Announcer: .com. will begin momentarily.
-: Thank you.
This is Chairman Christian.
This meeting of the Railroad Commission of Texas will come
to order to consider matters, which have been duly posted
with the secretary of state for June 16th, 2020.
Under our public participation policy,
anyone desiring to offer public testimony on any item
that are not noticed on today's agenda,
was required to register in advance.
We had two people register in advance,
Emma Pabst, with the Environment Texas
and Kate Norman, with Texas Gas Service.
The Commission will consider the items
on the agenda as posted on the agenda.
Callie, please call up the presenter for item number one.
Callie: Very good, thank you.
Claudia Godoy, will be presenting agenda item one,
Claudia, we are ready when you are.
-: Thank you.
Good morning, chairman and Commissioners.
For the record, my name is Claudia Godoy,
and I'm representing the Market Oversight Section
of the Oversight and Safety Division
Agenda item number one is gas utilities docket number 10945,
the application of Atmos Energy, West Texas division
for Test year 2019, annual interim rate adjustment
for the unincorporated areas.
This docket is the second interim rate adjustment
since the company's last rate case, GUD number 10743.
The adjustment represents an incremental increase
of $12,198,286 dollars
of which 1,030,741
is allocated to customers subject
to the order of this docket.
Staff recommends approval of the interim rate adjustment.
I'm available for questions.
-: Are there any questions.
I move that we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Sitton.
All in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up presenter
for agenda item two.
Callie: Well, thank you.
Claudia Godoy, will be continuing with agenda item two.
Claudia, you may continue.
-: Thank you.
Agenda item is gas utilities docket number 10955,
the application of Texas Gas Service company
for test year 2019 annual interim rate adjustment
for the West Texas service area.
This docket is the fourth interim rate adjustment
since the company's last rate case, GUD number 10506
This adjustment represents an incremental increase
of $4,666,421 dollars
of which 388,308 is allocated to customer subject
to the order in this docket.
Staff recommends approval of an interim rate adjustment.
I'm available for questions.
-: Are there any questions members?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Craddick, all favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up agenda item three.
Callie: Yes, thank you.
Sarah Montoya Foglesong,
will be presenting agenda item number three.
Sarah, we are ready when you are.
-: Good morning Commissioners.
For the record, my name is Sarah Montoya Foglesong,
I'm representing the Market Oversight Section
of the Oversight and Safety Division.
Before you today is gas utilities docket number 10947.
The application of CenterPoint Energy
for the test year 2019 annual inter rate adjustment
for the unincorporated portion of the South Texas division
and the city that seeded jurisdiction to the Commission.
This docket is the second interim rate adjustment
that company has filed for the portion of
the South Texas division jurisdictional to the Commission.
Since the order was issued in the most recent statement
of intent gas utilities docket number 10669.
This adjustment represents an incremental increase
of $2,981,622 dollars of which $988,817 dollars
is recoverable from customers impacted by this order.
I recommend approval of the interim rate adjustment
as revised and I'm happy
to answer any questions you may have.
-: Are there any questions?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed, motion passes, that item is approved.
-: Thank you. -: Callie,
please call up item number four.
Callie: Yes, thank you.
Christina Poole, will be presenting agenda item four.
Christina, we are ready when you are.
-: Good morning, chairman and Commissioners.
For the record, my name is Christina Poole,
and I'm with the Market Oversight Section
of the Oversight and Safety Division.
The item before you today's gas utility docket number 10948.
The application of CenterPoint Energy
for the test year 2019 annual interim rate adjustment
for the unincorporated areas of the Houston division
and the cities that seeded jurisdiction to the Commission.
This docket is a third interim rate adjustment
the company has filed since the final order
was issued in the most recent statement
of intent gas utility stock at number 10567.
This adjustment represents an incremental increase
of $12,167,035 dollars
of which $6,221,579 dollars will be recovered
from the customers subject to the order of this docket.
Staff recommends approval
of the interim rate adjustment as revised.
I'm available to answer questions.
-: Are there any questions.
I move we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up agenda item five.
-: Yes, thank you.
Frank Tomasik, will presenting agenda item five.
Frank, we are ready when you are.
-: Thank you very much, Callie.
Chairman and Commissioners, good morning.
I'm Frank Tomasik, with the Oversight and Safety Division
and this morning's next agenda item
is gas utilities, docket number 10949, application made
by CenterPoint Energy Entex
for the test year 2019 annual interim rate adjustment
for the unincorporated areas
and municipalities that ceded jurisdiction
in its Texas Coast division service area.
This is the third interim rate adjustments,...
Five, six, seven,
which set base interim rate adjustment components.
Under these factors, the companies identified
an annual test year increment rate requirement
of approximately $2,785,407 dollars
of which $1,006,530 dollars will be recovered
from the environments and seeded jurisdictional customers,
under the proposed rate adjustment.
Staff's review of this filing has found it to be compliant
with the provisions of the Grip Statutes
and staff is recommending approval.
I can address any questions at this time.
-: Are there any questions?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up agenda item six.
Callie: Yes, thank you.
Dee Marlo Chico, will be presenting agenda item six.
Dee Marlo, we are ready when you are.
-: Good morning, chairman and Commissioners.
My name is Dee Marlo Chico,
Administrative Law Judge with the Hearings division.
Item number six is a gas utility rate case
that resulted in a settlement
between CenterPoint Energy Resources Corporation,
DBA CenterPoint Energy Entex
and CenterPoint Energy Texas Gas and four interveners,
staff, the East Texas Coalition of cities,
the lines of CenterPoint municipalities
and the cities of Belmont and Sour Lake.
CenterPoint filed a statement of intent on November 14, 2019
to increase rates in its Belmont, East, Texas division.
The examiners recommend approval of the settlement
as set forth in the proposed final order.
The settlement represents diverse interests
and the parties have engaged in significant discovery
regarding the issues in dispute.
No exceptions or replies are filed.
The deadline for Commission action is June 16, 2020.
I'm available for questions.
Christian: Are there any questions.
Callie: Commissioners, we do have Mark Santez,
representing CenterPoint Energy in attendance today
and is available for questions or comments.
-: Any questions members?
Thank you.
I move we approve examiners recommendation.
Is there a second?
-: Second.
Second by Commissioner Craddick, all in favor say, aye.
All: Aye.
-: And that item is approved.
Callie, please call up item number seven.
Callie: Yes, thank you.
Veronica Ruberto, will be presenting agenda item seven.
Veronica, we are ready when you are.
-: Good morning chairman and Commissioners
for the record, Veronica Ruberto,
Administrative Law Judge with the Hearings division.
I will be presenting items seven through nine.
Item number seven is the application
by Luminant Mining company, LLC requesting
a multi-phase release of reclamation obligations
on an aggregate 586.7 acres,
permit number three F,
within Big Brown Mine located in Freestone County.
There are four proposed mine land uses, pasture land,
fish and wildlife habitat,
develop water resources and industrial commercial.
Evidence in the record supports that Luminant has completed
all reclamation activities required
for the various spaces of release.
After notice, no comments or requests
for a hearing were received.
Staff and Luminant are the only party to the proceeding.
No exceptions were filed,
no changes to the current bond are requested.
It is recommended that the request for various phases
of release for an aggregate 586.7 acres be approved
and that Luminant be eligible
to reduce bond monies attributable to the areas granted
for release of this docket.
I'm available for questions.
-: Are there any questions members?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up agenda item eight.
Callie: Yes, thank you.
Veronica, will be continuing with agenda item eight.
Veronica, we are ready when you are.
-: Item number eight is the application
by San Miguel Electric Cooperative inc,
requesting phase one release of reclamation obligations
on 369.6 acres, permit number 11G
within San Miguel, Lignite mine located in Atascosa
and McMullen counties.
Two approved post mine land uses
are within the requested area for release,
pasture land and industrial commercial.
Evidence in the record supports
that San Miguel has completed
all reclamation activities required
for phase one release of the requested acreage.
After notice, no comments or requests
for a hearing were received.
Staff and San Miguel are the only parties to the proceeding.
No exceptions were filed,
no changes to the current bond are requested in this docket.
It is recommended the request for phase one release
for 369.6 acres to be approved
and that San Miguel be eligible
to reduce the bond monies attributed
to the area's granted release in this docket.
I'm available for questions.
-: Are there any questions?
I move we approve the examiner's recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up agenda item number nine.
Callie: Yes, thank you.
Veronica, will still be continuing
with agenda item number nine,
Veronica, we are ready when you are.
-: Item number nine is a motion for rehearing.
On April 21st, 2020, the Commission signed
a final order approving the application
for Marshall Mine, LLC,
and issued a renewed and revised permit.
We numbered as permit number 59A to Marshall.
A timely motion for rehearing was filed
by Mr. Charles Ferguson, an interested person on the docket.
No replies were received from the parties.
Mr. Ferguson's motion (murmurs) it did not raise new issues
of fact and law previously considered by the Commission.
It is recommended that the motion for rehearing be denied.
The motion for rehearing will be overruled
by operation of law on July 30th, 2020.
I'm available for questions.
Christian: Are there any questions?
I move we approve the examiner's recommendation.
Is there a second?
Sitton: Second.
Christian: Second by Commissioner Sitton,
all in favor, say aye.
All: Aye.
Christian: Any opposed?
Motion passes, that item is approved.
Callie, please call up the next agenda.
Callie: Yes, thank you.
Kyle Lebby, will be presenting agenda item number 10.
Kyle, we are ready when you are.
-: Morning chairman and Commissioners,
Kyle Lebby, Administrative Law Judge.
Item 10 is an application by Luminant Mining company, LLC,
requesting release and phase two
and three reclamation obligations for 225.8 acres
within the Three Oaks Mine located
in Lee and Bastrop counties.
The approved post mining land for use 225.8 acres
is pasture land.
