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New Mexico fines Texas oil company more than $40 million for numerous violations

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(The Center Square) – The New Mexico Environment Department (NMED) and the New Mexico Energy, Minerals and Natural Resources Department (EMNRD) are taking action against Ameredev II, LLC and Ameredev Operating, LLC for violating state law and permitting requirements.

NMED issued Ameredev an Administrative Compliance Order for violations, including excess emissions from five facilities in Lea County, according to a press release from the New Mexico Environmental Department.

Here is what the order requires from the company:

Cease and desist all excess emissions from its facilities in accordance with applicable regulations. Seek permits reflective of the equipment and operations on-site. Hire an NMED-approved independent, third-party auditor to assess all Ameredev facilities in New Mexico. Undertake projects to mitigate excess emissions. Pay a civil penalty $40,336,818 to the State of New Mexico’s general fund.

The company must respond to the order and pay the penalty within 30 days. Alternatively, it may request a hearing to challenge the decision.

The five oil- and natural gas-extracting Ameredev facilities lacked the means to transport gas to a midstream pipeline, as state law requires. As a result, Ameredev emitted more than 7.5 million pounds of excess hydrogen sulfide, sulfur dioxide, nitrogen oxides, carbon monoxide, and volatile organic compound emissions into the atmosphere.

“Ameredev is a Texas-based exploration and production company that exploited public health for profit,” Environment Secretary James Kenney said in the release. “Ameredev’s management team have shown blatant disregard for our right to breathe clean air and now they must be held accountable.”

Lea County citizens initially contacted the state to bring attention to excessive flaring at these facilities in 2019. State inspectors saw the company was underreporting emissions to the state and had unpermitted equipment at its sites.

“The violations we identified at the sites show ignorance of the law or at worst willful disregard by the company for environmental regulations and our regulatory program,” environment department Air Quality Bureau Compliance & Enforcement Section Chief Cindy Hollenberg said. “This action sends a strong message this company and to the oil and gas industry as a whole that we take compliance seriously.”

Additionally, EMNRD’s Oil Conservation Division issued a Notice of Violation and wants to fine Ameredev $2.412 million for violating many rules at one of its wells. Among other infractions, the company did not file production/natural gas waste reports. These reports are necessary to determine if companies are following state law.

The NOV requires the company to provide the following, according to the release:

Immediate correction of the issues identified at the Facility; Payment of a civil penalty; and Ameredev to undertake an audit of its other facilities to identify any similar issues.

“Ameredev willfully ignored basic tenets of New Mexico’s Oil and Gas Act that have been on the books since 1935, not to mention the state’s nation-leading rules to prevent climate pollution that ban routine venting and flaring,” Energy, Minerals and Natural Resources Department Secretary Sarah Cottrell Propst said in the release. “Today we’re pursuing the maximum penalties EMNRD is allowed to assess by law. If the legislature had not imposed caps on EMNRD’s penalty authority, the fine would be much higher.”

The NOV also says if it issues an order, the Oil Conservation Division will review whether or not it should revoke Ameredev’s ability to transport due to its compliance issues.

“We are very concerned with the pattern and practice we are seeing in Ameredev’s operation given the fact that the operator and its facilities are relatively new in New Mexico,” division Director Dylan Fuge said. “OCD will conduct a more detailed review of the remainder of Ameredev’s operations.”

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