Private E&P Hilcorp Energy will pay a $9.4 million civil penalty for failing to reduce emissions during well completions in New Mexico’s San Juan Basin.
The Justice Department, Environmental Protection Agency (EPA) and New Mexico Environment Department (NMED) announced the settlement Oct. 17. The agencies said it was the first case to address violations of the Clean Air Act New Source Performance Standards covering well completions from fracking.
The civil penalty will be split between the U.S. and the State of New Mexico.
Under the settlement, Hilcorp is required to replace, “on a faster timeline than federal regulations require, old process control equipment with equipment that does not emit air pollution.”
The mitigation project will occur in Rio Arriba, San Juan and Sandoval counties, New Mexico. The effort will result in an estimated 113,000 tons of reduced CO2 over the next three years.
The federal and state governments alleged that Hilcorp conducted at least 192 well completion operations in the area from Aug. 2, 2017, through Aug. 1, 2019.
“At 145 of these well completions, Hilcorp captured none of the gas and instead released into the atmosphere all gas that flowed back following fracking,” the agencies said in a statement.
Hilcorp is one of New Mexico’s top natural gas producers. The company acquired legacy assets in the San Juan Basin from ConocoPhillips in 2017.
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