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Oil and Gas Operator Pays Millions for Clean Air Act Violations

Public prosecution ‘a great model’ for future suits against polluters.

A recent agreement between an environmental group and an oil and gas company that dramatically cuts excess oilfield pollution at a facility in southern New Mexico could be a model both for quicker resolutions to pollution violations and a legal roadmap for private groups looking to hold fossil fuel companies to account under the Clean Air Act.

In late September, WildEarth Guardians entered into a consent decree with a branch of the multinational Oxy USA for regularly exceeding permitted emission limits of lung-damaging air pollutants at an oil and gas pumping and compressor station northeast of Carlsbad, New Mexico. In its suit, the environmental group claimed that the releases were so frequent that they couldn’t possibly be accidents or malfunctions but a part of the company’s normal operating procedure and a violation of its state-issued air pollution permit.

The decree is unusually important for two reasons. First, both parties agreed to settle the case before trial to avoid costly, long-term and public prosecution — without an admission of guilt or liability. A judge is currently reviewing the settlement, with a final decision likely before the end of the year. Second, and most notably, WildEarth Guardians (WEG) sued the company under a section of the federal Clean Air Act called the Citizen Suit provision, leapfrogging the usual prosecution by state or federal agencies and setting a playbook for similar suits in the future.

State permits set both hourly and yearly limits to how much a facility can release of certain air pollutants. According to online public records from the Air Quality Bureau of the New Mexico Environment Department (NMED), over the past three years Oxy’s Turkey Track gas compressor station, which opened in October 2018, racked up nearly 280 releases exceeding the facility permit, both before and after the company twice asked for and received pollution limit increases from NMED in 2019.

“There are a lot of companies and a lot of facilities that regularly report excess emissions,” says Jeremy Nichols, climate and energy program director at WEG. “But this one, this Oxy facility, really rose to the top and really seemed to be a poster child for how the industry chronically violates and [passes] it off as just the cost of doing business.”

WildEarth Guardians didn’t have to spend days or months in the field to find Oxy’s violations. In fact, Nichols didn’t even have to leave his office. Every month, fossil fuel production companies across the state file reports with NMED, tallying how much of four types of emissions — sulfur dioxide, nitrogen oxide, carbon monoxide and volatile organic compounds — were released in excess of their allowed, licensed amounts. Monthly reports dating back to October 2019 are posted online, available to the public at any time.

“It’s amazing,” Nichols says. “Industry reports. They do. They’re diligent. Because if they don’t report and then if they get caught, the consequences are much more severe and you start to veer into the criminal realm.”

“The Clean Air Act is one of the most complicated environmental statutes, and so it is challenging to bring these kinds of suits.”
~ Gabriel Pacyniak, associate professor of law, University of New Mexico

After reviewing the records, the question quickly became how to choose which facility to go after. “There’s a lot of bad facilities out there and we obviously don’t have the bandwidth or the resources to go after every single one,” says Nichols. “So we approach this from the standpoint of where can we make an example, and hopefully have taken that outsized impact?”

For Oxy, that impact entails $500,000 in fines, another $500,000 for air quality and public health projects in the area, $5.5 million in upgrades to the Turkey Track compressor station and other facilities and multiple changes in how the company deals with the excess unwanted, harmful gases that are a normal part of the oil and gas production process.

“The Clean Air Act is one of the most complicated environmental statutes, and so it is challenging to bring these kinds of suits,” says Gabriel Pacyniak, an associate professor of law at the University of New Mexico and the school’s primary faculty supervisor of its natural resources and environmental law clinic. “WildEarth Guardians here is doing great work.”

Nichols says that his group’s size offers it a nimbleness that governmental bureaucracy often can’t match. “Their approach to enforcement is different than ours,” he says. But this case was so obvious that “they could have easily launched their own enforcement case here, and they didn’t. You know, that’s on them.”

Matthew Maez, director of communications at NMED, says, “The New Mexico Environment Department takes its mission to hold polluters accountable seriously. However, chronic underfunding that persisted for years does impact the department’s ability to conduct significant enforcement activities.” He pointed to cases against three gas plants undertaken by NMED in recent years that led to millions in fines and two of them being shuttered entirely.

“Citizen suits that help curb air pollution are positive outcomes for public health and the environment,” Maez says. “Government agencies are not in competition with private groups when it comes to enforcement.”

Pacyniak thinks the same. “WildEarth Guardians here has demonstrated the importance of the citizen suit provisions to fill in gaps when agencies are not able to enforce all of the exceedances that take place,” he says.

