WEBVTT 00:00:00.000 --> 00:00:03.050 .com. will begin momentarily. 00:00:03.050 --> 00:00:03.883 Thank you. 00:00:03.883 --> 00:00:05.020 This is Chairman Christian. 00:00:05.020 --> 00:00:08.200 This meeting of the Railroad Commission of Texas will come 00:00:08.200 --> 00:00:11.360 to order to consider matters, which have been duly posted 00:00:11.360 --> 00:00:15.550 with the secretary of state for June 16th, 2020. 00:00:15.550 --> 00:00:17.950 Under our public participation policy, 00:00:17.950 --> 00:00:20.890 anyone desiring to offer public testimony on any item 00:00:20.890 --> 00:00:23.600 that are not noticed on today's agenda, 00:00:23.600 --> 00:00:26.100 was required to register in advance. 00:00:26.100 --> 00:00:28.100 We had two people register in advance, 00:00:28.100 --> 00:00:30.940 Emma Pabst, with the Environment Texas 00:00:30.940 --> 00:00:33.530 and Kate Norman, with Texas Gas Service. 00:00:33.530 --> 00:00:35.400 The Commission will consider the items 00:00:35.400 --> 00:00:37.746 on the agenda as posted on the agenda. 00:00:37.746 --> 00:00:41.163 Callie, please call up the presenter for item number one. 00:00:42.947 --> 00:00:43.960 Very good, thank you. 00:00:43.960 --> 00:00:47.710 Claudia Godoy, will be presenting agenda item one, 00:00:47.710 --> 00:00:49.773 Claudia, we are ready when you are. 00:00:50.650 --> 00:00:51.630 Thank you. 00:00:51.630 --> 00:00:52.797 Good morning, chairman and Commissioners. 00:00:52.797 --> 00:00:55.930 For the record, my name is Claudia Godoy, 00:00:55.930 --> 00:00:58.267 and I'm representing the Market Oversight Section 00:00:58.267 --> 00:01:01.100 of the Oversight and Safety Division 00:01:01.100 --> 00:01:05.203 Agenda item number one is gas utilities docket number 10945, 00:01:06.250 --> 00:01:10.320 the application of Atmos Energy, West Texas division 00:01:10.320 --> 00:01:13.890 for Test year 2019, annual interim rate adjustment 00:01:13.890 --> 00:01:16.410 for the unincorporated areas. 00:01:16.410 --> 00:01:19.490 This docket is the second interim rate adjustment 00:01:19.490 --> 00:01:24.340 since the company's last rate case, GUD number 10743. 00:01:24.340 --> 00:01:26.890 The adjustment represents an incremental increase 00:01:26.890 --> 00:01:28.783 of $12,198,286 dollars 00:01:31.860 --> 00:01:35.600 of which 1,030,741 00:01:35.600 --> 00:01:38.240 is allocated to customers subject 00:01:38.240 --> 00:01:39.770 to the order of this docket. 00:01:39.770 --> 00:01:42.850 Staff recommends approval of the interim rate adjustment. 00:01:42.850 --> 00:01:44.740 I'm available for questions. 00:01:44.740 --> 00:01:46.040 Are there any questions. 00:01:46.912 --> 00:01:49.230 I move that we approve the examiners recommendation. 00:01:49.230 --> 00:01:50.494 Is there a second? 00:01:50.494 --> 00:01:51.327 Second. 00:01:51.327 --> 00:01:52.610 Second by Commissioner Sitton. 00:01:52.610 --> 00:01:54.600 All in favor, say aye. 00:01:54.600 --> 00:01:55.630 Aye. 00:01:55.630 --> 00:01:56.463 Any opposed? 00:01:56.463 --> 00:01:58.560 Motion passes, that item is approved. 00:01:58.560 --> 00:01:59.990 Callie, please call up presenter 00:01:59.990 --> 00:02:01.510 for agenda item two. 00:02:01.510 --> 00:02:02.343 Well, thank you. 00:02:02.343 --> 00:02:05.140 Claudia Godoy, will be continuing with agenda item two. 00:02:05.140 --> 00:02:06.763 Claudia, you may continue. 00:02:07.760 --> 00:02:08.800 Thank you. 00:02:08.800 --> 00:02:11.083 Agenda item is gas utilities docket number 10955, 00:02:13.910 --> 00:02:16.820 the application of Texas Gas Service company 00:02:16.820 --> 00:02:20.470 for test year 2019 annual interim rate adjustment 00:02:20.470 --> 00:02:22.870 for the West Texas service area. 00:02:22.870 --> 00:02:25.510 This docket is the fourth interim rate adjustment 00:02:25.510 --> 00:02:30.510 since the company's last rate case, GUD number 10506 00:02:30.710 --> 00:02:32.860 This adjustment represents an incremental increase 00:02:32.860 --> 00:02:37.007 of $4,666,421 dollars 00:02:38.050 --> 00:02:44.080 of which 388,308 is allocated to customer subject 00:02:44.080 --> 00:02:46.000 to the order in this docket. 00:02:46.000 --> 00:02:48.560 Staff recommends approval of an interim rate adjustment. 00:02:48.560 --> 00:02:50.567 I'm available for questions. 