Underground Storage of Natural Gas

NMSA 1978 ch. 70, art. 6

in effect

NMSA 1978, § 70-6-1 Public interest and welfare

70-6-1. Public interest and welfare The underground storage of natural gas which promotes conservation thereof, which permits the building of reserves for orderly withdrawal in periods of peak demand, which makes more readily available our natural gas resources to the domestic, commercial and industrial consumers of this state, and which provides a better year-round market to the various gas fields, is hereby declared to be in the public interest and welfare of this state and the citizens hereof. 1953 Comp., § 65-9-1, enacted by Laws 1963, ch. 139, § 1.

NMSA 1978, § 70-6-2 Definitions

70-6-2. Definitions As used in Chapter 70, Article 6 NMSA 1978: A. "underground storage" means storage of natural gas in a subsurface stratum or formation of the earth; B. "natural gas" means natural gas either while in its original state after withdrawal from the earth or after it has been processed by removal of component parts not essential to its use for light and fuel; C. "native gas" means gas that has not been previously withdrawn from the earth; D. "division" means the oil conservation division of the energy, minerals and natural resources department; E. "commission" means the oil conservation commission; F. "natural gas company" means any person, firm or corporation engaged in the distribution, sale or furnishing of natural gas to or for the public and subject to regulation by the New Mexico public utility commission under the Public Utility Act or any person, firm or corporation engaged in the business of transporting natural gas and subject to regulation by the federal energy regulatory commission under the Natural Gas Act; and G. "public body" means the state or any department, board, commission, bureau, institution, public agency, county or political subdivision thereof, including bodies corporate, bodies politic, municipal corporations, school districts, conservancy districts and quasi-municipal corporations of all kinds. 1953 Comp., § 65-9-2, enacted by Laws 1963, ch. 139, § 2; 1977, ch. 255, § 68; 1987, ch. 234, § 66; 1993, ch. 282, § 42.

NMSA 1978, § 70-6-3 Acquisition of lands for purposes of underground natural gas storage; lands controlled by public body, executor, administrator, guardian, receiver or trustee

70-6-3. Acquisition of lands for purposes of underground natural gas storage; lands controlled by public body, executor, administrator, guardian, receiver or trustee Any natural gas company desiring to make use of a formation or stratum as a reservoir for the underground storage of natural gas shall attempt to acquire by option, lease, conveyance or other negotiated means, such formation or stratum prior to resorting to the exercise of the power of eminent domain as hereinafter granted. Any public body and any executor, administrator, guardian, receiver or trustee shall be authorized to grant to any such natural gas company rights for underground storage of natural gas in lands subject to its or his control in the same manner as provided by law for entering into oil and gas leases, or if any such public body, executor, administrator, guardian, receiver or trustee shall not be specifically authorized by law to make oil and gas leases, then in the manner provided by law for lease by such public body, executor, administrator, guardian, receiver or trustee of interests in land, or if any such public body, executor, administrator, guardian, receiver or trustee shall not be specifically authorized by law to make oil and gas leases or leases for interests in land, then in the manner provided by law for the sale by such public body, executor, administrator, guardian, receiver or trustee of interests in land. 1953 Comp., § 65-9-3, enacted by Laws 1963, ch. 139, § 3.

