New Mexico reaches record settlement over natural gas flaring in the Permian Basin
ALBUQUERQUE, N.M. — New Mexico has reached a record settlement with a Texas-based company over air pollution violations at natural gas extraction sites in the Permian Basin.
The $24.5 million deal with Ameredev announced Monday is the largest settlement the state Ministry of Environment has ever reached for a civil oil and gas sector violation. It stems from the flaring of billions of cubic meters of natural gas that the company extracted over an 18-month period but was unable to transport to downstream processors.
Environment Minister James Kenney said in an interview that the flared gas would have been enough to power nearly 17,000 homes for a year.
“It’s completely the opposite of the way it’s supposed to work,” Kenney said. “If they hadn’t wasted New Mexico’s resources, they could have used that gas.”
Flaring or burning off the gas resulted in more than 7.6 million pounds of excess emissions, including hydrogen sulfide, sulfur dioxide, nitrogen oxides and other gases that state regulators say are known to cause respiratory problems and contribute to climate change.
Ameredev said in a statement issued Monday that it was pleased to have resolved a “legacy issue” and that the state Air Quality Bureau was not aware of any ongoing compliance issues at the company’s facilities.
“This is an issue that we take very seriously,” the company said. “Over the past four years, Ameredev has not suffered from excessive emissions related to flaring, thanks to our significant – and ongoing – investments in several advanced technologies and operational improvements. ”
While operators can vent or flare natural gas during emergencies or equipment failures, New Mexico adopted rules in 2021 to ban routine venting and flaring and set a 2026 deadline for the companies to capture 98% of their gas. The rules also require regular tracking and reporting of emissions.
Ameredev said it captured more than 98% of its gas when the new venting and flaring rules were adopted, and its annual capture rate has been above 98% since then.
A study published in March in the journal Nature calculated that U.S. oil and natural gas wells, pipelines and compressors emit more greenhouse gases than the government thought, causing $9.3 billion in climate damage annually. The authors say it’s a solvable problem, as about half of emissions come from just 1% of oil and gas sites.
Under the settlement, Ameredev agreed to conduct an independent audit of its operations in New Mexico to ensure compliance with emissions requirements. It must also submit monthly reports on actual emissions figures and propose a plan for weekly inspections for a period of two years, or install leak monitoring and repair equipment.
Kenney said it was a citizen complaint that first alerted state regulators to Ameredev’s flaring.
The Environment Department is currently investigating numerous other possible pollution violations around the watershed, and Kenney said this would likely lead to more penalties.
“With an average compliance rate of 50% of air quality regulations by the oil and gas industry,” he said, “we have an obligation to continue to ensure compliance and hold polluters accountable.”