00:02:50.567 --> 00:02:52.267 Are there any questions members? 00:02:53.400 --> 00:02:55.600 I move we approve the examiners recommendation. 00:02:55.600 --> 00:02:56.433 Is there a second? 00:02:56.433 --> 00:02:57.266 Second. 00:02:57.266 --> 00:02:59.730 Second by Commissioner Craddick, all favor, say aye. 00:02:59.730 --> 00:03:00.563 Aye. 00:03:01.480 --> 00:03:02.313 Any opposed? 00:03:02.313 --> 00:03:05.170 Motion passes, that item is approved. 00:03:05.170 --> 00:03:07.850 Callie, please call up agenda item three. 00:03:07.850 --> 00:03:08.920 Yes, thank you. 00:03:08.920 --> 00:03:10.090 Sarah Montoya Foglesong, 00:03:10.090 --> 00:03:13.500 will be presenting agenda item number three. 00:03:13.500 --> 00:03:15.263 Sarah, we are ready when you are. 00:03:16.570 --> 00:03:18.517 Good morning Commissioners. 00:03:18.517 --> 00:03:20.970 For the record, my name is Sarah Montoya Foglesong, 00:03:20.970 --> 00:03:22.860 I'm representing the Market Oversight Section 00:03:22.860 --> 00:03:24.940 of the Oversight and Safety Division. 00:03:24.940 --> 00:03:29.550 Before you today is gas utilities docket number 10947. 00:03:29.550 --> 00:03:31.150 The application of CenterPoint Energy 00:03:31.150 --> 00:03:34.917 for the test year 2019 annual inter rate adjustment 00:03:34.917 --> 00:03:38.530 for the unincorporated portion of the South Texas division 00:03:38.530 --> 00:03:41.730 and the city that seeded jurisdiction to the Commission. 00:03:41.730 --> 00:03:43.740 This docket is the second interim rate adjustment 00:03:43.740 --> 00:03:45.660 that company has filed for the portion of 00:03:45.660 --> 00:03:50.660 the South Texas division jurisdictional to the Commission. 00:03:50.770 --> 00:03:53.110 Since the order was issued in the most recent statement 00:03:53.110 --> 00:03:57.120 of intent gas utilities docket number 10669. 00:03:57.120 --> 00:03:59.520 This adjustment represents an incremental increase 00:03:59.520 --> 00:04:08.150 of $2,981,622 dollars of which $988,817 dollars 00:04:08.150 --> 00:04:11.330 is recoverable from customers impacted by this order. 00:04:11.330 --> 00:04:13.420 I recommend approval of the interim rate adjustment 00:04:13.420 --> 00:04:14.620 as revised and I'm happy 00:04:14.620 --> 00:04:16.760 to answer any questions you may have. 00:04:16.760 --> 00:04:18.857 Are there any questions? 00:04:18.857 --> 00:04:21.040 I move we approve the examiners recommendation. 00:04:21.040 --> 00:04:22.353 Is there a second? 00:04:22.353 --> 00:04:23.186 Second. 00:04:23.186 --> 00:04:26.320 Second by Commissioner Sitton, all in favor, say aye. 00:04:26.320 --> 00:04:27.270 Aye. 00:04:27.270 --> 00:04:30.763 Any opposed, motion passes, that item is approved. 00:04:30.763 --> 00:04:31.596 Thank you. Callie, 00:04:31.596 --> 00:04:33.740 please call up item number four. 00:04:33.740 --> 00:04:34.573 Yes, thank you. 00:04:34.573 --> 00:04:37.570 Christina Poole, will be presenting agenda item four. 00:04:37.570 --> 00:04:39.173 Christina, we are ready when you are. 00:04:39.173 --> 00:04:41.300 Good morning, chairman and Commissioners. 00:04:41.300 --> 00:04:43.050 For the record, my name is Christina Poole, 00:04:43.050 --> 00:04:45.020 and I'm with the Market Oversight Section 00:04:45.020 --> 00:04:47.370 of the Oversight and Safety Division. 00:04:47.370 --> 00:04:51.790 The item before you today's gas utility docket number 10948. 00:04:51.790 --> 00:04:53.420 The application of CenterPoint Energy 00:04:53.420 --> 00:04:57.510 for the test year 2019 annual interim rate adjustment 00:04:57.510 --> 00:05:00.750 for the unincorporated areas of the Houston division 00:05:00.750 --> 00:05:04.500 and the cities that seeded jurisdiction to the Commission. 00:05:04.500 --> 00:05:06.930 This docket is a third interim rate adjustment 00:05:06.930 --> 00:05:09.480 the company has filed since the final order 00:05:09.480 --> 00:05:11.230 was issued in the most recent statement 00:05:11.230 --> 00:05:14.113 of intent gas utility stock at number 10567. 00:05:15.870 --> 00:05:18.330 This adjustment represents an incremental increase 00:05:18.330 --> 00:05:20.163 of $12,167,035 dollars 00:05:22.682 --> 00:05:26.293 of which $6,221,579 dollars will be recovered 00:05:28.010 --> 00:05:31.260 from the customers subject to the order of this docket. 