State reaches $24.5M settlement with oil company over air pollution violations

Apr. 29—A Texas oil company has agreed to pay $24.5 million in a settlement with state regulators for excessive flaring that emitted massive pollutants posing threats to the environment and public health.

The state Environment Department reached the agreement with Ameredev, based in Austin, Texas, after initially citing the company for $40.3 million in penalties last year.

Regulators found Ameredev had flared about 3.2 billion cubic feet of natural gas between 2018 and 2020, emitting huge amounts of pollutants, including enough carbon dioxide — a potent greenhouse gas — to heat 16,640 homes in a year.

A spokesman for the Environment Department wrote in an email it's the Air Quality Bureau's largest settlement in memory.

"This settlement makes one thing crystal clear — companies that pollute our air will pay for circumventing New Mexico's rules," Gov. Michelle Lujan Grisham said in a statement. "Today's settlement is about penalizing the bad actors in an effort to protect communities from breathing harmful pollution."

The flaring released a total of 7.6 million pounds of toxic byproducts. The main pollutants were hydrogen sulfide, sulfur dioxide, nitrogen oxides, carbon monoxide and volatile organic compounds.

These pollutants can impair breathing and cognition and, in heavy doses, cause heart and lung problems. Carbon dioxide contributes to climate change.

In a statement, Ameredev officials said they were pleased to have resolved the issue, adding the company looks forward "to continuing to responsibly work with the State of New Mexico and regional stakeholders to support the state's economic development as well as American energy security."

In the past four years, Ameredev has had no other incidents of flaring causing excess emissions, the company said, attributing it to technological improvements and more efficient operations.

In addition to the cash settlement, Ameredev also agreed to:

* Conduct a third-party compliance audit of its operations at all of its New Mexico facilities.

* Submit monthly reports of emission rates at its New Mexico sites operating under permits or notices of intent.

* Conduct weekly optical gas imaging inspections for each New Mexico facility for two years or implement an advanced leak-and-repair monitoring technology.

After the unlawful flaring was discovered, Ameredev enlisted a third-party contractor to review the data. The findings were passed to the state Environment Department's air quality bureau.

Officials determined Ameredev extracted oil and natural gas without any way to transport it to a midstream pipeline as required by state law. Instead, the company flared the natural gas, creating the pollution.

The Environment Department and Oil Conservation Division took separate enforcement actions.

Ameredev failed to file required production and natural gas waste reports, which show compliance with the state's fossil fuel waste rule, the division said at the time.

In a statement, state Environment Secretary James Kenney said the agency is now using remote sensing technology, on-the-ground inspections and citizens' complaints to catch violators.

"Let this serve as a wake-up call to the oil and gas industry," Kenney said. "The only option to avoid enforcement is to comply with state rules and permits."