NMSA 1978, § 70-6-4 Appropriation of underground storage facilities; limitations

70-6-4. Appropriation of underground storage facilities; limitations By eminent domain proceedings, any natural gas company may appropriate for underground storage of natural gas any subsurface stratum or formation in any land which the division shall have found to be suitable for the underground storage of natural gas, and in connection therewith may appropriate such other interests in the land as may be required to maintain and operate facilities for such underground storage; provided, however, that the right to appropriate underground formations and strata shall be limited as follows: A. no formation or stratum which is producing or which is capable of producing oil in paying quantities, through any known recovery method, shall be subject to appropriation hereunder; B. no formation or stratum that contained native gas producible in paying quantities shall be subject to appropriation hereunder, unless the recoverable volumes of native gas originally in place therein shall be substantially depleted, and unless such formation or stratum has a greater value or utility as a gas storage reservoir for the purpose of insuring an adequate supply of natural gas, or for the conservation of natural gas, than for the production of the relatively small volumes of native gas which remain therein; C. no formation or stratum underlying lands which contain known commercial deposits of potash shall be subject to appropriation hereunder; D. no formation or stratum shall be subject to appropriation hereunder if its use for underground storage purposes would cause injury to surface or underground water resources; E. no rights or interest in existing underground gas reservoirs, being used for the injection, storage and withdrawal of natural gas, owned or operated by others than the condemner, shall be subject to appropriation; F. no dwelling, barn, store, warehouse or other building shall be subject to appropriation hereunder; and G. the right of appropriation hereby granted shall be without prejudice to the rights of the owner of said lands or of other rights or interests therein to drill through the underground stratum or formation so appropriated in such manner as shall comply with orders, rules and regulations of the division issued for the purpose of protecting underground storage strata or formations against pollution and against the escape of natural gas therefrom and shall be without prejudice to the rights of the owner of said lands or other rights or interests therein as to all other uses thereof. 1953 Comp., § 65-9-4, enacted by Laws 1978, ch. 59, § 1.

NMSA 1978, § 70-6-5 Findings of oil conservation division

70-6-5. Findings of oil conservation division Any natural gas company desiring to exercise the right of eminent domain as to any land for underground storage of natural gas shall, as a conditional [condition] precedent to the filing of its petition in the district court, obtain from the division a decision finding: A. that the underground stratum or formation sought to be acquired is suitable for the underground storage of natural gas; B. that the underground stratum or formation sought to be acquired is incapable of producing oil in paying quantities through any known recovery method; C. that the formation or stratum sought to be acquired is not underlying lands which contain known commercial deposits of potash; D. that injury will not be caused to surface or underground water resources; E. that the underground stratum or formation sought to be acquired, if it contained native gas capable of production in paying quantities, is substantially depleted of recoverable native gas, and that such formation or stratum has a greater value or utility as a gas storage reservoir than for the production of the remaining volumes of native gas therein; F. the extent of the horizontal limits of the reservoir expected to be penetrated by displaced or injected gas; and G. that no portion of the formation or stratum sought to be acquired has been appropriated or is being utilized for the injection, storage and withdrawal of natural gas by others. 1953 Comp., § 65-9-5, enacted by Laws 1963, ch. 139, § 5; 1977, ch. 255, § 70.

NMSA 1978, § 70-6-6 Commission or division procedure

70-6-6. Commission or division procedure The laws, rules and regulations relating to commission or division action in matters pertaining to conservation of oil and gas shall be applicable to commission or division proceedings under this act [70-6-1 to 70-6-8 NMSA 1978]. 1953 Comp., § 65-9-6, enacted by Laws 1963, ch. 139, § 6; 1977, ch. 255, § 71.

NMSA 1978, § 70-6-7 Exercise of right of eminent domain

70-6-7. Exercise of right of eminent domain Any natural gas company having first obtained a decision from the division may proceed to appropriate for underground storage of natural gas subsurface strata or formations and such other interests in the property as may be required to maintain and operate facilities for such underground storage in the manner provided by the Eminent Domain Code [42A-1-1 to 42A-1-33 NMSA 1978]. 1953 Comp., § 65-9-7, enacted by Laws 1963, ch. 139, § 7; 1977, ch. 255, § 72; 1981, ch. 125, § 53.

NMSA 1978, § 70-6-8 Ownership of injected gas

70-6-8. Ownership of injected gas All natural gas which has previously been reduced to possession, and which is subsequently injected into underground storage in any strata or formation shall at all times be deemed the property of the injector, his heirs, successors or assigns; and in no event shall such gas be subject to the right of the owner of the surface of said lands or of any mineral interest therein, under which said strata or formation lie, or of any person other than the injector, his heirs, successors and assigns, to produce, take, reduce to possession, waste or otherwise interfere with or exercise any control thereover, provided that the injector, his heirs, successors and assigns shall have no right to gas in any stratum, formation or portion thereof, in which storage rights have not been acquired pursuant to this act [70-6-1 to 70-6-8 NMSA 1978], or otherwise purchased. 1953 Comp., § 65-9-8, enacted by Laws 1963, ch. 139, § 8.

Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18573/index.doFetched: 10/20/2026