Railroad Commission of Texas will come to order to consider matters which
have been duly posted with the Secretary of State for April 23, 2019.
The Commission will consider the items on the agenda as posted on the agenda. Under
our public participation policy, anyone desiring to offer public testimony on any
items that are not noticed on today's agenda will need to fill out a testimony form
found in the back of the room and submit it to Commission Secretary Kathy Way.
And a reminder to turn off your cell phones. Item number one. Good morning.
Morning, Chairman and Commissioners. My name is Amy
Bruce. I'm representing the Market Oversight section
of the Oversight and Safety Division. Before you
today is Gas Utilities Docket number 10825. The
application filed by Gulf Coast Express Pipeline LLC pursuant to the Natural Gas
Policy Act Section 311 for review of the reasonableness of a transportation rate.
Gulf Coast Express Pipeline LLC provided testimony
and supporting data demonstrating that the
requested rates do not exceed a cost based rate. Staff recommends approval of the
requested rates, and I'm available for any questions.
- Thank you. Are there any questions?
I move we approve the examiners' recommendation.
Is there a second? - Second. All those in favor
say aye. Motion passes. Item approved. Thank you, Amy. Item number 2. Good morning.
- Good morning, Chairman and Commissioners. For the record, my name is Robert Music,
technical examiner For the Hearings division.
Item number two is the application of PetCo
Petroleum Corporation to increase the injection
pressure for their current permit to inject
fluids into their reservoir productive of
oil and gas under Statewide Rule 46. The
current permit authorizes PetCo to inject
fluids for the secondary recovery initiative
on the Annie lease, well number ten, in Great
County, Texas. PetCo's existing permit limits the
injection pressure to two hundred pounds per
square inch. PetCo asserts that the current
injection pressure physically limits their
injection volume. PetCo's application request
to increase the ejection pressure to one thousand
pounds to eject a permitted maximum volume
of twelve hundred fifty barrels per day of fresh
and salt water. The application is protested
by Kirkpatrick Oil Company, and offset operator
and the operator of the Blake lease, which
is on the southern boundary and contiguous
with the Annie lease. Kirkpatrick contends the
increase injection pressure will increase
the injection volumes and damage mineral
resources associated with the Blake lease
and cause waste by straining oil that will
not be recovered. As such, an increase in
water injection costs by a fivefold increase
from two hundred to one thousand pounds and
maximum surface objection pressure will worsen
the current conditions. PetCo failed to meet its
burden of proof that the increase injection
volumes would not harm Kirkpatrick's mineral
resources. The examiners recommend denial
of PetCo's application to amend the maximum
surface injection pressure from two hundred
to one thousand pounds. No exceptions were
filed. I'm available for questions.
- Thank you. There any questions? I move we approved
the examiners' recommendation. Is there a second?
Second by Commissioner Christian. All
those in favor say aye. Motion passes.
Item's approved. Thank you, Robert. Item number three. Good morning, Christie.
- Good morning, Chairman. Good Morning,
Commissioners. For the record, Christie Reeve,
Administrative Law Judge with the Hearings
division. I'll be presenting items number three
through fifteen, all of which are motions
for rehearing resulting from default orders
signed in good faith claim complaints. Item
number three. On February 26, 2019, the Commission entered an order
finding that Arrowhead Productions LP does
not have a good faith claim right to operate
the subject lease. On March 8 Arrowhead filed
a timely motion for rehearing. No response
was filed by complainants. Arrowhead's motion
for rehearing fails to meet any of the prongs
of the Craddock test and fails to comply with
the requirements of the Texas Government Code.
It is recommended that the motion be denied.
The motion will be overruled by Operation
of Law on June 6, 2019. I'm available for questions.
- Thank you. Any questions?
I move we approve the examiners' recommendation.
Is there a second? Second by Commissioner Sitton.
All those in favor say aye. Motion passes.
Item's approved. And you're going to do four through fifteen together?
