New Mexico Register / Volume XXXI, Issue 4
/ February 25, 2020
This is an amendment to 19.15.5 NMAC, amending Sections 3, 8, 9, and 10, effective 2/25/2020.
Explanatory statement: Statute citations were corrected throughout
the rule to conform to correct legislative styles.
19.15.5.3 STATUTORY AUTHORITY: 19.15.5 NMAC is adopted pursuant to the Oil
and Gas Act, Section 70-2-6, Section 70-2-11, [and] Section 70-2-12, Section
70-2-31, and Section 70-2-31.1 NMSA 1978.
[19.15.5.3 NMAC – N, 12/1/2008, A, 2/25/2020]
19.15.5.8 ENFORCEMENT OF STATUTES AND
RULES: The division is charged with
the duty and obligation of enforcing the state’s rules and statutes relating to
the conservation of oil and gas, including the prevention of waste and the
protection of correlative rights, and [including] the protection of
public health and the environment. An
owner or operator shall obtain information pertaining to the regulation of oil
and gas before beginning operations.
[19.15.5.8 NMAC - Rp, 19.15.1.12 NMAC, 12/1/2008, A, 2/25/2020]
19.15.5.9 COMPLIANCE:
A. An operator is in compliance with Subsection A of 19.15.5.9 NMAC if the operator:
(1) currently meets the financial assurance requirements of 19.15.8 NMAC;
(2) is not subject to a division or commission order, issued after notice and hearing, finding the operator to be in violation of an order requiring corrective action;
(3) does not
have a penalty assessment that is unpaid more than [70] 30 days
after issuance of the order assessing the penalty; and
(4) has no more than the following number of wells out of compliance with 19.15.25.8 NMAC that are not subject to an agreed compliance or final order setting a schedule for bringing the wells into compliance with 19.15.25.8 NMAC and imposing sanctions if the schedule is not met:
(a) two wells or fifty percent of the wells the operator operates, whichever is less, if the operator operates 100 wells or less;
(b) five wells if the operator operates between 101 and 500 wells;
(c) seven wells if the operator operates between 501 and 1000 wells; and
(d) 10 wells if the operator operates more than 1000 wells.
[B. The division shall notify an operator
on a monthly basis when, according to records on file with the division, a well
on the inactive well list described in Subsection F of 19.15.5.9 NMAC shows no
production or injection for the past 12 months by making such information
available on the division’s website.
Further, at least 60 days prior to commencing an enforcement action
against an operator for a violation of 19.15.5.9 NMAC, the division shall
notify the operator by first class mail to the address provided to the division
pursuant to Subsection C of 19.15.9.8 NMAC.
C. The division shall make available on
its website and update weekly the status of operators’ financial assurance
19.15.8 NMAC requires, according to division records.
D. Orders requiring corrective action.
(1) The division shall make available on
its website division or commission orders, issued after notice and hearing,
finding an operator to be in violation of an order requiring corrective action.
(2) An operator who contests an order
finding it to be in violation of an order requiring corrective action may
appeal and may seek a stay of the order.
An order that is stayed pending appeal does not affect an operator’s
compliance with Subsection A of 19.15.5.9 NMAC.
(3) An operator who completes the
corrective action the order requires may file a motion with the order’s issuer to
declare the order satisfied. The
division or commission, as applicable, may grant the motion without hearing, or
may set the matter for hearing.
E. Penalty assessments.
(1) The division shall make available on
its website penalty assessments assessed under the Oil and Gas Act over the
last 12 months and the date the operator paid them, according to division
records.
(2) Any order that is stayed pending
appeal does not affect an operator’s compliance with Subsection A of 19.15.5.9
NMAC.
F] B. Inactive wells.
(1) The division shall make available on its website, and update daily, an “inactive well list” listing each well, by operator, that according to division records:
(a) shows
no production or injection for past 15 months;
[(a)]
(b) does not have its well
bore plugged in accordance with 19.15.25.9 NMAC through 19.15.25.11 NMAC;
[(b)] (c) is not in approved temporary abandonment in
accordance with 19.15.25.12 NMAC through 19.15.25.14 NMAC; and
[(c)] (d) is not subject to an agreed compliance or final
order setting a schedule for bringing the well into compliance with 19.15.25.8
NMAC [and imposing sanctions if the operator does not meet the schedule].
