PETITION FOR WRIT OF CERTIORARI TO THE OIL CONSERVATION COMMISSION. Petitioners Earthworks Oil and Gas Accountability Project ( OGAP ) and New Mexico

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1 FIRST JUDICIAL DISTRICT COURT STATE OF NEW MEXICO SOUNTY OF SANTA FE EARTHWORKS OIL & GAS ACCOUNTABILITY PROJECT and NEW MEXICO WILDERNESS ALLIANCE Petitioners, Case No. v. NEW MEXICO OIL CONSERVATION COMMISSION Respondent. PETITION FOR WRIT OF CERTIORARI TO THE OIL CONSERVATION COMMISSION Petitioners Earthworks Oil and Gas Accountability Project ( OGAP ) and New Mexico Wilderness Alliance ( Wilderness Alliance ) hereby submit this Petition for Certiorari in accordance with the requirements of NMRA In support of their Petition, Petitioners STATE: I. Basis of Jurisdiction 1) The jurisdiction of this Court is invoked pursuant to Article VI, 13 of the New Mexico Constitution and NMRA which provide for review pursuant to the New Mexico constitution when there is no statutory right to an appeal or other statutory right of review. In this case, the New Mexico Oil and Gas Act does not provide any right of review of Oil Conservation Commission rulemakings. NMSA 1978, ,

2 II. Oil Conservation Commission Proceedings 2) The Oil Conservation Commission s ( Commission ) most recent regulations governing oil and gas field wastes, et. seq. NMAC ( Pit Rule ), are the latest development in a controversy that began with the Oil Conservation Division s ( Division ) Pit Rule petition, submitted to Commission on September 21, The Division s 2007 petition sought to replace the then existing rule governing disposal of oil and gas field wastes, et. seq. ( Rule 50 ) with more environmentally protective rules. 3) During 2007 and 2008, the Commission held a public hearing on the Division s Pit Rule petition. In a three week trial-like proceeding mandated by the New Mexico Oil and Gas Act ( Act ) and its implementing regulations, the parties to the rulemaking, including OGAP, presented extensive technical and non-technical evidence on the proposed rule. 4) On May 9, 2008, the Commission entered its Order No. R-l2939 ( 2008 Pit Rule Order ) in Case No , thereby adopting the Pit Rule. 5) On July 10, 2008, several members of the New Mexico Oil and Gas Association ( NMOGA ) and the Independent Petroleum Association of New Mexico ( IPANM ) petitioned the District Court for review of the 2008 Pit Rule Order. Both writs were granted and the two appeals were consolidated under Case No. D-0101-CV ( 2008 Appeal ). 6) Subsequently, the Commission amended the Pit Rule to effectively rescind an important environmental standard referred to as the chloride standard that governs the concentrations of chlorides, or salts, in oil field wastes. The amendment became final on July 17, 2009, after another trial-like proceeding. Order No. R A. OGAP petitioned the District Court for review of the chloride standard amendment on July 30, 2009, and review was granted as Case No. D-0101-CV ( 2009 Appeal ). 2

3 7) In 2012, while the 2008 and 2009 Appeals were still pending in the First Judicial District Court, NMOGA and IPANM submitted petitions to amend the Pit Rule to the Commission. 8) On the same day, the oil and gas industry parties in the 2008 and 2009 Pit Rule Appeals filed a motion with the First Judicial District Court requesting a stay of both the 2008 and 2009 Appeals. The Commission filed a separate concurrence with this motion. The Commission also filed a separate motion in the 2009 Appeal requesting a stay of that proceeding, arguing that the Commission s decision in the current proceeding would likely render the issues in Cases 1863 and [2473] moot. 9) The District Court stayed, but did not dismiss, the 2008 and 2009 Appeals on January 23, ) The Commission exercised its discretion and accepted NMOGA s and IPANM s 2012 petitions. The petitions were heard as Case Numbers and The Commission later consolidated these two case numbers. 11) Prior to the Commission holding public hearings on the Industry petitions, OGAP sought and received a Writ of Prohibition prohibiting the Commission from conducting the hearings on the Industry petitions. That Writ, however, was subsequently quashed. 12) The Commission held public hearings on NMOGA s and IPANM s Petitions on May 14-18, June 20-22, and August 28-29, During these public hearings, the Commission heard expert technical testimony, sworn and unsworn public testimony, entertained evidentiary objections and took evidence. 13) The Commission issued an order, Order No. R D ( 2013 Order ), on June 6, 2013 that significantly changed the Pit Rule. A copy of that Order is attached as Exhibit A. 3

4 14) Pursuant to the Oil and Gas Act, on June 25, 2013, OGAP requested that the Commission rehear its 2013 Order based on several legal errors. See, NMSA (A). A copy of that request for rehearing is attached as Exhibit B. 15) The Commission failed to act on OGAP s request for rehearing within ten days and pursuant to (A), the 2013 Order became final on July 5, III. Parties to the Proceeding Below 16) In addition to OGAP and the Wilderness Alliance, the parties below were: a) The New Mexico Oil Conservation Division; b) New Mexico Oil and Gas Association; c) Independent Petroleum Association of New Mexico; d) New Mexico Citizens for Clean Air and Water; e) Nearburg Producing Company; f) Jalapeño Corporation; g) New Mexico Cattlegrowers Association; h) New Mexico State Land Office. IV. Petitioners are Entitled to Relief 17) The Commission s decision to amend the Pit Rule was made solely as a political accommodation to the oil and gas industry and not for any purpose relating to the Commission s statutory duties of protecting correlative rights, preventing waste, or protecting the environment and fresh water supplies. 18) As noted above, the Commission most recently amended the Pit Rule based on petitions from NMOGA and the IPANM. The primary purpose of amending the Pit Rule was to remedy increased costs and alleged inconvenience to the oil and gas industry. However, there is 4

