SURFACE OWNERS PROTECTION ACT - NEW MEXICO

From: NMCGA [mailto:nmcga@nmagriculture.org]
Sent: Saturday, February 24, 2007 5:04 PM
Subject: Surface Owner Protection / House Energy Committee 2.26.07

HB 827, Representative Andy Nunez' Surface Owner Protection Act, is on the schedule for the House Energy & Natural Resources Committee Monday, February 26, 2007 at 8:30 a.m. in room 315. The bill was amended some in its' first committee. Negotiations have continued and there will be a final set of agreed upon additional amendments offered on Monday. After three (3) years of work, it appears that there is agreement between surface owners (homeowners and ranchers) AND that New Mexico will have the strongest landowner bill in the nation. Regarding bonding-on (when there is no agreement between the landowner and oil company), the bill requires a company to post either a $10,000 damages bond or a $25,000 statewide “blanket” bond for all its wells. If the damages from one well exceeds the $25,000 amount in the blanket bond, the company must re-up its bond. Currently, a company can come on a person’s property without posting any bond amount at all. Companies are currently only required to post a reclamation bond with the state for final plugging and abandonment. If you go to court today to get damages from an oil company, under common law, the burden of proof is on you to demonstrate that a company caused unreasonable damages. With SOPA, it will be much easier to get compensation for damages because you will not have to prove whether or not a company was reasonable in its operations on your land. Companies will be required to pay compensation for damages and use under SOPA. Currently, landowners in New Mexico are afforded no protection when companies want to conduct oil and gas operations on their property. Certainly there are reasonable agreements between surface owners and oil and gas operators. However a voluntary system has not served all surface owners equally. There has been concern that this bill would give operators more descression than they already have. Every effort has been made to ensure that private property rights are protected. One of the amendments on Monday will further clarify that. Please let me know if you have any questions and if we can provide further clarification on the bill language....