In a legal back-and-forth, Round Mountain-based Texas Fabco Solutions has filed a counter lawsuit against Tap Rock Operating LLC, alleging that the oil and gas company violated health, safety and environmental regulations at several New Mexico facilities.
Late last year, Texas Fabco, which provides design-build, engineering and fabricating services to oil and gas companies, suggested a design that featured upstream oil stabilizers, according to the Southeast Texas Record report. Tap Rock agreed to use the stabilizers on a trial basis in its facility design. However, the company allegedly failed to follow guidelines, creating unsafe conditions.
“This resulted in equipment throughout the facilities, including the stabilizers, compressors, and other parts of the facility to frequently load up with high concentrations of H2S and clog up with sulfur solids,” according to the counterclaim cited by the publication.
Court documents said that Tap Rock employees allegedly tampered with sensors and allegedly installed fans “to push fresh air across H2S sensors, to prevent them from alarming, blatantly violating its air emissions permits and health and safety protocols.” Tap Rock Executive Vice President of Operations Aaron Byrd allegedly was "aware of this unlawful practice—observing it first-hand," the documents stated.
Activist groups kept a close eye on the company’s facilities, and in early August an activist posted an image on Twitter allegedly showing what was an oil spill at a Tap Rock plant.
“Can anyone confirm a major spill near Jal, NM today?” the activist posted on Twitter.
Texas Fabco and Tap Rock, according to court records cited by the Southeast Texas Record, reached a Master Services Agreement three years ago. For its part, the court records noted that Tap Rock was to "build equipment, complete construction, and supervise contractors." In addition to allegedly failing to use the equipment as designed, Tap Rock allegedly was using the stabilizer as an oil filtration system. All of these instances also raised a red flag among activists.
“A leak of thousands of barrels of oil into an open-top temporary water tank also triggered H2S sensors,” according to the counterclaim cited by the Southeast Texas Record.
Workers at the site also took a photograph of Byrd allegedly wearing his sensor incorrectly. Moreover, the images also show the "unlawfully" installed fans like those cited in court records.
The legal document filed by Texas Fabco also alleges that improper safety precautions led to a flare stack becoming engulfed in flames and burning down. This is a particularly dangerous occurrence that also violates environmental regulations. A video posted to social media in August appears to corroborate these claims.
Citing crowdsourced reports, The New Mexico Sun noted that Tap Rock has come under scrutiny for several regulatory violations in New Mexico. The company also allegedly has been linked to several accidents. The publication noted that two of the company’s locations have come under the EPA microscope, with 14 of the company's 26 locations in violation of agency regulations.
Golden, Colorado.-based Tap Rock is backed by NGP Energy Capital, a Dallas private equity firm. The company recently raised $500 million by issuing corporate bonds to several lenders, including Bank of America, JP Morgan, RBC, and Citigroup, according to Cbonds.com.
A representative from Tap Rock Resources did not respond to a request for comment.