5 no statute that gives the Commission authority to adopt or amend a rule for purely economic reasons or for the convenience of the industry it regulates. The Commission therefore acted arbitrarily, capriciously, and contrary to law. 19) The Commission also lacks jurisdiction to promulgate the amendments adopted by the Order. Because the Commission s decision to adopt the 2008 pit rule was appealed to district court, the Commission lost jurisdiction. Since the district court never entered an order, mandate, or judgment dismissing either the 2008 or 2009 Appeals, the court retained jurisdiction of those matters and the Commission was without jurisdiction to make any changes to the Pit Rule. 20) Under the Act, the Commission has the obligation to protect fresh water. NMSA 1978, (B)(15), (21), (22); see also, NMSA 1978, (E), (F). The 2013 Order demonstrates that the Commission abdicated its duty to protect fresh water supplies because it has substituted a blanket determination of which water sources constitute fresh water, when a site specific analysis is required. As set out in an October 2, 1985, Oil Conservation Division Memorandum regarding Hearings for Exception to Order No. R-3221 ( OCD Memorandum ), fresh water supplies includes all groundwater that has a total dissolved solids concentration of less than 10,000 mg/l, except groundwater for which there is no present or no reasonably foreseeable beneficial use. A copy of that Order and Memorandum is attached as Exhibit C. 21) Reasonably foreseeable beneficial use does not mean merely holding back groundwater contamination for some arbitrary number of years, as the Commission appeared to believe in the instant proceeding. See 2013 Order at 41, N. Instead, the Commission or Division must determine whether there is any reasonably foreseeable future use of groundwater at a given location, based on objective site-specific criteria such as site location, depth to water, 5

6 present use, background water quality and aquifer characteristics. The Commission s failure to do this in the 2013 Order, or to include any requirement to do this on a case by case basis, renders its decision arbitrary and capricious. 22) The 2013 Order is per se arbitrary and capricious because the evidence presented in consolidated Case No.14784/14785 is substantially identical to the evidence that was presented in the 2008 Pit Rule hearing (Case No ), yet the Commission reached a radically different result. The Commission failed to adequately explain what circumstances had changed and how the 2013 Order addresses those changes. 23) Alternatively, because the evidence in the two proceedings is substantially identical, the Commission s 2013 Order is not based on substantial evidence in the record. 24) The 2013 Order and amended Pit Rule are contrary to law with respect to the provisions governing multi-well fluid management pits because the notice given was insufficient to reasonably inform the public about the nature of the proposed regulations and the pits they were intended to regulate. 25) The Commission s supplemental hearing, which was intended to cure the defect that the bulk of the Commission s deliberations were based on a version of the Pit Rule that was superseded, was arbitrary and capricious because the Commission impermissibly narrowed that hearing s focus, contrary to the public notice provided. See, 2013 Order at 5, ) There is substantial evidence in the record demonstrating that Commission Chair Bailey and Commissioner Balch demonstrated bias in favor of granting Industry s proposed amendments to the Pit Rule. Further, there is substantial evidence in the record that Commissioner Balch prejudged the alleged economic impacts of the 2008 Pit Rule on the oil and gas industry, which was a basis for amending the 2008 Pit Rule. 6

7 V. Relief Sought A) For the reasons explained above, OGAP and the Wilderness Alliance respectfully request that this Court vacate Order Order No. R D. B) Alternatively, OGAP and the Wilderness Alliance seek an order remanding Order No. R D, or the appropriate parts thereof, to the Commission for further consideration consistent with law. Respectfully submitted: NEW MEXICO ENVIRONMENTAL LAW CENTER B y: /s/ Eric Jantz Eric Jantz R. Bruce Frederick Douglas Meiklejohn Jonathan Block 1405 Luisa Street, Ste. 5 Santa Fe, NM (505) ejantz@nmelc.org /s/ Judith Calman NEW MEXICO WILDERNESS ALLIANCE Judith Calman 142 Truman St., Ste. B-1 Albuquerque, New Mexico judy@nmwild.org 7

8 CERTIFICATE OF SERVICE I hereby certify that on this 1 st day of August 2013, I have delivered a copy of the foregoing pleading in the above-captioned case via electronic mail and/or U.S. Mail, First Class to the following: Gabrielle Gerholt Oil Conservation Division Energy, Minerals and Natural Resources Department 1220 St. Francis Drive Santa Fe, New Mexico Gabrielle.Gerholt@state.nm.us Caren Cowen Michael Feldewert N.M. Cattle Growers Association Adam Rankin PO Box 7517 Holland and Hart, LLP Albuquerque, New Mexico PO Box 2208 nmcga@nmagriculture.org Santa Fe, New Mexico mfeldewert@hollandhart.com James G. Bruce AGRankin@hollandhart.com Nearburg Producing Company PO Box 1056 Karin Foster Santa Fe, New Mexico Independent Petroleum Association of New Mexico jamesbruc@aol.com 5805 Mariola Place Albuquerque, New Mexico Hugh Dangler fosterassociates2005@yahoo.com New Mexico State Land Office 310 Old Santa Fe Trail Dr. Donald Neeper PO Box 1148 New Mexico Citizens for Clean Air & Water Santa Fe, New Mexico B Walnut Street hdangler@slo.state.nm.us Los Alamos, New Mexico dneeper@neeper.net Eric Hiser Jorden Bischoff & Hiser, PLC Patrick Fort 7272 E. Indian School Road Jalapeno Corporation Suite 360 PO Box 1608 Scottsdale, Arizona Albuquerque, New Mexico EHiser@jordenbischoff.com patrickfort@msn.com By: /s/ Eric Jantz 8