(2) [For purposes of 19.15.5.9 NMAC, the
listing of a well on the division’s inactive well list as a] A well
inactive for more than [one year plus 90 days] 15 months creates
a rebuttable presumption that the well is out of compliance with 19.15.25.8
NMAC.
C. Financial assurance. The division shall make available on its
website and update weekly the status of operators’ financial assurance that
19.15.8 NMAC requires, according to division records.
[19.15.5.9 NMAC - Rp, 19.15.1.40 NMAC, 12/1/2008; A, 11/30/2016, A, 2/25/2020]
19.15.5.10 [COMPLIANCE PROCEEDINGS:] ENFORCEMENT:
[A. The provisions in 19.15.4
NMAC applicable to adjudicatory proceedings shall apply to compliance
proceedings unless altered or amended by 19.15.5.10 NMAC.
B. A compliance proceeding is an
adjudicatory proceeding in which the division seeks an order imposing sanctions
for violation of a provision of the Oil and Gas Act, NMSA 1978, Sections 70-2-1
through 70-2-38 or a provision of a rule or order issued pursuant to the
act. Such sanctions may include but are
not limited to:
(1) requiring
compliance with a provision of the Oil and Gas Act, NMSA 1978, Sections 70-2-1
through 70-2-38 or a provision of a rule or order issued pursuant to the act;
(2) assessment
of civil penalties pursuant to NMSA 1978, Section 70-2-31(A); Subsection A of
Section 70-2-31 NMSA 1978;
(3) corrective
action including but not limited to abatement or remediation of contamination
and removal of surface equipment;
(4) plugging and abandonment of a well
and restoration and remediation of the well location, and authority for the
division to forfeit the applicable financial assurance if the well is not
plugged and abandoned and the location restored and remediated;
(5) denial,
cancellation or suspension of a permit;
(6) denial,
cancellation or suspension of authorization to transport; or
(7) shutting in
a well or wells.
C. The division initiates an
administrative compliance proceeding by filing a written application with the
division clerk:
(1) identifying
the operator and any other responsible parties against whom the order is
sought; including the surety if the division seeks an order allowing forfeiture
of a surety bond;
(2) identifying
the provision of the Oil and Gas Act, NMSA 1978, Sections 70-2-1 through
70-2-38, or the provision of the rule or order issued pursuant to the act,
allegedly violated;
(3) providing a
general description of the facts supporting the allegations;
(4) stating the
sanction or sanctions sought; and
(5) providing
proposed legal notice.
D. The division shall provide notice of
compliance proceedings as follows:
(1) the division
shall publish notice in accordance with 19.15.4.9 NMAC.
(2) the division
shall provide notice to the operator and any other responsible parties against
whom the compliance order is sought by following the provisions of 19.15.4.12
NMAC.
E. The director may enter into an
agreed compliance order with an entity against whom compliance is sought to
resolve alleged violations of any provision of the Oil and Gas Act, NMSA 1978,
Sections 70-2-1 through 70-2-38 or any provision of any rule or order issued
pursuant to the act. The director may
enter into an agreed compliance order prior to or after the filing of an
application for an administrative compliance proceeding. An agreed compliance order shall have the
same force and effect as a compliance order issued after an adjudicatory
hearing.
F. Nothing in 19.15.5.10 NMAC precludes
the division from bringing other actions provided for in the Oil and Gas Act,
NMSA 1978, Sections 70-2-1 through 70-2-38, including but not limited to the
following: suit for indemnification
pursuant to NMSA 1978, Section 70-2-14(E) or NMSA 1978, Section 70-2-38(B); an
action through the attorney general with respect to the forfeiture of illegal oil
or illegal gas pursuant to NMSA 1978, Section 70-2-32; an injunction under NMSA
1978, Section 70-2-28; or collection of penalties pursuant to NMSA 1978,
Section 70-2-31(A).
