State oil commission votes on fine enforcement

This article has been corrected to reflect that New Mexico’s oil and gas industry generated a record $3.1 billion in state revenue in Fiscal Year ’19. 

The state Oil Conservation Commission voted Thursday to adopt rules to enforce fines for oil and natural gas companies that pollute New Mexico’s air and water.

The Oil Conservation Division of the Energy, Minerals and Natural Resources Department had lost the bulk of that authority in a state Supreme Court case in 2009. The power to enforce most fines fell upon the state Attorney General. But last year’s House Bill 546 restored the division’s ability to issue fines to energy companies. The commission’s action Thursday echoes that legislation.

“Reinstating the Division’s authority to assess civil penalties gives us another tool in our toolbox to ensure that the oil and gas industry is acting responsibly in New Mexico,” Adrienne Sandoval, Oil Conservation Division director, said in a statement. “New Mexico is a great example of how industry can thrive while also being responsible, and this new rule is another step in the right direction to improving regulatory compliance and ensuring a level playing field for diligent operators.”

The vote comes the same day that the New Mexico Oil and Gas Association said the booming industry had generated a record $3.1 billion in state revenue in Fiscal Year 19. NMOGA had supported HB 546, saying that the law strikes a good balance of supporting industry while also protecting the state’s air and water.

Spills of oil or wastewater in the oil field are some of the energy industry violations that can now be penalized by OCD.

In 2018, OCD reported 1,712 violations by oil and gas companies, but collected no civil penalties. The division collected no fines from 2011 to 2015, and has issued only three fines since 2009.

“We applaud the Oil Conservation Commission’s leadership for holding bad actors accountable and pushing the industry in New Mexico to meet global and national standards,” said Jordan Smith, executive director of Climate Advocates Voces Unidas. “New Mexicans deserve a state-of-the-art industry with state-of-the-art safeguards to match and the OCC’s action is a step in the right direction.”

Under the new rules, OCD could levy fines of $2,000 to $10,000 a day.

Other state agencies are enforcing fines for energy companies that violate state air and water quality standards. In November 2019, the state Environment Department issued notices of violation to Matador Production Co. and Mewbourne Oil Co. for air quality issues at their southeast New Mexico facilities. Earlier this week, NMED notified two more natural gas operators that their Permian Basin facilities may be in violation of state emissions standards.

Theresa Davis is a Report for America corps member covering water and the environment for the Albuquerque Journal.

 

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