SANTA FE An amended version of a bill that would require oil and gas companies to compensate private landowners for damages to their property caused by drilling operations was cleared Monday for a House floor vote.
The 14-member House Energy and Natural Resources Committee gave its unanimous support of House Bill 827, which establishes the Surface Owners Protection Act.
"This has been around a long time, and there have been a lot of compromises," said Rep. Andy Nunez, D-Hatch, who was flanked by New Mexico Oil and Gas Association President Bob Gallagher and Alisa Ogden, president-elect of the state's Cattle Growers' Association.
"There has been a lot of blood let on both sides," Nunez said.
If approved, the bill would require oil and gas industry officials to place a surety bond of $10,000 per well, or a $25,000 blanket surety bond, to cover damages caused by drilling.
Landowners have long pressed state officials for legislation that requires oil and gas companies to compensate them when operators damage their property while accessing their wells.
In cases of a split estate, where the property rights are owned by one person and the mineral rights by another, state statute grants the owner of the mineral rights the ability to use as much of the surface of the land as necessary, and does not require any compensation to the landowner.
Under the bill, property owners would be compensated for the use of their property and notified within 30 days of a company's intent to enter the property.
However, the act would only apply to new mineral leases entered into after July 1, when the proposed law would take effect. Current leases in areas such as the San Juan Basin, where 50-year mineral contracts exist, would not be affected, said Rep. R.J. Strickler, R-Farmington.
New lease agreements in the southeast portion of the state will likely be the most affected because less land is owned by the government, Gallagher said. The San Juan Basin is situated largely on federal land in northwestern New Mexico, where less than 10 percent is public property.
Rep. Peter Wirth, D-Santa Fe, said the proposed law ensures that those who may be affected by the operation of an oil and gas well will be heard.
"This really forces the parties to sit down at the table and work out an agreement," Wirth said.
Carl Johnson, a rancher from southeastern New Mexico, was alone in his opposition to the bill as he spoke before the committee Monday morning. He said the measure would "tear apart" laws already in place.
"We deal with oil and gas companies every day," Johnson said. "This bill addresses the bad apples, and there a lot of them."
The bill is supported by the New Mexico Attorney General's Office.
source news : alamogordonews.com
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