New Mexico’s Bold Move: A $48 Million Fine on Targa Northern Delaware LLC

Tackling Excessive Emissions at Red Hills Gas Processing Plant

In a significant move, the New Mexico Environment Department (NMED) has imposed a nearly $48 million fine on Targa Northern Delaware LLC. The Houston-based natural gas firm, a subsidiary of Targa Resources Corp., faces this staggering penalty for emission releases exceeding allowable limits at its Red Hills Gas Processing Plant in Lea County, New Mexico.

The action underlines NMED’s commitment to enforcing environmental regulations. Zachary Ogaz, NMED’s General Counsel, emphasized the seriousness with which permits are regarded, stating, “Failing to comply with your permit invites accountability.”

Comprehensive Penalty and Required Response

• Cease all excess emissions at the processing plant immediately.
• Complete 16 projects and improvements estimated to cost $140 million to address operational and emission issues.
• Pay a civil penalty of $47.8 million to the state general fund.

These measures stem from Targa’s violations, which include releasing nearly 2 million pounds over its permitted air emission limits across five pollutants: carbon monoxide, nitrogen oxides, sulfur dioxide, volatile organic compounds, and hydrogen sulfide.

The Health and Environmental Impact

These pollutants pose significant threats to both human health and the environment. Notably:

• Nitrogen oxides and volatile organic compounds contribute to smog formation, impacting respiratory health.
• Ozone exposure can lead to respiratory issues like asthma and emphysema, making breathing difficult.
• Hydrogen sulfide exposure can cause severe health effects, including seizures and coma at high levels.

In addition to the aforementioned pollutants, Targa’s operations also involved the release of approximately 7 million pounds of methane, a potent greenhouse gas significantly contributing to global warming.

Industry-Wide Ramifications and Accountability

This enforcement action against Targa is not an isolated case. It follows a trend of rigorous penalties in the oil and gas sector in New Mexico:

• Hilcorp Energy Company – $9.4 million fine in October 2024 for emission reduction failures during well completions.
• Ameredev II LLC – $24.5 million fine in April 2024, marking the largest civil penalty collected by NMED.
• Apache Corporation – $4 million in February 2024, plus over $5.5 million for compliance projects.
• Mewbourne Oil Company – $5.5 million penalty in August 2023, alongside significant compliance project investments.
• Matador Production Company – $1.15 million penalty in March 2023, plus over $5 million for regulatory compliance projects.

These actions underscore New Mexico’s stringent regulatory stance and commitment to environmental protection.

Targa’s Financial Standing Amidst Legal Scrutiny

Despite the hefty penalties, Targa Resources Corp. projects financial resilience. The company reported a substantial year-over-year earnings increase, up $229 million to over $1 billion, as revealed in a recent company release.

Regarding the ongoing legal proceedings, Targa stated in an SEC filing that any related financial expenditures were expected to be immaterial to their consolidated financial statements.

Compliance and Future Actions

Targa must address the NMED compliance order and penalty within 30 days or seek a hearing before the NMED Cabinet Secretary. Meanwhile, NMED has escalated the issue to federal and state regulators to determine any potential additional civil or criminal liabilities.

The case underscores the essential role of energy regulators in maintaining environmental standards and their readiness to impose severe penalties on non-compliant entities.

Source: https://www.okenergytoday.com/2024/12/new-mexico-hits-oil-company-with-48-million-fine-over-environmental-violations/