Luminant has demonstrated as confirmed
by Commission records and analysis
that all reclamation activities have been accomplished
as required for phase two and three release.
In response to the publication of the notice of application
one person submitted a written comment
but no request for hearing were received.
Luminants's staff were the only parties to the proceeding.
Nobody filed exceptions,
no changes to the current bond are requested in this docket.
As a result of proposed order prescribes that Luminant
is eligible to reduce the bond of the amount
that is attributable to
the subject divergent future bond adjustments.
For release to the 225.8 acres is recommended
and I'm available for questions.
-: Any questions members?
I move we approve examiners recommendation.
Is there a second?
-: Second
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
All opposed?
Motion passes, that item is approved.
Callie, please call up the presenter
for agenda items 11 and 12.
Callie: Yes, thank you.
Peter Buva, will be presenting agenda item 11 and 12.
Peter, we are ready when you are.
-: Good morning, chairman and Commissioners.
My name is Peter Buva, Technical Examiner
with the Hearings division.
I will be presenting items, number 11 and 12 together.
Items number 11 and 12 are applications
by Reece County SWD, LLC,
pursuant to Statewide Rule 46 to inject fluid
into the reservoir, not productive of oil and gas
for the Brice SWD, well number one
and Bear SWD, well number one,
reeves block for the 4430 field, Reese County, Texas.
The applications that are protested
by PDC Permian Incorporated and
(speaks in foreign language)
PDC protested the application for the Bear Well
PDC contends that there is no industry need
for the Bear Well and that the approval
of the proposed well will result
in waste and harm rights.
PDC also disputes that Reeves has a good faith claim
to operate the well.
Mr, and Mrs. Rantelia,
colleges and landowners protested, both applications.
Mr. and Mrs. Rantelia, operate an RV park located less than
a mile from the proposed wells.
At the hearing Mr. and Mrs. Rantelia, expressed
their concern with the potential safety issues
that may come from a lightning strike to these wells
and for the groundwater protection.
Reeves presented evidence addressing
each of the requirements in Statewide Rule 46.
The examiners find that the proposed wells will
not cause pollution of freshwater
or endanger, or injure oil and gas, or geothermal resources.
The applicant provided evidence in support
of the industry need for the proposed Wells.
The applicant also produce a copy
of a recorded surface lease showing that Reeves has
a good faith claim rights to operate the proposed wells.
Regarding Mr. and Mrs. Rantelia's protest,
the examiners note that prevention
of lightning strike does not fall within the requirements
of Texas Water Code or rule 46.
The examiners recommended approval of the applications,
exceptions and replies have been filed.
I'm available for any questions.
Callie: Well, Commissioners we also have Jay Stewart,
representing Reeves County SWD, LLC
and Callie Kenny, representing PDC, Permian Incorporated
in attendance today and is available
for questions and comments as well.
-: Any questions members?
I move, we approve the examiners recommendation.
Is there a second.
-: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, those items are approved.
Callie, please call up 13.
-: Yes, thank you.
Ashley Correll, will be presenting agenda item 13.
Ashley, we are ready when you are.
-: There she is.
Callie: Good morning, Ashley.
-: Good morning, chairman and Commissioners.
I am Ashley Correll, Technical Examiner
for the Hearings division.
Item number 13 is the application of Encana Oil and gas USAP
for permanent gas well classification for nine wells
and the Eagleville, Eagleford two field.
Rule eight of the Special Field Rules states,
any well in the fields completed with the gas oil ratio
of 3000 cubic feet per barrel and above
maybe permanently reclassified as a gas well provided
the GOR was determined within 180 days of completion.
The examiners find that Encana provided sufficient evidence
to support reclassification of five of the nine wells.
The examiners also find that
the initial potential tests estimated daily production data
prior to the wells going on artificial lift
and select allocation test results do not support
the reclassification of four of the wells.
The examiners recommend approval of the application
for five wells and denial of the application for four wells.
Exceptions were filed.
I'm available for any questions.
-: Are there any questions?
I move, we approve the examiners recommendation.
Is there a second.
Craddick: Second.
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up a presenter for agenda item 14.
Callie: Yes, thank you.
Ezra Johnson, will be presenting agenda item 14.
Ezra, we are ready when you are.
-: Good morning, chairman and Commissioners,
for the record, my name is Ezra Johnson,
Administrative Law Judge with the Hearings division,
I will be presenting items 14 through 17.
Item 14 is the application
of Sabinal Energy Operating, LLC
for approval and certification
of an initial tertiary enhanced recovery project
on the Westbrook Southeast unit
via seismic stimulation pursuant to Statewide Rule 50.
In August, 2017, Energen Resources Corporation,
the prior operator of record installed two seismic tools
on the Westbrook Southeast unit
and began seismic stimulation enhanced recovery operations.
Energen did not submit a form age 12
prior to the installation of the seismic tools
or otherwise seek Commission approval
for the enhanced recovery project prior to commencement.
Sabinal, the current operator of record,
purchased Energen's existing project
on the Westbrook Southeast unit and filed a form age 12
to apply for the enhanced oil recovery tax rate
more than two years after commencement.
Sabinal's application was administratively denied
as untimely under the Texas tax code and Statewide Rule 50.
Sabinol acknowledges that its application was untimely.
Granting Sabinol's untimely application
under the present circumstances would be directly contrary
to the plain language of Statewide Rule 50
and the governing statute.
It would also be contrary to the stated legislative intent
of the governing statute and applicable legal precedent.
The examiners recommend that the Commission deny
the application and I'm available for questions.
Callie: Commissioners we also have Bill Hainga
and Robert Partlow, with Sabinol Energy Operating, LLC
in attendance today, and are also available
for questions or comments.
-: Any questions members?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
Second by Commissioner Sitton, all in favor, say aye.
-: Aye. -: Aye.
-: Any opposed?
Motion passes, that item is approved.
Item number 15, Callie.
Callie: Yes, thank you.
Ezra, will be continuing with agenda item 15.
Ezra, we are ready when you are.
-: Item 15 is the application
of Rickaway Energy Corporation seeking
a determination contrary to Commission staff's
prior determination that it be allowed
to renew its form P five.
Rickaway argues that it is entitled to a plugging extension
for the subject inactive wells, because it brought
into compliance at least 10% of the wells listed
on its inactive well inventory as of September 1st, 2018,
the date of their last annual renewal.
However, the well actually restorative production
was not on Rickaway's active well inventory
as of September 1st, 2018 because the Commission did
not approve the transfer of operatorship
for that well until December of 2018.
Accordingly Rickaway is not entitled to plugging extensions
for the subject inactive wells.
The examiners recommend that
the Commission deny Rickaway's application
to renew his form P five and order that Rick away bring
the Wells into compliance with Statewide Rule 15.
Exceptions and replies were filed
and I'm available for questions.
Christian: Are there any questions?
I move we approve the examiners recommendation.
Is there a second?
Craddick: Second.
Christian: Second by Commissioner Craddick,
all in favor, say aye.
All: Aye.
Christian: Any opposed?
Motion passes,
that item is approved.
Callie, please call up presenter for agenda item 16 and 17.
Callie: Yes, thank you.
Ezra Johnson, will be continuing with agenda item 16 and 17.
Ezra, we are ready when you are.
-: Item 16 and 17 concern, a motion for rehearing
of a final order issued by the Commission granting
the applications of Boykin Energy, LLC,
pursuant to Statewide Rule nine.
None of the issues raised in the motion
for rehearing are new.
All issues raised in the motion were already raised
by the protestants and considered by the Commission prior
to the Commission issuing the final order in this case.
In addition, there were clerical errors
in the final order sign on April 21st, 2020
of a non-material nature
that should be corrected by amendment.
The examiners recommend that the Commission amend
the final order to correct the noted clerical errors
and deny the motion for rehearing.
The motion will be overruled by operation
of law on July 30th, 2020, and I am available for questions.
Callie: Commissioners, we also have George Neale
and Steph Crawford, representing Boykin Energy, LLC
and John Hicks, with Kogi operating in attendance today
and available for questions or comments as well.
-: Are there any questions?
I move we approve the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
Any opposed?
Motion passes, those items are approved.
Callie, please call it agenda item 18.
Callie: Yes, thank you.
Kristi reef, will be presenting agenda item 18.
Kristi, we are ready when you are.
-: Morning chairman and Commissioners, it's Kristi Reeve,
Administrative Law Judge with the Hearings division.
Item number 18 is a motion for rehearing.
On April 21st, 2020, the Commission entered
an order finding Geomeg Energy Operating Company, LLC does
not have a good faith claim to operate
the subject lease and order the wells club.
The order was the result of a landowner complaint
and Geomeg's failure to respond to the ALJs letter,
requesting Geomeg either provide evidence supporting
its good faith claim or request a hearing.
On May 18th, 2020,
the Commission received Geomeg's
timely motion for rehearing.
No response was filed by the complainant, by the deadline.
Geomeg's motion fails all prongs of the Craddock test.
It is recommended that the motion be denied.
The motion will be overruled by operation of law
on July 30th, 2020.
I'm available for questions.
Christian: Are there any questions.
I move we approve the examiners recommendation.
Is there a second?
Craddick: Second.
Christian: Second by Commissioner Craddick.
All in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, agenda items 19 through 21.
Callie: Yes, thank you.
Jennifer Cook, will be presenting agenda item 19 through 21.
Jennifer, we are ready when you are
-: Good morning Chairman and Commissioners.
I am Jennifer Cook, an Administrative Law Judge
with the Hearings division.
I will be presenting items 19 through 21 together.
They regard a motion for rehearing.
On April 21, 2020, the Commission issued
an order ordering Votaw production company, LLC,
to plug the subject wells and pay to the Commission
an administrative penalty of $24,155 dollars.
A timely motion for rehearing was received from Votaw.
