IPANM (Nov. 10, 2020) – As promised, IPANM is tracking the implementation of the state administration’s use of the new civil penalty authority for wellsite violations. This authority was given to the state after passage of HB 546 during the 2019 Legislative Session. IPANM stood in opposition of this new authority, and fought certain parameters of its implementation during the January 2 & 3, 2020 Administrative Penalty Rulemaking in Santa Fe. Since the February 2020 rule adoption, OCD has begun to use this authority, with the first penalties being issued in June of 2020.

A few weeks ago, IPANM heard from a reputable San Juan Basin operator (with no prior violations) who had been assessed a civil penalty under the new authority in excess of $120,000 for reporting violations. Based on our initial discussions with the operator, IPANM referred the information to our lawyer. Since that time, the operator has hired IPANM’s lawyer to represent the case.

At this time, the case is pending further informal discussion with the administration to find an amicable resolution, including a reduction of what IPANM considers an excessive fine based on the merits of the violation. If the case does not reach resolution, it may very well go to a formal hearing.

IPANM is closely monitoring this case, and will further update members on the outcome. As this is the first major case involving an independent operator receiving an excessive find, it is important that IPANM members be aware of the new regulatory authority under the Administrative Penalties rule. Furthermore, IPANM may get involved in the case if necessary and/or may solicit support from membership base on the concern over the precedent it may establish moving forward.