New Mexico fines Permian Basin oil driller Ameredev $42M for air pollution
An Austin, Texax-based oil and gas company was fined about $42 million by the State of New Mexico for alleged air pollution violations at facilities in the southeast region of the state.
The New Mexico Environment Department (NMED) and the Energy, Minerals and Natural Resources Department (EMNRD) issued dual fines Thursday accusing Ameredev Operating of illegal natural gas emissions and failure to report emissions.
NMED’s fines, totaling about $40.3 million stemmed from alleged violations at five facilities near Jal in Lea County, where the agency said five regulated air pollutants were excessively emitted.
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The Department’s order in addition to the civil penalty called on Ameredev to cease all excess emissions from its facilities in the state, seek adequate permits for the emissions, hire and NMED-approve independent auditor to assess all of the company’s sites in the state and take action to mitigate future emissions.
Ameredev did not respond to a request for comment from the Carlsbad Current-Argus.
It must respond to NMED’s notice and pay the penalty within 30 days or request a hearing.
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NMED said Ameredev extracted oil and gas from the five facilities without a plan to transport resulting gas to a midstream operation from processing or transmission as required by law.
Without such a path for the gas, the company burned off about 3.2 million cubic feet of natural, NMED charged, emitting 7.5 million pounds of hydrogen sulfide, sulfur dioxide, nitrogen oxides, carbon monoxide and volatile organic compounds.
NMED Cabinet Secretary James Kenney said the company “exploited” New Mexico for profit by skirting the state’s air pollution rules, actions that could cause health problems, create smog and contribute to climate change.
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The violations were discovered when residents of Lea County contacted NMED with concerns about “excessive flaring,” read the announcement, and state inspectors found equipment lacking proper permits at each of the five sites, and more emissions than were reported by the company.
Complaints about excessive flaring from the local community dated back to at least 2019, records show.
“Ameredev is a Texas-based exploration and production company that exploited public health for profit,” Kenney said. “Ameredev’s management team have shown blatant disregard for our right to breathe clean air and now they must be held accountable.”
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Cindy Hollenberg, compliance and enforcement section chief with NMED’s Air Quality Bureau said the fines issued by NMED should serve as a warning to the broader oil and gas industry to follow state law.
“This action sends a strong message to this company and to the oil and gas industry as a whole that we take compliance seriously,” she said.
Meanwhile, EMNRD’s Oil Conservation Division (OCD) issued another $2.4 million fine to Ameredev for multiple violations of OCD rules at one of its wells in Lea County, alleging in that case that the company failed to report natural gas production or waste as required by OCD regulations.
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The reports are used to determine if operators are within state law regarding emissions, OCD said, as part of New Mexico’s climate policy.
The OCD ordered Ameredev to correct the problems, begin an audit of its other facilities and pay the fine.
The Division was also considering revoking the company’s authority to transport natural gas due to its alleged noncompliance.
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OCD Director Dylan Fuge said most of Ameredev’s facilities were “relatively new” in New Mexico, as records showed the well in question was approved by the agency in 2021, and planned a more thorough review of its operations in the state.
“We are very concerned with the pattern and practice we are seeing in Ameredev’s operation given the fact that the operator and its facilities are relatively new in New Mexico,” Fuge said. “OCD will conduct a more detailed review of the remainder of Ameredev’s operations.”
Ameredev is backed by Houston-based firm EnCap Investments that provides capital for U.S. oil companies.
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In a letter to EnCap, the agencies detailed eight violations found by NMED at Ameredev’s facilities and called on the investment firm to audit all of the operators in its portfolio for potential environmental violations.
“While Ameredev is directly responsible for responding to the allegations, it is critical for EnCap Investments, as its owner, to be apprised of the gravity of Ameredev’s compliance issues,” the letter read.
“At this time, both NMED and EMNRD recommend EnCap Investments notify all oil and natural gas operators in its portfolio of Ameredev’s compliance issues and that you encourage such operators to conduct regulatory self-audits and disclose any potential violations to our agencies.”
Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.
This article originally appeared on Carlsbad Current-Argus: New Mexico fines Permian oil driller Ameredev $42M for air pollution