[19.15.5.10 NMAC - Rp,
19.15.14.1227 NMAC, 12/1/2008]]
A. General. Whenever the division determines that a
person violated or is violating the Oil and Gas Act or a provision of any rule,
order, permit or authorization issued pursuant to the Oil and Gas Act, the
division may seek a sanction by:
(1) issuing a
temporary cessation order if it determines that the alleged violation is
causing or will cause an imminent danger to public health or safety or a
significant imminent environmental harm.
The temporary cessation order shall remain in place until the earlier of
when the division determines that the alleged violation is abated or 30 days,
unless a hearing is held before the division and a new order is issued;
(2) issuing a
notice of violation; or
(3) commencing a
civil action in district court.
B. Sanctions. The division may seek one or more of the
following sanctions:
(1) a civil
penalty;
(2) modification,
suspension, cancellation or termination of a permit or authorization;
(3) plugging and
abandonment of a well;
(4) remediation
and restoration of a well location and associated facilities, including the
removal of surface and subsurface equipment and
other materials;
(5) remediation
and restoration of a location affected by a spill or release;
(6) forfeiture
of financial assurance;
(7) shutting in
a well or wells; and
(8) any other
remedy authorized by law.
C. Notice of violation.
(1) A notice of violation issued by the
division shall state with reasonable specificity:
(a) the identity
of the alleged violator;
(b) the nature
and factual and legal basis of the alleged violation, including the provision
of the Oil and Gas Act or rule, order, permit or authorization allegedly
violated;
(c) whether
compliance is required immediately or within a specified time period;
(d) the sanction(s) available for the
alleged violation, the sanction(s) proposed by the division, and a statement
that the division will take into consideration the violators good faith efforts
to comply with the applicable requirements;
(e) the
availability of a process for informal review and resolution of the alleged
violation, and the procedure to initiate the informal review process, including
the contact information of the appropriate division employee;
(f) a statement that if the notice of
violation is not informally resolved within 30 days of service, the division
will hold a hearing, but that the hearing shall not prohibit the parties from
negotiating and settling the notice of violation at any time; and
(g) the date of
the hearing, which shall be no later than 90 days after the date of the notice
of violation.
(2) The division shall serve the notice
of violation on the alleged violator by certified mail, and may provide the
notice of violation by electronic mail if possible.
(3) If during the informal review the
division and the alleged violator agree to resolve the alleged violation, they shall incorporate their agreement into a stipulated final order
signed by both parties. The stipulated
final order shall state that the alleged violator admits the division’s
jurisdiction to file the notice of violation, consents to the specified relief,
including the civil penalty, if any, and waives the alleged violator’s right of
review by the commission.
(4) If the division and the alleged
violator fail to enter a stipulated final order within 30 days of service, the
division shall hold a hearing at the division’s principal office.
D. Civil penalties. A civil penalty assessed by the division
shall account for the seriousness of the violation, good faith efforts to
comply with the applicable requirement, history of noncompliance under the Oil
and Gas Act and other relevant factors.
The civil penalty assessed by the division shall not exceed $2,500 per
day of noncompliance for each alleged violation, unless the alleged violation
presents a risk either to the health or safety of the public or of causing
significant environmental harm, or unless the noncompliance continues beyond
the time specified in the notice of violation or stipulated final order,
whereupon the civil penalty may not exceed $10,000 per day of noncompliance for
each alleged violation, provided that the civil penalty assessed by the
division for an alleged violation shall not exceed $200,000.
(1) General provisions.
(a) Designation
of parties. The parties shall
be the division and the person served with a notice of violation or order,
referred to herein as “respondent”.
(b) Representation. Respondent may appear and participate in a
hearing either pro se or through counsel, provided that a collective entity,
including a corporation, partnership, unincorporated association, political
subdivision or governmental agency shall appear only through counsel or a duly
authorized officer or member.
(c) Rule applicability. In the absence of a specific provision in this
section, the hearing examiner may apply the New Mexico rules of civil procedure
and evidence.
