June 29, 2023

Texas-based company fined $40 million for excess emissions at NM Permian Basin facilities

New Mexico Environment Department

An unauthorized flare at Ameredev’s Nandina facility, photo by AQB inspectors taken on Dec. 31, 2019.

State agencies fined a Texas-based oil and gas company operating in the Permian Basin more than $40 million for alleged violations of air quality regulations.

Ameredev II, LLC and Ameredev Operating, LLC allegedly released “significant excess emissions of five regulated air pollutants from five facilities in Lea County,” according to a press release from the New Mexico Environment Department.

NMED and the state’s Energy, Minerals and Natural Resources Department announced separate enforcement actions against the company on Thursday.

“Ameredev is a Texas-based exploration and production company that exploited public health for profit,” Environment Secretary James Kenney said in a press release. “Ameredev’s management team have shown blatant disregard for our right to breathe clean air and now they must be held accountable.”

The NMED order requires Ameredev to “cease and desist from all excess emissions” and to obtain permits that reflect the equipment and operations at the sites. The company must also hire an independent, NMED-approved auditor to assess all of its facilities in New Mexico and undertake projects to mitigate excess emissions. NMED also fined the company more than $40.3 million, which will go to the state’s general fund.

EMNRD’s notice of violation includes a proposed $2.4 million fine.

According to the press release, EMNRD is limited in the amount it can fine the company. 

“Ameredev willfully ignored basic tenets of New Mexico’s Oil and Gas Act that have been on the books since 1935, not to mention the state’s nation-leading rules to prevent climate pollution that ban routine venting and flaring,” EMNRD Secretary Sarah Cottrell Propst said in a press release. “Today we’re pursuing the maximum penalties EMNRD is allowed to assess by law. If the legislature had not imposed caps on EMNRD’s penalty authority, the fine would be much higher.”

According to the press release, the five facilities in question have no means of transporting gas to midstream pipelines as required by state law. Because of this lack of infrastructure, Ameredev flared more than 3.2 million thousand cubic feet of natural gas and released an amount of carbon dioxide equivalent to heating approximately 16,640 homes for one year, according to NMED. Additionally, those actions led to emissions of more than 7.5 million pounds of excess hydrogen sulfide, sulfur dioxide, nitrogen oxides, carbon monoxide and volatile organic compounds.

The flaring led Lea County residents to contact the state agencies in 2019, resulting in inspections where NMED says officials found unpermitted equipment present at each site and, in some cases, twice as many emission sources as Ameredev reported to the state.

NMED further states in the press release that many required air pollution emissions controls were either not in place or not operational.

“The violations we identified at the sites show ignorance of the law or at worst willful disregard by the company for environmental regulations and our regulatory program,” NMED Air Quality Bureau Compliance & Enforcement Section Chief Cindy Hollenberg, who was also a member of the site investigation team, said in the press release. “This action sends a strong message to this company and to the oil and gas industry as a whole that we take compliance seriously.”