Murchison Oil and Gas fined $2 million for wastewater spills near Carlsbad
Two spills of oilfield wastewater that were not cleaned up for years near Carlsbad landed a Permian Basin oil company $2 million in fines issued Thursday by state regulators.
Murchison Oil and Gas was issued a notice of violation (NOV) by the Oil Conservation Division (OCD), an arm of the Energy, Minerals and Natural Resources Department (EMNRD), for the incidents along with the civil penalty. The OCD reported the company failed to properly clean up spilled produced water at two separate well sites about 16 miles south of Carlsbad.
Murchison did not respond to an inquiry from the Carlsbad Current-Argus.
More: Oil and gas fees could be raised to pay for better air pollution oversight in New Mexico
Produced water is a combination of flowback from hydraulic fracturing, or fracking, fluids and formation water brought to the surface with oil and gas from underground rock formations. The OCD said remediating produced water spills was needed to prevent environmental contamination.
The OCD requires operators to report to the State any releases of produced water and plans to clean them up. The agency said Murchison did not report or work to remediate the spills and “took actions that risk exacerbating the possible contamination,” read a news release.
The company could still take steps to address the problem, per OCD rules, but could face a hearing before the OCD to enforce the terms of the NOV.
More: Oil and gas land auction cut by more than 3,000 acres in New Mexico amid concerns
“Environmental justice means holding polluters like Murchison accountable for their actions,” said EMNRD Deputy Secretary Dylan Fuge. “Murchison’s pattern of non-compliance is unacceptable. We’re sending a message loud and clear: obey the rules or face the consequences.”
What happened?
Murchison’s violations of state environmental laws dated back to April 2012, when the OCD reported it received a notification of release from the company for five barrels of produced water spilled at a well site when rainwater caused drilling pits to overflow.
On June 13, 2023, the OCD reported the incident report was not closed as identified by a buyer of the well which requested the case be closed “as is,” read the notice of violation. The OCD informed the contractor the request was insufficient, and that current remediation requirements must be met as no remediation plan was received before August 2018.
The OCD granted Murchison two extensions for the plan, and later found the area of the spill to be highly karstic, meaning the spill must be remediated to the “most stringent” criteria. Karst is an underground landform made mostly of limestone that his highly porous and connects with groundwater sources. A spill in a karst area can leach into local drinking water, which is why regulators attach additional requirements for such spills.
Murchison requested a variance to these rules, read the notice of violation, but OCD denied it after finding the justification inadequate.
“The variance request does not demonstrate how public health, the vegetation, wildlife, and surrounding environment will be equally or better protected if the contamination is left in place,” read the notice.
More: Oil and gas leases blocked on Permian Basin state land most likely to produce fossil fuel
In a separate incident on April 26, 2018 the OCD was notified by the New Mexico State Land Office of a produced water spill at another well site owned by Murchison which reported the spill was less than 5 barrels of produced water. Later reports indicated the spill was much larger, up to 25 barrels, read the notice.
In June 2023, a buyer of the well contacted OCD as this incident was also not closed, records show. Extensions were again granted, and Murchison requested a variance from regulations tied to the karstic nature of the area which was also rejected by the agency.
The OCD found Murchison had failed to meet reporting requirements in both incidents. In the second case, the Division reported Murchison used freshwater in an attempt to wash off the produced water from the area, which the agency contended could worsen environmental contamination.
More: Gov. Lujan Grisham vetoes tax exemption for small oil and gas wells in New Mexico
The two incidents led to 12 different violations of state law, the notice read. All the violations were considered either negligence or gross negligence, per the report, and ranged from one to 1,906 days in violation.
State taking enforcement actions against Permian Basin oil companies
The fines against Murchison were the latest in a string of enforcement actions taken by New Mexico regulators against oil companies in the Permian Basin.
In February, Apache agreed to a $9.5 million settlement with the New Mexico Environment Department’s Air Quality Bureau for unauthorized releases of air pollution at 23 sites in southeast New Mexico.
More: 2023 a growth year for companies throughout the Permian Basin
Mewbourne Oil was fined $5.5 million in August 2023, also for air pollution violations in the region, and Ameredev was handed a $40 million fine in June 2023 for violations at its sites throughout the state.
NMED Cabinet Secretary James Kenney estimated about half of New Mexico oil and gas operators are following state environmental laws.
Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on the social media platform X.
This article originally appeared on Carlsbad Current-Argus: Murchison fined $2M for oilfield wastewater spills near Carlsbad