00:05:31.260 --> 00:05:32.620 Staff recommends approval 00:05:32.620 --> 00:05:35.060 of the interim rate adjustment as revised. 00:05:35.060 --> 00:05:37.070 I'm available to answer questions. 00:05:37.070 --> 00:05:39.001 Are there any questions. 00:05:39.001 --> 00:05:41.180 I move we approve the examiners recommendation. 00:05:41.180 --> 00:05:42.482 Is there a second? 00:05:42.482 --> 00:05:43.315 Second. 00:05:43.315 --> 00:05:46.162 Second by Commissioner Craddick, all in favor, say aye. 00:05:46.162 --> 00:05:47.280 Aye. 00:05:47.280 --> 00:05:48.550 Any opposed? 00:05:48.550 --> 00:05:50.837 Motion passes, that item is approved. 00:05:50.837 --> 00:05:53.205 Callie, please call up agenda item five. 00:05:53.205 --> 00:05:54.771 Yes, thank you. 00:05:54.771 --> 00:05:57.879 Frank Tomasik, will presenting agenda item five. 00:05:57.879 --> 00:05:59.603 Frank, we are ready when you are. 00:06:00.470 --> 00:06:01.700 Thank you very much, Callie. 00:06:01.700 --> 00:06:02.950 Chairman and Commissioners, good morning. 00:06:02.950 --> 00:06:05.800 I'm Frank Tomasik, with the Oversight and Safety Division 00:06:05.800 --> 00:06:07.130 and this morning's next agenda item 00:06:07.130 --> 00:06:11.240 is gas utilities, docket number 10949, application made 00:06:11.240 --> 00:06:12.073 by CenterPoint Energy Entex 00:06:12.073 --> 00:06:14.980 for the test year 2019 annual interim rate adjustment 00:06:14.980 --> 00:06:16.520 for the unincorporated areas 00:06:16.520 --> 00:06:18.560 and municipalities that ceded jurisdiction 00:06:18.560 --> 00:06:21.160 in its Texas Coast division service area. 00:06:21.160 --> 00:06:23.460 This is the third interim rate adjustments,... 00:06:25.540 --> 00:06:26.740 Five, six, seven, 00:06:26.740 --> 00:06:29.310 which set base interim rate adjustment components. 00:06:29.310 --> 00:06:31.130 Under these factors, the companies identified 00:06:31.130 --> 00:06:33.140 an annual test year increment rate requirement 00:06:33.140 --> 00:06:36.550 of approximately $2,785,407 dollars 00:06:36.550 --> 00:06:40.230 of which $1,006,530 dollars will be recovered 00:06:40.230 --> 00:06:42.830 from the environments and seeded jurisdictional customers, 00:06:42.830 --> 00:06:44.630 under the proposed rate adjustment. 00:06:44.630 --> 00:06:47.230 Staff's review of this filing has found it to be compliant 00:06:47.230 --> 00:06:48.720 with the provisions of the Grip Statutes 00:06:48.720 --> 00:06:50.390 and staff is recommending approval. 00:06:50.390 --> 00:06:52.620 I can address any questions at this time. 00:06:52.620 --> 00:06:54.600 Are there any questions? 00:06:54.600 --> 00:06:56.790 I move we approve the examiners recommendation. 00:06:56.790 --> 00:06:58.077 Is there a second? 00:06:58.077 --> 00:06:58.910 Second. 00:06:58.910 --> 00:07:01.940 Second by Commissioner Sitton, all in favor, say aye. 00:07:01.940 --> 00:07:02.810 Aye. 00:07:02.810 --> 00:07:03.780 Any opposed? 00:07:03.780 --> 00:07:06.200 Motion passes, that item is approved. 00:07:06.200 --> 00:07:08.910 Callie, please call up agenda item six. 00:07:08.910 --> 00:07:09.743 Yes, thank you. 00:07:09.743 --> 00:07:13.400 Dee Marlo Chico, will be presenting agenda item six. 00:07:13.400 --> 00:07:16.090 Dee Marlo, we are ready when you are. 00:07:16.090 --> 00:07:18.200 Good morning, chairman and Commissioners. 00:07:18.200 --> 00:07:19.670 My name is Dee Marlo Chico, 00:07:19.670 --> 00:07:22.760 Administrative Law Judge with the Hearings division. 00:07:22.760 --> 00:07:25.980 Item number six is a gas utility rate case 00:07:25.980 --> 00:07:27.410 that resulted in a settlement 00:07:27.410 --> 00:07:30.730 between CenterPoint Energy Resources Corporation, 00:07:30.730 --> 00:07:33.480 DBA CenterPoint Energy Entex 00:07:33.480 --> 00:07:37.560 and CenterPoint Energy Texas Gas and four interveners, 00:07:37.560 --> 00:07:40.690 staff, the East Texas Coalition of cities, 00:07:40.690 --> 00:07:43.270 the lines of CenterPoint municipalities 00:07:43.270 --> 00:07:46.350 and the cities of Belmont and Sour Lake. 00:07:46.350 --> 00:07:50.900 CenterPoint filed a statement of intent on November 14, 2019 00:07:50.900 --> 00:07:54.610 to increase rates in its Belmont, East, Texas division. 