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Energy producers ask Trump to adopt KISS Rule on royalties

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Dr. Van Romero from New Mexico Institute of Mining and Technology addresses royalty payments with energy producers Monday in Artesia. (Mike Smith Photo)

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ARTESIA — Energy producers from Chaves and Eddy counties talked of frustration when dealing with the federal government during a luncheon speech given by the vice president of research and chief executive officer of New Mexico Institute of Mining and Technology Monday.

Dr. Van Romero is also a member of the Royalty Policy Committee chartered earlier this year by U.S. Department of Interior Secretary Ryan Zinke.

The committee has been charged with giving input on royalty management issues and other mineral related policies to Secretary Zinke.

“President Trump wants the U.S. to be energy dominant,” Romero said.

He said the commission met a week ago and he said the royalty process, “gets really complicated really fast.”

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Romero said royalty payments date back to the 1930’s, “it was done when well drilling was vertical.”

“Horizontal drilling presents a problem,” Romero said. He added that the federal government then comes up with a number that the producer has to pay.

He said the committee is looking for input on how the Department of Interior can make the business climate conducive.

Romero added that the department has put together a list of priorities ranging from stewardship to increasing revenue.

“Sliding royalties are a possibility,” Romero said. “Maybe the laws we have are outdated, the secretary wants to focus on what he can do now.”

Romero also addressed the current political climate in the state. In particular he talked about how the Sandoval County Commission in central New Mexico is dealing with drilling issues.

“It has gone from one end of the spectrum to the other,” he said. “It’s back and forth and what we’ve done is to develop and provide sound science and engineering judgement to the things that people want to do.”

Romero said his job isn’t to write legislation or ordinances, “but if you want to propose something we can take a look at it and tell you what are the law of unintended consequences is.”

He said New Mexico Tech can provide, “honest to God sound engineering.”

Romero added, “there’s a lot of fake science out there, a lot of things they hear someone say and take it as gospel without knowing the fundamental background behind it. You need sound science and sound engineering to make decisions.”

Betty Young, president and chief financial officer of Read and Stevens Energy Development in Roswell agreed with Romero.

“We are tired of educating the federal and state government,” she said

“We know the science,” Young added. “It’s frustrating educating government agencies.”