Environment Department announces record oil and gas violation settlement

The New Mexico Environment Department on Monday announced it has reached a $24.5 million settlement with Ameredev II LLC, a Texas-based oil and gas company, over alleged air quality violations.

It is the department’s largest ever civil oil and gas violation settlement. The state says that $24.1 million of that settlement will go into the state’s general fund.

Ameredev flared more than 3,219,402 thousand cubic feet of natural gas from October 2018 to April 2020, according to the environment agency, when five company facilities extracted oil and gas but couldn’t accept or transport the gas to downstream processors.

The flaring released 7.6 million pounds of toxic gasses and compounds into the air, according to the Environment Department. The agency’s Environmental Protection Division issued a $40.3 million administrative compliance order, a way to address issues and order remedies, to Ameredev in June 2023.

“This settlement makes one thing crystal clear — companies that pollute our air will pay for circumventing New Mexico’s rules,” Gov. Michelle Lujan Grisham said in a statement. “Today’s settlement is about penalizing the bad actors in an effort to protect communities from breathing harmful pollution.”

The Environment Department’s Air Quality Bureau isn’t aware of any ongoing pollution at Ameredev facilities in the state, according to a Monday news release.

A spokesperson at Ameredev said the company hasn’t experienced excess emissions from flaring over the past four years because of investments in “various advanced technologies and operational enhancements.”

“This is an issue we take very seriously. … We are pleased to resolve this legacy issue, and look forward to continuing to responsibly work with the State of New Mexico and regional stakeholders to support the state’s economic development as well as American energy security,” the spokesperson said.

Ameredev also agreed to perform an independent, third-party compliance audit of operations in New Mexico, submit monthly reports of emission rates, conduct state-approved gas monitoring and submit or amend a battery permit application, according to the New Mexico Environment Department. Violations of the agreement will result in $2,000 daily penalties to the state’s general fund.

Environment Department Secretary James Kenney said in a statement the Ameredev settlement is a wakeup call to the oil and gas industry.

“The only option to avoid enforcement is to comply with state rules and permits,” he said.

Kenney told the Associated Press that the flared gas would have been enough to have supplied nearly 17,000 homes for a year.