- Yes, ma'am. On February 26, 2019, the Commission entered an order
finding that Top Op LLC does not have a good faith claim right to
operate various leases in Victoria County, Texas. The order was the
result of a good faith claim complaint filed by the trustee of one
of the mineral owners and Top Op's subsequent
failure to answer the ALJ's letter requiring
Top Op to either provide evidence it holds a
good faith claim or request a hearing. These
dockets had a previous order signed on August 21, 2018.
The result of the same facts. On October 30, 2018,
a motion for rehearing was granted for
Top Op on the prior order recommended by
the ALJ out of an abundance of caution due
to a possible mailing issue. As Top Op
failed to request a hearing subsequent to
the prior order being vacated, the ALJ
another letter on December 3, 2018, giving
notice to Top Op to schedule a hearing
or provide evidence that it has a good faith
claim. Top Op failed to respond to the letter
by the due date or at any time prior to the
Commission signing the February 26, 2019,
order. On March 21, 2019,
Top Op filed that second motion
for rehearing, again stating that it did not
receive the ALJ's letter and that complainant
had failed to serve it with the complaints
so it was unable to respond. A response was
received from complainant. In summary, complainant
states it finds it implausible that Top Op
receives orders mailed but not letters. And
that Top Op failed to provide any
supporting evidence or affidavits to support
its claims. It is recommended that the motion
be denied. The motion will be overruled by
operation of Law on June 6, 2019.
I'm available for questions.
- Thank you. They're any questions? I have affidavits from
both parties. Does anybody want
to hear from either one of them?
I move we approve the examiners'
recommendation for items four through fifteen.
Is there a second? Second by Commissioner Christian.
All those in favor say aye. Motion passes. Items are approved.
- Thank you very much.
Alright, we're going to items sixteen through
twenty eight which is the Oil and Gas Consent
Agenda. There are thirteen items on this. I move
we approve item sixteen through twenty eight.
Is there a second? Second by Commissioner
Sitton. All those in favor say aye.
Motion passes. Those items are approved. Master
Default Orders. There are six of those. Items
twenty nine through thirty four. I move we
approve items twenty nine through thirty four.
Is there a second? Second by Commissioner Christian.
All those in favor say aye. Motion passes.
Those items were approved.
And Agreed Enforcement Orders. There are a
hundred fifty one of these. I move we approve
items thirty one through one eighty five.
Is there a second? Second by Commissioner
Sittion. All those in favor say aye. Motion
passes. Those items were approved. I'm sorry
did I go too fast? - Did you say one ninety five or one eighty five?
- One eighty five. I hope. - You said thirty one through, - Thirty five. I'm sorry, let
me start over. Thirty five through one eighty
five, yes? One hundred fifty one items. Do I
need to redo my motion. Did I get right?
Did it clarify it? Okay, so we've approved
thirty five through one eighty five. Thank you.
And that concludes nearing section. Thank you.
We'll now take up Administrative. Wei, good morning.
- Good Morning, Chairman and Commissioners.
Wei Wang, Executive Director. As of last
Thursday, our head count in this agency
is seven hundred seventy one employees. And
also, as of last Thursday, we had physically
plugged one thousand and eighty five wells. I
believe Clay would have a more detailed report
for the second quarter for you on well plugging
and site remediation later. And I'm also glad
to report we continue to make improvements
on our IT systems. And for Form ST1, this
is the form related to high cost gas incentive.
We're planning, we plan to release that form
online on April 29, next Monday, as
part of the Oil Field Relief Initiative.
In addition to that, we also made enhancement
to RRC oil. This is the online inspection
look up. And when we're release this, in January, I've
mentioned that we'll continue to make improvements
on this online form. And today, I have with
me Edgar, and he's going to do a very quick
demo to show you the additional features we
put on this RRC Oil to enhance transparency. Thank you.
- Good morning, Commissioners, Chairman.