00:07:54.610 --> 00:07:57.140 The examiners recommend approval of the settlement 00:07:57.140 --> 00:08:00.000 as set forth in the proposed final order. 00:08:00.000 --> 00:08:02.240 The settlement represents diverse interests 00:08:02.240 --> 00:08:05.700 and the parties have engaged in significant discovery 00:08:05.700 --> 00:08:08.030 regarding the issues in dispute. 00:08:08.030 --> 00:08:10.550 No exceptions or replies are filed. 00:08:10.550 --> 00:08:14.550 The deadline for Commission action is June 16, 2020. 00:08:14.550 --> 00:08:16.350 I'm available for questions. 00:08:16.350 --> 00:08:17.470 Are there any questions. 00:08:17.470 --> 00:08:19.890 Commissioners, we do have Mark Santez, 00:08:19.890 --> 00:08:22.490 representing CenterPoint Energy in attendance today 00:08:22.490 --> 00:08:24.900 and is available for questions or comments. 00:08:24.900 --> 00:08:26.343 Any questions members? 00:08:28.280 --> 00:08:29.579 Thank you. 00:08:29.579 --> 00:08:31.920 I move we approve examiners recommendation. 00:08:31.920 --> 00:08:33.174 Is there a second? 00:08:33.174 --> 00:08:34.007 Second. 00:08:34.007 --> 00:08:37.280 Second by Commissioner Craddick, all in favor say, aye. 00:08:37.280 --> 00:08:38.320 Aye. 00:08:38.320 --> 00:08:39.720 And that item is approved. 00:08:40.678 --> 00:08:43.760 Callie, please call up item number seven. 00:08:43.760 --> 00:08:44.593 Yes, thank you. 00:08:44.593 --> 00:08:48.340 Veronica Ruberto, will be presenting agenda item seven. 00:08:48.340 --> 00:08:50.908 Veronica, we are ready when you are. 00:08:50.908 --> 00:08:52.330 Good morning chairman and Commissioners 00:08:52.330 --> 00:08:54.090 for the record, Veronica Ruberto, 00:08:54.090 --> 00:08:56.660 Administrative Law Judge with the Hearings division. 00:08:56.660 --> 00:08:59.243 I will be presenting items seven through nine. 00:09:00.120 --> 00:09:02.120 Item number seven is the application 00:09:02.120 --> 00:09:05.460 by Luminant Mining company, LLC requesting 00:09:05.460 --> 00:09:08.580 a multi-phase release of reclamation obligations 00:09:08.580 --> 00:09:12.270 on an aggregate 586.7 acres, 00:09:12.270 --> 00:09:14.070 permit number three F, 00:09:14.070 --> 00:09:17.950 within Big Brown Mine located in Freestone County. 00:09:17.950 --> 00:09:21.330 There are four proposed mine land uses, pasture land, 00:09:21.330 --> 00:09:23.210 fish and wildlife habitat, 00:09:23.210 --> 00:09:26.800 develop water resources and industrial commercial. 00:09:26.800 --> 00:09:29.550 Evidence in the record supports that Luminant has completed 00:09:29.550 --> 00:09:31.400 all reclamation activities required 00:09:31.400 --> 00:09:33.620 for the various spaces of release. 00:09:33.620 --> 00:09:35.680 After notice, no comments or requests 00:09:35.680 --> 00:09:37.410 for a hearing were received. 00:09:37.410 --> 00:09:40.770 Staff and Luminant are the only party to the proceeding. 00:09:40.770 --> 00:09:42.030 No exceptions were filed, 00:09:42.030 --> 00:09:45.080 no changes to the current bond are requested. 00:09:45.080 --> 00:09:48.100 It is recommended that the request for various phases 00:09:48.100 --> 00:09:52.820 of release for an aggregate 586.7 acres be approved 00:09:52.820 --> 00:09:54.310 and that Luminant be eligible 00:09:54.310 --> 00:09:57.560 to reduce bond monies attributable to the areas granted 00:09:57.560 --> 00:09:59.270 for release of this docket. 00:09:59.270 --> 00:10:00.887 I'm available for questions. 00:10:00.887 --> 00:10:02.587 Are there any questions members? 00:10:03.880 --> 00:10:06.180 I move we approve the examiners recommendation. 00:10:06.180 --> 00:10:07.347 Is there a second? 00:10:07.347 --> 00:10:08.180 Second. 00:10:08.180 --> 00:10:11.290 Second by Commissioner Sitton, all in favor, say aye. 00:10:11.290 --> 00:10:12.260 Aye. 00:10:12.260 --> 00:10:13.210 Any opposed? 00:10:13.210 --> 00:10:15.610 Motion passes, that item is approved. 00:10:15.610 --> 00:10:17.930 Callie, please call up agenda item eight. 00:10:17.930 --> 00:10:18.810 Yes, thank you. 00:10:18.810 --> 00:10:21.790 Veronica, will be continuing with agenda item eight. 