Oil & Gas News

Permian Basin oil and gas company agrees to pay $650,000 after air pollution lawsuit

DCP Operating air pollution settlement

A Permian Basin oil and gas operator agreed to pay $150,000 in fines and spend $500,000 to improve air quality in the region while taking steps to cut down on gas flaring as part of a settlement to a lawsuit filed in March 2021 by environmental groups.

This article originally appeared on Carlsbad Current-Argus – See credit details at end of story

DCP Operating Company agreed to make improvements to a gas plant in the Odessa, Texas area on the eastern side of the Permian that would reduce the facility’s use of flaring, or the burning off excess gas while also dedicating the funds listed in the settlement to air quality work in the area via projects chosen by the plaintiffs.

Site improvements involved upgrading and repairing leaking valves and installing carbon-capture devices at the facility.

DCP also agreed to automatic penalties in the future of up to $14,500 per ton of hydrogen sulfide more than agreed-upon limits, per the settlement signed by environmental groups and company leadership.

Company spokesperson Jeanette Alberg said the emissions described in the settlement were caused by technological malfunctions at the facility.

“We work diligently to eliminate these events and, when they do occur, we notify the appropriate regulatory authority consistent with state requirements, assess the event or circumstance, and work to remedy the situation as quickly as possible,” Alberg said.

She said under Texas law, the company believed it could defend the emission events in court, but opted to come to a resolution that would appease the plaintiffs and ultimately lead to operational improvements.

“We focus on safety and reliability and have worked diligently to eliminate these types of upset and malfunction events,” Alberg said.

“As part of this Settlement Agreement and consistent with our ongoing sustainability efforts, we are committed to ensuring the decisions we make today are also the right decisions for the future.”

Flaring became controversial in recent years as fossil fuel production in the basin shared by southeast New Mexico and West Texas increased drastically and advocates became concerned with the industry’s environmental impact.

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The State of New Mexico’s Oil Conservation Division banned routine flaring at oil and gas facilities in that state, and environmentalists across the border called for their lawmakers to do the same.

Considering this lack of state regulations on oil and gas emissions in Texas, Attorney with the plaintiff the Environmental Integrity Project Colin Cox said the federal government and the administration of President Joe Biden must step in and devise standardized environmental regulations to improve air quality across the U.S.

The U.S. Environmental Protection Agency did begin devising its own regulations to curb the emission of greenhouse gas methane, the main component of extracted natural gas, and Cox said stricter rules were needed to protect the environment from industrial pollution.

“When it comes to both climate change and environmental justice, the Biden Administration has been talking the talk for almost two years. But federal enforcement of environmental laws has fallen by over 50 percent in the past three years,” Cox said.

“Time is short for the Biden EPA to walk the walk. Today’s settlement is one example of what EPA should be leading to reduce greenhouse gases and toxic pollution in the oil and gas fields.”

About 15 miles northwest of Odessa in Ector County, DCP’s Goldsmith gas processing plant removes hydrogen sulfide, a dangerous air pollutant, from oil and gas extracted in the Permian before it can be sent to market via pipeline almost 500 miles east via pipeline to the Gulf Coast.

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The plaintiffs contended this facility was one of the nation’s largest emitters of resulting “sour gas” which is created when sulfur dioxide and hydrogen sulfide are released into the air.

“Today’s settlement goes to show that oil and gas companies can reduce air pollution and flaring when they are motivated to do so,” said Corey Troiana, with the Texas Campaign for the Environment, a plaintiff in the suit.

“Our state environmental agencies have dropped the ball on pollution enforcement, which is why we need to call on the Biden Administration EPA to ramp up and strengthen basic enforcement of all our nation’s anti-pollution laws.”

After the settlement was signed by the parties in the case, it will go before the EPA for approval under the Clean Air Act.

This wasn’t the first time DCP ran afoul of a government agency and its air pollution regulations.

In September 2021, the New Mexico Environment Department (NMED) announced a $950,000 settlement it reached with that company for illegal emissions at 12 gas facilities in Eddy and Lea counties on the southeast New Mexico side of the Permian.

NMED cited the company for about 3.8 million pounds of pollutants like nitrogen oxides, carbon monoxide, volatile organic compounds (VOCs), sulfur dioxide, and hydrogen sulfide during a two-year period from May 1, 2017, to June 30, 2019.

Aside from the fine, DCP was ordered to permanently close its Eunice Gas Plant and submit compliance reporting to the State.

“New Mexico is not a sacrifice zone. DCP has shown a blatant disregard for New Mexico communities in which it operates and clean, breathable air by spewing millions of pounds of harmful pollution into frontline communities,” said NMED Cabinet Secretary James Kenney upon announcement of the settlement.

Alberg touted the company’s work in reducing pollution amid the 2021 settlement, pointing to a 95 percent decline between then and 2018 in emission events resulting from malfunctions.

“Decreasing our environmental footprint is a constant focus for DCP Midstream,” she said. “DCP is committed to ensuring the decisions we make today are also the right decisions for the future.”

Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.

This article originally appeared on Carlsbad Current-Argus: Permian Basin oil and gas company to pay $650,000 for air pollution


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