Texas Railroad Commission

Published on: February 2, 2015

Texas Railroad Commission Adopts Rules Aimed at Earthquakes

Earthquakes linked to oil and gas activity are in the news. A recent study in Ohio linked a rash of small earthquakes to fracing of wells in the area. Earthquakes in Oklahoma have increased tenfold since 2009. A swarm of small earthquakes hit the Dallas-Fort Worth area recently. The US Geological Survey is raising its evaluation of earthquake hazard risk in Texas as a result.

In Texas, the spate of small earthquakes is tentatively tied to injection wells rather than fracing of new wells. The theory is that the injected water lubricates lithologic layers, allowing them to slip and causing quakes.

The Environmental Protection Agency estimates that there are 144,000 Class II injection wells in the US. The RRC has permitted more than 50,000 Class II injection wells in Texas since the 1930’s. These injection wells are used to dispose of water and waste produced from wells, both that from the fracing process and water produced with oil and gas in the production phase. Many oil wells produce hundreds of barrels of water for each barrel of oil produced. Without injection wells, the Texas oil and gas industry would screech to a halt.

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Published on: January 14, 2015

Colorado Oil & Gas Conservation Commission Initiates Online Complaint Process

By John McFarland

The Colorado Oil and Gas Conservation Commission now allows landowners with complaints against operators to file their complaint online. Go to http://cogcc.state.co.us/ and click on “Complaints” in the left-hand column.If you’re a surface owner with no mineral rights and you have objections to a proposed well location, you can also get the COGCC to inspect the site and consider your objections and require the operator to accommodate your concerns.

The online portal is very user-friendly and a real effort to make it easier for the public to participate in the process. The Texas Railroad Commission should take note. The COGCC has also significantly increased its oversight staff, increased its collaboration with local governmental entities, sponsored studies on air and water impacts, and adopted policies on health and safety issues.

Published on: December 8, 2014

New Texas Railroad Commission Rules on Pipeline Permits

By John McFarland

The Texas Railroad Commission has adopted amendments to its pipeline permits rule, 16 TAC Sec. 3.70. The amendments require pipeline companies to submit documentation to support their claim that they will operate the line as a common carrier or gas utility.

In Texas, pipelines have the right to condemn pipeline easements for lines that are common-carrier or gas-utility lines. Until the Supreme Court’s decision in Texas Rice Land Partners v. Denbury in 2011, pipelines assumed that all they had to do in order to exercise the right of eminent domain was file a form at the RRC – a Form T-4 – stating that the proposed line would act as a common carrier or gas utility. In Denbury, the court said that filing the form is not enough.

The court in Denbury first held that a pipeline does not acquire condemnation authority merely by obtaining a permit from the Railroad Commission and subjecting itself to that agency’s jurisdiction as a common carrier. The court then held that in order for a pipeline to have condemnation power it must serve a public purpose, and to serve a public purpose, “a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.” Once a landowner challenges its right to exercise eminent domain, “the burden falls upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent domain.” The court said that the question of whether the pipeline is dedicated to a “public use” is ultimately a judicial question.

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Published on: September 29, 2014

Texas’ New Seismologist

By John McFarland

Michael Brick has written an excellent article in the Houston Chronicle about the Texas Railroad Commission’s new seismologist, David Craig Pearson. The article, “Vexed by Earthquakes, Texas Calls In a Scientist,” relates the events leading up to his hiring, his background, and the RRC’s initial foray into addressing the issue by proposing new rules on injection well operators.

Dr. Pearson grew up in McCamey, worked in the oil fields, studied at SMU, and worked at Los Alamos National Laboratory in New Mexico for 13 years. He left in 2006, returning to West Texas and ranching. He inherited some mineral rights in Upton County. When the RRC advertised for a seismologist, he applied and was hired.

So far, Dr. Pearson has published no conclusions, but the RRC has been praised for its new proposed rules. Pearson testified in August before the House Energy Resources Subcommittee on Seismic Activity that he wants to wait for reports from SMU’s study of seismic and injection activity around the town of Azle, in the Barnett Shale, before drawing any conclusions.

Published on: September 23, 2014

EPA Praises RRC

By John McFarland

In a letter to the Texas Railroad Commission commenting on the RRC’s proposed rules on curbing earthquakes caused by high-pressure injection of waste fluids, the Environmental Protection Agency “applauded the RRC’s efforts to ensure it has sufficient regulatory authority to respond to any event of the type where concerns may arise.” Maybe the agencies will kiss and make up? Not likely. But the EPA agrees with proposed rules published by the RRC that would require applicants for disposal well permits to submit information about the area’s risk for earthquakes as part of their application. The rules also strengthen the RRC’s authority to limit or halt injection from existing wells where earthquake events occur.

Initially the RRC was slow to respond to complaints about earthquakes. At one point, citizens from the town of Azle, particularly affected by earthquakes, staged a protest before the RRC at which Azle citizens serenaded the commission with their own composition based on Elvis Presley’s All Shook Up. The RRC has now hired its own seismologist, and although Commissioners are cautious about connecting earthquakes to oil and gas activity, the proposed rules are a step in the right direction.

Texas now has more than 3,600 active commercial injection wells; it granted 668 permits last year alone. Earthquakes strong enough to damage homes have occurred in the Barnett Shale region. Similar problems have occurred in Oklahoma and other regions.

