Enchant Energy wants state lawmakers to define underground carbon storage issues

Noel Lyn Smith
Farmington Daily Times

GALLUP — Enchant Energy is urging New Mexico lawmakers to consider legislation to clarify issues in the state around pore space ownership, which is the empty space between grains of rocks underground where the firm hopes to store carbon it would remove while running the coal-fired San Juan Generating Station with carbon capture technology.

Some of Enchant Energy's leadership team met July 13 in Gallup with members of the state's Water and Natural Resources Committee to seek support for a new law.

Pore space starts just below the surface. It can be used to sequester carbon dioxide by injecting the gas thousands of feet underground.

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Enchant Energy has been working with the City of Farmington to retrofit the San Juan Generating Station near Waterflow with carbon capture technology after current operations end next year.

Cindy Crane, CEO of Enchant Energy, said negotiations continue for the transfer of ownership to Farmington from the current power plant owners.

Enchant Energy CEO Cindy Crane, center, addresses the Water and Natural Resources Committee on July 13 during a meeting at the University of New Mexico's branch in Gallup.

Enchant Energy officials view a proposal about pore space ownership as beneficial to the state by creating jobs, furthering economic development and generating taxes and payments from injection fees.

Enchant Energy tries to make the case for legal definition

Peter Mandelstam, chief operating officer of Enchant Energy, discussed the subject with state representatives and senators at a July 13 meeting of the Water and Natural Resources Committee at the University of New Mexico's Gallup branch.

In addition to the financial benefits, the bill would define ownership and conveyance without harming mineral rights, he said.

"Like any developers, all we want is regulatory certainty. What we say today is, with some very modest legislation – that doesn't harm oil and gas – we can move forward with a new business in New Mexico," Mandelstam said.

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He added that the state could follow North Dakota in enacting a statute about pore space.

Among the legal issues that cause uncertainty are ownership issues when a parcel has separate owners for the surface and mineral rights.

The Bismarck Tribune reported in January that a North Dakota district court judge declared the law unconstitutional after an association of landowners sued the state, arguing that the law stripped them of their right to be compensated.

Other states that have laws regarding pore space are Montana, Oklahoma and Wyoming.

The San Juan Generating Station is seen on April 20, 2015, on County Road 6800 near Waterflow.

Rep. Jack Chatfield, R-Mosquero, said cattle owners in New Mexico advocated several years ago for similar legislation.

Presentations at that time by supporters to state lawmakers focused on pore space projects in the North Sea near Norway, Chatfield explained.

"There are some projects that exist around the world that do this," he said. "I don't know if this one is viable or not viable. I think that's a conversation that we have to have."

A story by Eastern New Mexico News in 2009 states there were two bills that centered on pore space ownership and both faced opposition from several oil and gas developers.

Sen. Linda Lopez, D-Albuquerque, said she remembered the Senate Judiciary Committee spent quite amount of time discussing pore space.

"I anticipate more," she said after listening to the presentation by Enchant Energy.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 or by email at nsmith@daily-times.com.

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