stuck with the bill

Houston company to pay millions to remedy pollution concerns in Permian Basin

Apache Corp. will pay $4 million in penalties and spend more than $5 million on preventative measures to reduce emissions at its wells in the Permian Basin. Photo via Getty Images

A Houston company has reached a multimillion-dollar settlement with the federal government and the state of New Mexico to address air pollution concerns in the largest oil and gas producing region in the United States.

The agreement announced Tuesday with Apache Corp. calls for the company to pay $4 million in penalties and spend more than $5 million on preventative measures to reduce emissions at its wells in the Permian Basin, which spans parts of New Mexico and Texas.

Apache was accused in a civil lawsuit of failing to comply with federal and state requirements to capture and control emissions at some of its operations in the two states. Federal officials and regulators in New Mexico identified the alleged violations through field investigations and flyovers by helicopters outfitted with infrared cameras that can detect hydrocarbon vapors that are invisible to the naked eye.

Efforts by regulators to crack down on oil companies have ramped up in recent years through a combination of on-the-ground inspections, flyovers and now satellite imagery as they look for Clean Air Act violations across the Permian Basin and in other oil producing regions.

New Mexico Environment Secretary James Kenney said he's concerned about the compliance rate for companies operating in New Mexico, describing it as terrible.

“The ozone levels are rising, and you know, I think this is that moment where we have to hold up the mirror to industry and say, 'If you don’t like what you see, it’s a reflection of your own effort,” he said during an phone interview.

The civil complaint targeting Apache comes nearly a year after federal and state officials announced a similar agreement with another producer in the Permian Basin over violations. In 2022, an investigation by The Associated Press showed 533 oil and gas facilities in the region were emitting excessive amounts of methane.

Surveillance done by state and federal regulators in 2019, 2020 and 2022 turned up alleged violations at nearly two dozen of Apache’s sites.

The company said in an email that the consent decree announced Tuesday resolves alleged violations from years ago and that the company acted swiftly to remedy the issues. Changes have included modifications to allow for more measurement, monitoring and capture of emissions and increased site inspections and expedited maintenance timelines.

“Moving forward, the consent decree represents our commitment to continuous improvement across our facilities in the Permian Basin," the company said. "We also continue to collaborate with industry partners through organizations such as the Environmental Partnership and the U.N.’s Oil and Gas Methane Partnership in striving toward a more sustainable future.”

The agreement covers 422 of Apache's oil and gas well pads in New Mexico and Texas, ensuring that they will comply with state and federal clean air regulations and that past illegal emissions will be offset.

State and federal officials estimate that compliance will result in annual reductions of 900 tons of methane and more than 9,650 tons of volatile organic compounds, which contribute to smog.

In all, state officials said the recent consent decrees with energy companies cover about 15% of oil and gas production in New Mexico and about 9% of the wells.

While many operators in the Permian are complying with existing regulations, Kenney warned those that are skirting the rules will spur even greater federal and state enforcement over the entire industry if ozone levels continue to rise.

“Simply stated, the message is ‘Do better,’" Kenney said.

Apache's plan calls for making design improvements and installing new tank pressure monitoring systems that will provide advance notice of potential emissions and allow for an immediate response. Regular reports also will be submitted to the state.

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A View From HETI

A new report predicts that Texas will be home to 30 percent of the U.S. data center market by 2028. Photo via Chevron.com

Data centers are proving to be a massive economic force in Texas.

For instance, a new report from clean energy company Bloom Energy predicts Texas will see a 142 percent increase in its market share for data centers from 2025 to 2028. That would be the highest increase of any state.

Bloom Energy expects Texas to exceed 40 gigawatts of data-center capacity by 2028, representing a nearly 30 percent share of the U.S. market. A typical AI data center consumes 1 to 2 gigawatts of energy.

“Data center and AI factory developers can’t afford delays,” Natalie Sunderland, Bloom Energy’s chief marketing officer, said in the report. “Our analysis and survey results show that they’re moving into power‑advantaged regions where capacity can be secured faster — and increasingly designing campuses to operate independently of the grid.”

“The surge in AI demand creates a clear opportunity for states that can adapt to support large-scale AI deployments at speed,” Sunderland adds.

Further evidence of the data center explosion in Texas comes from ConstructConnect, a provider of data and software for contractors and manufacturers. ConstructConnect reported that in the 12-month span through November 2025, data-center construction starts in Texas accounted for $11 billion in spending. At $12.5 billion, only Louisiana surpassed the Texas total.

Capital expenses for U.S. data centers were expected to surpass $425 billion last year, according to ratings agency S&P Global.

ConstructConnect also reports that Texas is among five states collectively grabbing 80 percent of potential data center construction starts. Currently, Texas hosts around 400 data centers, with close to 60 of them in the Houston market.

A large pool of data-center construction spending in Texas is flowing from Google, which announced in November that it would earmark $40 billion for new AI data centers in the state.

“Texas leads in AI and tech innovation,” Gov. Greg Abbott proclaimed when the Google investment was unveiled.

Other studies and reports lay out just how much data centers are influencing economic growth in the Lone Star State:

  • A study by Texas Royalty Brokers indicates Texas leads the U.S. with 17 clusters of AI data centers. The study measured the density of AI data centers by counting the number of graphics processing units (GPUs) installed in those clusters. GPUs are specialized chips built to run AI models and perform complex calculations.
  • Citing data from construction consulting company FMI, The Wall Street Journal reported that spending on construction of data centers is expected to rise 23 percent in 2026 compared with last year. Much of that construction spending will happen in Texas. In the 12 months through November 2025, the average data center cost $597 million, according to ConstructConnect.
  • Data published in 2025 by commercial real estate services company Cushman & Wakefield shows three Texas markets — Austin, Dallas and San Antonio — boast the lowest construction costs for data centers among the 19 U.S. markets that were analyzed. The mid-range of costs in that trio of markets is roughly $10.65 million per megawatt. Houston isn’t included in the data.

Although Houston isn’t cited in the Cushman & Wakefield data, it nonetheless is playing a major role in the data-center boom. Houston-area energy giants Chevron and ExxonMobil are chasing opportunities to supply natural gas as a power source for data centers, for example.

“As Houston rapidly evolves into a hub for AI, cloud computing, and data infrastructure, the city is experiencing a surge in data-center investments driven by its unique position at the intersection of energy, technology, and innovation,” says the Greater Houston Partnership.

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