DOI to Facilitate N.M. Oil, Gas, Potash Development

As part of President Obama’s all-of-the-above energy strategy to promote domestic energy and mineral production, Secretary of the Interior (DOI) Ken Salazar on Monday issued a new Secretarial Order to facilitate the co-development of oil, natural gas and potash resources within the 500,000-acre Designated Potash Area (DPA) in southeast New Mexico.

"This comprehensive strategy will allow us to move beyond years of disagreement and litigation between the energy and potash industries and provides a balanced approach that will strengthen New Mexico’s economy,” Secretary Salazar said. “I want to thank the members of the Joint Industry Technical Committee for their efforts in working toward a solution to this longstanding issue."

The final strategy, first released in draft form in July, would provide greater certainty to mineral lessees and allow for increased production in the oil-rich Permian Basin. At the same time, the Order offers more certainty for the orderly development of potash resources that are important to U.S. agriculture, including some deposits that are internationally unique and significant.

The Secretarial Order reflects the collaborative work of leaders from the potash and oil and gas industries, as well as feedback from the public. The action supports the Administration's goal of continuing to increase domestic oil and gas production, which has grown each year the President has been in office. Domestic oil production last year was higher than any time in nearly a decade and natural gas production is at its highest level ever. Foreign oil imports now account for less than 50 percent of the oil consumed in America – the lowest level since 1995.

The DPA contains significant deposits of both potash - the common name for potassium bearing minerals, primarily used for fertilizer - and oil and gas in New Mexico, most of which is managed by the Bureau of Land Management (BLM). The DPA currently produces 75 percent of the potash mined in the United States and is also home to nearly 800 federal oil and gas leases. Co-development, or the safe and orderly concurrent development of oil, gas, and potash in the DPA, supports regional job creation and will increase the supplies of important energy and fertilizer resources.

"This Secretarial Order protects New Mexico jobs, ensuring the co-development of potash, oil, and gas," said U.S. Senator Jeff Bingaman. “I applaud Secretary Salazar and the potash and oil and gas communities for their coordinated efforts to resolve this issue."

"I applaud Secretary Salazar, the BLM, and members from the oil, gas and potash industries for coming together on this matter after too many years of unproductive conflict,” said U.S. Senator Tom Udall. “The responsible co-development of these natural resources is key to job creation in our southeast region and the energy and food security of our nation."

The Secretarial Order calls for the use of emerging technologies associated with horizontal drilling and production of oil and gas to help minimize impacts and surface disruption. The designation of Development Areas where oil and gas wells could be drilled from one or more Drilling Islands will reduce the number of roads, power lines and other facilities that can impact potash resources and the safety of potash miners. These techniques will result in more orderly development and greater recovery of potash and oil and gas resources.

The Secretarial Order also encourages regular, constructive discussion among the industries and the BLM and provides an industry forum to jointly address any concerns that arise in specific situations.

Salazar had met with the Potash/Oil and Gas Joint Industry Technical Committee (JITC) in Carlsbad, New Mexico on January 5, 2012, to support the ongoing dialogue between representatives of these industries, who had been meeting since 2011. The JITC has worked to improve the relationship between the industries, promote a healthy discussion of the issues, and develop a comprehensive strategy to overcome decades of disagreements and litigation.

The final Secretarial Order announced today incorporates suggestions received during a 45-day public comment period. It revises and supersedes a previous Secretarial Order issued in 1986.

"We appreciate the feedback we received from the public and industry on the draft Secretarial Order,” said Acting BLM Director Mike Pool. "This is an important milestone and I want to thank Secretary Salazar for his leadership on this issue." The final order, along with the notice of availability on the analysis of comments received on the draft order, will be published in the Federal Register.