State regulators say the company never filed a required report. They found out from journalists.
A nonprofit satellite detected more than 1,400 kilograms of methane per hour pouring from Permian Resources' storage tanks near Carlsbad, New Mexico, in early February. Researchers at PSE Healthy Energy modeled the co-released benzene as reaching a peak concentration of about 87,000 parts per billion near the tanks, spreading across nearly 80 square miles and over more than a dozen schools and childcare centers, exposing an estimated 30,000-plus people to a known carcinogen. Hunterbrook Media, which does not disclose a short position in the company, alleges Permian never reported the release to state environmental regulators, who say they heard about it first from Hunterbrook's own inquiry.
Ticker: PR (Permian Resources Corporation)
Research Firm: Hunterbrook Media
Report URL: https://hntrbrk.com/breaking-news/permian-resources-carlsbad?ref=shortreport.fyi
Position Disclosure: No short position disclosed in the source report.
Thesis
Hunterbrook Media alleges that Permian Resources concealed a major toxic air release, leaving tens of thousands of Carlsbad residents unprotected, while pressing forward with a new urban drilling project that local officials approved without knowing the February incident had occurred.
- Unreported Benzene Release: The New Mexico Environment Department confirmed to Hunterbrook that Permian did not report the February methane release or the accompanying hazardous air pollutant discharge, including benzene, even though state and federal law apparently requires reporting within 24 hours.
- Satellite-Detected Plume Scale: Carbon Mapper detected the release at more than 1,400 kilograms of methane per hour; PSE Healthy Energy's plume modeling placed the benzene concentration near the tanks at approximately 87,000 parts per billion, which PSE said is more than 10,000 times higher than a California OEHHA health benchmark.
- Mass Public Exposure: PSE Healthy Energy's Methane Risk Map modeled the benzene cloud covering nearly 80 square miles, including large parts of Carlsbad and more than a dozen schools and childcare centers, with an estimated exposure of more than 30,000 people.
- Conflicting Emergency Flare Records: The New Mexico Oil Conservation Division database shows Permian reported emergency gas flares near the tank battery on February 2 and February 9, but not on February 7, the date Carbon Mapper detected the methane release. A spokesperson for the Energy, Minerals, and Natural Resources Department said staff found "conflicting information" in the database and could not respond confidently without a field inspection.
- Regulators Blind Until Contacted: The New Mexico Environment Department's directors of environmental protection and compliance and enforcement both confirmed the release was never reported to them. The department told Hunterbrook it is "completely under-resourced" and that prior enforcement "has not been enough to make the industry change its behavior."
- City-Limits Drilling Expansion: Permian is moving forward with the Water Buffalo Unit, comprising 10 new oil wells and a central tank battery within Carlsbad city limits. The project, which the report says would drill through a groundwater aquifer near Happy Valley, was approved by the Carlsbad City Council in June on a rare split vote, with several residents objecting.
- Local Officials Unaware of Prior Release: Carlsbad's economic development director, who publicly cited "tens of millions" in projected royalties at the June council meeting, told Hunterbrook she had been unaware of the February methane release. Mayor Rick Lopez, who supports the new project per the Carlsbad Current Argus, declined to comment on the February discharge or its implications.
- Construction Already Progressing: Hunterbrook drone imagery shows active construction at the Water Buffalo Unit site. The project is expected to be completed by this fall.
Catalysts
- This fall: Completion of Permian's Water Buffalo Unit within Carlsbad city limits. Operational startup would intensify community and regulatory scrutiny of emissions disclosures at a second urban site.
- Timing unspecified, pending field visit: New Mexico's Energy, Minerals, and Natural Resources Department said it could not respond confidently to the February release without a field inspection. Any inspection outcome could trigger formal findings or enforcement referrals.
- Ongoing: The New Mexico Environment Department confirmed the release was never reported. A formal enforcement action or penalty proceeding for the unreported hazardous air pollutant discharge remains an open possibility.
- Ongoing: Additional permitting scrutiny or legal challenges related to the Water Buffalo Unit, given the split council vote and documented resident opposition, could delay or halt the project.
Company Response
Permian Resources did not respond to multiple requests for comment from Hunterbrook. Mayor Rick Lopez, who supports the Water Buffalo Unit per the Carlsbad Current Argus, declined to comment specifically on the February discharge and its implications for the city drilling project.
