Sunset legislation and other critical issues draw greater scrutiny as the Texas Legislature heads down the home stretch.
The Texas legislative session is in full swing. Many issues are being discussed. The Railroad Commission Sunset is probably the biggest issue impacting our industry at this point. The House Energy Resources Committee heard testimony last month concerning the Sunset Bill, HB 2166. Ben Shepperd did an excellent job testifying before this committee.
Several issues in the proposed Sunset Bill pose concerns for PBPA members. The PBPA has supported keeping the current structure of three statewide elected commissioners serving staggered six-year terms. The proposed Sunset Bill would institute new fundraising limitations and ethics issues. The fundraising limitations could put an incumbent commissioner at a significant disadvantage to a potential challenger. The ethics issues would be a potential minefield for commissioners and operators, working interest owners, and royalty owners who have issues before the Railroad Commission.
The Sunset Bill proposes to change the name of the Railroad Commission to the Texas Energy Resources Commission. There seems to be growing momentum to change the name to something that more accurately reflects the responsibilities of the Railroad Commission. However, there are significant concerns that a name change could open the door for the EPA to challenge the state’s authority over the Underground Injection Control (UIC) and other federal issues. The House Energy Committee has been encouraged to fully investigate any unintended consequences to a name change.
The Sunset Bill proposes to repeal the $20 million cap on the oilfield regulation and cleanup fund. It also proposes to abolish the Oil Field Cleanup Advisory Committee. There are numerous other proposed changes.
In addition to the Sunset Bill, there are many bills proposed relating to water rights, use, disposal, recycling, and hydraulic fracturing. One significant bill is Senate Bill 873, which addresses groundwater conservation districts and their authority to require a permit for drilling or operation of a water well for use in drilling, exploration, or hydraulic fracturing.
Although operators are required to comply with all groundwater district rule and regulations, water wells used solely to supply water for rigs that are actively engaged in drilling or exploration operations for oil or gas are exempt from permitting requirements. This exemption is under attack.
There are many proposals floating around concerning recycling and reuse of produced water and hydraulic fracture flowback. The technologies are very new and in a state of rapid change. As a result, the PBPA has tried to encourage incentives to encourage recycling rather than unreasonable requirements and penalties that may not be the best practices.
In addition to the legislative session, the PBPA’s Legislative and Regulatory Committees have both been reviewing the Statewide Rule 13 concerning casing and cementing and completion practices, and the group has also been providing feedback and comments to the Railroad Commission staff concerning the proposed changes. Several PBPA Board members have travelled to Austin to express PBPA’s concerns.
The 45-day comment period ended April 1.
We are hopeful the final rule rewrite will be something that is workable and adequately protects groundwater.
In addition to Rule 13, the RRC will be reviewing and proposing amendments to Rule 9, relating to Disposal Wells, Rule 36, relating to Hydrogen Sulfide Areas, and Rule 46, relating to Fluid Injection into Productive Reservoirs. The PBPA is actively involved in providing the RRC staff comments and feedback to ensure that any changes produce the desired outcome while being workable for the oil and gas industry.