March 6, 2019

Fix needed for a big loophole for oil & gas


Natural Gas pipeline going through New Mexico.

New Mexico has a big legal loophole in dire need of a fix.

Shale oil and gas production in the Permian Basin in southeastern New Mexico has catapulted the state to be one of the largest producers in the nation. Along with that rapid increase comes more pollution and a dramatic rise in spills of chemicals and waste. In fact, the total number of oil and gas related spills increased nearly 100 percent since 2008 and more than 500 percent since 2000.

Despite this increase in violations by the oil and gas industry, fines for those infractions have plummeted to zero. Thanks to a 2009 State Supreme Court case, New Mexico’s Oil Conservation Division can inspect and issue violations, but it can’t issue penalties. The decision effectively negates its enforcement authority.

One flagrant example of the consequences of limited enforcement power is the 2016 explosion at a WPX fracking site that caused the evacuation of 55 local residents near Nageezi. Thirty six oil storage tanks caught fire, with some that remained burning for 3 days. WPX had received violation notices before. They reported spills of waste and crude oil, but the Oil Conservation Division issued no fines…because they didn’t have the power to do so.

This is no isolated example, either. Earthworks issued a report in January detailing this problem titled, “Moving New Mexico Ahead: Restoring Strength and Authority to the Oil Conservation Division.” Among the data collected, the report shows that the Oil Conservation Division collected not a single fine last year despite the 1,712 violations reported to their office. The Oil Conservation Division also collected $0 in fines between 2011 and 2015—not a single one.

The report had several recommendations including restoring the Oil Conservation Division’s authority to assess civil penalties for violations of the New Mexico Oil and Gas Act and strengthening enforcement capacity with more budgetary resources and well-paid, well-trained inspectors.

Fortunately, a crucial piece of legislation, SB186, is gaining support in the Roundhouse that would fulfill the report’s first recommendation and restore the power of the Oil Conservation Division to fine oil and gas operators who break the law and threaten the health of New Mexicans.

Although the bill is currently amended to cap the agency’s authority to assess fines at $250,000 without going to court—a limitation that does not exist for other enforcement agencies—SB186 is a step in the right direction. The bill has already passed through the Senate Conservation and Judiciary Committees. It awaits an all important vote in the Senate Finance Committee that is expected some time this week.

A yes vote for SB186 is a vote for fairness and for good government. Because it is not rocket science that law-breakers must be penalized, not only to deter them from breaking the law again, but to send the message to others that law breaking will not be tolerated.

Right now the message that New Mexico sends to the oil and gas industry is: “You are beyond the reach of the law.” That needs to change.

Nathalie Eddy is Earthwork’s Colorado & New Mexico field advocate.