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Oil and Gas-Related Legislation from the 82nd Texas Legislative Session

Bills of Interest from the Texas Legislature’s now-completed session:

  • SB 652 – re-authorized the Texas Railroad Commission for two more years. The Lege was unable to agree on changes recommended by the Sunset Commission to reform the RRC. See my discussion of Sunset recommendations here and here. Legislators could not agree on a provision changing the terms of the three commissioners from 6 to 4 years, and could not agree on a provision transferring hearings involving enforcement and gas utility rates to the State Office of Administrative Hearings.  See story here.
  • HB 3134 – Revises earlier legislation (HB 2259, passed in the previous session) that made it more difficult for an operator to renew its operating license if it had unplugged wells not in compliance with rules. The revision gives the operators more time to achieve compliance, and will make it more difficult to require operators to plug inactive wells. See my description of HB 2259 here.
  • HB 3328 – mandates public disclosure of chemicals used in hydraulic fracturing treatments in Texas. The oil and gas industry supported the measure. Environmental groups called the legislation a mixed bag.  EDF advisor Scott Anderson said that the bill doesn’t allow for a “simple, statewide list of what chemicals are used by whom and in what quantities.” Also, the bill may not be fully implemented until 2013.  Railroad Commissioner David Porter said he would push the RRC to complete its rulemaking on the bill by July 1, 2012, a full year before the deadline set out in the bill.
  • SB 875 – prohibits nuisance suits against gas companies as long as they have a valid permit and are in compliance. The bill was pushed by the industry to prevent nuisance lawsuits related to emissions and noise from gas compressor facilities and other installations near populated areas.
  • SB 332 – provides that a landowner “owns the groundwater beneath the surface of the landowner’s land as real property,” and entitles the landowner to drill for and produce the groundwater, subject to reasonable regulation. This bill as originally filed provided that a landowner “has a vested ownership interest in and right to produce groundwater below the surface of the landowner’s property.” The bill is likely to give rise to litigation about the ability of groundwater districts to regulate water wells.

Other legislation of interest that did not pass:

  • HB 2087 – would have allowed operators to force-pool non-participating royalty interests. The bill was opposed by landowners, including the Texas Land and Mineral Owners’ Association.
  • HB 2939– would have required operators to submit an annual report of groundwater used to the RRC, the TCEQ and the TWDB.
  • HB 3586 – would have allowed for compulsory unitization for purposes of enhanced oil recovery and CO2 storage.
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