(d) Computation of time. In computing any period of time under
19.15.5.10 NMAC the day of the event from which the designated period begins to
run shall not be included, and the last day of the computed period shall be
included, unless it is a Saturday, Sunday or legal state holiday, in which case
the time is extended until the next day which is not a Saturday, Sunday or
legal state holiday. Whenever a party
must act within a prescribed period after service, and service is by first
class mail only, three days is added to the prescribed period.
(e) Extensions of time. The hearing examiner may grant an extension
of time to file a document or continue a hearing upon timely motion upon
consent of the parties, or for good cause shown after consideration of
prejudice to the other party and undue delay to the hearing.
(f) Filing of documents. A party shall file the original of each
document and serve a copy on the other party, accompanied by a certificate of
service identifying the method and address used to complete service.
(g) Service of documents. A party shall serve each document on the
other party or its counsel, as applicable, by personal service or first class
mail, or by electronic mail if the parties agree.
(h) Form of documents. Unless otherwise ordered, all documents,
except exhibits, shall be on 8 1/2 x 11-inch white paper, shall contain the
caption of the notice of violation or temporary cessation order on the first
page and shall be signed by the party or its counsel, as applicable.
(2) Pre-hearing procedures.
(a) Docketing. At the expiration of the 30 day period for
informal resolution of a notice of violation, when a party appeals a final
order under Subsection E of 19.15.5.10 NMAC, or when the division gives notice
that it intends to extend a temporary cessation order, the division shall
docket the notice of violation or order for hearing, identify the factual basis
for the alleged violation and proposed sanction(s), and serve a notice of
docketing on respondent.
(b) Answer. No later than 10 days after service of the
notice of docketing, respondent shall file an answer stating its objection, if any,
and the factual and legal basis for such objection, to each alleged violation
and proposed sanction in the notice of violation or order.
(c) Hearing examiner. The hearing examiner shall have the authority
to take all measures necessary to conduct a fair, impartial and efficient
adjudication of issues, and to maintain order and avoid undue delay, including
the authority to conduct pre-hearing conferences and hearings, rule on
procedural and evidentiary motions, govern the examination of witnesses and the
admission of evidence, issue orders and prepare a recommended decision. After the division issues the notice of
violation, the hearing examiner shall not discuss ex parte the merits of the
proceeding with the division or the respondent.
(d) Pre-hearing conference. The hearing examiner may hold a pre-hearing
conference to narrow the issues, eliminate or resolve preliminary matters and
encourage settlement, and may issue a pre-hearing order on procedural and
evidentiary matters, including a schedule for the filing of motions and
testimony, stipulations regarding alleged violations and requested relief,
including proposed civil penalties or elements thereof, and any other matter
necessary for the efficient conduct of the hearing.
(e) Pre-hearing statements. No later than seven calendar days before the
hearing, a party who intends to present evidence at the hearing shall file and
serve a statement that contains the following information:
(i) the name, address, employment and qualifications, including
education and work history, of each witness;
(ii) a statement
identifying the opinions and factual assertions supporting each witness’
testimony;
(iii) the exhibits
and other evidence to be presented by each witness; and
(iv) procedural matters
that are to be resolved prior to the hearing.
(f) Enforcement. The hearing
examiner may enforce the requirements of 19.15.5.10 NMAC by any appropriate
means, including the exclusion of testimony, exhibits and other evidence.
(i) General. All motions, except motions made orally
during the hearing, shall be in writing, specify the grounds for the motion,
state the relief sought, indicate whether the motion is opposed or unopposed
and be served on the other party.
(ii) Unopposed
motions. An unopposed motion
shall state that concurrence of the other party was obtained and shall be
accompanied by a proposed order approved by the parties.
(iii) Opposed
motions. An opposed motion
shall state either that concurrence was sought and not obtained, or the reason
that concurrence was not sought.
(iv) Response. No later than 10 days after service of an
opposed motion, the opposing party may file a response. Failure to file a response shall be deemed a
waiver of any objection to the granting of the motion.
(v) Reply. No later than 10 days after service of a
response to an opposed motion, the moving party may file a reply.
(vi) Decision. The hearing examiner shall decide all motions
without a hearing, unless otherwise ordered by the hearing examiner sua sponte or upon written
request of a party.
