New Mexico has reached a record settlement with a Texas-based company over air pollution violations at natural gas gathering sites in the Permian Basin.
The $24.5 million settlement with Ameredev announced Monday is the largest settlement ever reached by the state Department of Environmental Protection for a civil oil and gas violation. This stems from the flaring of billions of cubic feet of natural gas that the company had extracted over an 18-month period but was unable to transport it to downstream processors.
Environment Secretary James Kenney said in an interview that the flared gas would have been enough to power nearly 17,000 homes for a year.
“This is completely opposite of how this is supposed to work,” Kenney said. “If they hadn’t wasted New Mexico’s resources, they could have used this gas.”
Flaring, or burning the gas, resulted in more than 7.6 million pounds of excess emissions, including hydrogen sulfide, sulfur dioxide, nitrogen oxides and other gases that regulators say of the state, are known to cause respiratory problems and contribute to climate change.
Ameredev, in a statement Monday, said he was pleased to have resolved what is described as a “legacy issue” and that the state’s Office of Air Quality was unaware of ongoing compliance issues at company facilities.
“This is a matter we take very seriously,” the company said. “Over the past four years, Ameredev has not experienced any excess emissions events related to flaring thanks to our significant – and continued – investments in various advanced technologies and operational improvements.
While operators can vent or flare natural gas in the event of an emergency or equipment failure, New Mexico in 2021 rules adopted ban routine venting and flaring and set a 2026 deadline for companies to capture 98% of their gas. The rules also require regular monitoring and reporting of emissions.
Ameredev said it was capturing more than 98% of its gas when the new venting and flaring rules were adopted, and the annual capture rate has since been above 98%.
A study published in March in the journal Nature calculated that U.S. oil and natural gas wells, pipelines and compressors were releasing more greenhouse gases than the government thought, causing $9.3 billion in climate damage per year. The authors say this is a fixable problem, as about half of emissions come from just 1% of oil and gas sites.
Under the terms of the agreement, Ameredev agreed to conduct an independent audit of its New Mexico operations to ensure compliance with emissions requirements. It must also submit monthly reports on actual emission rates and propose a plan for weekly inspections for a period of two years or install leak monitoring equipment and repairs.
Kenney said it was a citizen complaint that first alerted state regulators to Ameredev’s flaring.
The Environment Ministry is currently investigating many other potential pollution violations around the basin, and Kenney said it’s likely more penalties could result.
“With an average compliance rate of 50% for air quality regulations by the oil and gas industry,” he said, “we have an obligation to continue to ensure compliance and demand accountability to polluters.
