Enforcement finally comes to the San Juan Basin gaspatch: An energy sacrifice zone no more? We’ll see — Jonathan P. Thompson (LandDesk.org) #ActOnClimate

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October 22, 2024

😱 Methane Madness 🛢️

The News: Last week the Land Desk reported that Hilcorp Energy had agreed to pay $9.4 million in penalties for air pollution violations in the San Juan Basin of northwestern New Mexico. It is, as one Farmington-area advocate told me, “a big deal.” It marks the culmination of years of on-the-ground efforts to get Hilcorp to clean up its act, and it potentially heralds a new era in which federal and state regulators actually enforce environmental laws in an area often treated like an energy sacrifice zone. 

The Context: A decade ago, scientists revealed that satellites had detected unusually high concentrations of methane over the San Juan Basin, one of the nation’s most prolific natural gas fields. This was alarming because methane, the primary ingredient in natural gas, is a potent greenhouse gas, with 86 times the warming potential of carbon dioxide over a 20-year period. The plume was named the Four Corners Methane Hot Spot, and garnered national attention. 

While coal mines and natural geologic seeps contributed to the plume, the prime culprit was no mystery: The vast oil and natural gas industry infrastructure, which is woven like rebar into the landscape here, and burps and leaks methane and other hydrocarbons and volatile organic compounds from valves, pipes, compressors, and newly completed wells. At the time, ConocoPhillips’ San Juan Basin operations were emitting an estimated 277,514 metric tons of methane each year, making them the Basin’s — and the nation’s — largest methane emitter. 

In other words, ConocoPhillips was a major contributor to this slow-moving environmental disaster, which didn’t go over so well with some of its shareholders. While it did upgrade some of its equipment in an effort to reduce emissions, the corporation ultimately chose to sell out of the Basin. In 2017 Hilcorp, a private Houston-based company, purchased all of ConocoPhillips’ San Juan Basin assets for about $3 billion. In doing so, Hilcorp not only acquired more than 11,000 oil and gas wells, many of them low-producing and high-emitting, but also the status of being one of the worst methane polluters in the country. 

The transfer raised concerns. Private companies like Hilcorp are less transparent than public ones, and Hilcorp has established almost no local presence, letting ConocoPhillips sleek glass and steel office building sit empty. And while a public corporation is beholden to its shareholders, Hilcorp’s levers are pulled by its founder and CEO, Jeffery Hildebrand, net worth $12.6 billion. 

Hildebrand is known for buying up Aspen real estate, including a ranch once owned by John Denver, and for contributing millions of dollars to Donald Trump’s presidential campaigns and to other Republican candidates. Hildebrand recently hosted a Trump fundraiser in Houston that was attended by Alaska Gov. Mike Dunleavy. Hilcorp bought up most of BP’s assets in Alaska, making it one of the state’s major oil and gas operators. Dunleavy is trying to lure energy-intensive data centers to the state to establish a better business case for the construction of a multi-billion-dollar natural gas pipeline. 

According to self-reported data, Hilcorp’s San Juan Basin facilities’ emissions have remained more or less steady since the 2017 transfer. But multiple studies have found that the EPA’s and industry’s estimates are far lower than actual emissions. And it is now known that Hilcorp failed to report some emissions — those from oil and gas well completions — as required by state law. 

More than 120 of Hilcorp’s wells sit on Don and Jane Schreiber’s Devil’s Spring Ranch, located in the Blanco Canyon area east of Farmington. They’ve been pushing back against the industry and the land managers that seemed inclined to do its bidding for years — often to no avail. They’ve cooperated with Earthworks, the mining watchdog group, which has documented leaking Hilcorp facilities on and around the Schreibers’ ranch. Last week’s announcement signaled that the work was not in vain. 

While many of Hilcorp’s 11,406 San Juan Basin wells emit methane, the EPA’s and New Mexico Environment Department’s enforcement action focuses just on well completion operations — which are the post-drilling steps, including hydraulic fracturing, that put a well into production — at 192 of Hilcorp’s wells. According to the federal agency’s complaint, Hilcorp “vented all of the flowback gas emissions, including methane and VOC, directly to the atmosphere during flowback … .” (“Flowback” is when hydraulic fracturing fluids, water, sand, and associated gases surge back out of the well following fracturing). 

This violated rules requiring operators to capture the flowback gases and pipe them, reuse them, or inject them back underground. The activity resulted in excess emissions of more than 500 tons of VOC (or volatile organic compounds, which are health hazards and ozone precursors) and 1,200 tons of methane. Meanwhile, Hilcorp didn’t report the completions properly or at all, again violating state and federal rules. 

The $9.4 million penalty is more or less pocket change for a company like Hilcorp. But the consent decree also requires the firm to take extra measures to minimize emissions during completion and flowback and to properly classify its wells and report activity and emissions. The company is also required to hire an approved independent third-party verifier to conduct a compliance verification program for every well-completion it conducts for the next three years. If Hilcorp fails to live up to these terms, it will be penalized. Hilcorp must also carry out a mitigation project to replace nearly 1,300 low- and intermittent-bleed pneumatic controllers with non-emitting devices on its San Juan Basin facilities located on tribal lands. 

Methane Madness: Part I — Jonathan P. Thompson May 14, 2021

Methane, it’s all the rage these days. Or maybe it would be better to say that it’s the outrage, since that’s what this greenhouse gas, consisting of one part carbon and four parts hydrogen, is causing. The alarm and outrage have surged in the wake o…

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📸 Parting Shot 🎞️

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