Drilling for oil and gas can take place on federal lands in the Permian Basin so long as it does not damage mineable potash deposits, according to newly proposed guidelines issued by the Bureau of Land Management (BLM).
In a July 12 conference call with reporters, Interior Secretary Ken Salazar announced the proposal, contained in a draft Secretarial Order that updates 1986 guidance. Salazar was joined on the call by New Mexico senators Jeff Bingaman and Tom Udall, and acting BLM Director Mike Poole.
“It’s important that we end years of costly litigation and disagreement and together start a new chapter of collaboration when it comes to oil and gas and potash development in New Mexico,” said Salazar, while offering praise to representatives of the oil and gas and potash industries who helped draft the proposal, published Friday, July 13 in the Federal Register.
“What we’re proposing today is a common-sense framework that emphasizes the co-development of potash and oil and gas in the region, and strengthens the economy by continuing to support our nation’s energy and agriculture needs,” Salazar said.
The order establishes quarter-mile buffer zones for oil wells and a half mile for gas wells.
“These buffer zones will stay in effect until such time as revised distances are adopted by the BLM Director or other BLM official, as delegated,” the draft order states.
The technical committee of industry reps includes officials from Intrepid Potash and Mosaic Potash, the two companies currently operating in the basin. Other leaseholders include Yates Petroleum Corp. and Occidental Petroleum Corp., but their leases have been assigned to, and are being developed by, Mosaic.
According to the Federal Register notice, “It is envisioned that the majority of the Designated Potash Area will eventually be divided into Development Areas designed to minimize the impacts to potash mining while allowing for the development of oil and gas resources. It is intended that Development Areas will be developed with extended reach horizontal wells using the most current technology, consistent with applicable laws and regulations.”
Three different areas would be set up under the new guidelines:
- Development Areas, which are blocks of federal oil and gas leases to be identified by BLM and which could be developed as a unit from one or more “drilling islands.”
- Barren Areas, defined as “lands within the Designated Potash Area where sufficient data is available to establish that the area lacks mineable potash resources.”
- Unknown Areas, or “areas within the Designated Potash Area where there is an absence of data to classify the potash mineralization of the lands. While Barren Areas may be preferred locations for Drilling Islands, Unknown Areas may warrant protection from oil and gas drilling until such time as data is available to properly classify the potash mineralization.”
BLM foresees that “the majority of the Designated Potash Area will eventually be divided into Development Areas designed to minimize the impacts to potash mining while allowing for the development of oil and gas resources. It is intended that Development Areas will be developed with extended reach horizontal wells using the most current technology, consistent with applicable laws and regulations.”
The order continues, “No wells shall be drilled for oil or gas at a location which, in the opinion of the Authorized Officer, would result in undue waste of potash deposits or constitute a hazard to or unduly interfere with mining operations being conducted for the extraction of potash deposits.”
According to the FR notice, which allows for a 30-day comment period, “Among other benefits, the revised