SENATE BILL 547

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

William Soules

AN ACT

RELATING TO OIL AND GAS; AMENDING AND ENACTING SECTIONS OF THE OIL AND GAS ACT TO BAN HORIZONTAL HYDRAULIC FRACTURING; DECLARING AN EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Oil and Gas Act is enacted to read:

     "[NEW MATERIAL] HORIZONTAL HYDRAULIC FRACTURING BANNED.--A person shall not combine horizontal drilling and multistage hydraulic fracturing in the state for the purpose of extracting oil or natural gas."

     SECTION 2. Section 70-2-33 NMSA 1978 (being Laws 1935, Chapter 72, Section 24, as amended) is amended to read:

     "70-2-33. DEFINITIONS.--As used in the Oil and Gas Act:

          A. "horizontal drilling" means the method of drilling used to increase the exposure of a well to an oil or natural gas source rock formation that typically exists as a near-horizontal layer of bedrock. After drilling vertically to just above a targeted source rock, the direction of drilling is transitioned approximately ninety degrees to horizontal so that the resulting borehole enters the source rock and continues through it horizontally. Typically, the resulting horizontal, or lateral, section of the well is hydraulically fractured in multiple stages;

          B. "hydraulic fracturing" means the process of injecting fluid, usually a mixture of water, sand and chemicals, into an oil- or natural-gas-bearing rock formation adjacent to the borehole of an oil or natural gas well for the purpose of either creating new fractures or expanding existing fractures to stimulate the flow into the well of oil or natural gas that would otherwise remain in the rock formation;

          [A.] C. "person" means:

                (1) any individual, estate, trust, receiver, cooperative association, club, corporation, company, firm, partnership, joint venture, syndicate or other entity; or

                (2) the United States or any agency or instrumentality thereof or the state or any political subdivision thereof;

          [B.] D. "pool" means an underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both. Each zone of a general structure, which zone is completely separate from any other zone in the structure, is covered by the word "pool" as used in the Oil and Gas Act. "Pool" is synonymous with "common source of supply" and with "common reservoir";

          [C.] E. "field" means the general area that is underlaid or appears to be underlaid by at least one pool and also includes the underground reservoir or reservoirs containing the crude petroleum oil or natural gas or both. The words "field" and "pool" mean the same thing when only one underground reservoir is involved; however, "field", unlike "pool", may relate to two or more pools;

          [D.] F. "product" means any commodity or thing made or manufactured from crude petroleum oil or natural gas and all derivatives of crude petroleum oil or natural gas, including refined crude oil, crude tops, topped crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, treated crude oil, fuel oil, residuum, gas oil, naphtha, distillate, gasoline, kerosene, benzine, wash oil, waste oil, lubricating oil and blends or mixtures of crude petroleum oil or natural gas or any derivative thereof;

          [E.] G. "owner" means the person who has the right to drill into and to produce from any pool and to appropriate the production either for [himself] the person or for [himself] the person and another;

          [F.] H. "producer" means the owner of a well capable of producing oil or natural gas or both in paying quantities;

          [G.] I. "gas transportation facility" means a pipeline in operation serving gas wells for the transportation of natural gas or some other device or equipment in like operation whereby natural gas produced from gas wells connected therewith can be transported or used for consumption;

          [H.] J. "correlative rights" means the opportunity afforded, so far as it is practicable to do so, to the owner of each property in a pool to produce without waste [his] the owner's just and equitable share of the oil or gas or both in the pool, being an amount, so far as can be practicably determined and so far as can be practicably obtained without waste, substantially in the proportion that the quantity of recoverable oil or gas or both under the property bears to the total recoverable oil or gas or both in the pool and, for such purpose, to use [his] the owner's just and equitable share of the reservoir energy;

          [I.] K. "potash" means the naturally occurring bedded deposits of the salts of the element potassium;

          [J.] L. "casinghead gas" means any gas or vapor or both indigenous to an oil stratum and produced from such stratum with oil, including any residue gas remaining after the processing of casinghead gas to remove its liquid components; and

          [K.] M. "produced water" means water that is an incidental byproduct from drilling for or the production of oil and gas."

     SECTION 3. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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