00:10:21.790 --> 00:10:23.590 Veronica, we are ready when you are. 00:10:24.560 --> 00:10:26.140 Item number eight is the application 00:10:26.140 --> 00:10:28.780 by San Miguel Electric Cooperative inc, 00:10:28.780 --> 00:10:32.170 requesting phase one release of reclamation obligations 00:10:32.170 --> 00:10:36.640 on 369.6 acres, permit number 11G 00:10:36.640 --> 00:10:40.520 within San Miguel, Lignite mine located in Atascosa 00:10:40.520 --> 00:10:42.670 and McMullen counties. 00:10:42.670 --> 00:10:44.470 Two approved post mine land uses 00:10:44.470 --> 00:10:46.940 are within the requested area for release, 00:10:46.940 --> 00:10:49.520 pasture land and industrial commercial. 00:10:49.520 --> 00:10:50.990 Evidence in the record supports 00:10:50.990 --> 00:10:52.900 that San Miguel has completed 00:10:52.900 --> 00:10:54.740 all reclamation activities required 00:10:54.740 --> 00:10:57.410 for phase one release of the requested acreage. 00:10:57.410 --> 00:10:59.030 After notice, no comments or requests 00:10:59.030 --> 00:11:00.690 for a hearing were received. 00:11:00.690 --> 00:11:04.010 Staff and San Miguel are the only parties to the proceeding. 00:11:04.010 --> 00:11:06.030 No exceptions were filed, 00:11:06.030 --> 00:11:09.200 no changes to the current bond are requested in this docket. 00:11:09.200 --> 00:11:11.980 It is recommended the request for phase one release 00:11:11.980 --> 00:11:15.000 for 369.6 acres to be approved 00:11:15.000 --> 00:11:16.660 and that San Miguel be eligible 00:11:16.660 --> 00:11:18.740 to reduce the bond monies attributed 00:11:18.740 --> 00:11:21.960 to the area's granted release in this docket. 00:11:21.960 --> 00:11:23.636 I'm available for questions. 00:11:23.636 --> 00:11:25.580 Are there any questions? 00:11:25.580 --> 00:11:27.870 I move we approve the examiner's recommendation. 00:11:27.870 --> 00:11:29.160 Is there a second? 00:11:29.160 --> 00:11:29.993 Second. 00:11:29.993 --> 00:11:33.270 Second by Commissioner Craddick, all in favor, say aye. 00:11:33.270 --> 00:11:34.380 Aye. 00:11:34.380 --> 00:11:35.230 Any opposed? 00:11:35.230 --> 00:11:37.510 Motion passes, that item is approved. 00:11:37.510 --> 00:11:39.940 Callie, please call up agenda item number nine. 00:11:39.940 --> 00:11:40.880 Yes, thank you. 00:11:40.880 --> 00:11:42.360 Veronica, will still be continuing 00:11:42.360 --> 00:11:44.240 with agenda item number nine, 00:11:44.240 --> 00:11:45.940 Veronica, we are ready when you are. 00:11:45.940 --> 00:11:49.170 Item number nine is a motion for rehearing. 00:11:49.170 --> 00:11:52.460 On April 21st, 2020, the Commission signed 00:11:52.460 --> 00:11:55.060 a final order approving the application 00:11:55.060 --> 00:11:56.860 for Marshall Mine, LLC, 00:11:56.860 --> 00:11:59.700 and issued a renewed and revised permit. 00:11:59.700 --> 00:12:03.300 We numbered as permit number 59A to Marshall. 00:12:03.300 --> 00:12:05.400 A timely motion for rehearing was filed 00:12:05.400 --> 00:12:09.430 by Mr. Charles Ferguson, an interested person on the docket. 00:12:09.430 --> 00:12:11.910 No replies were received from the parties. 00:12:11.910 --> 00:12:16.030 Mr. Ferguson's motion (murmurs) it did not raise new issues 00:12:16.030 --> 00:12:19.650 of fact and law previously considered by the Commission. 00:12:19.650 --> 00:12:23.320 It is recommended that the motion for rehearing be denied. 00:12:23.320 --> 00:12:25.560 The motion for rehearing will be overruled 00:12:25.560 --> 00:12:29.560 by operation of law on July 30th, 2020. 00:12:29.560 --> 00:12:30.730 I'm available for questions. 00:12:30.730 --> 00:12:32.630 Are there any questions? 00:12:33.615 --> 00:12:36.120 I move we approve the examiner's recommendation. 00:12:36.120 --> 00:12:37.501 Is there a second? 00:12:37.501 --> 00:12:38.334 Second. 00:12:38.334 --> 00:12:39.330 Second by Commissioner Sitton, 00:12:39.330 --> 00:12:41.250 all in favor, say aye. 00:12:41.250 --> 00:12:42.220 Aye. 00:12:42.220 --> 00:12:43.380 Any opposed? 00:12:43.380 --> 00:12:45.650 Motion passes, that item is approved. 00:12:45.650 --> 00:12:48.210 Callie, please call up the next agenda. 00:12:48.210 --> 00:12:49.110 Yes, thank you. 00:12:49.110 --> 00:12:52.390 Kyle Lebby, will be presenting agenda item number 10. 00:12:52.390 --> 00:12:54.273 Kyle, we are ready when you are. 00:12:55.760 --> 00:12:57.390 Morning chairman and Commissioners, 00:12:57.390 --> 00:12:59.960 Kyle Lebby, Administrative Law Judge. 