Staff fail to reply in opposition to the motion.
None of the issues raised at the motion
for rehearing are new.
All issues raised in the motion were already raised
by Votaw and considered by the Commission prior
to the Commission issuing the order in these cases.
It is recommended that the motion be denied.
The motion will be overruled
by operation of law on July 30, 2020.
I'm available for questions.
-: Any questions members?
I move we approve examiners recommendation.
Is there a second?
Sitton: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, those items are approved.
Callie, please call up the next agenda item.
Callie: Yes, thank you.
If we can just give a moment,
it seems like we've lost Commissioner Sitton.
Give me just a minute while we figure out what's going on.
There he is, welcome back.
-: You were in the opposite side of my screen, now you moved.
-: I'm starting to take this personally, Callie.
(laughing)
-: No, no, no, no. (laughing)
Well, thank you.
Joe Menefe, will be presenting agenda item number 22.
Joseph, we are ready when you are.
-: Good morning chairman, Commissioners,
for the record, Joe Menefe,
Paralegal in the Hearings division.
I'll be presenting items 22 through 25
all of which are P5 motions for rehearing,
all done as a result of honor orders, denying renewal
of the operator P5 because of wells non-compliant
with Statewide Rule 15.
Item number 22.
Subsequent to filing it's motion
for rehearing Borden, Roland inc has come into compliance.
Therefore it's recommended the motion be granted
and the underlying docket dismissed as moved.
I'm available for questions.
Christian: Are there any questions
I move we approve the examiners recommendation.
Is there a second?
Craddick: Second.
-: Second by Commissioner Craddick.
-: Any opposed?
All in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes and that item is approved.
Next item.
Callie: Thank you, Joe, will be continuing
with agenda item 23.
Joe, we're ready when you are.
-: Item number 23.
In its motion for rehearing, Lee-Walker Mineral, LLC states
its failure to request a hearing was due
to COVID-19 disruption of oil and gas operations
that the filing of compliance documentation is eminent
and that granting the motion will not injure the Commission.
Staff proposes the motion, 14 wells remain noncompliant
with Statewide Rule 15.
It is recommended the motion be denied.
The motion will be overruled by operation of law
on July 30th.
I'm available for questions.
-: Are there any questions members.
I move we approve the examiners recommendation.
Is there a second?
-: Second.
Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up item 24.
Callie: Yes, thank you, Joe will be continuing
with agenda item 24.
Joe, we are ready when you are.
-: Item number 24.
In its motion, M5 Standing Energy, LLC states
its failure to request a hearing was due to
its managing member being hospitalized during
the extension period.
That the filing of compliance documentation is eminent
and that the Commission would not be impacted
by granting its motion.
Staff opposes the motion.
Nine wells remain noncompliant with Statewide Rule 15.
It is recommended the motion be denied.
The motion will be overruled by operation of law
on July 30th.
I'm available for questions.
-: Are there any questions members?
I move we approve examiners recommendation.
Is there a second?
Craddick: Second
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Now please present agenda item 25.
-: Yes, thank you,
Joe will be continuing with agenda item 25.
Joe, we are ready when you are.
-: Item number 25.
In it's motion for rehearing,
Subsurface Production, Inc states it's failure to request
a hearing was due to COVID-19 disruption
of oil and gas operations,
that the filing of compliance documentation is eminent
and that the Commission would not be injured
by granting its motion.
Staff opposes the motion.
24 wells remain non-compliant with Statewide Rule 15.
It is recommended the motion be denied.
The motion will be overruled
by operation of law on July 30th.
I'm available for questions.
Christian: Are there any question.
I move we approve the examiners recommendation.
Is there a second?
Sitton: Second.
-: Second by Commissioner Sitton, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Let's move on to the Oil and Gas Consent Agenda.
There are 59 items on the Oil and Gas Consent Agenda.
I move we approve items 26 through 85 except item 54,
which staff has requested to pass to the next conference.
Is there a second?
-: Second.
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, those items are approved.
Let's move on to Master Default Orders.
There are only 20 Master Default Orders.
I move we approve items 86 and 105.
Is there a second?
Craddick: Second.
-: All in favor say aye.
Second by Commissioner Sitton, all in favor say aye.
All: Aye.
-: Any opposed?
Motion passes.
Let's move to the Agreed Enforcement Orders.
There are 201 Agreed Enforcement Orders.
I move we approve items 106 through 306.
Is there a second?
-: Second.
-: Second by Commissioner Craddick.
All in favor say aye.
All: Aye.
-: Any opposed?
Motion passes, those items are approved.
That concludes the hearing section.
We'll now take up our Administrative Agendas.
Callie, please call up the item and the presenter
for agenda item 307.
Callie: Yes, thank you.
Randall Collins, will be presenting agenda item 307.
Randall, we are ready when you are.
-: Good morning Commissioners, for the record,
I'm Randall Collins, Chief Operating Officer.
For the record item number 307 on the agenda pertains
to the Commission's approval of certain contracts pursuant
to the Commission's delegation of authority
and section 2261.25 for the Texas Government Code.
The Commission's internal delegation authority
and section 2261.254 requires Commissioner approval
of contracts associated amendments greater than
or equal to $1 million dollars.
And the issue today is amendment
for an existing IT contract for services.
Approval of the item today will ensure
the agency's operations remain on schedule,
the necessary approvals will be in place pursuant
to the Commission's delegation of authority and state law.
Summary of the amendment is included along
with the contract number and the amount in your notebook.
Staff ask the Commission to approve the amendment pursuant
to the Commissioner's delegation of authority
and I'm available if you have any questions.
Christian: Are there any questions?
I move we approve these agendas, these agency contracts.
Is there a second?
Sitton: Second.
Christian: Second by Commissioner Sitton,
all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call it the agenda item 308.
Callie: Yes, thank you.
David Cooney, will be presenting agenda item number 308.
David, we are ready when you are.
-: Thank you, Callie.
Good morning, Mr. Chairman, Commissioners.
My name's David Cooney, from the Office of General Counsel.
Item number 308 is staff's recommendation
to adopt amendments to the Railroad Commission MOU,
memorandum of understanding with the TCEQ
to conform with recent legislation,
including House Bill 2230 from the 84th session
and House Bill 2771 from the 86th legislature
and update the definition of underground source
of drinking water in the MOU.
House Bill 2230 authorized
the Railroad Commission disposal wells
to accept certain TCEQ waste related
to desalination and water treatment.
House Bill 2771 transfers from the Railroad Commission
to the TCEQ Authority to regulate discharges
of produced water, hydrostatic test water
and gas plant effluent into surface waters of the state.
The transfer occurs upon TCEQ receiving EPA approval
of amendments to
its Texas Pollutant Discharge Elimination System Program
to capture those oil and gas discharges.
Amending the MOU is a necessary element
to TCEQ receiving EPA approval.
The amendments were proposed at conference
on February 11th, 2020 and published
in the February 28th Texas Register.
The Commission received no comments.
The Railroad Commission received no comments.
The only change from the proposal specifies
a July 15th, 2020 effective date,
which was coordinated with the TCEQ
and which keeps us well ahead
of agency action deadlines in 2771.
Staff recommends adoption.
I am available for questions.
-: Are there any questions members?
David, one question, and this may not affect.
I know we've talked before
about of course the discharge of water and
the Feds were quite adamant
that they would meet about every 10 years
and I gave approval that it has
to be done a certain way, certain desks.
And we approached them with the idea of just tell us
the finished product you want so that we can take the water
and put it into the surface waters.
What do you want it to be in condition?
And they finally said, well, we'll come back
basically distilled waters that came back.
Is this gonna affect anything that's having to wait on TCEQ
to eliminate that water that's been up,
that we do according to Fed standards.
-: Not that I'm aware of Commissioner,
but I mean, it may put into TCEQ's lap,
put that problem into TCEQ lap
because they will be responsible for discharges.
If the discharge you're talking about fits
into one of the category, well, it's pretty broad category.
TCEQ is gonna take authority over pretty much all discharges
from oil and gas activities.
-: Okay, thank you very much.
-: Yes, sir.
-: Are there any other questions?
I move we approve these agency contracts.
Is there a second?
(mumbles)
I'm sorry, I move we adopt amendment 16 TAC 3.30 relating
to the moratorium of understanding
between the Railroad Commission and TCEQ.
Is there a second?
-: Second.
-: Second by Commissioner Craddick.
All in favor say aye.
All: Aye.
-: Any opposed?
That motion passes, that item is approved.
Callie, please call up presenter for agenda item 309.
Callie: Yes thank you.
Clay Woodul, will be presenting agenda item 309.
Clay, good morning, we are ready when you are.
-: Good morning chairman and Commissioners.
For the record I am Clay Woodul,
Assistant Director for Field Operations.
Item 309 is the Commission's oil and gas monitoring
and enforcement plan for fiscal year 2021.
A draft of this plan was presented to you on April 20th
and was then made available
for public comment until May 21st.
During that period, the Commission received
a total of eight comments from the public,
environmental and industry groups.
The final version of the plan includes items
that support the goals of demonstrating
the Commissions oil and gas monitoring
and enforcement activities, and the strategic use
of Commission resources to ensure public safety
and protecting the environment.
This plan must be posted to the Commission's website
no later than July 1st.
That deadline will be met with your approval today.
May I answer any questions?
-: Are there any questions?
I'll move we approve the oil and gas monitoring
and enforcement plan for fiscal year 2021.
Is there a second?
-: Second.
-: Second by Commissioner Sitton.
All in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Callie, please call up the presenter for the next item.
Callie: Yes, thank you.
April Richardson, will be presenting agenda item 310.
April, we are ready when you are.
It looks like you just need to start your video and unmute.
-: Here we go, good morning.
Good morning, Mr. Chairman, Commissioners,
for the record, my name is April Richardson,
Director of Alternative Fuel Safety
in the Oversight and Safety Division.