For the record, my name is Edgar Chavez.
And this morning, I'm gonna provide you with
a very quick update on the enhancements that
we did to the RRC Oil. During the last presentations,
I think, you asked what, you know, is this gonna
be like this forever? Are you gonna continue to
make enhancements? And we are going to continue
to listen to the feedback that we received
from our constituents, our industry, the
general public. And one of the things that
they've been asking a lot was ability to
export the results to an Excel file. So this is our main
website. Right if you click here. It will get you to our
RRC Oil. The obligation, uh let me reset this.
So if somebody is interested in no compliance
of Statewide Rule 5. And they click Search, they
will get, you know, forty eight inspections
that were not complying on that rule. And now
they want to export all those results to
an Excel file. They click this button and it
will open up an Excel file. And now that, they
can do whatever they want with it, they can
share with with their own, uh, staff if they
want to. So that is the primary feature. There's
additional items like we did. If there's more
than a certain number of records, there's
messaging, that there's your record. There's
a messaging that that shows up. Uh, but in
general, that some of the main things that
we have heard from the users of his application.
And all of this is, again, with the
spirit of continual transparency and improving our reporting capabilities.
- Thank you. I've heard a lot about the Excel spreadsheet.
People wanted that. So I appreciate you getting that.
And this is my last night.
Great. Thank you. Appreciate it. Thank you. - Are you are you hire
on the side? So I've been trying to move my address book
for two years to Excel. Always get the phone numbers
on the cities, and it's screwed up.
- We can do something about. - No you can't.
No state resources. Thank you. Thank you all
for continuing to improve.
- That concludes my report this morning. Thank you.
- Thank you.
- Usually, we have to call the Help Desk.
- Yeah, but they don't know, if they speak my language, it's kind
of a problem. East Texas compared to
wherever they're from is hard to understand.
- Good morning, Chairman and Commissioners. For the
record, my name is Alex Schott, General Counsel for the
Railroad Commission of Texas. We've got nothing to
report for item one eighty seven other than to note
that the proposed comments we talked about
last session have been filed with EPA.
And Vanessa has the next two items. - Okay. Thank you. Morning.
- Good morning. Vanessa Bridges, Assistant General Counsel,
for the record. Item one eighty eight on the agenda
pertains to Commissioner approval of certain
contracts pursuant to the Commission's delegation
of Authority and Section 2261.254 of the Texas Government
Code. The Commission's internal delegation
of authority requires Commissioner approval
of contracts and associated amendments greater
than or equal to five hundred thousand dollars.
Section 2261.254 requires approval of contracts and associated
amendments greater than one million dollars.
At issue today are new contracts for statewide
well plugging services. Approval of this item today will ensure agency
operations remain on schedule, and the necessary
approvals will be in place pursuant to the
Commission's delegation of authority and state law.
- Thank you. Are there any questions?
I move we approve the staff's recommendation. Is
there a second? Second by Commissioner Christian.
All those in favor say aye. Motion passes. Item's approved.
- And Item one eighty nine
is the quarterly report on the Commission
centralization of agency procurement and contracts
management and compliance with Senate
Bill 20 from the 84th Legislature.
The Office of General Counsel's Contracts attorney
has been working closely with the Contracts
Management Group and the Oil and Gas Division
on solicitations for special plugging projects
that will allow for more non routine plugging
efforts to be completed in a matter that is
compliant with both SB20 and comptroller
best practices. Additionally, OGC has
been working with the Contracts Management
group and divisions to ensure that agency
risk management standards are in line with
comptroller best practices in the areas of
bonding and insurance requirements. These
assessments and resulting new language changes
result in the agency having stronger solicitations
and contracts that will allow for more efficient
future solicitations on similar projects.
And finally, the agency's grants coordinators
working with staff and OGC to develop a revised
reference guide for divisions contracting
with federal grant dollars.