00:12:59.960 --> 00:13:04.180 Item 10 is an application by Luminant Mining company, LLC, 00:13:04.180 --> 00:13:05.740 requesting release and phase two 00:13:05.740 --> 00:13:10.660 and three reclamation obligations for 225.8 acres 00:13:10.660 --> 00:13:12.600 within the Three Oaks Mine located 00:13:12.600 --> 00:13:14.193 in Lee and Bastrop counties. 00:13:15.270 --> 00:13:18.710 The approved post mining land for use 225.8 acres 00:13:18.710 --> 00:13:20.400 is pasture land. 00:13:20.400 --> 00:13:22.960 Luminant has demonstrated as confirmed 00:13:22.960 --> 00:13:25.510 by Commission records and analysis 00:13:25.510 --> 00:13:28.050 that all reclamation activities have been accomplished 00:13:28.050 --> 00:13:30.250 as required for phase two and three release. 00:13:31.680 --> 00:13:34.960 In response to the publication of the notice of application 00:13:34.960 --> 00:13:37.530 one person submitted a written comment 00:13:37.530 --> 00:13:40.380 but no request for hearing were received. 00:13:40.380 --> 00:13:43.000 Luminants's staff were the only parties to the proceeding. 00:13:43.000 --> 00:13:45.150 Nobody filed exceptions, 00:13:45.150 --> 00:13:49.040 no changes to the current bond are requested in this docket. 00:13:49.040 --> 00:13:51.890 As a result of proposed order prescribes that Luminant 00:13:51.890 --> 00:13:54.290 is eligible to reduce the bond of the amount 00:13:54.290 --> 00:13:55.340 that is attributable to 00:13:55.340 --> 00:13:57.793 the subject divergent future bond adjustments. 00:13:58.820 --> 00:14:02.260 For release to the 225.8 acres is recommended 00:14:02.260 --> 00:14:04.270 and I'm available for questions. 00:14:04.270 --> 00:14:05.593 Any questions members? 00:14:06.550 --> 00:14:08.770 I move we approve examiners recommendation. 00:14:08.770 --> 00:14:09.824 Is there a second? 00:14:09.824 --> 00:14:10.657 Second 00:14:10.657 --> 00:14:13.830 Second by Commissioner Craddick, all in favor, say aye. 00:14:13.830 --> 00:14:14.840 Aye. 00:14:14.840 --> 00:14:16.270 All opposed? 00:14:16.270 --> 00:14:18.770 Motion passes, that item is approved. 00:14:18.770 --> 00:14:20.217 Callie, please call up the presenter 00:14:20.217 --> 00:14:22.930 for agenda items 11 and 12. 00:14:22.930 --> 00:14:23.763 Yes, thank you. 00:14:23.763 --> 00:14:27.800 Peter Buva, will be presenting agenda item 11 and 12. 00:14:27.800 --> 00:14:29.593 Peter, we are ready when you are. 00:14:31.028 --> 00:14:32.850 Good morning, chairman and Commissioners. 00:14:32.850 --> 00:14:35.220 My name is Peter Buva, Technical Examiner 00:14:35.220 --> 00:14:36.570 with the Hearings division. 00:14:37.470 --> 00:14:40.980 I will be presenting items, number 11 and 12 together. 00:14:40.980 --> 00:14:43.700 Items number 11 and 12 are applications 00:14:43.700 --> 00:14:47.090 by Reece County SWD, LLC, 00:14:47.090 --> 00:14:50.220 pursuant to Statewide Rule 46 to inject fluid 00:14:50.220 --> 00:14:53.410 into the reservoir, not productive of oil and gas 00:14:53.410 --> 00:14:57.400 for the Brice SWD, well number one 00:14:57.400 --> 00:15:00.890 and Bear SWD, well number one, 00:15:00.890 --> 00:15:05.890 reeves block for the 4430 field, Reese County, Texas. 00:15:07.360 --> 00:15:08.740 The applications that are protested 00:15:08.740 --> 00:15:11.205 by PDC Permian Incorporated and 00:15:11.205 --> 00:15:14.170 (speaks in foreign language) 00:15:14.170 --> 00:15:17.560 PDC protested the application for the Bear Well 00:15:17.560 --> 00:15:20.490 PDC contends that there is no industry need 00:15:20.490 --> 00:15:22.890 for the Bear Well and that the approval 00:15:22.890 --> 00:15:25.050 of the proposed well will result 00:15:25.050 --> 00:15:28.170 in waste and harm rights. 00:15:28.170 --> 00:15:31.270 PDC also disputes that Reeves has a good faith claim 00:15:31.270 --> 00:15:32.483 to operate the well. 00:15:33.710 --> 00:15:35.223 Mr, and Mrs. Rantelia, 00:15:36.200 --> 00:15:39.560 colleges and landowners protested, both applications. 00:15:39.560 --> 00:15:43.330 Mr. and Mrs. Rantelia, operate an RV park located less than 00:15:43.330 --> 00:15:45.620 a mile from the proposed wells. 00:15:45.620 --> 00:15:48.280 At the hearing Mr. and Mrs. Rantelia, expressed 00:15:48.280 --> 00:15:51.030 their concern with the potential safety issues 00:15:51.030 --> 00:15:53.870 that may come from a lightning strike to these wells 00:15:53.870 --> 00:15:55.713 and for the groundwater protection. 