Item 310 is the alternative fuel safety department's request
for approval to publish proposed revisions
to the LPG form one and the new LPG form 1M
on the Commission's website for review
through the end of June.
We are also requesting that if no comments are received
or only comments in support with no suggested revisions,
that the forms automatically go into effect
on July 1st, 2020.
If comments are received that are not in support
of the revisions, then the forms will be proposed
for adoption at a future conference.
The changes to LPG form one application for LPG license
or license renewal are related
to the Chapter nine rule changes
that went into effect January 6, 2020
and add fields to assist with the processing
of the application when received,
which will also make the process more efficient for staff.
Division and department names were updated
as well as contact information.
The instructions page of the LPG form one was also updated
to provide instructions on the edit fields
and some existing fields
that either didn't have instructions
or the instructions needed to be updated.
LPG form one M, application
for LPG container manufacturer registration
was created as a result of the Chapter nine rule changes
that went into effect January 6, 2020.
This forms of out allows LPG container manufacturers
to apply for a registration or use their form
to renew an existing registration.
May I answer any questions?
-: Are there any questions?
I move we approve the new LP gas form one M
and amendments to LP gas form one.
Is there a second?
-: Second.
-: Second by Commissioner Craddick, all in favor, say aye.
All: Aye.
-: Any opposed?
Motion passes, that item is approved.
Agenda item 311 is a discussion on the issue of flaring.
I've arranged for several panels of interested parties
to help facilitate this discussion.
Please save your questions to the end of each panel.
The first panel will be from our environmental groups.
Callie, please call up the panelist
one at a time in this order.
Mr. Trammell Crow, with EarthX,
Mr. Colin Leyden, with the Environmental Defense Fund
and Cyrus Reed, with Sierra Club.
Callie: Yes, thank you.
Looks like we're still kind of bringing everybody up,
we're waiting on a one more.
Trammel Crow, with EarthX will be presenting at this time.
Trammel, trauma or Trammel, I'm so sorry,--
-: Trammel.
Callie: You are invited to speak.
-: Thank you and you can hear me and you can see me.
Callie: We can, yes thank you.
-: Thank you very much.
I'd like to share what I've learned in a decade
of total immersion in sustainability.
I'm not going to testify as a scientist, industry expert
or even a typical environmental activist, EarthX is the
most conservative major environmental event in the world.
In the business world, I've seen companies make decisions
that are short-term and miss out on long-term profits.
In the environmental arena, I've been disappointed by NGOs,
which too often oppose realistic solutions
that are 100% of victories
for everything they think is wrong in the world.
By bringing together thousands of business
and environmental organizations for 10 years now,
it's clear to me that the natural world is in dire straits,
but that there are realistic economic solutions.
Some future thinking companies already flare gas
to fuel generators power to reuse or produce water
and technology already exists
to compress the flare gas for resale.
Let's think of flare gas as a resource and a commodity.
$750 million dollars of it was flared in Texas in 2018.
This issue is the lowest hanging fruit
in the entire energy sector
of renewables and alternatives, oil and gas.
I recommend that the Commission
probably gather representatives from all points of view,
industry, investors, scientists and environmental groups
to set goals and timetables.
As a real estate developer, my father knew
he didn't really own the land, we're stewards of the land.
Personally, I'm as committed to free enterprise
as I am to my native state and my country.
But Adam Smith, the author of "The Wealth of Nations"
the Bible of capitalism devised an economic system in 1776
that he admitted would never work
without a common value system.
And this day of Free thought, the conservation of nature
is one of our greatest value systems.
I think everybody in this Zoom knows
that our natural resources are bountiful, but not eminent
and have a certain value, with today's technology
it could be easily exploited.
To waste it is shortsighted.
We are leaders in Texas and we're the energy capital.
So let's lead.
Thank you.
Christian: Thank you Mr. Crow,
and again, members if you'll hold
your questions till the end of the panel.
And Mr. Crow, if you'd stay with us, we'd appreciate it.
Next is Mr. Colin Leyden,
with the Environmental Defense Fund.
-: Yes, good morning Commissioners.
My name is Colin Leyden, speaking
on behalf of Environmental Defense Fund.
Thank you for the opportunity to speak today
and to the Commission for hearing
the many diverse voices calling for progress on flaring
and putting the issue on the agenda.
Recently, you've heard a chorus of voices,
industry, both large and small, mineral owners, investors,
academics, and environmental groups, all calling for an end
to the wasteful environmental damaging practice
of routine flaring.
Of course, this is not a new issue
for the Railroad Commission.
In fact, the Commission took a tough stand against flaring
during the Oil Boom in the 1930s and 40s.
More recently in the Shale Era, Commissioner Porter, tried
to focus on the enormous flaring waste
and pollution in the Eagleford.
Unfortunately, that effort didn't get far.
So we're here talking about the problem again today
because it hasn't been fixed, but a new day means
a new opportunity to finally get it right.
Fundamentally the flaring problem is an incentive problem.
-: Okay, I just gave it.
-: The economics of the oil field are just around liquids--
-: But thank you for that.
Participant: All right sorry..
-: With the dry gas often treated as a waste product.
Too often, flaring is the cheapest option.
It's no wonder then that operators in Texas have burned off
roughly a trillion cubic feet of natural gas since 2013,
enough to meet the yearly needs
of every Texas home three times over.
In thinking about what I wanted to say today
to the Commission, I kept landing on a simple truth,
the practice of routine flaring
just doesn't reflect our values.
Nobody likes waste and nobody likes pollution.
And most folks in and around industry will tell you
that they don't like routine flaring either,
but it's not going away because
we haven't changed the incentives.
And in this case, we can't change the incentives
until the Commission acts to change them.
That's why EDF urges the Commissioners to adopt
the concrete goal of ending routine flaring in Texas
by 2025 and instruct Commission staff
to develop a plan to achieve this goal.
We know this can be done
because many of the leading operators are
either already doing it or quickly working to achieve it.
EDF recently sponsored a Gaffney Cline report,
profiling five of these leading companies
and their journey to end routine flaring.
Each producer success was due almost entirely
to intentional decisions to preventing flaring
in the first place and ensuring a destination
and use for the gas is in place
before bringing a well online, and a willingness
to shut a well in that isn't achieving this.
We can be inspired and guided by the strong flaring work
of companies at the leading edge,
but to put routine flaring in the rear view mirror,
we need to include all operators.
In my time, working in and around state government,
I know that most elected officials and staff
are in it for the right reasons.
They wanna do right by the people of Texas.
Right now, the Commission has the opportunity to do that.
Let's work together to end routine flaring in Texas by 2025.
Thank you.
I'm happy to answer any questions.
-: Thank you, Callie, I'm sorry,
I imposed myself the last time.
It's your turn.
Callie: No worries, we go with the flow here. (laughing)
Thank you Cyrus, very much.
I'm sorry, thank you Colin, very much.
So Commissioners, Cyrus Reed, see, I'm all thrown off now.
-: I messed you, I'm sorry, my fault.
(laughing)
Callie: Cyrus Reed,
with the Sierra Club will be presenting at this time.
Cyrus, you're invited to speak.
-: Yes, thank you so much.
Can you hear me all?
-: Yes sir. -: We can, thank you.
-: This Cyrus Reed, with the Lone Star captain
of the Sierra club and first of all, I wanted to thank
the Chairman Wayne Christian, for inviting me to speak.
I view this as very much, the first step in discussion
and I believe you'll be well served by opening up
this discussion to all stakeholders, industry,
environmental groups, land owners, mineral owners.
I will echo Colin's statement that I think setting
a long-term goal of ending routine flaring
by a date like 2025 is a good way
to get us going in the right direction.
And so I'll echo his statement.
I'll also note that there are large disparities in flaring.
So not all companies are equal,
but we do know that flaring has increased.
We know that from the number of permits
that were nearly 7,000 last year,
that in some cases covered many wells, but there
are great disparities between the amount of gas flared.
We also know based on some of the work that EDF
and others have done,
that some of the flaring is not being done correctly.
There are some unlit flares,
there were some malfunctioning flares.
Those really need to be a major focus
of the Railroad Commission.
The third point I'll make is,
and I did send you very exhaustive comments,
which I will not read.
You guys have a lot of authority.
You have authority under Chapter 31, Chapter 85,
where it declares waste is illegal
and Chapter 86, there's a prohibition against gas
in the atmosphere and Chapter 91,
you have a lot of authority on prevention of waste.
So you have the authority to do a lot as the Commissioners.
The fourth point I'll make is
you can't ignore pollution.
I know that the Railroad Commission is charged with waste
and TCEQ is charged with air pollution,
but we have a strange situation going on where
the TCEQ says, it's the Railroad Commission's job
to do these flaring permits and the Railroad Commission says
it's TCEQ's job to make sure they don't violate
the Clean Air Act.
But within the very rule itself, rule 32 under B,
you already say very explicitly that
you must follow the Clean Air Act.
And we believe and this is Sierra club's perspective
that in some cases, some of the flaring permits
you're giving are violating the Clean Air Act.
How, because the amount of pollution,
not the actual methane, but associated byproducts
like sulfur dioxide and hydrogen sulfide
are exceeding the permit levels of the very operators.
And so as a first step, we think there should be
some sort of a check to make sure the amounts
and volumes that that are being flared do not
actually violate the Clean Air Act.
And we think it's easy to create a check with TCEQ
to make sure that the amounts that could be flared would
not violate their permit levels.
We think it's a serious problem.
So we agree with EDF
on setting a long-term goal,
we think there are steps you can do in the meantime
to help us get there.
One is, let's end this practice
of extending permits past the six months.
Six months is in the rule but as a practice,
the Commission has been granting folks flaring permits
for a year or two years.
So we think six months should really be enough time
for anyone to get their house in order
and find infrastructure.
