to analyze your pay levels against current market practices.
Benefits of the Survey:
How to Participate Questions? Contact Cheryl Lopez with The Whitney Smith Company. |
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Create Your Member Center Login Today!
The PBPA's new online Member Center includes new resources for Gusher level members and higher! Create your login today using the email we have on file to access resources like:
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Looking for a Summer Intern? |
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The new online Member Center allows PBPA members at the Gusher level or higher to post FREE job openings at their company including internships!
Share your internship opening(s) today and PBPA will help network the position with local colleges and universities to find students eager for experience.
Login to the Member Center or create your account to begin sharing work opportunities! |
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PBPA Events |
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RECAP: Clay Shoot + Pit King Challenege |
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This month's Clay Shoot + Pit King Challenge went off with a bang! 💥
Thank you to everyone who participated in the shoot, sponsored, cooked, and volunteered to make the event a success.
Special Recognition:
Special thanks to Flogistix for their sponsorship of the photography. Check out more of the official event photos on our social media or website! |
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Committee Meetings |
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For more information on these or any of our other committees, please contact Stephen Robertson at stephen@pbpa.info or (432) 684-6345. |
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Community Events |
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MC PPDC provides quality training programs designed to keep oil and gas industry professionals current in their areas of expertise by offering the latest industry updates, as well as providing timely and pertinent educational opportunities. Click the link below for upcoming classes being offered by the MC PPDC in the coming months.
Customized Training Available! For more information contact Midland College PPDC at (432) 683-2832 or cepetroleumtraining@midland.edu |
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Texas Tech University is announcing a brand-new opportunity to learn oil-and-gas law from the comfort of your office or home - and at your own pace! You can now take the very same Oil & Gas Law I course I teach every Fall, Spring, and Summer to students enrolled at Texas Tech University School of Law. The course includes:
Click on this link to enroll – Oil & Gas Law (ttu.edu) |
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Young Driver Safety Clinic
Wednesday, June 26th 8:30 AM - 1:30 PM Carlsbad, NM |
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This half-day clinic is a driving course that gives new/young drivers the knowledge and experience to succeed in emergency situations. |
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June 24 - 25, 2024 Hobbs, NM
Lea County is known as the EnergyPlex, home to traditional energies including oil and gas and nuclear as well as renewable energy such as wind and solar. The New Mexico EnergyPlex Conference, hosted by the Economic Development Corporation of Lea County, is free to attend and open to the public. Register for an in-depth look at different energy industries within Lea County and the opportunity to network with industry professionals.
PBPA's President, Ben Shepperd will be participating on a panel on June 25th titled 'The Power of Association' with Missi Currier (NMOGA), and Jim Winchester (IPANM). |
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Permian Basin Petroleum Association | 601 North Marienfeld St., Suite 200, Midland, TX 79701 |