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New Mexico eyeing stricter regulations, more fines on oil and gas spills

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State oil and gas regulators are considering stricter regulations that could bring automatic fines against operators that report spills of substances associated with extraction such as crude oil or produced.

WildEarth Guardians filed a petition earlier this month with the Energy, Minerals and Natural Resource Department’s Oil Conservation Division (OCD), the State’s main compliance arm for oil and gas activities.

The petition called for the Oil Conservation Commission to take up the proposed rulemaking at its Nov. 4 meeting where commissioners could set a future hearing to vote on codifying the proposed rules into law.

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In its application for rulemaking, the group argued that spills and releases of waste from the oilfield such as natural gas, crude, produced water and other contaminants were not expressly outlawed by New Mexico state law.

The initial petition only added requirement for produced water and the Commission agreed to a hearing in April 2021, but WildEarth Guardians recently expanded their petition to included all forms of oilfield waste and another hearing must be set.

Produced water is a combination of water that flows back to the surface during the hydraulic fracturing process and formation water brought to the surface from underground rock formations that contain oil and natural gas.

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Produced water is traditionally pumped back underground, but many companies have opted in recent years to treat the water and reuse it for future fracking operations.

Under current regulations, operators must report a spill or release to the regulator and then take subsequent steps to remediate the release and the impacted environment and take steps to prevent future incidents to avoid fines.

“The proposed rule would fill that glaring regulatory hole by specifically prohibiting major or minor releases, as those terms are already defined in the Commission’s rules,” read the application.

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WildEarth Guardians cited the environmental impacts of “routine” releases of substances associated with extraction, pointing to 15,811 such incidents reported by the OCD since 2010 – about 7,102 releases of produced water and 4,203 releases of crude oil.

This year, as of Oct. 26 the OCD reported 573 produced water releases and 297 crude oil spills, per state records.

While the operators are required to remediate the environment and work to recover as much of the spilled resource as possible, WildEarth Guardians pointed thousands of gallons of oil and produced water reported as “lost” by the OCD.

The group argued this meant operators were not required to “fully” remediated spills by state regulators.

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“While OCC’s rules require reporting and cleanup of both major and minor releases, the Commission’s cleanup standards fail to ensure that the operators responsible for spills fully remediate the environmental damage caused by toxic pollution,” the application read.

“In fact, OCD records show significant quantities of oil and gas and related toxic waste products ‘lost’ into the environment after accidental releases.”

The changes proposed by WildEarth Guardians would add additional reporting requirements for spills, while also prohibiting them and calling for notices of violations upon reporting of a spills or requiring civil action and imposing penalties on operators.

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Daniel Timmons, staff attorney with the WildEarth Guardians said stricter regulations must be enacted by the State to properly protect the environment from the impacts of extraction.

“If New Mexico is serious about protecting public health and the environment from the oil and gas industry’s toxic waste, then regulators need to ensure that irresponsible, careless, and unsafe handling is no longer tolerated,” Timmons said.

“While the New Mexico Oil Conservation Commission claims to want to protect people from the oil and gas industry’s waste, it’s disturbing that spills remain legal and rampant.”

Bill Brancard, EMNRD general council said expanding the agency recommended scope of the petition be expanded to include not only produced water, but other forms of extractive waste.

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“They trying to directly attach new penalty provisions,” he said. “They want to attach spills so that if you report a spill you might also have to pay fines. Their logic is that if they (operators) incur fines, that could reduce spills.”

Brancard said companies are already required to report spills or releases and clean them up and incur the associated costs.

He said the State was largely unspecific about how companies clean up a spill, and stricter regulations could benefit the process.

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“We require that they clean it up, but we aren’t very specific about how you have to clean it up,” Brancard said. “It can be very costly if you have a spill to clean up.”

EMNRD relies on operators to report spills, Brancard said, with thousands of wells throughout New Mexico and few inspectors available.

More fines imposed on the companies reporting the spills, he said, could lead to less reports as operators attempt to avoid such fines.

“That’s the debate that will occur before the Commission,” Brancard said. “Having 60,000 wells out there and not a lot of inspectors makes it hard for us to report spills. We rely on operator reporting. The argument could be made that if they have these fines added, they might not report a lot.”

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Less operator reporting could mean more resources expended by already cash-strapped state regulators, Brancard said, and could delay the clean-up process.

He said spills and accidental releases are bound to happen, and the important thing is to make sure they are adequately remediated by those responsible.

“There’s inevitably going to be spills and accidents, Brancard said. “We really want to get companies out there and clean it up. The quicker its cleaned up, the less risk to the environment.”

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

This article originally appeared on Carlsbad Current-Argus: New Mexico eyeing stricter regulations, more fines on oil and gas spills

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