We think you could set an overall state-wide goal
for the state of 2%
and then also set individual operator goals
so that within a year or two, we're not allowing flaring
of more than five or 10% of the total amount
of gas produced for those operators.
That's something that Commissioner Sitton mentioned
in his report, as it's possible for you guys
to set overall goals and then goals
for individual operators.
We think you could require vapor recovery units
on storage tanks, which would nearly eliminate flaring
on storage tanks, which could be important.
The six point I'll make is inspections and enforcement.
You guys have done a good job in terms of getting
more inspectors and increasing
the amount of inspections you're doing.
But we could say for those who are getting a 32H exception,
that an extra inspection is required to make sure they're
actually flaring correctly and meeting the parameters,
that is something we could do.
We do agree with the decision you just adopted,
the Enforcement Report.
We agree that you should look at drone technology.
That can be very important so we're supportive of that.
And we do want you to use your full enforcement power
for those folks who are violating their permit limits,
or either exceeding the limits or venting the gas.
Let's be strong
and send a message to the industry.
Aligned with two more points,
which are more on the incentive side,
you guys, again, under Chapter 91 are required
to come up with programs for waste minimization
and you've done that on your website.
I don't see that you've done it specific
to the issue of flaring.
So I think you could work with industry and others
to put best practices and provide trainings
to operators about what are the best practices
for hopefully avoiding routine flooring altogether,
or where you can't, what are some of the best practices.
And finally I'll mention,
and this is really a legislative issue,
but I worked with a number of people,
including at some of the oil and gas associations
to create a program within the Texas Emission Reduction Plan
for a new implementation technology
that includes the oil and gas fields.
We believe that program,
it's got a very little amount of money in it.
We believe working with the Texas legislature
we could expand that program and make incentives available
to operators who go beyond the law
to clean up their existing or new sites
and avoid flaring, venting and methane emissions overall.
And so I do think there's a role for regulation,
enforcement and incentives to help us with these problems.
And with that, sorry, I went on a little long,
with that I'll end my comments
and happy to answer questions.
-: Okay, thank you, gentlemen.
Members, do you have any questions of this panel?
-: Yes, I've got a question.
Mr. Sitton.
-: Gents, I appreciate your, Trammell, Cyrus, Colin,
I appreciate your well thought out comments
and I appreciate the fact that,
especially in the age that we're in today,
we're all being really thoughtful about
how to make changes like this.
Cyrus, in particular I really appreciated
your level of technical detail, you went to several
of our rules and talked about what our abilities are,
and we've all spent some time wrapping
our heads around that.
Let me ask you a question and you brought up specifically,
you know, pollutants other than methane
and combusting methane, and you mentioned sulfur dioxide
and one other one, I don't remember
which other one you mentioned it might be, (clears throat)
you know, might be specific pollutants that are listed
as such outside of normal organic substances
like methane or CO2,
let's assume that those were handled.
So that is a good issue but let's park that
for just a second and go back to simply
the combustion of methane.
And here's my question.
You mentioned like vapor recovery units on storage tanks.
Give me your thoughts on
how we should consider the economics.
Say for example, storage tanks,
where you're talking very low amounts
of natural gas leak came up,
we could require vapor recovery units,
but the economics of that would, there are lots
of situations where the economics would never play out.
So we would be asking a company to spend,
you know, or even capturing in vapor recover units
or something, we'll be asking a companies to spend millions
when the gas that can be captured is worth thousands,
I mean, I'm just curious your thoughts on this.
-: So there is always a balance.
I will say that without, I'll get to your specific question,
I mean, a number of states,
Texas is not the only oil and gas producing state.
You know, we're the biggest. -: We're number one.
-: We're the biggest producer
and the biggest polluter in my view.
But other States, New Mexico, as you may know,
is going through a process where they're looking at methane
and flaring and they're in the middle of that process,
they haven't finished.
Wyoming and Colorado is now looking at existing sources,
they've already handled new sources.
And so I think this is something, a number of states
are trying to figure out and struggling with,
what's the right level
of environmental regulation versus economics.
But you know, I work for Sierra Club,
so that's where I'm coming from.
And my feeling is if you're an industry
and you have storage tanks,
particularly storage tanks that may be located close to
the workers or communities or schools,
we should be recovering that vapor, we should not allow
that to impact nearby communities or ultimately our climate.
So again, I don't run an oil and gas company,
so it's hard for me to know the economics,
but in my view, we should be requiring vapor recovery units.
And if we can't require them for everybody,
if somebody wants to flare let's instead, say, no,
you've got to first recover that gas.
If you wanna flare at the well head,
well, at least you've gotta use
this pollution control equipment over here.
I don't have all the answers,
but I think if we were to open up the rule
and start the discussion, I bet you
a lot of good ideas would come out.
I don't know what the right balance's exactly,
but I do think, it just seems wrong to me to waste gas
and allow it to sift off these storage tanks.
And you know, honestly the new, you know,
the newer operators who are putting in storage tanks now,
for the most part,
the leading operators are already doing this.
So it's not, I don't think it's unreasonable.
-: Let me ask, the question I was asking is,
historically you go back for the last 100 years,
our approach at the Commission has been
that we consider economics in waste.
And when we say, when someone says, well, hey,
by 2025, we need to simply do away with flaring altogether
then there is and my question to that is,
okay, let's suppose we consider that,
the question is, do we ignore economics?
Do we say it doesn't matter if we're asking you
to spend millions to prevent, on the spectrum
that, no, do you believe that we should
just ignore economics
and only consider the molecules and you can go away
from tanks or talk about flanges and other very small areas.
We're talking very small amounts of gas,
or should we take into account economics and consider when,
yeah, sometimes it just doesn't make sense to talk about
such a small amount of gas and such a large cost
that we should permit that.
Or do you think that we should ignore economics?
-: I don't think I'm asking the Railroad Commission
to ignore economics, but I would also ask you to consider
the impacts of not dealing with methane pollution
and other pollutants.
The other pollutants I mentioned were sulfur dioxide
and hydrogen sulfide,
and also in lower amounts, nitrogen oxide.
And I do not want the Railroad Commission to become TCEQ,
that's not your job, but what I'm suggesting
is there should be some sort of a check with TCEQ.
Because what happens is operators flare
because you've given them the permission to flair.
They then report that to TCEQ as upset emissions.
And if you look at the total amount of pollutants,
they're often busting through their normal pollution limits.
And we just think that there has to be some sort of check.
-: Commissioner, if you don't mind if I jump in
on the economics question,
I mean, as you know, there's different timeframes, right?
To look at economics.
I think in my discussions with industry on flaring,
a vast majority of the gas capture technologies
they admittedly have an upfront capital costs,
end up having a relatively decent return on investment.
And, you know, I understand that,
that can be a burden on smaller operators. (clears throat)
But to Cyrus's point, I think if we started to have
these discussions, we'd learned from industry quite a bit
more about the economics specifically, I'm not surprised,
a lot of them are hesitant to share
that kind of information, you know, for competitive reasons
but I think what we'd find out is quite a bit of them have
a return on investment that's not unreasonable.
-: Let me be candid, I mean,
we're not here to get my opinions, we're here to get yours,
but I believe that there are opportunities
and I like the way Trammell, put it.
I think there is, especially in
a challenging price environment, there's a temptation
for some operators to make short-term decisions
and miss the long-term opportunities.
I think that there's absolutely opportunity there.
My question is when we start talking about black
and white ultimatums, like zero flaring
by a certain timeline, then the message that,
that sends is to ignore economics.
So that's why I'm asking, in principle,
should we consider economics or not?
It sounds like, Colin, you didn't say this,
but go back to it, Cyrus said, it sounds like
you're not saying that we should ignore economics,
simply that the economics might be favorable
for some instances, in which case we could,
I don't wanna put words in your mouth,
sounds what you're saying, we could change our rules
that would not have a negative effect
on economics in the long run.
That's your speculation.
-: I think it just comes down to a matter of reasonableness
and what you mean by interpreting economics.
Like for instance, there's been an argument recently about
when you're considering economics,
do you include the oil or just the gas?
I mean, you know, there was a lawsuit filed,
an active lawsuit over that.
So, you know, that's someone asking a different way
of interpreting the economics.
So I think you're gonna get into those sorts of questions,
it's not simply sort of a black and white,
do we consider economics or not?
Yes, but how do we look at economics
and how is that sort of framed in the big picture?
And yes, there are going to be decisions that are made
that cost operators money, we do that all the time.
And we've done it historically in oil and gas regulations.
And it's sort of the history of regulations of industry
in general, we have a fight over
how much this is gonna cost,
environmentalist and others say one thing,
industry has another, eventually technology
and innovation end up making a lot of these arguments moot.
And I suspect that we're headed that way pretty quickly
when it comes to flaring,
as well as other gas capture circumstances.
-: And don't forget my last point, which were,
my last two points, which is one,
the Commission absolutely can also provide best practices
and training to help industry
and the leading industry can help other industry on this.
Obviously that's hard in a competitive environment,
but also we do have incentive programs at the state
through CHAP that could be expanded.
So obviously we wouldn't wanna give industry money
for just meeting the rules, but to the extent
we have incentive programs where companies are willing
to go beyond the current rules, I think
that's something that we'd be supportive of.
-: Any further questions members?
Okay, one question I have just to the panel,
one of our big problems is of course the takeaway
and doing such,
would there be significant opposition from your groups
for additional pipeline capacity
to the LNG facility construction we're doing
in order to, you know, provide a means that economically
we could use this gas some more profitably
and in a better manner, but it would require more pipelines
and to make sure these LNG facilities we're planning
to export from become more functional.
Is there objection in that from your groups?
-: I can only speak for the Sierra Club
and I'll just say, I'll admit there is.
We have been opposing those LNG facilities
because of the overall climate impact of...