00:15:57.030 --> 00:15:58.960 Reeves presented evidence addressing 00:15:58.960 --> 00:16:02.570 each of the requirements in Statewide Rule 46. 00:16:02.570 --> 00:16:04.690 The examiners find that the proposed wells will 00:16:04.690 --> 00:16:07.020 not cause pollution of freshwater 00:16:07.020 --> 00:16:11.890 or endanger, or injure oil and gas, or geothermal resources. 00:16:11.890 --> 00:16:13.677 The applicant provided evidence in support 00:16:13.677 --> 00:16:16.680 of the industry need for the proposed Wells. 00:16:16.680 --> 00:16:18.410 The applicant also produce a copy 00:16:18.410 --> 00:16:22.000 of a recorded surface lease showing that Reeves has 00:16:22.000 --> 00:16:24.893 a good faith claim rights to operate the proposed wells. 00:16:25.820 --> 00:16:29.000 Regarding Mr. and Mrs. Rantelia's protest, 00:16:29.000 --> 00:16:31.510 the examiners note that prevention 00:16:31.510 --> 00:16:34.180 of lightning strike does not fall within the requirements 00:16:34.180 --> 00:16:36.883 of Texas Water Code or rule 46. 00:16:37.800 --> 00:16:41.110 The examiners recommended approval of the applications, 00:16:41.110 --> 00:16:43.490 exceptions and replies have been filed. 00:16:43.490 --> 00:16:45.840 I'm available for any questions. 00:16:45.840 --> 00:16:48.200 Well, Commissioners we also have Jay Stewart, 00:16:48.200 --> 00:16:51.630 representing Reeves County SWD, LLC 00:16:51.630 --> 00:16:56.050 and Callie Kenny, representing PDC, Permian Incorporated 00:16:56.050 --> 00:16:57.780 in attendance today and is available 00:16:57.780 --> 00:17:00.450 for questions and comments as well. 00:17:00.450 --> 00:17:01.653 Any questions members? 00:17:03.810 --> 00:17:05.790 I move, we approve the examiners recommendation. 00:17:05.790 --> 00:17:07.539 Is there a second. 00:17:07.539 --> 00:17:08.372 Second. 00:17:08.372 --> 00:17:11.320 Second by Commissioner Sitton, all in favor, say aye. 00:17:11.320 --> 00:17:12.300 Aye. 00:17:12.300 --> 00:17:13.410 Any opposed? 00:17:13.410 --> 00:17:16.510 Motion passes, those items are approved. 00:17:16.510 --> 00:17:19.390 Callie, please call up 13. 00:17:19.390 --> 00:17:20.800 Yes, thank you. 00:17:20.800 --> 00:17:24.323 Ashley Correll, will be presenting agenda item 13. 00:17:25.790 --> 00:17:28.373 Ashley, we are ready when you are. 00:17:39.040 --> 00:17:40.550 There she is. 00:17:40.550 --> 00:17:42.610 Good morning, Ashley. 00:17:42.610 --> 00:17:44.450 Good morning, chairman and Commissioners. 00:17:44.450 --> 00:17:46.610 I am Ashley Correll, Technical Examiner 00:17:46.610 --> 00:17:47.680 for the Hearings division. 00:17:47.680 --> 00:17:52.367 Item number 13 is the application of Encana Oil and gas USAP 00:17:53.440 --> 00:17:57.090 for permanent gas well classification for nine wells 00:17:57.090 --> 00:18:00.100 and the Eagleville, Eagleford two field. 00:18:00.100 --> 00:18:02.520 Rule eight of the Special Field Rules states, 00:18:02.520 --> 00:18:06.130 any well in the fields completed with the gas oil ratio 00:18:06.130 --> 00:18:09.060 of 3000 cubic feet per barrel and above 00:18:09.060 --> 00:18:12.920 maybe permanently reclassified as a gas well provided 00:18:12.920 --> 00:18:16.463 the GOR was determined within 180 days of completion. 00:18:17.690 --> 00:18:20.810 The examiners find that Encana provided sufficient evidence 00:18:20.810 --> 00:18:25.290 to support reclassification of five of the nine wells. 00:18:25.290 --> 00:18:26.810 The examiners also find that 00:18:26.810 --> 00:18:30.910 the initial potential tests estimated daily production data 00:18:30.910 --> 00:18:33.710 prior to the wells going on artificial lift 00:18:33.710 --> 00:18:37.010 and select allocation test results do not support 00:18:37.010 --> 00:18:40.020 the reclassification of four of the wells. 00:18:40.020 --> 00:18:42.470 The examiners recommend approval of the application 00:18:42.470 --> 00:18:46.140 for five wells and denial of the application for four wells. 00:18:46.140 --> 00:18:47.760 Exceptions were filed. 00:18:47.760 --> 00:18:49.343 I'm available for any questions. 00:18:49.343 --> 00:18:51.293 Are there any questions? 