- Thank you, I appreciate the update. We don't have to take any,
there's no item, to do anything, but thank you
for continuing to work on that. I appreciate it.
Thank you. Alex? One ninety. Morning.
- Morning, Chairman, Commissioners.
For the record, I am Clay Little,
Oil and Gas division, and I will be presenting items one
ninety and one ninety one.Item one ninety, staff is
seeking your approval to make available for public
comment the Commission's Oil and Gas division
monitoring and enforcement plan for Fiscal Year
2020. The plan was required by House Bill 1818
from the 85th Legislature. House Bill 1818 also requires
the Commission to seek public input as the plan's
developed. With your approval, the plan will be made
available to the public from today until May 23
with the option to submit the
feedback via a web-based survey form or via US Mail.
We will return to conference on June 18
with a final version of the plan for your
approval. That version will reflect any public
comment received by May 23. The final
version of the plan must be posted to the
Commission's website no later than July 1. May I answer any questions?
- Any questions? All right,
I move we approve the staff's recommendation.
Is there a second? Second by Commissioner
Sitton. All those in favor say aye. Motion passes. Item is approved.
Commissioners, item one ninety one is the Oil Field Clean-up Program
Second Quarter Status Report for Fiscal
Year 2019. I will present the well-plugging
report and Peter Pope will present the site remediation
section. During the second quarter, plugging
operations were completed and files were closed
on two hundred ninety nine wells at a cost
five million five hundred ninety six thousand
four hundred eleven dollars. This includes
only those wells that were plugged, invoiced by
the plugging contractor, and approved replacement
by field operations. During this same period,
four hundred fifty two new wells were approved
for plugging with state funds. The memo in your
notebooks incorrectly list this as eighteen
hundred, eight hundred fifteen new wells.
The fiscal years bank totals through the end of the second quarter
include eight hundred two wells physically club, of which five hundred
forty nine have been invoiced and paid, and
a total of eight hundred fifteen new wells
have been approved for plugging with state funds.
As Wei mentioned earlier, this last Thursday,
we have a thousand and eighty five wells physically plugged
at an estimated cost of twenty one point eight million.
And I'll turn this over to Peter.
- Before you do, so how many wells do we
have left to plug? Roughly? Do you have
any idea? Is it still that six thousand magic number?
The three thousand for the two years?
She's talking about the total. Not the backlog.
- What do we have? What's our backlog?
- Our backlog? We have, our orphan well population is still
running at, I believe the last month, it was at 6500 orphan wells.
- I just wanna make sure. We might get asked that
question. Thank you. I know, we're still, we're making
progress, but we're treading water. - We are. Keeping our heads slightly above.
- That's right. Y'all are doing a great job. Thank you.
- Good morning, Chairman and Commissioners, Peter
Pope, Manager of the Site Remediation section. During
the second quarter of Fiscal Year 19, the
state managed clean-up program completed
and closed forty eight activities using OGRQ
funds at a cost of six hundred twenty nine
thousand four hundred nine dollars. An additional
seventy six activities were authorized during the quarter.
At the end of the second quarter, year-to-date,
fifty seven cleanup activities have
been completed at a cost six hundred eighty one
thousand eight hundred seventy three dollars.
One hundred sixteen clean up activities were,
one hundred sixteen authorized cleanup
activities remain to be completed. For a current,
for a more current snapshot, as of April 18,
the program completed another forty nine activities
giving us a total of one hundred six completed
activities at a cost of six million three hundred
sixty six thousand seven hundred ninety six dollars.
And then an additional forty activities
have been completed in the field at a cost
of one million, about one point two million, but those are awaiting
final invoice payment. I'm available to answer any questions.
- Thank you. There any questions? Thank you all
for the work you're doing. We sure appreciate
it. Item one ninety two is public participation. We don't have anybody
else. Item one ninety three's Executive Session,
which we're not going into. Are there any
other duly posted matters? Hearing none then this meeting
is adjourned. Thank you all very much for the work.