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The New Mexico Surface Owners Protection Act (SOPA) requires the oil and gas operator to:
- Notify the surface owner 30 days prior to beginning any oil
and gas operations;
- Describe the proposed operations so that
the surface owner can evaluate the effects of the operations
on his/her property;
- Propose a surface use and compensation agreement
that addresses the timing, location and scope of operations and
an offer of compensation; the bill provides the elements that
should be included in the offer of compensation. The bill gives
the surface owner 20 days to accept, negotiate changes to, or
reject the agreement and offer. If no agreement is reached within
30 days, the bill allows the operator to post a surety bond of
$10,000 for the benefit of the surface owner, or a $25,000 statewide
blanket bond and then begin operations. The surface owner may
then file a legal claim for the use of the land and any damages.
Regarding bonding-on (when there is no agreement between the landowner and oil company), the SOPA 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. Previously, a company could come on a person’s property without posting any bond amount at all. Companies were only required to post a reclamation bond with the state for final plugging and abandonment.
Previously, if a New Mexican went to court to get damages from an oil company, under common law, the burden of proof was on the landowner to demonstrate that a company caused unreasonable damages. With the Surface Owner Protection Act, 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 are required to pay compensation for damages and use under SOPA.
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After a decade of effort, lawmakers
stripped industry of its control over oil and gas regulations,
and added representatives of public health, wildlife, and agriculture
to the commission.
- that oil and gas companies consider the rights
of landowners
- that oil and gas companies minimize their impact
to the surface
- that unreasonable use of the surface gives a landowner
a cause of action (to bring a lawsuit)
- in any litigation, puts
the burden of proof on companies - not landowners - to demonstrate
their reasonable use of the surface.
- This bill does not establish,
alter, impair or negate the current authority of local and county
government to regulate land use related to oil and gas operations
This new law sets out requirements that companies minimize impacts
and damage and these requirements will lead to the use of best
practices. Employment of best practices has shown to reduce impacts
AND increase profits and production through more efficient exploration
and production techniques.
To address this conflict, the Landowner Protection Act codifies
the 1997 decision of the Colorado Supreme Court in Gerrity v. Magness,
which laid out a framework for accommodation between the competing
uses.
Under the Gerrity decision, mineral owners
may access the oil or gas beneath the surface in a way that accommodates
the surface owner’s use of their property “to the fullest extent
possible.” The court’s decision provides a standard – minimizing
adverse impacts to the surface – that surface owners currently
do not have when negotiating with operators under COGCC rules or
the Colorado Oil and Gas Act.
The Landowner Protection Act does not mandate specific well locations,
production techniques or COGCC involvement in private negotiations.
Instead, the law simply requires oil and gas operators to choose
those means of operation that will minimize the intrusion and damage
to the surface.
- As highlighted by the court in Gerrity, operators are in a
much better position to know which means of operation are technologically
sound and economically practicable. Therefore, the Landowner
Protection Act requires that operators bear the burden to choose
locations and techniques that will give reasonable access to
the oil or gas, while minimizing impact and damage to the surface
owners’ use
of the surface of the land.
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