NMED issues notice of violation to Hilcorp

FARMINGTON — The state's announcement of an air quality violation notice against a major oil and gas company operating in the San Juan Basin drew immediate reaction from two oil and gas industry groups.

Hilcorp Energy Company may have violated state and federal air quality laws more than a year ago while recompleting a natural gas well near Bloomfield, according to the New Mexico Environment Department.

The heads of two industry groups said there's a political tinge to the state's announcement of the violation notice, one saying he hopes to work with the new NMED administrators on issues affecting wells in the San Juan Basin.

NMED sent Hilcorp a notice of violation Wednesday, more than a year after Hilcorp allegedly vented from the gas well into the atmosphere for 46 hours. The New Mexico Air Quality Control Act requires natural gas released during hydraulic fracturing to be captured rather than vented or flared.

The alleged violation occurred Feb. 21, 2018.

Enforcement or politics?

Independent Petroleum Association of New Mexico Executive Director Jim Winchester issued a statement Friday saying he has concerns about the decision to politicize a notice of violation. He said NMED did not provide full context of the production process and regulations for San Juan Basin natural gas wells.

"As the NMED is aware, the pressure and geology of San Juan wells require the use of nitrogen in the completion process," Winchester said. "Flowback from this completion process can contain excess amounts of nitrogen that cannot be used for fuel, combustion or sales. The existing regulations allow for these completion technologies to be used. The NMED's interpretation of the existing rules will significantly impact all development projects in the San Juan Basin."

He stated that IPANM will work with the new NMED administration to effectively and efficiently address emissions within the framework of what is feasible in the basins.

The New Mexico Oil and Gas Association also criticized the notice.

"This is a question for the EPA to settle with the San Juan Basin operators," NMOGA spokesman Robert McEntyre said in an email. "The basin is home to tens of thousands of low pressure, marginal wells that were never intended to be a part of the air quality regulations due to the relatively small amount of emissions. We should look for a balanced approach that takes into account the nature of production in the northwest."

Hilcorp was asked for a comment, but their spokesperson was not in the office Friday.

Notice not a final determination

NMED discovered the incident while reviewing information Hilcorp submitted to the U.S. Environmental Protection Agency in January in response to an information request the EPA sent the company in October, according to an email from NMED spokesperson Maddy Hayden.

Hayden said notices of violation are not a final determination that a violation has occurred and the notices offer the opportunity for the recipient to discuss their actions, including what they did to achieve compliance.

“NMED is committed to assuring the oil and natural gas industry’s compliance with rules and permits,” said NMED Secretary James Kenney in a press release. “This creates a level playing field among operators while ensuring public health and environmental protections.”

Hilcorp faces fines of up to $15,000 per day that the violation occurred.

The well in question is located on federal land east of Bloomfield. Hilcorp recompleted the well last year to allow it to produce from the Blanco-Mesaverde gas pool as well as the Dakota gas pool.

This notice of violation comes months before the rehearing of an application Hilcorp submitted to the New Mexico Oil Conservation Commission to increase the number and density of wells that can draw from the Blanco-Mesaverde gas pool.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.