New Mexico Achieves Record Settlement for Gas Flaring in Permian Basin

New Mexico has achieved a significant milestone in its efforts to combat air pollution, securing a record USD 24.5 million settlement with Texas-based Ameredev over violations at natural gas gathering sites in the Permian Basin. This marks the largest settlement the New Mexico Environment Department has ever finalized for a civil oil and gas violation. The issue centered on the flaring of billions of cubic feet of natural gas, which Ameredev had extracted but failed to transport to downstream processors over an 18-month period.

Environment Secretary James Kenney highlighted the gravity of the situation, noting that the flared gas could have supplied nearly 17,000 homes for a year. "It's completely the opposite of the way it's supposed to work," Kenney stated, emphasizing the waste of New Mexico's resources. The flaring resulted in over 7.6 million pounds of excess emissions, including harmful gases such as hydrogen sulfide, sulfur dioxide, and nitrogen oxides, which are known to cause respiratory issues and contribute to climate change.

Ameredev responded to the settlement by acknowledging the resolution of what it termed a "legacy issue." The company asserted its commitment to environmental compliance, noting that it has not experienced any flaring-related excess emissions events in the last four years due to significant investments in advanced technologies and operational enhancements.

New Mexico has taken steps to curb routine venting and flaring of natural gas with rules adopted in 2021, setting a 2026 deadline for companies to capture 98% of their gas. These regulations also mandate regular tracking and reporting of emissions. A study published in Nature highlighted that American oil and natural gas wells, pipelines, and compressors emit more greenhouse gases than previously estimated by the government, causing substantial climate damage annually. However, it also pointed out that this is a fixable issue.

As part of the settlement, Ameredev has agreed to conduct an independent audit of its operations in New Mexico to ensure compliance with emission requirements. The company is also required to submit monthly reports on actual emission rates and propose a plan for weekly inspections over two years or install leak detection and repair monitoring equipment.

The initial alert to Ameredev's flaring came from a citizen complaint, according to Kenney. With numerous other potential pollution violations under investigation around the basin, Kenney indicated that more penalties could be forthcoming. He stressed the obligation of the Environment Department to ensure compliance and hold polluters accountable, citing a 50% average compliance rate with air quality regulations by the oil and gas industry.

This landmark settlement underscores New Mexico's commitment to environmental protection and its proactive stance against pollution by oil and gas operations. It serves as a reminder of the importance of regulatory compliance and the potential consequences for failing to adhere to environmental standards.