Questions of whether certain information must be shared or not are at the forefront of much debate within the industry.
The Texas House Energy and Natural Resources Committees both met in late
Ben Shepperd
June to discuss Interim charges. These Interim hearings will guide the development of legislation we will see in the 2013 legislative session.
A broad range of issues were discussed from Railroad Commission funding to increasing enforcement.
There was also considerable testimony which presented an extremely negative view regarding the Enbridge pipeline spill in Michigan. The anti-pipeline crowd, best articulated by the group Public Citizen, can be summarized as follows:
1. Bitumen (tar sand oil) is heavier than water;
2. Additives which are toxic are added to the bitumen in order to dilute it;
3. They argue that it requires greater pressure to transport the bitumen mixture through the pipeline; and
4. Therefore, they argue that spills are more likely to occur and that when they do occur, they will be more harmful because the bitumen will sink in water and be difficult to recover and clean. Additionally, they argue that the toxic additives will be more harmful to water than regular crude.
In summary, they are requesting legislation that would do two things as follows:
1. Require disclosure of additives; and
2. Require enhanced inspections of pipelines transporting bitumen.
There was considerable discussion of a perceived need to change the law and regulations regarding submission and confidentiality of oil and gas well logs. In particular, witnesses noted that there is no requirement for operators to submit logs on dry holes. They also argued for a lessening of the confidentiality provisions regarding logs that must be submitted currently and that all well logs should be required to be submitted digitally. Additionally, a suggestion was raised for imposing a $5,000.00 fine against violators.
These witnesses suggested that new legislation would result in more information being available to operators and the public; such information sharing was recommended, in turn, as an impetus to more efficient exploration and production, and as being conducive toward fewer dry holes being drilled.
Similar legislation has failed to pass the last two sessions.
Over at the Railroad Commission, things have been very active. As the Commission begins the Sunset process again, they have initiated a number of changes in operator requirements. Most notable among these is the increased emphasis on enforcement for violations. The Commission recently announced their increased enforcement of HB 2259 and HB 3134 provisions. These laws are known as the Inactive Well bills, which also have strong surface equipment removal requirements. Please pay attention to your inactive well inventory or it will cost you.
The PBPA Regulatory Practices committee has developed extensive comments to submit to the Bureau of Land Management regarding the BLM proposed hydraulic fracing rules. In their proposal, BLM proposes to modernize its management of well stimulation activities to ensure that fracturing operations conducted on federal lands or where the federal government owns the subsurface mineral estate follow certain best practices, including:
1) The public disclosure of chemicals used in hydraulic fracturing operations on federal lands.
2) confirmation that wells used in fracturing operations meet appropriate construction standards.
3) a requirement that operators put in place appropriate plans for managing flow back waters from fracturing operations.
We strongly believe that these new guidelines are unnecessary and believe that the states do an excellent job of regulating these activities and should maintain primary jurisdiction.
As part of its ongoing efforts under Plan EJ 2014 to integrate environmental justice into all of its programs, the Environmental Protection Agency (EPA) is soliciting public comment on ways that EPA and permit applicants can meaningfully engage communities in the permitting process.
Lastly, the U.S. Fish and Wildlife Service will issue its proposal to list the Lesser Prairie Chicken as endangered sometime around August 15th. Here we go again. PBPA is analyzing the scientific research and evaluating the various conservation efforts being discussed. We will work very hard to build a strong case against listing.