Hilcorp fined $9.4M in first settlement for fracing violations under new standards

(WO) — Hilcorp Energy Co., the privately held oil producer run by billionaire Jeff Hildebrand, will pay a $9.4 million civil penalty for failing to reduce emissions of methane and volatile gases in New Mexico.

It’s the first settlement to address violations from fracing under the Clean Air Act’s New Source Performance Standards, the Department of Justice and Environmental Protection Agency said in a joint statement Thursday. The money will be split between the federal government and the state, it said. 

The agencies found Hilcorp captured none of the gases emitted from three-quarters of the 192 wells the company completed in Rio Arriba and San Juan counties in the two years through August 2019. Hilcorp is required to install new equipment that doesn’t emit air pollution in a move that will reduce the equivalent of 113,000 tons of CO₂ emissions — equal to taking 24,000 cars off the road for a year, the statement said. 

“Hilcorp is a large, sophisticated natural gas producer and should know better than to violate Clean Air Act requirements to capture and control gas produced as a result of fracing,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. 

The government reduced its initial penalty after reviewing Hilcorp’s operations for five years, the company said Friday in a separate emailed statement. 

“The alleged violations were from several years ago and involved short duration procedures on wells with an extremely low potential to emit, the company said. “Hilcorp has since made operational adjustments to ensure future compliance.”