NM Stat § 70-2-11 (2021)
2021 New Mexico Statutes|Chapter 70 - Oil and Gas|Article 2 - Oil Conservation Commission; Division;|Section 70-2-11 - Power of commission and division to prevent waste and protect correlative rights.

A. The division is hereby empowered, and it is its duty, to prevent waste prohibited by this act and to protect correlative rights, as in this act provided. To that end, 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 this act, whether or not indicated or specified in any section hereof. B. The commission shall have concurrent jurisdiction and authority with the division to the extent necessary for the commission to perform its duties as required by law. History: Laws 1935, ch. 72, § 9; 1941 Comp., § 69-210; Laws 1949, ch. 168, § 9; 1953 Comp., § 65-3-10; Laws 1977, ch. 255, § 46. ANNOTATIONSCompiler's notes. — The term "this act," referred to in this section, means Laws 1935, ch. 72, §§ 1 to 24, which appear as 70-2-2 to 70-2-4, 70-2-6 to 70-2-11, 70-2-15, 70-2-16, 70-2-21 to 70-2-25, 70-2-27 to 70-2-30, 70-2-33 NMSA 1978. No authority to assess civil penalties. — Neither the oil conservation commission nor the oil conservation division has the statutory authority to assess civil penalties because 70-2-28 NMSA 1978 requires the attorney general to bring an action to establish liability and assess penalties for violations of the Oil and Gas Act, 70-2-1 NMSA 1978 et seq., or related rules or orders. Marbob Energy Corp. v. Oil Conservation Comm'n, 2009-NMSC-013, 146 N.M. 24, 206 P.3d 135. Authority based on power of prevention of waste. — The statutory authority of the commission to pool property or to modify existing agreements relating to production within a pool under either 70-2-17C or 70-2-17E NMSA 1978 must be predicated on prevention of waste. Sims v. Mechem, 1963-NMSC-103, 72 N.M. 186, 382 P.2d 183. Commission has jurisdiction over matters related to conservation of oil and gas in New Mexico, but the basis of its powers is founded on the duty to prevent waste and to protect correlative rights, as set forth in this section. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Powers of proration and creation of spacing units remain intact. — The standards of preventing waste and protecting correlative rights, as laid out in this section, are sufficient to allow commission's power to prorate and create standard or nonstandard spacing units to remain intact, and 70-2-18 NMSA 1978 is not an unlawful delegation of legislative power. Rutter & Wilbanks Corp. v. Oil Conservation Comm'n, 1975-NMSC-006, 87 N.M. 286, 532 P.2d 582. Prevention of waste by pooling. — Commission's finding that most efficient and orderly development of the subject acreage could be accomplished by force pooling is not equivalent to a finding that this pooling will prevent waste. Sims v. Mechem, 1963-NMSC-103, 72 N.M. 186, 382 P.2d 183. Protection of correlative rights. — The prevention of waste is of paramount interest to the legislature and protection of correlative rights is interrelated and inseparable from it. The very definition of "correlative rights" emphasizes the term "without waste." However, protection of correlative rights is a necessary adjunct to the prevention of waste. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Although subservient to prevention of waste and perhaps to practicalities of the situation, protection of correlative rights must depend upon the commission's findings as to extent and limitations of right. This the commission is required to do under legislative mandate. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Property rights of natural gas owners. — The legislature has stated definitively the elements contained in property right of natural gas owners. Such right is not absolute or unconditional. It consists of merely (1) an opportunity to produce, (2) only insofar as it is practicable to do so, (3) without waste, (4) a proportion, (5) insofar as it can be practically determined and obtained without waste, (6) of gas in the pool. Continental Oil Co. v. Oil Conservation Comm'n, 1962-NMSC-062, 70 N.M. 310, 373 P.2d 809. Authority held not exceeded. — When an oil well was located so that it could produce oil from the top portion of the pool, thereby avoiding waste that would have occurred unless the well was allowed, but the well was located so that it could effectively drain the entire pool, and the oil conservation commission, charged with the protection of correlative rights of the other lease owners in the pool, placed a production penalty on the well to protect these rights, the commission did not exceed the broad statutory authority granted by the Oil and Gas Act. Santa Fe Exploration Co. v. Oil Conservation Comm'n, 1992-NMSC-044, 114 N.M. 103, 835 P.2d 819. The judicial branch is precluded from interfering with administrative rule-making proceedings. — A court may not intervene in rule-making proceedings before the adoption of a rule or regulation, because the separation of powers doctrine forbids a court from prematurely interfering with the administrative processes created by the legislature, and therefore pending appeals of the New Mexico oil conservation commission's rules did not preclude the commission from exercising its authority to promulgate additional rules. Earthworks' Oil & Gas Accountability Project v. N.M. Oil Conservation Comm'n, 2016-NMCA-055, cert. denied. Requirements for adopting new rules. — In adopting a new rule, an administrative agency is required to provide a statement of reasons for doing so, and the law requires only that the public and the reviewing courts are informed as to the reasoning behind the new rule, so where the New Mexico oil conservation commission (commission) adopted a rule in 2013 that differed from a rule adopted in 2008, despite being based on identical evidence, the new rule was not arbitrary and capricious where the commission enumerated its reasons for adopting the 2013 rule, gave detailed explanations for the standards and requirements that it created in the 2013 rule and, in its order promulgating the rule, provided additional basis for, and reasoning behind, adopting the 2013 rule. Petitioners failed to meet their burden of demonstrating that the 2013 rule is not reasonably related to the commission's legislative purpose. Earthworks' Oil & Gas Accountability Project v. N.M. Oil Conservation Comm'n, 2016-NMCA-055, cert. denied. Former act to prohibit waste. — There was no delegation to the commission of power to make law or determine what it shall be in the former Oil Conservation Act, but act was, in effect, a prohibition against waste. 1951 Op. Att'y Gen. No. 51-5397. Law reviews. — For comment on Cont'l Oil Co. v. Oil Conservation Comm'n, 70 N.M. 310, 373 P.2d 809 (1962), see 3 Nat. Res. J. 178 (1963). Am. Jur. 2d, A.L.R. and C.J.S. references. — 38 Am. Jur. 2d Gas and Oil §§ 145 to 148, 157. 58 C.J.S. Mines and Minerals §§ 229, 234.