Notable Details
- PSE Healthy Energy concluded, based on gas samples collected in the same county, that the February release likely included benzene, ethylbenzene, hexane, toluene, and xylenes, not methane alone.
- The Water Buffalo Unit would drill through a groundwater aquifer on Carlsbad's west side near Happy Valley to reach the Wolf Camp and Bonespring formations, making residents' water contamination fears more concrete than a generic proximity argument.
- Carlsbad's economic development director, after learning from Hunterbrook that the February release had occurred, said local health concerns are difficult for her to understand because oil and gas activity in the area is longstanding, adding: "It's nothing new." She also acknowledged oil production has inherent risks and that she would also worry about the wells' proximity.
- A 2023 Texas Monthly profile described Permian Resources as "an anomaly" in oil and gas, noting that its co-CEOs, Will Hickey and James Walter, are both in their 30s and that the workforce is largely millennials and Gen Z.
"Everybody should be disturbed," she said.
Michelle Miano, director of the Environmental Protection Division at the New Mexico Environment Department, speaking to Hunterbrook about the unreported February release at Permian Resources' tank battery outside Carlsbad.
FAQs
What exactly did Hunterbrook Media find in its investigation of Permian Resources?
Hunterbrook found that a satellite-detected February methane release at Permian's tank battery was never reported to New Mexico environmental regulators, despite state and federal rules that apparently require reporting hazardous air pollutant discharges within 24 hours. The New Mexico Environment Department confirmed to Hunterbrook that the company did not report either the methane release or the accompanying benzene and other toxic pollutants. Hunterbrook also found that state regulators first learned of the incident through Hunterbrook's own inquiry, not from the company.
How was the benzene exposure estimate of more than 30,000 people calculated?
PSE Healthy Energy, an independent scientific research institute, used its Methane Risk Map tool and gas composition samples collected in Eddy County, New Mexico, to model what pollutants likely accompanied the methane release. Based on that modeling, PSE estimated the benzene plume covered nearly 80 square miles, including large portions of Carlsbad and more than a dozen schools and childcare centers. The 30,000-plus exposure figure reflects the population PSE's plume model placed within the affected area.
Why did Carlsbad City Council approve the Water Buffalo Unit despite resident objections?
The Carlsbad City Council approved permits for the project in June on a split vote, the Carlsbad Current Argus reported. Supporters cited economic benefits: Kristen Gamboa of the Carlsbad Department of Development said the project would bring the city and mineral-rights owners "tens of millions" in royalties and create 30 permanent jobs at a Carlsbad field office. Opponents, including long-term residents of the Happy Valley neighborhood, raised concerns about groundwater contamination, proximity to homes and a park, and air quality risks including hydrogen sulfide.
What is the significance of the missing February 7 flare report?
The New Mexico Oil Conservation Division database shows Permian filed emergency gas flare reports on February 2 and February 9, but not on February 7, the specific date Carbon Mapper's satellite detected the methane release at the tank battery. The gap matters because it raises questions about whether the company's own internal records acknowledged the event at all, and because the Energy, Minerals, and Natural Resources Department said its staff found "conflicting information" in the database and could not respond to the release without a field inspection.
What did New Mexico regulators say about their ability to monitor oil and gas emissions events?
Michelle Miano, director of the Environmental Protection Division at the New Mexico Environment Department, told Hunterbrook her department is "completely under-resourced" and that without voluntary company disclosure it has little capacity to track emissions events independently. She said prior enforcement actions against oil and gas operators "has not been enough to make the industry change its behavior." The department's reliance on self-reporting is central to why, according to the report, regulators were unaware of the February release until Hunterbrook contacted them.
What health risks are associated with the pollutants PSE Healthy Energy identified in the release?
PSE concluded, based on county gas composition samples, that the February release likely included benzene, ethylbenzene, hexane, toluene, and xylenes alongside methane. Benzene is a known human carcinogen. PSE's model placed the peak nearby benzene concentration at approximately 87,000 parts per billion, which PSE said is more than 10,000 times higher than a benchmark set by California's Office of Environmental Health Hazard Assessment, a standard used for comparison because New Mexico does not publish an equivalent figure in the report.
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