The Independent Third Quarter 2010 PA I Independent Petroleum Association of New Mexico President's Report John Thompson INSIDE THIS ISSUE Well let‟s get started! After becoming President of IPANM Legislative & Governmental 2 at the annual meeting on Au- Update gust 4th I‟m glad to report Past President Message 3 that the “I” in Independent is justified! In just a short Southeast Regional Report 4 amount of time I have re- Northwest Regional Report 5 ceived a tremendous amount of information, New Members 6 ideas, and suggestions which all seem to point me in different directions! Seriously, the sup- Project NEED Update 7 port and encouragement that I have received Oil & Gas Day at the Capitol 8 are greatly appreciated. The annual meeting was another success and af- ter totaling the income and expenses, the 2010 meeting will become the most financially suc- cessful meeting that IPANM has ever had. We can thank past President Robert Armstrong and the tremendous effort of Pam Garlinger and her staff for this achievement. Review of Annual Meeting TO CONTACT US Karin Foster, our Executive Director, kicked things off at the annual convention with a great P.O. Box 1836 presentation that included a review of the cur- Roswell, New Mexico 88202 rent petitions filed by the New Energy Economy (NEE) and the New Mexico Environmental De- Phone: 575/ 622-2566 partment (NMED) to address green house gases Fax: 575/ 622-8996 and how the proposals will affect industry in E-Mail: [email protected] New Mexico, particularly the oil and gas busi- Web: www.ipanm.org ness. Karin also showed a recent study released by the Fraser Institute that surveyed oil and gas executives and their opinions of regulatory com- pliance, environmental regulations, and political stability. Sadly, the composite score showed (Continued on page 9) 1 The Independent Third Quarter 2010 Legislative & Governmental Update by Karin Foster A New Mexican Tale with a hundred New Mexicans in strong opposition Twist—Just in Time for Hal- to a GHG program. The formal hearing lasted loween eight days with the examination of nine NEE witnesses and 14 witnesses in opposition to She was called the “Indian Prin- the petition. The NEE witnesses included sev- cess” and the name was appropri- eral attorneys who had little or no oil and ate. She sat in the witness chair and gas experience, but had either been on a glared at the lady oil and gas attor- well site as a guest or had learned about the ney. Her back was straight. Her industry from the internet. The main witness attitude was certain, for in her mind she was right. for the petition was Steven Michal, who is She smiled to herself as she looked to the back of married to Sandra Ely, climate policy advisor the poorly lit hearing room. One of her many sup- to the Governor. Mr. Michal is the general porters was costumed in a nine foot tall puppet of counsel for Western Resource Advocates, her, holding the whole world in her hands. That which is also a client of the Coalition for puppet had been created for the national conven- Clean Affordable Energy, which employs En- tion in 1996 when she had been Ralph Nader’s run- vironment Improvement Board Member ning mate. Such wonderful memories! But now, she Green. Although Mr. Michal had never had a task at hand. She had come to New Mexico worked for either the oil and gas industry or to hammer the nail in the coffin of the fossil fuel a utility, he was able to profess his “expert industry in the Land of Enchantment . qualifications” of both industries. On August 18 Winona LaDuke, former Green In a nutshell, the NEE petition sought to do Party Candidate for Vice President, testified the following: Operations with CO2 emissions in support of the NEE petition to cap GHG greater than 25,000 metric tons would be re- emissions from oil and gas sources in New quired to establish a baseline with the NMED Mexico. She was cross-examined for four by mid 2011, based on the average emissions hours by several oil and gas lawyers. Al- of the past three years. During 2011 those though she admitted that even with eliminat- operators would be required to closely moni- ing all the emissions from the state, there tor emissions and determine how to reduce would be little impact on the global climate; CO2 emissions by three percent per year from nevertheless, she felt strongly that this was a 2012 until 2020. If a federal program that vital first step toward supporting wind devel- the NMED determines is as stringent as the opment in the state. Under cross- state program is implemented, the NEE pro- examination it also became clear that she gram would sunset. If the NMED cap and believed the fossil fuel industry had robbed trade petition was able to begin due to the the Native American people of their birth- participation of other states, the NEE peti- right to the minerals in “their earth.” tion would also sunset. The New Energy Economy (NEE) petition was Mr. Larry Scott, President of Lynx Petroleum heard by the Environment Improvement and past President of IPANM, testified Board (EIB), who is the ultimate fact finder against the NEE petition. He explained that in this case. Ms. Orth, the NMED-appointed this petition would have indirect impacts on hearing officer, had travelled the state and (Continued on page 11) had also heard comments from over three 2 The Independent Third Quarter 2010 Past President Farewell by Bob Armstrong During my recently com- industry and I know that he will devote his pleted term as President of time to work on the behalf of our member- IPANM, I gained a much ship. If John calls on you for assistance, I greater appreciation of the would ask that you make a commitment to work which IPANM and its him. That is what makes IPANM so effective. members do on behalf of the The fact that the membership takes the ini- oil and gas industry in New tiative to become personally involved makes Mexico. In addition to the a difference. I cannot tell you the number of paid staff of Karin Foster and times legislators have commented to me that Pam Garlinger, the Association members go it is meaningful that individual members out of their way to respond to challenges rather than lobbyists call upon them. which our industry faces. I cannot tell you how many times throughout the years that At the annual meeting we had several Direc- volunteers have stepped up to the plate tors whose terms in office were con- on behalf of all oil and gas produc- cluded. I want to thank Peter Court- ers in New Mexico. I want to sincerely ney, Frank Gorham, Gerri Harrington, thank the membership for all that and Johnny Knorr for their service as they do. Directors. Frank and Johnny both served as President of the I also want to recognize our Ex- Association. Gerri was recog- ecutive Director, Karin Foster, nized at the annual meeting and our Director of Opera- with the Member of the Year tions, Pam Garlinger, for all Award. their fine work. As an attor- ney, Karin has been leading the Lastly, because the chal- battle on many issues that the lenges to our Association industry faces. Whether it is the keep mounting, the cost to pit rule, greenhouse gas emissions hearings, address all of these issues becomes greater or working with our legislators, Karin is al- and greater. I would ask that when member- ways on point and dedicates 110% of her ship renewals are mailed out in the next few time on our behalf. As President of IPANM, I weeks that you consider increasing your level appreciated all the support which Pam gave of membership. We do have a corporate to me and to our Board of Directors. She membership level of $2,000 which many takes the initiative on many matters, and the members pay. Even if you are not able to in- work that she does in handling all the details crease to that level, any additional amount with regard to the annual meeting is admira- that you can give will be meaningful to the ble. We are indeed fortunate to have both Association. I can assure you that it is money Karin and Pam working on our behalf. well spent. If we are not able to maintain our level of involvement on many complex At the annual meeting in August, John issues, all our membership would be nega- Thompson with Walsh Engineering in Farm- tively impacted. Any additional support you ington succeeded me as President. John is can give will be appreciated. extremely knowledgeable with regard to the 3 The Independent Third Quarter 2010 Southeast Regional Report by Greg Nibert A little over two months ago, their concerns and questioned the authority we concluded a successful an- of the Environment Department to even en- nual meeting in Albuquerque at gage in this rule making. IPANM will continue the Sandia Resort. I again ex- to be an active participant in objecting to press my appreciation to our the proposal and being engaged in the law- sponsors and the members who suit filed by the New Energy Economy. attended, making the annual meeting a great success. I also extend my Second, some significant sales of assets are appreciation to Bob Armstrong for his strong being made by some stalwart oil and gas leadership this past year, and his continuing companies in southeastern New Mexico.