Violations could come down on 60% of oil and gas facilities inspected in NM’s Permian Basin

More state lawmakers are introducing bills to keep their state governments from doing business with financial institutions that take environmental, social or corporate governance into consideration when making investment decisions. Critics say these bills are designed to boost fossil fuel companies and will end up costing taxpayers. (Photo by Joe Raedle / Getty Images)

A state Environment Department and U.S. Environmental Protection Agency inspection of oil and gas facilities in New Mexico’s portion of the Permian Basin found more than half may be violating air quality rules.

New Mexico Environment Secretary James Kenney said the results are “cause for alarm.”

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Of the 124 facilities inspected over six months, 60% were found to be emitting volatile organic compounds. Those help create ozone, which can cause health problems from lung infections to cancer, according to the Environment Department.

Sec. Kenney said regulators have told the industry “quarter after quarter” that compliance with the federal Clean Air Act and state Air Quality Control Act needs to improve. The EPA has even warned it may redesignate the area as “ozone nonattainment,” creating even stricter regulations.

“There’s been multiple wake up calls to do better,” Kenney said. “And those wake up calls aren’t being heeded by the industry as a whole.”

Kenney said official violations are “likely,” and the department is simply making sure it has its evidentiary ducks in a row before moving forward with legal claims against the companies, which could face civil or even criminal penalties.

The EPA and U.S. Department of Justice have taken the lead on resolving the matter, according to the Environment Department, due to its short staffing.

Kenney has decried for years his agency’s skeleton crew, saying the agency lacks capacity to regulate the second highest oil-producing state in the nation. According to the department, only six people are responsible for enforcing air quality rules on 55,000 facilities.

Kenney said he is grateful lawmakers met his department’s budget request this year, which was hyper-focused on staffing, as it afforded existing employees needed raises.

“But, being very clear, we’ve not expanded the capabilities of the department,” he said. “We’ve merely made people whole.”

Kenney said higher permit fees could fund additional air quality staff.

The Environmental Improvement Board is considering the department’s proposal to raise general construction permits fivefold, from $5,100 to $25,500, and fees from major sources of air pollution from $38.47 to $81 per ton of air pollutant, according to the department, which could generate more than $15 million in new revenue.

The fees have not been updated in about two decades beyond consumer price index adjustments, according to the request , despite a 2,235% uptick in permitting from 2012 to 2023.

“I am hopeful and optimistic that they will agree with the department and raise those permit fees commensurate with the ability to do our jobs,” Kenney said.

He said he expects a decision in the fall.

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