New Mexico oil and gas laws can be found in Article 2, Chapter 70 of New Mexico Statute.  Pursuant to N.M. Stat. Ann. § 70-2-2, the production or handling of crude petroleum oil or natural gas of any type or in any form, or the handling of products in such manner or under such conditions or in such amounts as to constitute or result in waste is each hereby prohibited.

Powers and Jurisdiction of the Division and Commission

Pursuant to N.M. Stat. Ann. § 70-2-5, the director of the oil conservation division of the energy is appointed by the secretary of energy, minerals and natural resources.  The Oil Conservation Commission is composed of a designee of the commissioner of public lands, a designee of the secretary of energy, minerals and natural resources and the director of the oil conservation division[i].

Pursuant to N.M. Stat. Ann. § 70-2-6, the division has jurisdiction and authority over all matters relating to the conservation of oil and gas and the prevention of waste of potash as a result of oil or gas operations.  It will have jurisdiction, authority, and control of and over all persons, matters, or things necessary or proper to enforce effectively the provisions or any other law relating to the conservation of oil or gas and the prevention of waste of potash as a result of oil or gas operations.

The commission has concurrent jurisdiction and authority with the division to the extent necessary for the commission to perform its duties as required by law.  In addition, any hearing on any matter may be held before the commission if the division director, in his/her discretion, determines that the commission must hear the matter[ii].

Pursuant to N.M. Stat. Ann. § 70-2-11, the division is empowered, and it is its duty, to prevent waste prohibited by the statute and to protect correlative rights.  The division is empowered to make and enforce rules, regulations and orders, and to do whatever may be reasonably necessary to carry out the purpose of the statute.

Judicial Review

Pursuant to N.M. Stat. Ann. § 70-2-26, the secretary of energy, minerals and natural resources may hold a public hearing to determine whether an order or decision issued by the commission contravenes the public interest.  The hearing will be a de novo proceeding, and the secretary enters such order or decision as may be required under the circumstances, having due regard for the conservation of the state’s oil, gas, and mineral resources.  The commission can modify its own order or decision.

Orders and decisions of the secretary may be appealed by any party to the original hearing or the rehearing before the commission or by any party to the hearing before the secretary except that the appeal should not be a de novo proceeding and be limited to a review of the record of the hearing held pursuant to the provisions of the statute[iii].

Civil Actions

Pursuant to N.M. Stat. Ann. § 70-2-28, if any person violates, or threatens to violate, any statute with respect to the conservation of oil or gas, or both, or any provision, or any rule, regulation or order made, the division through the attorney general will bring suit against such person for penalties, if any are applicable, and to restrain such person from continuing such violation or from carrying out the threat of violation.

In such suit the division may obtain injunctions, prohibitory and mandatory, including temporary restraining orders and temporary injunctions, as the facts may warrant.  This includes an injunction restraining any person from moving or disposing of illegal oil or illegal oil product, or illegal gas or illegal gas product, and any or all such commodities, or funds derived from the sale[iv].

Penalties

Pursuant to N.M. Stat. Ann. § 70-2-31, any person who knowingly and willfully violates any provision of the Oil and Gas Act or any provision of any rule or order will be subject to a civil penalty of up to one thousand dollars for each violation. In the case of a continuing violation, each day of violation constitutes a separate violation.

The penalties are recoverable by a civil suit filed by the attorney general in the name and on behalf of the commission or the division in the district court of the county in which the defendant resides or in which any defendant resides if there be more than one defendant or in the district court of any county in which the violation occurred[v].

However, the payment of such penalty will not operate to legalize any illegal oil, illegal gas or illegal product involved in the violation for which the penalty is imposed or relieves a person on whom the penalty is imposed from liability to any other person for damages arising out of such violation.

It is unlawful if any person knowingly and willfully violates any provision of the Oil and Gas Act or any rule, regulation or order of the commission or the division or do any of the following for the purpose of evading or violating the Oil and Gas Act or any rule, regulation or order of the commission or the division issued pursuant to that act:

• make any false entry or statement in a report required by the Oil and Gas Act or by any rule, regulation or order of the commission or division;
• make or cause to be made any false entry in any record, account or memorandum required by the Oil and Gas Act or by any rule, regulation or order of the commission or division;
• omit or cause to be omitted from any such record, account or memorandum full, true and correct entries; or
• remove from this state or destroy, mutilate, alter or falsify any such record, account or memorandum.

Pursuant to N.M. Stat. Ann. § 70-2-31, a person who performs any of the above is subject to a criminal penalty that may include a fine of up to five thousand dollars or imprisonment for a term not exceeding three years or both such fine and imprisonment.

[ii] N.M. Stat. Ann. § 70-2-6.

[iii] N.M. Stat. Ann. § 70-2-26.

[iv] N.M. Stat. Ann. § 70-2-28.

[v] N.M. Stat. Ann. § 70-2-31.