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    Permian Basin oil and gas operator agrees to pay $90,000 in fines to New Mexico regulator


    October 15, 2021 - Adrian Hedden, Carlsbad Current-Argus

     

      An oil and gas operator in New Mexico's Permian Basin region agreed to pay the State $90,000 in civil penalties stemming from a fire that went unreported at a natural gas facility in Eddy County.

      New Mexico's Oil Conservation Division (OCD) - the compliance arm of the Energy, Minerals and Natural Resources Department (EMNRD) announced it reached a settlement with Enterprise Field Services after the regulator alleged the company failed to report the incident. The OCD issued the penalties in June.

      Enterprise declined to comment for this article.

      Initially, the OCD issued a fine of $204,300 along with a notice of violation to Enterprise, but the settlement lowered the fine and included multiple other conditions the company must follow to prevent future similar releases.

      More: Permian Basin poised to ramp up oil and gas production as mergers cool and prices rebound

      The fire occurred at Enterprise's Oxy Sand Dunes North Compressor Station in August 2020, records show, causing the release of about 250 barrels of condensate liquid.

      A barrel is about 42 gallons, meaning about 10,500 gallons of liquid pollutants were emitted during the incident.

      The incident, because it saw a release of more than 25 barrels of condensate liquid, was labeled a "major incident" by state officials, requiring Enterprise to report it within 24 hours.

      More: Merger creates new major Permian Basin oil and gas operator as energy prices soar

      The company did not report the fire until Dec. 14, 2020, records show, 134 days past the deadline.

      Enterprise also failed to report the incident to the OCD in writing within 15 days, issuing the written report Feb. 4, 2021, per state records, 171 days late.

      OCD Director Adrienne Sandoval said the agency was able to issue the fines under a bill passed by state lawmakers in 2019 and enacted the following year that granted the regulator authority to fine violators.

      More: New Mexico Gov. Michelle Lujan Grisham calls for unity with oil and gas in climate goals

      "The settlement with Enterprise holds the operator accountable and establishes a path to ensuring compliance moving forward," she said. "The reestablishment of OCD's ability to assess civil penalties was a crucial step to ensure companies are operating responsibly in New Mexico."

      Along with the civil penalties, Enterprise agreed to correct the company's Emergency Response Plan within 30 days to include correct contact information for state agencies, along with the proper requirements for spill notices into its Emergency Response Plan.

      Enterprise was also required to add the proper regulations to its documentation also within 30 days of the settlement.

      More: 'Crude intentions?' Group slams oil and gas on billboards across southeast New Mexico

      Within 60 days, the company must evaluate if the problem that caused the fire and spill at the Oxy Station applied to any of its other facilities and notify the State of such findings and investigate why the data collection system at the Oxy Station was not restarted after a July 28, 2920 software upgrade.

      "By not following the established protocol, Enterprise undermined the OCD's ability to ensure proper remediation of the site," Sandoval said upon issuing the initial notice of violation. "This is a key part of our regulatory authority and why failure to report is a considered a serious violation."

      The OCD was only able to issue three such penalties in the past 11 years before the new rules took place to oil and gas operators under the previous law, but has issued 25 complaints since including the Enterprise case and a violation issued in September against Hilcorp Energy Company.

      That case alleged Hilcorp did not follow remediation requirements at six sites in the San Juan Basin in northwest New Mexico.

      That case had yet to be resolved as of Thursday but proposed civil penalties of $1.6 million and a hearing in November if a settlement is not reached.

      "Failure to comply with remediation plans and reporting requirements is a serious violation as it makes it difficult for the OCD to ensure that human health and the environment are being protected," Sandoval said.

      Adrian Hedden can be reached at 575-618-7631, achedden@currentargus.com or @AdrianHedden on Twitter.

      ©2021 www.currentargus.com. Visit currentargus.com. Distributed by Tribune Content Agency, LLC.

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