Latest state on the not-so-hit parade of weak oil and gas regulation is New Mexico

The U.S. oil and gas boom has put more attention on regulation of the industry, done almost entirely by state agencies that tend to be friendly to the industry. The latest example is in New Mexico, where regulators have recorded 3,691 violations since 2010, but haven't fined any of the drillers or operators for the infractions "because the state Oil Conservation Division hasn't had the authority to levy fines since March 2009," Mike Soraghan reports for EnergyWire. "So when inspectors find a problem, there's not much they can do except ask the driller to fix it." (EnergyWire chart)

The problems stems from 2009 case when "the state Supreme Court agreed with a gas drilling company, Marbob Energy Corp., that the oil and gas agency lacked legal authority to issue fines," Soraghan writes. "To levy fines, the court said, the law requires the agency to ask the state attorney general to file a lawsuit in the county where the violation occurred. The agency hasn't referred any cases to the attorney general since the ruling, and the attorney general hasn't filed any cases."

In their ruling, the New Mexico justices said that the agency might well need to levy fines. At the time, agency Director Mark Fesmire told The Associated Press that the ruling left the New Mexico oil and gas industry 'basically unregulated'," Soraghan notes. "The Oil Conservation Division does have more severe penalties available. It can revoke a company's bond in some circumstances, which prevents it from operating. The department can also refuse to issue new permits to companies that aren't in compliance. But that's considered a drastic step and has not happened to an operational company since 2009." (Read more)