- Associated Press - Friday, March 25, 2016

SANTA FE, N.M. (AP) - New Mexico’s state land commissioner is ordering a broad examination of easements for injection wells used by the oil and natural gas industry to dispose of waste saltwater, in response to environmental damage at a site in the southeast of the state.

State regulators blame Midland, Texas-based Siana Operating for spills of oily water at an injection well site 20 miles southwest of Eunice, New Mexico. They have been waiting for a remediation plan from the company to fix the damage and remove old equipment. Photographs taken by the land office showed an unlined pool of water, oil on the ground and traces of liquid on the ground nearby.

Public Lands Commissioner Aubrey Dunn has instructed his agency’s district managers to look at each of about 60 saltwater disposal easements on state trust land for possible damages. Administrative reviews of leases also are planned. The site visits and reviews could take months to complete, agency spokeswoman Emily Strickler said.

Wastewater from drilling operations is typically delivered by truck to disposal sites like Siana’s, where most oil is skimmed off before water is injected deep underground.

State regulators accuse Siana of trespassing and damaging the site outside Eunice after it stopped making lease payments years ago. Siana owes $113,000 in unpaid royalties for water disposal and unpaid annual rental fees, according to a March 18 notice from the State Land Office.

“This revenue is owed to the beneficiaries of the state land trust, and thus, cannot be waived,” regulators wrote to Siana.

Trust lands in New Mexico extend across 9 million acres, with further subsurface land rights. Proceeds from leases pay for the Land Office budget and replenish multibillion-dollar funds used for public schools, universities, hospitals and other public institutions.

Siana is a major provider of well-water disposal services in New Mexico, operating two disposal wells that injected over 13 million gallons underground in 2014. It has relatively small-scale oil and natural gas extraction operations at nine sites in New Mexico. Representatives for the company could not be reached for comment Friday.

The State Land Office fenced off the injection well easement near Eunice to prevent more truck deliveries, conducted an emergency cleanup and sent Siana a roughly $20,000 bill for the work. Fee assessments for trespassing are under negotiation.

Earlier this month, the New Mexico Oil Conservation Division that regulates drilling operations ordered Siana to temporarily shut off all of its oil and disposal wells ahead of a hearing on possible violations. The order can stay in place for up to 15 days.

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