New Mexico, feds owed $6.2M from oil company in pollution settlement

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A Texas oil company has reached a $6.2 million settlement with the federal government and the state of New Mexico to resolve air pollution violations.

State and federal environmental regulators announced the settlement with Matador Production Co. on Monday.

They say the company agreed to comply with clean air regulations at all of its 239 oil and natural gas well pads in New Mexico, which is home to part of the Permian Basin, one of the most productive oil and gas regions in the world.

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Regulators had accused the company of failing to capture and control emissions from its storage tanks. They also say the company failed to obtain required permits at more than two dozen of its production operations in the state.

Matador said it already has seen improvements in operations and emissions controls since 2019. The company pointed to 2022 emissions data for its gross operated production and exploration operations, saying the intensity of direct greenhouse gas emissions decreased by 55% and methane emissions by 70%.

The company said it made changes to its maintenance and repair program to help avoid preventable emissions and noted that using aerial monitoring and other technology will help in what Matador and government regulators describe as an ongoing effort.

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. A Texas-based oil company has reached a multimillion-dollar settlement with the federal government and the state of New Mexico over reported pollution violations. (REUTERS/Angus Mordant)

State and federal officials said the alleged violations had resulted in excess emissions of volatile organic compounds, nitrogen oxide and carbon monoxide. The emissions were identified through flyover surveillance and field investigations done in 2019.

Under the settlement agreement, the U.S. Environmental Protection Agency and the New Mexico Environment Department said Matador will be the first producer to implement measures that will serve as a model in future resolutions involving other producers.

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"This settlement begins to hold the ninth-largest oil and gas producer in our state accountable and mitigate the harmful impacts to our communities and ability to breathe clean air," state Environment Secretary James Kenney said in a statement.

Assistant Attorney General Todd Kim, with the Justice Department’s Environment and Natural Resources Division, said air quality in the Permian Basin — which also spans parts of West Texas — is at risk of not meeting national standards and that federal regulators will continue working with New Mexico regulators to make sure oil companies follow the law.

The EPA and the state estimate that Matador’s compliance will result in a combined reduction of more than 16,000 tons of nitrogen oxide, volatile organic compounds and carbon monoxide. Greenhouse gases such as methane also will decrease as a result.

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As part of the settlement, Matador will pay a civil penalty of $1.15 million and will pay for aerial monitoring of its New Mexico facilities and for a supplemental environmental project involving diesel engine replacements.