The majority of Oxy’s excess emissions reports include:

“Oxy equipment malfunction …”

“Sudden and unexpected malfunction …”

“Sudden and unexpected equipment malfunction …”

“Sudden and unforeseeable malfunction …”

“Sudden and reasonably unforeseeable malfunction …”

Oxy began filing the reports soon after the Turkey Track plant opened in 2018, and all of these events led to toxic gases being flared or vented, contributing to air pollution in the Permian Basin. Jennifer Brice, director of communications and public affairs at Oxy, says that since the case started, the company has made repairs and changes and, “in addition to the upgrades and operational changes at our New Mexico facilities, we will continue to focus on initiatives to reduce emissions in our Permian operations.”

Oxy promotes itself as a leader in responsible fossil fuel production and carbon reduction. “We also have a history of collaborating with environmental organizations that share a commitment to minimizing emissions,” Brice says. As for Turkey Track, she says, “We believe the facilities in question received appropriate permits and, as noted in the Consent Decree, Oxy has denied WEG’s allegations.”

But those allegations are all based on public documents — the emissions reports filed by Oxy itself.

WEG’s main allegation is that the Turkey Track facility breached its emissions limits so often that it should have applied for more stringent licenses from the start. Nichols thinks industry’s first response to problems is to vent or flare the unwanted gases. “That’s not okay. But in their mind, that’s just normal business,” he says.

And in this case, Nichols says that Oxy came to the table and negotiated because of the seriousness of the allegations ​​”and a recognition that we kind of had them dead to rights.”

One possible reflection of this is that since WEG filed its lawsuit in late 2021, excess emission reports dropped precipitously at the Turkey Track plant. “It speaks to the fact that these and other excess emissions are occurring because of a lack of industry care and enforcement, not because of unavoidable upsets or malfunctions,” Nichols says.

The citizen suit provision of the Clean Air Act also allows citizen groups to recoup their legal costs from polluting companies.

While this type of citizen-initiated case is uncommon in the region, the pollution isn’t.

From October 1, 2019 to October 31, 2022, oil and gas operators across New Mexico reported emitting nearly 10,400 tons of regulated air pollutants above and beyond their licensed limits to New Mexico skies, most of it in the Permian Basin. That averages out to 9.2 tons combined, every day

In that period, 16 other companies released more air pollutants than Oxy USA WTP, the branch that runs the Turkey Track compressor station. In fact, that branch of Occidental Petroleum isn’t even the multinational company’s biggest polluter in New Mexico — plain, old-fashioned Oxy USA had more incidents and released almost twice as much pollution over the same time period. Among all facilities noted, Turkey Track had the fourth largest number of emissions, though in total it released orders of magnitude less gas than the biggest polluters on the list.

Again, this is all public information, reported by the companies themselves — and it is information both WEG and NMED hope other citizens’ groups will investigate and prosecute.

“Enforcement action by both public and private entities serves to ensure that more violations are uncovered and addressed,” says Maez at NMED. “Environmental nongovernmental agencies seeking federal grant funding for this purpose should contact the Environment Department for a letter of support.”

The citizen suit provision of the Clean Air Act also allows citizen groups to recoup their legal costs from polluting companies. WEG received $50,000 for legal fees in the settlement — far less than it cost the group for the two-year suit, Nichols says, but the symbolic amount sets a precedent, leaving the door open for future groups to collect more.

Pacyniak at UNM calls the Oxy settlement “a great model of a successful suit” brought by a citizens’ group. The pro-bono environmental law clinic he leads represents Native, low income and other legally underserved communities facing environmental threats in New Mexico. He says the clinic could use the settlement as a template if the right case presents itself in the future.

For groups wondering which companies to monitor, Maez says that NMED is preparing a list of major Clean Air Act violators that it will put on its website. “This list may help facilitate citizen lawsuits as the Environment Department cannot staff the adjudication of every matter,“ he says. A beta version of the site is already up and running, and Maez says NMED will be filling it with data in the coming weeks.

“These citizen suits under the Clean Air Act, they’re not trivial,” Nichols says. “You’re saying they broke the law, and you’re prepared to go to the mat to hold them accountable. And so we don’t take it lightly.”

Author: Jerry Redfern

Credits: This article by Jerry Redfern, https://capitalandmain.com, is published here as part of the global journalism collaboration Covering Climate Now. Copyright 2022 Capital & Main .