Exporting gas overseas, burning it overseas.
So I'll just say we have been opposing
some of the major pipelines to those LNG facilities.
So, you know, that's the organization I work for,
that's our position.
I don't know if that's a EDF's position.
-: So that's not necessarily because we
or the United States are doing something wrong, is
you're not trusting the use of that
to those we export to, is that correct?
-: It's the overall impacts.
So, and part of that, honestly,
part of those overall impacts are all of the flaring
and fugitive methane emissions.
If we were to solve the problems in the oil field,
that would lessen the impacts
of that pollution overall, right?
If we could get to zero, zero flaring, zero emissions
in the oil and gas field, that would make those products
much cleaner than they are today in terms of their impact.
-: Okay, so you're saying it might be more acceptable
if the pipelines and LNG, we reduce the flaring,
then that would, you know, if did one,
if that accomplishes one, you all might be more friendly
toward us allowing the pipelines and the LNG?
-: I can't speak for the Board of directors
of the Sierra Club,
so I think I'll just be quiet on that one.
-: Okay.
Any other statements?
Okay, very good though.
Gentlemen, I thank you,
Mr. Crow, Mr. Leyden and Mr. Reed, I thank you
for your excellent presentation and
the Railroad Commission is definitely concerned
about this issue and appreciate y'all's input
and hope you will continue to voice your opinion to us.
So we make the best, I know there is no such a thing,
in most cases there is a perfect decision for everybody
so this is gonna be quite a large issue,
that we are very much wanting everybody on Board
to make sure we come out with the best decision possible.
So thank you very much, and,
Callie, please call up our next group of panelists.
Callie: Okay, thank you.
The second panel will be oil
and gas companies, and operators.
Kirk Edwards, with Latigo Petroleum,
Stephanie Reed, with Parsley Energy
and Mike Starrett, with Occidental Petroleum.
Kirk, with Latigo Petroleum will be presenting at this time.
Kirk, you are invited to speak.
-: Thank you, Callie, can you see and hear me okay?
Callie: We can and thank you.
-: Great, thank you.
For the records, I'm Kirk Edwards,
President of Latigo Petroleum here, Odessa.
Thank you, Chairman Christian,
Commissioners Craddick and Sitton, for having me today.
I just wanna read you
the Texas Railroad Commission mission statement right quick.
Our mission is to serve Texas power stewardship
of natural resources and the environment,
our concern for personal and community safety,
and our support of enhanced development
and economic vitality for the benefit of Texans.
In order to reduce the flaring of newly drilled wells
in the Permian basin and other areas of Texas,
I believe the Railroad Commission
of Texas should immediately study the implementation
of limiting production land rules in areas
where there is no gas plant capacity
to take it in the newly drilled wells gas.
In a situation where an operator is not drilling
the first well in a new field that has a gas plant
that's currently taking gas
from the operator's gathering system, I would pose
that an operator that permits well after say July 1st, 2020,
that has no market because of plant capacity
for its natural gas be placed in an allowable situation.
The Railroad Commission would then have the authority
to limit the calendar days an operator can produce
in the well, along with any other wells
that operator has going into that gas plant.
This allowable mechanism would last until
the plant can take all the room, has the room
for all the operators wells natural gas
that are connected to that one gas plant.
In a situation where new wells are drilled
in an existing field with no immediate gas plant access,
I would request the Commission and only allow
the maximum number of dice for that operator to flare
it's natural gas production to 90 days with no extensions
and the operator must then shut the well
until an adequate market is found
for the well to produce into.
The reenactment of allowables in these unique cases
where there's no gas plant capacity will immediately stop
the current waste of our precious natural gas commodity
and at the same time increase the safety
in our oil and gas fields
for all the well that were drilled after July 1st, 2020.
This will also allow for the initial recovery
of the natural gas class in certain areas,
and they are bound state taxes for county schools
and the State of Texas overall.
Together these three accomplishments,
the accomplishments fit perfectly into
the Railroad Commission mission statement I quoted earlier.
Wells permitted before July 1st, 2020 and completed,
and producing say before October 1st, 2020,
will be grandfathered to flare as current statutes allow.
So no negative economics will affect any well
that has already been permitted, drilled and completed
before that timeframe.
But on these grandfathers wells,
the operators should not be allowed
an unlimited number for flaring stitches
without showing some deadline
of getting the wells natural gas to the market.
After agreeing to deadline, the operator should
then shut in their well, if they've
not secured natural gas takeaway for the newly drilled well.
And in this, I would say it does not apply,
this does not apply to wells designated
as new-field wildcat Wells as defined by the Commission.
And thank you for allowing me to speak to you today
and I'll take any questions you might have
after the other speakers.
Thank you.
Callie: Thank you, Kirk.
Stephanie Reed,
with Parsley Energy will be presenting at this time.
Stephanie, you are invited to speak.
-: Good morning, I'm Stephanie Reed,
of Parsley Energy speaking on item 311.
Chairman Christian, Commissioner Craddick,
and Commissioner Sitton, I wanna thank you
for the opportunity to provide comments today
on this important issue of flaring.
First, I'd like to start by thanking you three
and the staff of the Railroad Commission for all the work
that you've already done on the issue of flaring,
elevating this discussion from administrative staff,
hearings examiners, inspectors in the field.
It's evident that the entire Commission
is taking the issue seriously,
and it's absolutely led to reduce flaring
and positive outcomes for Texas, so I thank you.
At Parsley, we believe that the key
to eliminating routine flaring is prioritization,
foresight and advanced planning.
For some historical context, Parsley flared less than 3%
of total produced volumes in 2019 and in 2020 following
the acquisition of a company that was flaring
more than 20% at the time of acquisition,
we are now as a combined company flaring less than 1%
of our proforma produced volumes in June.
This did not happen by accident, but rather required
a methodical approach to reduce the flared volumes,
including spending millions of dollars
in necessary infrastructure.
As producers of critical energy we recognize
that it is our responsibility to minimize emissions
and take proactive steps to do so each and every day.
To that end, we have enacted the following steps
as our roadmap to reduce emissions.
First we set an aggressive corporate goal for flaring
and tied that metric to our corporate compensation.
This incentivizes key stakeholders and sends
a very strong message of leadership.
Secondly, we created more transparency
around our flared volumes, both internally and externally.
We issue daily reports to employees,
including our executive team that outline
our flaring percentage every day.
These reports detail what operational occurrence led
to that flare as well as a plan to mitigate that flare.
And finally, we work closely with our ministering partners
to ensure that takeaway is secure
before we place any new wells on production.
This requires advanced planning and foresight
because it sometimes requires 12 to 18 months
to secure a proper infrastructure.
We view takeaway as a constraint and not a barrier.
Ultimately we believe operating responsibly is a function
of advanced planning and working with local communities
and regulators to ensure we are protecting
our shared environment.
We understand that every operator has unique environmental
and economic realities to consider,
but we believe that committing
to eliminating routine flaring is a critical first step.
At Parsley we're proud to continue to work on this effort
with TXOGA and other organizations and companies
that make up the Methane and Flaring Coalition.
And we look forward to continued dialogue
and progress on this issue.
And with that, I'm happy to take your questions.
Callie: Thank you, Stephanie, I appreciate that.
We're gonna hold questions to the very end.
Mike Starrett, with Occidental Petroleum will be presenting
at this time.
Mike, you're invited to speak.
-: Good morning, Mr. Chairman and Commissioners.
Thank you for this opportunity to provide comments.
My name is Mike Starrett,
and I'm Occidental's Vice President
of Health Safety Environment
for domestic law and gas operations.
Occidental's committed to reduce flaring.
We were the first U.S. oil and gas company
to join the World Bank Initiative
to achieve zero routine flaring by 2030.
We believe that achieving these goals requires
that a consistent workflow process be applied
to site specific challenges presented
at each operating locations.
While we were taking action to reduce flaring,
we are also preparing our business for the future
to sustainably operate by addressing direct
and indirect emissions.
Our world carbon ventures team is taking a leadership role
in creating more carbon solutions.
Our teams are working with organizations
from various sectors to develop carbon capture, use
and sequestration projects.
These projects will source manmade CO2 for use
in enhanced oil recovery to produce
a lower carbon for carbon neutral barrel of oil.
LCV is exploring zero emission power sources
and partnering with others to lower emissions.
This work is being done across other industries
to capture CO2 emissions and sequester them underground,
and not an oil producing reservoirs.
These initiatives provide a promising lower carbon future,
but we know today that we must continue
our work to reduce flaring.
Occidental is a founding member
of the Environmental Partnership,
which currently consists of 83 operators representing
greater than 90% of the top U.S gas producers.
The partnership mission is to improve
the industry's environmental performance.
In March Occidental sponsored
a flaring best practice workshop in Midland.
The process to reduce flaring requires executive commitment
and employee buy-in in order to reach our goals.
The four main elements of our workflow process
are number one, site specific planning,
which includes identifying and evaluating gas takeaway
and facility design options.
Number two, routine surveillance, maintenance and repair
of well operations and emissions and pro-equipment.
Number three, focus training for engineers
and operations personnel.
And number four, accurate
and timely reporting of flare events.
Consistent with these goals, Occidental has taken
a leadership role in the Texas Methane and Flaring Coalition
and is committed to continue working with industry
to get solutions and best practices to minimize flaring.
Occidental believes in recommendations put forward
by the coalition and the Blue-Ribbon Task Force
are an effective first step to improving the quality
of the Commission's flare engagement,
which will facilitate an understanding
of two critical pieces of information.
Number one, why is flaring occurring in Texas,
and number two, how much flaring is occurring?
Once the Commission understands these critical pieces
of information, it will be well positioned to focus
on specific solutions to address each issue identified.
Thank you for the opportunity to provide comments.
-: Thank you, Mike. -: Thank you very much.