(h) Shortening Deadlines. On the written request of the alleged
violator showing good cause, the hearing examiner may shorten the deadlines
specified in Paragraph (2) of Subsection E of 19.15.10 NMAC to conduct the
hearing on the division’s application for a temporary cessation order as
expeditiously as possible. If the
division opposes the request to shorten deadlines, the procedures for opposed
motions set forth in Subparagraph (g) of Paragraph (2) of Subsection G of
19.15.5.10 NMAC shall not apply and the hearing examiner shall decide the
request, with or without hearing, as quickly as practicable.
(3) Hearing procedures.
(a) General. The hearing examiner shall admit all
evidence, unless he or she determines that the evidence is irrelevant,
immaterial, unduly repetitious or otherwise unreliable or of little probative
value. Evidence relating to settlement
that would be excluded by the New Mexico Rules of Evidence is not admissible.
(b) Witness
examination. Witnesses shall
be examined orally and under oath or affirmation, provided that the parties may
stipulate to the admission of the testimony of a witness, or part thereof. Parties shall have the right to cross-examine
a witness, provided that the hearing examiner may limit cross-examination that
is unduly repetitious, harassing or beyond the scope of the direct testimony.
(c) Exhibits. A party shall label each exhibit used during
the hearing or offered into evidence with a designation identifying the party,
the witness using or offering the exhibit and a serial number.
(d) Burden of persuasion. The division has the burden of going forward
with the evidence and of proving by a preponderance of the evidence the facts
relied upon to show the alleged violation occurred and that the proposed civil
penalty is appropriate. Following the
establishment of a prima facie case, respondent shall have the burden of going
forward with any adverse evidence or defense to the allegations.
(4) Post-hearing procedures.
(a) Transcript. The hearing shall be transcribed
verbatim. Respondent may order a copy of
the transcript from the reporter at its own expense.
(b) Recommended decision. The hearing examiner shall prepare a
recommended decision for review by the director.
(c) Final order. The director shall file a final order
addressing the material issues of fact and law and may assess a sanction for
each alleged violation, which shall be served on the division and the
respondent.
F. Commission review. No later than 30 days after the director
serves the final order, a party may file a notice of appeal with the commission
and shall serve the notice of appeal on the other party. The commission shall schedule a hearing on
the appeal and notify the parties of the date and time of the hearing. The commission shall conduct a de novo
review, provided however, that the parties may stipulate to the issues to be
heard and to the admission of all or part of the record before the
division. The commission shall conduct
the hearing in accordance with the adjudicatory procedures in Paragraph (1),
Subparagraphs (c) through (g) of Paragraph (2), Paragraph (3) and Subparagraph
(a) of Paragraph (4) of Subsection E of 19.15.5.10 NMAC.
G. Rehearings. A party may file an application for rehearing
with the commission pursuant to Section 70-2-25 NMSA 1978.
H. Payment of civil penalty. Respondent shall pay the full amount of the
civil penalty assessed in the final order (i) no
later than 30 days after the director serves the final order, or (ii) if
respondent files a notice of appeal to the commission or the district court
pursuant to Section 70-2-25 NMSA 1978, no later than 30 days after the commission
or the district court files a final order or the appeal is withdrawn.
I. Resolution after commencement of
hearing. If the parties agree to
resolve a notice of violation at any time after the commencement of a hearing,
they shall file a stipulated final order signed by both parties. The stipulated final order shall state that
respondent admits the division’s jurisdiction to file the notice of violation,
consents to the specified relief, including the civil penalty, if any, and
waives respondent’s right of review by the commission or the court, as
applicable.
J. Publication. On or about October 1 of each year, the
division shall publish a list identifying the temporary cessation orders and
notices of violation issued during the preceding year, along with the civil
penalty paid, if any.
K. Reservation. Nothing in 19.15.5.10 NMAC precludes the
division from bringing any other action and seeking any relief allowed by the
Oil and Gas Act.
[19.15.5.10 NMAC – Rp, 19.15.5.10 NMAC, 2/25/2020]