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Published on: August 26, 2014

Flaring in the Eagle Ford

By John McFarland

With increasing frequency, my landowner clients have complained about gas flaring, especially in the Eagle Ford Shale. Landowners are beginning to insist that their leases require royalty payments on flared gas. Landowners also complain of the odors and noise from gas flares.

The San Antonio Express News has recently published a four-part series, Up in Flames, on flaring in the Eagle Ford, after a year-long investigation. Among its findings:

Since 2009, flaring and venting of natural gas in Texas has surged by 400 percent to 33 billion cubic feet in 2012. Nearly 2/3 of the gas flared in 2012 came from the Eagle Ford.

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Published on: July 29, 2014

Jimmy McAllen’s Judgment Against Forest Oil Affirmed

By John McFarland

Jimmy McAllen’s battle against Forest Oil has moved one step closer to conclusion. Last week the Corpus Christi Court of Appeals affirmed an arbitration award of more than $20 million against Forest Oil for environmental and other damages to the McAllen Ranch and personal injuries to Mr. McAllen.

The fight began in 2004, when McAllen sued Forest. He claimed that Forest had buried mercury-contaminated iron sponge wood chips on the 27,000-acre McAllen Ranch. The wood chips are waste from Forest’s gas plant on the Ranch. He also claimed that he had contracted cancer from pipe containing naturally occurring radioactive material (NORM) that Forest had given him to build pens on his Santillana Ranch. The pens were built to house endangered rhinoceroses. McAllen contracted cancer that required amputation of his leg.

Forest responded that McAllen was bound by a prior settlement agreement that required him to arbitrate any claims arising out of Forest’s operations on his ranch. McAllen opposed arbitration. The trial court denied Forest’s motion to require arbitration, and the Corpus Christi Court of Appeals affirmed. Forest appealed to the Texas Supreme Court, which held that McAllen was bound by the arbitration agreement. Forest Oil v. McAllen, 268 S.W.3d 51 (Tex. 2008).

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Published on: July 23, 2014

Texas Railroad Commission Proposes New Rule on Authority of Pipelines to Condemn Private Property

By John McFarland

The Texas Railroad Commission has published a proposed rule that will change how pipelines are classified as “common carriers” and “gas utilities.” That classification determines whether pipelines can exercise the power of eminent domain — the power to condemn rights-of-way for pipelines.

In 2011, the Texas Supreme Court held in Texas Rice Land Partners v. Denbury Green Pipeline-Texas, LLC that the Railroad Commission’s method of classifying pipelines as common carriers and gas utilities was not sufficient to grant them eminent domain authority. The court held that, in order for a pipeline to have condemnation powers, it must serve a “public purpose,” and that in order for a pipeline to serve a public purpose, “a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.” Once a landowner challenges its status as a common carrier, “the burden falls upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent domain.” The court held that the RRC’s policy of classifying pipelines as common carriers or gas utilities based solely on the pipelines’ checking of a box on a form filed with the RRC was not sufficient to establish the public purpose of the line.

Since Denbury, the pipeline industry has struggled to find a way to efficiently establish pipelines’ common-carrier status without having to litigate the issue with every landowner it wants to cross over. Initially the industry sought legislation authorizing the RRC to have one hearing to establish that a proposed new line will in fact qualify for common-carrier status. Under the bill, that determination would then be binding on all landowners whose property will be crossed by the pipeline. Those landowners would be given the opportunity to participate in the hearings; notice of the hearings would be given by publication in local newspapers. The Texas Farm Bureau, the forestry industry, and other landowner groups opposed the bill. Most major oil and gas associations favored the bill. The bill never made it out of committee.

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Published on: July 2, 2014

Texas Railroad Commission’s New GIS Viewer Up and Running

By John McFarland

In the last legislative session, the Texas Legislature gave the Texas Railroad Commission money to upgrade its website. The RRC’s new GIS Viewer is now available for use. http://wwwgisp.rrc.state.tx.us/GISViewer2/ This map-based access to RRC information on wells, pipelines and records makes it much easier for the public to access RRC records.

One of its tasks that the RRC does well is provide easy access to its records. It has always been one of the most open and accessible regulatory agencies in the state, and it goes to great lengths to make its records easily available to the public. Its new GIS Viewer greatly enhances this capability.

There is as yet no tutorial on how to use the new Viewer, but if you play with it for a while, you will see how easy it is to use. When you open it, you see a map of the State, with the RRC’ district boundaries shown.

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Published on: June 19, 2014

Concerns Continue of Water Well Contamination from Hydraulic Fracturing

By John McFarland

Investigations continue in response to complaints of alleged contamination of water wells from drilling activity in the Barnett Shale.

In May, the Texas Railroad Commission issued a report of its investigation of complaints of well contamination by methane in Parker County. It concluded that “the evidence is insufficient to conclude that Barnett Shale production activities have caused or contributed to methane contamination in the aquifer beneath the neighborhood.”

But Parker County resident Steve Lipsky, who’s complaint at the RRC caused it to conduct its new study, continues his battle with Range Resources, arguing that its wells are responsible for the methane in his water well. Two other scientists who have reviewed the RRC test data concluded that the gas in Lipsky’s water is definitely the result of fracking operations.

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