Callie: Commissioners, let's complete panel number two,
are there any questions at this time?
-: Are there any questions members?
We certainly appreciate each of you for being here
and appreciate, and hope that you will continue
to work with us as we seek the imperfect answer
that will eventually arise,
but we appreciate so much the effort you've given,
your companies, your individual efforts
and we do appreciate it.
Thank you for being with us.
-: Thank you. -: Callie, please call
our next panel.
Callie: Yes, thank you.
The third and final panel, the Oil and Gas Industry Groups.
This includes, Ed Longanecker,
the Texas Independent Producers
and Royalty Owners Association also known as TIBRO.
Todd Staples, with the Texas Oil and Gas Association.
Jason Modglin, with Texas Alliance of Energy Producers
and Ben Shepperd, with PBBO,
say this three times fast, PBPA.
Ed, thank you for being here today.
We will be presenting at this time.
You are invited to speak.
It looks like we're still kind of transferring people on
so give them just a moment.
-: Jason, aren't you on the wrong side of the camera here,
didn't you leave from this office, what's going on?
-: Yes, sir.
-: Congratulations to you.
-: Thank you very much.
-: See, now you get to be in front of us, it'll be special.
(laughing)
Callie: Well, Jason, maybe go on first, (laughing)
give me just a moment. -: You brought Todd
on Board, I see.
Callie: Now there comes Ed, now there we go.
Good morning, Ed.
You can get started whenever you're ready.
-: Thank you, good morning, Chairman Christian,
and Commissioners again, for the record, Ed Longanecker.
For some reason, my video,
it doesn't look like it's working.
I'm the president of--
-: Yeah, we're seeing you.
-: Oh, you do, excellent, President of TIPRO.
I appreciate the opportunity to testify today
on the requested recommendations
that we recently provided to the Commission for review.
As you know, the organizations on this panel
are working together diligently through
the Blue Ribbon Task Force
and the Texas Methane Flaring Coalition on this task.
And I wanted to, for my remarks continue with a theme really
that was addressed by the two previous panels.
And that is to highlight some of the proactive efforts
of the U.S. oil and gas industry to reduce energy emissions
and provide just a few statistics to help illustrate,
and quantify its progress.
On the larger topics that energy production emissions
in the environment, we clearly should recognize
that our country is a leader in clean air,
water and environmental stewardship, while leading
the world in oil and natural gas production.
Thanks to Texas, of course.
In fact, methane emissions from oil and natural gas systems
are down 23% since 1990, according to 2020 data
from the Environmental Protection Agency.
And also since 2005,
total U.S. greenhouse gas emissions have dropped
by 12% percent and total greenhouse gas emissions
from fossil fuel combustion have decreased
by approximately 15%.
Increased use of natural gas to fuel power generation
is also the key factor in the reduction of U.S. emissions
of carbon dioxide to the lowest levels in a generation.
These and other positive energy emission trends
are in large part due to or attributable
to voluntary actions taken by U.S. oil
and natural gas companies, including investment
of over $300 billion dollars
in greenhouse gas mitigating technologies
over the past 20 plus years.
There are also numerous examples
of multi-stakeholder initiatives designed to improve
the environmental performance of the oil and gas industry.
And Steve mentioned one, the environmental partnership,
as well as one future, which are focused in part
on sharing industry best practices,
utilizing new technologies to reduce emissions
and collectively improving environmental performance
throughout the oil and gas value chain.
And of course as the largest producer of oil and gas
in the country, Texas operators are leading these efforts.
Despite this progress of our industry
and clearly measurable results,
we understand that more can be done.
It's this ongoing commitment and desire again,
to better assess the issues related to methane emissions,
flaring and industry-led solutions in our state that led to
the development of the Texas Methane and Flaring Coalition.
This yet again, voluntary effort comprised
of the leading industry trade associations in Texas
and over 40 prominent operators will help to identify
and promote operational and environmental best practices
to minimize flaring and methane emissions in our state.
And Commissioners, this coalition has been very hard
at work over the past six months and again, we were pleased
to provide our report for your review,
including our recommendations, and I'll let
my fellow panelists touch a little on that process,
some of the materials that we provided, our recommendations,
as well as our next step, because we do see this
as a longterm process and commitment.
Thank you.
Callie: Thank you, Ed, appreciate that.
Todd Staples of the TXOGA will be presenting at this time.
Todd, thank you for being here this morning.
You are invited to speak.
-: Thank you, Callie.
Chairman Christian, Commissioner Craddick,
Commissioner Sitton, thank you for allowing us
to present to you today.
For the record, I'm Todd Staples,
President of the Texas Oil and Gas Association,
the coalition that is the heart and brains
of the recommendations to you today,
represent truly scientists and engineers in the world.
Thankfully, they're operating right here
in the Lone Star State.
We believe that the recommendations that are presented in
the report that we're providing to you will reduce flaring.
In fact, we share the goal to end routine flaring in Texas
and these recommendations that lead toward that.
In fact, there's a couple of key changes
that I wanna highlight.
The first one is that reductions in flaring will occur
by reducing the administratively approved time to flare
by in most cases, 50% and higher and others.
And secondly, enhanced data submissions that will allow
for increased accountability through the analysis
of the progress of these flaring reductions.
These reductions in the complete report
are made available right now to the public,
they're on the Texas Methane and Flaring Coalition website,
Texasmethaneflaringcoalition.org,
Texasmethaneflaringcoalition.org.
We want everyone to have those because we need input
and we need ideas, and we need to continue this progress.
I wanna just real quickly touch six key elements
of these recommendations that we're making to you,
that we would like to work with you and other stakeholders
to continue to refine.
The first one, see as a proposed flaring matrix
that will guide the application of Statewide Rule 32.
Secondly enhancements to Statewide Rule 32 data sheet
to aid the Commission in its oversight and data collection.
The third element is the development
of a proposed new report, (mumbles)
pretty two subsequent report
that will provide increased information
and require submission of clear and usable data,
and provide for greater accountability.
The fourth thing is as a proposed updates
to the production report form instructions
that recommends the delineation
in reporting of vented and flared volumes.
Then there's an established best practices section.
And then finally, a firm commitment to continually refine
and assess where we are, and moving forward.
This report that is submitted to you goes into deep detail
about each one of these recommendations.
I certainly won't jump into all of those now,
but a couple of the highlights.
If you look at the, what we believe is the key item
in this package is the matrix,
which identifies the situations when flaring is necessary
and provides recommendations to the Commission
for the application of rule 32, that will resolve
and overall flaring reductions
because of the shortened timeframe
for administrative proposals of flaring.
For example, if there is a lack of infrastructure
or no pipeline available, there will be several options
in that matrix that you can look at
to reduce flaring based on the particular situation.
The point is that operations are different
and operators are different,
but these steps will lead to reduced flaring.
Importantly, a part of that
is to embrace emerging technology.
We believe that innovation and technology
is what has made Texas the energy capital of the world,
and we think that will drive environmental progress
in everything that we do.
The subsequent report is also an important feature.
This is a new report that we're recommending
to the Commission.
This recognizes the technological challenges
in accessing data.
The report would provide actual volumes and durations
of permitted flared events,
subsequent to the initial permit.
The goal is for the Commission to have this data
in a usable format to enable us all to accomplish our goals.
There are also improvements to Statewide Rule 32 data sheet
that we believe will be important.
And really just to wrap up this whole process,
we believe that we can get to the end of routine flaring.
We believe that more data is better data.
It will enable the Commission
to do its job easier and more efficiently.
We believe that these recommendations will reduce
the days of flaring in Texas.
And we look forward to working with the stakeholders,
with you to make certain it's done the right way.
And importantly, in this process, we need to be
very sensitive to enabling technology and innovation.
And some of our companies have mentioned already
on this presentation today that has led
to tremendously good results that we want to make certain
are incorporated as we move forward.
Thank you for letting us present today.
Callie: Thank you, Todd.
Jason Modglin, with the Texas Alliance
of Energy Producers will be presenting at this time.
Jason, you're welcome to speak.
-: Good morning.
My name is Jason Modglin, President of
the Texas Alliance of Energy Producers.
Chairman Christian, Commissioner Craddick,
and Commissioner Sitton, thank you for the opportunity
to provide comments today regarding flaring and venting.
The Texas Alliance of Energy Producers represents
nearly 3000 individuals and member companies
from across Texas with a focus on independent operators
from small family owned businesses
to large publicly traded companies.
They are committed to advancing the standards
of the domestic oil and gas industry.
It's an honor to be with you.
The alliance participates
in the Texas Methane and Flaring Coalition
and supports its goals.
We know these recommendations represent
a good starting point for dialogue to continue with you
and other stakeholders to show reductions
in the number, duration and frequency of events.
We have made good progress, but there's more work to do.
The alliance stands ready to assist the Commission
with developing tools, to compile and analyze flaring
and venting data, to improve transparency,
and allow for the public and industry to better understand
and prioritize the areas to improve.
The mainframe transformation project
along with continued improvements to the website,
putting more forms online
and publicly accessible data will create efficiencies
that benefit the Commission, operators and the public.
The coalitional report builds on industry best practices
to alternative solutions, to venting or flaring
during exploration and production activities.
Technology utilization
and better planning practices help achieve reductions.
Or one of the most important tools
is more pipeline infrastructure in the field
to reduce congestion and capacity issues.
And one-size-fits-all approach to this issue does not work
for all operators or all fields and we believe
the proposed matrix does a good job of providing flexibility
for these operational realities.
As new pipelines are built
and gas processing facilities come online,
there will be more opportunities to move this gas to market,
which your leadership
to provide regulatory certainty makes possible.
You along with Commission staff should be applauded
for the incredible work you all are engaged in
during the ongoing response to COVID-19, staff continued
to inspect wells, process permits
and review applications timely,
and the alliance is grateful for their service.
