More than half the oil and gas facilities recently inspected in the Permian Basin were likely in violation of state and federal air pollution rules after a joint operation by the New Mexico Environment Department (NMED) and the Environmental Protection Agency.

Seventy-five of the 114 sites inspected were likely in violation of volatile organic compound (VOC) regulations, the NMED said, and could face fines under the Clean Air and Air Quality Control acts.

Fourteen EPA inspectors and five from NMED used satellite imagery, regulatory reports and other data, along with onsite inspections at oil and gas sites throughout the region.

The study inspected Earthstone Energy, Franklin Mountain Energy, Kaiser Francis Oil Company, Marathon, Permian Resources, Tap Rock and XTO Energy Inc. About 112 of the facilities were in communities with “environmental justice” concerns, the report read, due to higher levels of ozone pollution.

President of the New Mexico Oil and Gas Association Missi Currier said the findings of the state and federal government did not represent the industry as a whole, which she said largely followed environmental policies.

“Our members make every effort to comply with federal and state regulations to help protect the communities in which we operate,” Currier said. “While we recognize the effort undertaken, the findings were based on a small sample of operations in the state. Our members are dedicated to correcting mistakes when they do occur and continuing to work with regulators.” VOCs create ground-level ozone, or smog, when interacting with sunlight. State action to limit air pollution began after reports the region was in violation of federal air quality standards.

Meanwhile, the EPA was considering listing the entire basin, in Texas and New Mexico, in violation or “non-attainment” of the National Ambient Air Quality Standard (NAAQS) for ozone, an act that could restrict further federal approvals for oil and gas activities.

New Mexico’s Environmental Crimes Task Force would investigate and potentially prosecute any criminal violations.

NMED Cabinet Secretary James Kenney said the State would likely increase fees and fines charged to the industry to make up for what he said the department lacked in enforcement resources. The agency had 30 permitting and five enforcement staff members, inadequate resources, Kenney said, for more than 55,000 oil and gas facilities in New Mexico.

“The results of our federal and state oil and gas investigations are cause for alarm, with a meager 40 percent compliance rate,” Kenney said. “With the impacts of climate change ravaging our state and air quality degrading, we have no choice but to increase sanctions on polluters until we see a commitment to change behavior.”

New Mexico looks to tighten rules, feds offer more funds

NMED in March submitted a proposed rulemaking to the Environmental Improvement Board looking to raise permitting fees oil and gas companies pay when building extraction sites in the state, hoping the adequate revenue would allow the State to hire more environmental staff.

The proposal stipulated an increase of annual criteria pollution fees from $38.47 per ton to $81 a ton. Filing fees for new construction permits would also be raised from $500 to $2,000 under the proposal, while permit fees would be anchored to the consumer price index to allow them to increase with inflation.

The agency estimated the updated fees would generate $35.8 million in added revenue for the Air Quality Bureau, compared to the about $8.8 million it presently receives from the present fee rates.

NMED held a public hearing March 20 to give more insight on the proposal, the EIB held a hearing June 27 with a final decision by the board expected soon after.

As the State looks to staff up its enforcement efforts, the EPA and U.S. Department of Justice will aid in resolving New Mexico’s enforcement issues, the release read. The U.S. Treasury will receive half the civil penalties instead of the New Mexico General Fund.

“Currently, six people are now managing over 114 active enforcement matters which take thousands of hours, so I welcome the resources provided to us by the EPA and DOJ to hold these polluters accountable,” said NMED Compliance and Enforcement Section Chief Cindy Hollenberg.

The EPA and Department of Energy in June said they were committing $850 million to cut methane pollution at il and gas facilities around the country, targeting specifically smaller operators to aid them in complying with the EPA’s recently published methane standards.

Funds appropriated through the Inflation Reduction Act will be offered to state, industry and tribal organizations throughout the country through a competitive grant process, read an EPA news release.

“These investments from President Biden’s Investing in America agenda will drive the deployment of available and advanced technologies to better understand where methane emissions are coming from,” said EPA Administrator Michael Regan. “That will help us more effectively reduce harmful pollution, tackle the climate crisis and create good-paying jobs.”