- Associated Press - Thursday, April 14, 2016

SANTA FE, N.M. (AP) - New Mexico oil field regulators presented evidence Thursday that a Texas-based driller spilled oily salt water repeatedly at waste-water injections sites and oil wells without properly reporting it, and ignored initial warnings to stop operations.

The New Mexico Oil Conservation Division gave testimony and showed photographs and a video at a public hearing in Santa Fe to back up allegations that Siana Operating of Midland, Texas, failed to report a spill of contaminated water and then significantly underestimated the spill after it was discovered by inspectors.

Further inspections in February turned up evidence of unreported spills of oil, salt water and other oil-field waste at several Siana wells. The spills took place among two clusters of wells outside Eunice in the southeastern corner of New Mexico.

A newly hired attorney for Siana asked for more time to respond and was given two weeks until the next hearing.

A violation finding from an adjudicatory panel would give state officials authority to ensure compliance or declare Siana wells abandoned, plug them and access security bonds.

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. As they reach underground for oil and natural gas, rigs in southern New Mexico also often draw up salt water from an ancient aquifer.

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 wells.

Oil Conservation Division emails and testimony show Siana was alerted to a spill at one of its sites in late September but did not report the spill until Jan. 11, and then falsely said two barrels of liquid escaped. Photographs presented by the division showed a larger liquid spill and further salt deposits on the ground.

The State Land Office is making its own claims against Siana on accusations the company trespassed and damaged an injection well site outside Eunice on state trust lands after it stopped making lease payments years ago.

The company also has been asked to reimburse the state for about $20,000 to clean and fence off the injection well easement to prevent more truck deliveries.

Earlier this month, Public Lands Commissioner Aubrey Dunn offered in a letter to reduce Siana’s obligations to $300,000, and delay collection of half the money.

Siana Attorney Robert Stranahan wrote back to say that Siana does not have sufficient funds to comply or make a counter-offer, and that the company would like to “find a workable solution to cure the outstanding issues.”

State oil field regulators also say Siana has been injecting waste water at an unapproved depth at one of its wells.

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