Your encouragement to find ways to open back up
to allow for economic activity to resume is essential.
Thank you for the recent work
to reopen alternative fuels testing and the reopening
of central records, which is critical
to industry acquisition and exploration activities.
The industry and public have greatly benefited
from robust permitting, compliance
and enforcement actions by the Commission.
The policies implemented by the Commission at work
to shorten the duration of flaring
and volume of flaring limit venting extensions,
and deploy new technology to the field, like drones
to increase the efficiency of inspectors.
The alliance supports the Commission's continued action
to further monitoring and enforcement abilities
and your efforts related to Statewide Rule 32.
Thank you again, Mr. Chairman,
on behalf of the Texas Alliance for Energy Producers,
for the invitation and opportunity to provide comments.
Callie: Thank you, Jason.
Ben Shepperd, with PBPA will be presenting at this time.
Ed, you are invited to speak.
I mean, I'm sorry, Ben, on my apologies.
-: Thank you, Callie.
For the record, Mr. Chairman, members, I'm Ben Shepperd,
President of the Permian Basin Petroleum Association,
say that three times, right in a row,
greatly appreciate the invitation to speak today
and the opportunity to work
with such a broad spectrum of industry
on the Texas Methane Flaring Coalition.
This is truly an unprecedented effort
that we are proud to be a part of
and bringing in all facets of the oil and gas industry,
we will meet our goals of reducing flaring.
We firmly believe the efforts being done
at the Commission currently and the efforts
of the energy industry currently are making meaningful steps
in reducing flaring volumes across the state.
Just to remind everybody that we did not get here overnight.
In the last 10 years, production in the Permian Basin
was quadruple, more than quadruple,
and much of our infrastructure struggled
under the strain of that growth.
Or currently as has been mentioned,
there are over $4 1/2 billion dollars worth
of pipelines coming online within the next year
and those will continue to help with
our transportation needs and should assist
in reducing flaring as well.
It's our strong belief that the PBPA,
that energy development
and environmental stewardship can go hand in hand.
This report is evidence of those efforts.
Through the countless hours, the coalition member companies
and staff had worked collaboratively
to develop very fast and so this report,
and this set of recommendations, it's just the first step
in changing the culture in the industry
as it relates to flaring.
The industry is committed through these practices
to create a culture and a regulatory process
that keeps these situations to a minimum,
both in terms of volume and in terms of duration.
As I've said, and it has been said before,
this is only the beginning of our joint work
in developing a data-driven process
that takes into account actual lines of flaring
that operators are engaging in,
as well as the efforts that the Commission could take
that would provide greater transparency for operators,
regulators, and the public.
We believe this data sheet and the subsequent reports
that Todd mentioned, will allow us all to see
the progress made by operators over time and demonstrate
the results of the technologies in overall operations.
We will continue to use the data collected
and other information to report on these successes,
and continue to develop best practices.
We intend to continue the work of this coalition.
We're not going away after this,
with feedback from the Commission,
we intend to have additional workshops,
continue to meet and discuss best practices.
Our goal is to reduce flaring
as has been stated before.
And I think we have
a strong industry association commitment to that.
Some of them, the other next steps that are contained
in the report that we expect to finish
before the end of the year include
a methane emissions report, a flaring report,
assisting in the aerial surveys
and continue with the data collection efforts.
We think these combined efforts will help bring real results
to the industry and to the state.
Thank you for allowing me the opportunity to testify today.
I'm happy to answer any questions.
Callie: Thank you, Ben.
Commissioners, this completes our third panel.
Are there any questions at this time?
-: Members, do you have any questions of our panel?
Man, y'all have done great, you've answered every question
that could possibly come to mind here, so what a great job.
I thank you all for being a part of this.
I thank you for being our Blue Ribbon Panel
that's helped in other issues and look forward to hopefully
in days ahead that you will continue to give consideration
to advising the Railroad Commission at different times.
I think one good thing that I hope we bring
on the three panels that have presented today is that
there is a certainty,
I'm big on certainty to the market.
I believe last time we gave a decision on proration,
some lacked, some did it, but at least I think
it brought some certainty to at least the markets.
And quite frankly, the Railroad Commission will take credit
for the growth of the price of West Texas, WTI
ever since that decision.
So I think the Railroad Commission
is a good part of bringing that certainty.
And this time, I think it's been a big concern of mine
that the lack of financing we see as a problem in the future
to development of our share price.
We have a lot of folks, I was with a group up in Dallas
that the person from Wall Street expressed
that their people were bailing out on financing,
or they were starting different mutual funds
that do anything but fossil fuels and a large part
of that they were using was the vision of flaring
in West Texas banned.
They were showing all the flaring being done.
And while we at the Commission say the industry has done
a good job, that message has not been,
I think, adequately expressed to the markets.
And I appreciate that we've brought everybody together,
the good work that you've done and looking forward
to making sure that based on this day
that we can tell Wall Street, the markets, the nation,
all of the different organizations who represent
the environmental movement and all of the industry that
the Texas industry has and is working toward
definitely being a solving issue
of solving this flaring problem.
We're on that direction, that movement.
I thank all of you for the work that you've done
in your organizations for doing this.
So we appreciate you very much.
Again, any other questions before we dismiss this panel?
If not, thank you all so much for the work you do
and for the advice you've been giving.
One other thing here, here's another thought
and people get half when I do this,
but we had a group from North Dakota come in
and spoke to Wei, and the staff here and it's was working
from North Dakota and it's a group of the industry
that had come together.
We have a problem, I think at least in my office,
I'm sure the other Commissioners do,
that there's some great new technologies brought
to the Railroad Commission.
And you know, we're sitting here saying, man,
that sounds like a great technology
and they bring it to our office and talk to us and
we really don't have a place in
the governmental Railroad Commission to approve
or disapprove, or give a seal of approval
to specific new techniques, new industry
and that's what you all are involved in.
What they've done in North Dakota is
the Governor's put together a panel like a shark tank
and that shark tank reviews new technology
and then of course, in that state,
and we've been talking with Governor Abbott,
there's a matching fund the industry kind of matches
with the state and awards those projects
that the industry approves of as potentially good.
The lassens to go ahead and develop their technology.
So it expedites good ideas to the industry.
So that's just what we've been presented.
I hope that you'll get with way
and a look over what North Dakota has done
and perhaps, just give us an opinion on that.
'Cause issues like flaring and this other things,
and there's many others, there's new technologies
that as a Commissioner I feel very inadequate number one,
but we don't have the capacity for sharing these good ideas.
Well, who do they go to?
Who do we send them to, this great new idea?
And yet we had them come to our offices regularly.
So I'll repeat myself, but you might consider looking
at the method North Dakota has used.
I think it's worked real well there
in getting technology started to solve issues
such as flaring and other issues.
So thank you again, that's just me with my ideas,
but thank you for the work that you've done
and the work that you are doing and appreciate all
of the panelists today coming together to approve flaring.
Thank y'all so much.
And as I stated I the last meeting,
this is now the opportunity time
to implement meaningful reforms to reduce flaring
before oil and gas production climbs back to previous highs.
Wei, between now and the next meeting,
can you have your staff look into the report provided
by the Blue Ribbon Task Force and the other groups
that have presented to us today
and Wei, if you would make sure we can see how much of this
we can implement this fall and a tip to join the industry
and all of us together weigh and what the Commission can do
to reduce flaring in Texas.
-: Mr. Chairman, may I make one comment,
please, for this panel?
-: Commissioner Craddick.
-: If you don't mind.
So I wanna thank you one for your leadership
and thank you for the Blue Ribbon Panel
for being involved with this for the last nine months.
We've been looking at this as well in my office,
and I appreciate you moving it forward and getting us,
trying to get some solutions and some thoughts.
One of the keys that we found, and I think this,
the recommendations in this,
we've got one of the challenges that we've had,
one of the priorities we've all had as an agency
is to make sure our data's improved.
And one of the things that I realized after sitting
in some meetings and sitting on a workshop all day long
as the only regulator one day at the end of January,
is that people want our data.
And I think that data and figuring out
how to continue to improve that will be a priority,
updating our worksheets and the information
we collect will be very important as we go forward,
not just so people can see what we do,
transparency's been very important to us.
And I know that we've communicated that,
but I appreciate industry continuing to understand that
as well as frankly, the environmental community want
our data and so as we go forward, IT upgrades, and I know
we're gonna have an interesting session going forward,
I think will be and should be a priority for us,
as well as having inspectors and funding our inspectors.
I think that's will be, in my opinion, be priorities
for us going forward.
And like, I wanna commend our staff as well.
Frankly, they've seen and understood that we had some issues
and have been looking at this at least
in the Hearings division for the last six months,
nine months, a year and are doing smarter things.
So those are some good recommendations
from this Blue Ribbon Panel as we go forward
on some things we should be looking for.
So thank you for being a leader on this,
and I appreciate you giving me just a minute.
-: Thank you very much, Commissioner.
Okay, Wei, I hope between now and our next meeting,
can you have the staff look into the report prepared
by these Blue Ribbon Panel and these other two groups
that have reported today and their recommendation,
and see if we can implement something this fall,
that will drastically reduce flaring in Texas.
-: Yes, sir, we'll do.
As a matter of fact, we already started looking
at the data sheet and to make it more user friendly,
and additional information
that will aid our permitting process.
So we'll look into that
and report back in the next conference.
-: Thank you.
Agenda item 312 is our public participation item.
We have Emma Pabst, with the Environment Texas
and Kate Norman, with Texas Gas Service,
both registered to speak.
Does anyone want to hear from them?
If no one does let's move on to agenda item 313.
Agenda item 313 is our executive session item,
which we will not be going into today.
Are there any other matters, duly posted matters
to be bought before the Commission at this time?
Hearing none, this meeting
of the Railroad Commission of Texas is adjourned.