Oil & Gas News

New Mexico Fines Ameredev $40MM Over Egregious Violations

Ameredev, Fine, Flaring

By: Yahoo – State regulators have imposed a $40.3 million fine on a Texas oil company for what they called egregious violations that included excessive emissions and unlawful flaring.

The state Environment and Energy, Minerals and Natural Resources departments took separate enforcement actions against Austin, Texas-based Ameredev for alleged breaches of state rules and permitting requirements.

The Environment Department found the company released excessive amounts of five air pollutants from as many facilities in Lea County.

The Ameredev facilities also extracted oil and natural gas without any means to transport the gas to a midstream pipeline as required by state law, the agency said.

Instead, the company chose to flare more than 3.2 billion cubic feet of natural gas, enough to heat 16,640 homes for a year.

The heavy emissions produced a total of 7.5 million pounds of toxic byproducts, including hydrogen sulfide, sulfur dioxide, nitrogen oxides, carbon monoxide, and volatile organic compounds. These pollutants can cause heart and lung problems, impaired cognition, convulsions, and death; they also contribute to climate change.

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

The agency issued a compliance order that requires the company to:

* Cease all excess emissions from its facilities in accordance with regulations

* Seek permits to cover equipment and operations

* Hire an approved independent, third-party auditor to assess all Ameredev facilities in New Mexico

* Initiate projects to reduce excess emissions.

Ameredev must respond to the agency’s order and pay the penalty within 30 days or request a hearing.

In 2019, Lea County residents contacted the state to express concerns about profuse flaring at the Ameredev facilities.

Inspectors visited the sites and found unpermitted equipment and in some cases twice as many emission sources as the company had reported to the state, the agency said. Records indicated emissions went beyond allowable limits, with many of the required air pollution controls not in place or operational.

In a separate action, the Oil Conservation Division issued a notice of violation and a proposed civil penalty of $2.4 million to Ameredev for rule violations at one of its wells.

Ameredev failed to file required production and natural gas waste reports, which show compliance with waste rules that are key to the state’s climate policy, the division said.

The company must pay the penalty, correct the infractions and conduct an audit at its other New Mexico facilities, which a preliminary review indicates may have similar issues, the agency said. It still could face the prospect of having its authority to transport oil and gas within the state revoked.

“Ameredev willfully ignored basic tenets of New Mexico’s Oil and Gas Act that have been on the books since 1935,” Energy, Minerals and Natural Resources Secretary Sarah Cottrell Propst said in a statement.

It also flouted the state’s ban on routine venting and flaring, Cottrell Propst added.

If the state Legislature hadn’t imposed caps on the department’s penalty authority, the fine would be much higher, she said.

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