The Justice Department, the Environmental Protection Agency (EPA), and the New Mexico Environment Department (NMED) have reached a settlement with Hilcorp Energy Company regarding violations of the Clean Air Act and New Mexico state law at its oil and gas production sites in New Mexico.
Hilcorp has agreed to pay a $9.4 million civil penalty for failing to reduce emissions during well completion operations. The penalty will be divided between the U.S. government and the State of New Mexico. The company is also required to hire an EPA-approved third-party auditor to ensure compliance with air quality regulations.
Additionally, Hilcorp must replace outdated process control equipment with newer technology that does not emit air pollution on Tribal lands of the Jicarilla Apache Nation Reservation in Rio Arriba County, as well as on Navajo Nation Off-Reservation Trust Land in San Juan and Sandoval counties. This project aims to address excess volatile organic compound (VOC) and methane emissions resulting from improper well completions.
The settlement is expected to lead to over 113,000 tons of reduced carbon dioxide emissions over three years, equivalent to removing 24,000 cars from roads annually. It will also eliminate nearly 583 tons of VOC emissions each year.
This case marks the first enforcement action addressing violations related to hydraulic fracturing or "fracking" under the Clean Air Act's New Source Performance Standards.
“Hilcorp is a large, sophisticated natural gas producer and should know better than to violate Clean Air Act requirements," stated Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. He emphasized commitments made by Hilcorp for infrastructure upgrades leading to significant reductions in methane and VOC emissions.
Assistant Administrator David M. Uhlmann of EPA’s Office of Enforcement and Compliance Assurance described the settlement as "a huge win for the environment," highlighting its potential impact on reducing climate-damaging emissions.
Secretary James Kenney of NMED remarked that holding polluters accountable is crucial for ensuring safe air quality for future generations in New Mexico.
Investigations revealed that Hilcorp conducted numerous well completion operations without capturing or controlling gas flows adequately, releasing thousands of tons of harmful methane and VOCs into the atmosphere.
The settlement forms part of EPA's Mitigating Climate Change National Enforcement initiative aimed at reducing methane emissions from oil, gas, and landfill sources while prioritizing communities affected by pollution.
Details about public comments on this consent decree are available on both EPA's website dedicated to Hilcorp Energy Company and through information provided by the Justice Department online platform regarding environmental consent decrees.