EARTHWORKS

NM Oil & Gas Enforcement - Inspections

In 2010, more than 53,000 wells produced oil and gas in New Mexico. That year, there were just 12 New Mexico Oil Conservation Division (OCD) inspectors to oversee these wells: that is more than 4,000 wells per inspector, which is the most unfavorable ratio of any state [1] that we analyzed.

To visit every producing well at least once per year, OCD inspectors would each have to inspect more than 15 wells per day. Needless to say, OCD did not.

In 2010, OCD conducted 20,780 inspections, which means that at least 60% of producing wells did not get inspected [2]. In 2011, OCD increased its number of inspections, but still failed to inspect approximately 54% of producing wells.

A lack of inspection capacity has been a problem in New Mexico for years. In 2008 it was reported that OCD inspectors in the Aztec office made an effort to inspect each of the district’s 24,000 active wells once every five years. That year, the entire state of New Mexico employed 18 inspectors. In 2011, there were six fewer inspectors in the state [3], so it almost certain that wells inspected by the Aztec office of OCD are still only inspected once every five years, at most.

New Mexico’s inspection capacity lags behind other states

Compared to other oil and gas states [1], New Mexico’s inspection capacity is low. As seen in the map, in 2010 Pennsylvania had 65 inspectors to monitor 90,000 active wells and New York state had 16 inspectors to monitor approximately 10,000 active wells. Meanwhile, New Mexico OCD had 12 inspectors to monitor more than 50,000 wells in a state that is larger than New York and Pennsylvania combined.

OCD inspectors have a higher inspection burden than their counterparts in other states. In 2010, New Mexico inspectors carried out, on average, 1,732 inspections each. In 2011, OCD increased its number of oil and gas inspections by more than 5,000, but retained the same number of inspectors. So each inspector carried out an average of 2,129 inspections [4], and possibly as many as 2,450, in 2011.

Inspectors in other states conduct far fewer inspections [5]. In 2011, Texas and Colorado inspectors each performed approximately 1,184 and 816 inspections, respectively, and Ohio and Pennsylvania inspectors each carried out fewer than 400 inspections per year. It seems reasonable to assume that an inspector who conducts 400 or 1,000 inspections per year can do so in a much more thorough manner than an inspector who conducts more than 2,000 inspections per year.

OCD has recognized its lack of inspection capacity. In the Energy, Minerals and Natural Resources Annual Report for 2011, one of the OCD’s goals was to “increase staffing in the district offices to enhance application processing and well inspections.”

New Mexico must hire more inspectors

According to other state oil and gas agencies [6], all new wells should be inspected at least three times (e.g., at least twice during the drilling/completion process, and once after drilling is completed), and each active wells should be inspected at least once a year. This means that OCD should have performed at least 55,000 inspections in 2011 [7]. They conducted just 25,543 [8].

Clearly, there is a critical need to increase the number of inspectors in the state – both to decrease the burden on existing inspectors, and to increase OCD’s capacity to inspect more wells on an annual basis. If staffing levels increase, all new hires should be put toward inspections, not to processing permit applications, until OCD can provide adequate oversight for all of its existing wells.

For more information:

Endnotes

1 Table: State-by-state comparison of inspection staff and activity (2010). Table updated July 31, 2012. View table footnotes here.

2 In 2010, there were 53,063 wells that produced oil or gas and OCD inspectors conducted 20,780 inspections. It is likely that some wells were inspected more than once (e.g., if a violation was found a well might receive a follow-up inspection, or if a new well was drilled an inspector might visit multiple times during and after drilling). But assuming that each inspection was done for a different well, OCD inspectors did not visit 32,283 wells, or 61% of wells that produced oil or gas in 2010.

In 2011, according to information provided to Earthworks by OCD, the agency conducted 25,543 inspections in 2011. The Petroleum Recovery Research Center. GO-TECH web site shows 53,309 producing wells that year, which means that 53,309 – 24,543 = 28,766 producing wells (54%) were not inspected. (Source: Information request to Jim Winchester, New Mexico Environment Department & Energy, Minerals & Natural Resources Department Communications officer. Data received March 5, 2012.) Data published by New Mexico Energy, Minerals and Natural Resources Departmental Annual Report for 2011 (p. 43) suggests that 29,394 inspections occurred. We have assumed that the numbers we received from OCD through our information request are correct.

3 In 2011 there were 12 OCD inspectors in New Mexico. (Source: Personal communication between Lisa Sumi, Earthworks and New Mexico Oil Conservation Division Enforcement and Compliance Manager, Daniel Sanchez, OCD attorney, Sonny Swazo, and New Mexico Environment Department & Energy, Minerals & Natural Resources Department Communications officer, Jim Winchester. March 5, 2012.)

4 According to information provided to Earthworks by OCD, the 12 inspectors performed 25,543 inspections in 2011. So each inspector carried out an average of 25,543/12 = 2,129 inspections. (Source:Information request to Jim Winchester, New Mexico Environment Department & Energy, Minerals & Natural Resources Department Communications officer. Data received March 5, 2012.) According to the New Mexico Energy, Minerals and Natural Resources Departmental Annual Report for 2011 (p. 43) there were 29,394 inspections carried out by OCD in 2011. If these numbers are used, then inspectors each conducted 29,394/12 = 2,450 inspections.

5 Table: State-by-state comparison of inspection staff and activity (2011). Table updated July 31, 2012. View table footnotes here.

6 Pennsylvania: Pennsylvania Code. Title 25 §78.901-906. Inspection Policy Regarding Oil and Gas Wells. North Dakota: Western Organization of Resource Councils. 2005. Law and Order in the Gas Fields. p. 7. New York: Division of Mineral Resources. 2009 Oil, Gas and Mineral Resources Annual Report. p. 20.

7 The New Mexico Energy, Minerals and Natural Resources Departmental Annual Report for 2011 shows that 1,190 oil and gas wells were drilled and completed in 2010 (p. 41). No data were found for 2011. But the annual report also shows that rig counts were higher in 2011 than 2010 (p. 42). Assuming that 1,190 wells were drilled in 2011, then at least 3,570 inspections should have occurred at these well sites. In 2011 there were 53,209 producing wells, each of which should have been inspected at least once. So, at approximate 52,000 of these were not new wells. 3,570 new well inspections + 52,000 active well inspections = approximately 55,000 inspections.

8 Data from information request made to Jim Winchester, New Mexico Environment Department & Energy, Minerals & Natural Resources Department Communications officer. Data received March 5, 2012.

Tagged with: regulations, new mexico, inspections, fracking, enforcement, drilling

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