United States v. Hilcorp Energy Co.

The U.S. Department of Justice, EPA, and the New Mexico Environment Department <a href="https://www.justice.gov/opa/pr/natural-gas-producer-agrees-settlement-reduce-emissions-new-mexico">announced</a> the lodging of a proposed consent decree to resolve alleged Clean Air Act violations by Hilcorp Energy Company at its oil and gas production operations in New Mexico. The complaint alleged that Hilcorp vented excess emissions of more than 500 tons of volatile organic compounds and more than 1,200 tons of methane when it conducted well completion operations and flowbacks at at least 145 wells in Rio Arriba County and San Juan County. The agencies said that the settlement was part of EPA’s Mitigating Climate Change National Enforcement and Compliance Initiative and that this case was the first to address violations of the Clean Air Act New Source Performance Standards covering well completions following hydraulic fracturing. The consent decree requires payment of a $9.4 million civil penalty, with $4.7 million going to the U.S. and $4.7 million to New Mexico. The consent decree also imposes compliance requirements and the retaining of an independent third-party verifier to conduct a compliance verification program. Hilcorp also must implement an Environmental Mitigation Project that involves replacement of old process control equipment at facilities on Tribal lands on a faster timeline than would be required under federal regulations. Hilcorp also must fulfill reporting requirements.