An international oil and gas company agreed to pay $1.77 million in fines to New Mexico regulators for violations in its wastewater operations in the Permian Basin.
XTO Energy was first issued four notices of violations by New Mexico’s Oil Conservation Division (OCD) in February for violating state regulations at water disposal facilities south of Malaga.
The facilities were injecting oil and gas wastewater, known as produced water in industry terms brought to the surface with oil and gas and high in salt and other toxic chemicals. They were found in violation of reporting the amount of water injected, or notifying the state when injection commenced.
To dispose of produced water, energy companies like XTO often pump it back into the shale formations it came from and are required by the State of New Mexico to report volumes of water injected and when operations begin.
The notices issued to XTO reported the company had failed to do so, initially incurring fines up to about $2.2 million.
Disposal injection is closely regulated in southeast New Mexico’s Permian Basin as the practice was recently linked to increasing earthquakes along the border to Texas in both states.
After being notified of OCD’s discovery of the violations, XTO audited all of its water injection sites in New Mexico, finding other similar violations, per the OCD’s announcement.
Courtney Wardlaw, spokesperson for XTO’s parent company ExxonMobil said none of the violations were linked to induced seismicity and the deficiencies in the operations were fixed.
“We have fully implemented the needed corrective actions in New Mexico. We’ve been operating in New Mexico for quite some time, and we make a priority for the safety of our workforce and the environment in those communities in which we operate.”
Wardlaw said the company and others in the fossil fuel industry worked with the State to monitor for increased seismicity in the area.
“None of the violations implied induced seismicity. We continue to work with industry and regulators to monitor for seismic activity,” Wardlaw said. “If there’s any identified impacts on that, we’ll do what we can to prevent seismicity.”
Seven earthquakes between magnitude 2.5 and 4 were reported between March and September 2021, per the OCD prompting the OCD to implement regulations aimed at limiting disposal volumes or shutting in injection wells based on their distance from reported earthquakes.
OCD Director Adrienne Sandoval said XTO’s facilities in question were now in compliance, expecting the company to follow reporting and permitting requirements moving forward for its underground injection control (UIC) facilities.
“Thanks to the good work of our staff and XTO’s collaborative and proactive approach, the OCD has been able to quickly bring XTO’s operations back into compliance with the UIC regulation,” Sandoval said. “Every operator, no matter the size, is subject to the same requirements.”
The agency reported such seismicity declined in New Mexico since the new rules went into effect, although records show some increase in the number of quakes in the greater Permian Basin region.
Throughout the Permian Basin oilfields, there 491 earthquakes of M 2.5 or higher so far this year.
The quakes were reported mostly northwest of Pecos, Texas per data from the U.S. Geological Survey, locations which would not trigger action against operators in New Mexico.
There were also several along the two state’s border in the Malaga area, records show, near oilfield towns Carlsbad and Hobbs.
Increasing seismicity was reported in the region, year over year, records show, with 237 quakes in 2020 and 550 in all of 2021.
“We did see some increasing seismic activity over the past couple of years. It’s been a slow buildup of increasing magnitude,” Sandoval said. “The geology doesn’t know there’s a state line. “We want to be protective as there is increased production and subsequently increased water production.”
Adrian Hedden can be reached at 575-628-5516, [email protected] or @AdrianHedden on Twitter.