00:18:52.460 --> 00:18:54.870 I move, we approve the examiners recommendation. 00:18:54.870 --> 00:18:56.120 Is there a second. 00:18:56.120 --> 00:18:56.953 Second. 00:18:56.953 --> 00:19:00.160 Second by Commissioner Craddick, all in favor, say aye. 00:19:00.160 --> 00:19:01.280 Aye. 00:19:01.280 --> 00:19:02.400 Any opposed? 00:19:02.400 --> 00:19:04.170 Motion passes, that item is approved. 00:19:04.170 --> 00:19:07.780 Callie, please call up a presenter for agenda item 14. 00:19:07.780 --> 00:19:08.753 Yes, thank you. 00:19:08.753 --> 00:19:12.290 Ezra Johnson, will be presenting agenda item 14. 00:19:12.290 --> 00:19:14.113 Ezra, we are ready when you are. 00:19:15.160 --> 00:19:16.750 Good morning, chairman and Commissioners, 00:19:16.750 --> 00:19:18.700 for the record, my name is Ezra Johnson, 00:19:18.700 --> 00:19:21.800 Administrative Law Judge with the Hearings division, 00:19:21.800 --> 00:19:24.653 I will be presenting items 14 through 17. 00:19:25.650 --> 00:19:27.550 Item 14 is the application 00:19:27.550 --> 00:19:30.260 of Sabinal Energy Operating, LLC 00:19:30.260 --> 00:19:31.840 for approval and certification 00:19:31.840 --> 00:19:34.820 of an initial tertiary enhanced recovery project 00:19:34.820 --> 00:19:37.240 on the Westbrook Southeast unit 00:19:37.240 --> 00:19:41.300 via seismic stimulation pursuant to Statewide Rule 50. 00:19:41.300 --> 00:19:45.150 In August, 2017, Energen Resources Corporation, 00:19:45.150 --> 00:19:48.660 the prior operator of record installed two seismic tools 00:19:48.660 --> 00:19:50.700 on the Westbrook Southeast unit 00:19:50.700 --> 00:19:54.143 and began seismic stimulation enhanced recovery operations. 00:19:54.980 --> 00:19:57.160 Energen did not submit a form age 12 00:19:57.160 --> 00:19:59.740 prior to the installation of the seismic tools 00:19:59.740 --> 00:20:01.560 or otherwise seek Commission approval 00:20:01.560 --> 00:20:05.120 for the enhanced recovery project prior to commencement. 00:20:05.120 --> 00:20:07.670 Sabinal, the current operator of record, 00:20:07.670 --> 00:20:09.710 purchased Energen's existing project 00:20:09.710 --> 00:20:13.260 on the Westbrook Southeast unit and filed a form age 12 00:20:13.260 --> 00:20:16.490 to apply for the enhanced oil recovery tax rate 00:20:16.490 --> 00:20:19.170 more than two years after commencement. 00:20:19.170 --> 00:20:21.610 Sabinal's application was administratively denied 00:20:21.610 --> 00:20:26.290 as untimely under the Texas tax code and Statewide Rule 50. 00:20:26.290 --> 00:20:29.690 Sabinol acknowledges that its application was untimely. 00:20:29.690 --> 00:20:31.900 Granting Sabinol's untimely application 00:20:31.900 --> 00:20:34.680 under the present circumstances would be directly contrary 00:20:34.680 --> 00:20:37.070 to the plain language of Statewide Rule 50 00:20:37.070 --> 00:20:39.060 and the governing statute. 00:20:39.060 --> 00:20:42.040 It would also be contrary to the stated legislative intent 00:20:42.040 --> 00:20:45.960 of the governing statute and applicable legal precedent. 00:20:45.960 --> 00:20:47.860 The examiners recommend that the Commission deny 00:20:47.860 --> 00:20:50.373 the application and I'm available for questions. 00:20:51.464 --> 00:20:53.840 Commissioners we also have Bill Hainga 00:20:53.840 --> 00:20:58.120 and Robert Partlow, with Sabinol Energy Operating, LLC 00:20:58.120 --> 00:21:00.450 in attendance today, and are also available 00:21:00.450 --> 00:21:02.290 for questions or comments. 00:21:02.290 --> 00:21:03.623 Any questions members? 00:21:05.330 --> 00:21:07.470 I move we approve the examiners recommendation. 00:21:07.470 --> 00:21:08.699 Is there a second? 00:21:08.699 --> 00:21:09.532 Second. 00:21:09.532 --> 00:21:12.830 Second by Commissioner Sitton, all in favor, say aye. 00:21:12.830 --> 00:21:14.180 Aye. Aye. 00:21:14.180 --> 00:21:15.170 Any opposed? 00:21:15.170 --> 00:21:17.810 Motion passes, that item is approved. 00:21:17.810 --> 00:21:19.918 Item number 15, Callie. 00:21:19.918 --> 00:21:20.751 Yes, thank you. 00:21:20.751 --> 00:21:23.440 Ezra, will be continuing with agenda item 15. 00:21:23.440 --> 00:21:25.223 Ezra, we are ready when you are. 00:21:26.690 --> 00:21:29.070 Item 15 is the application 00:21:29.070 --> 00:21:31.620 of Rickaway Energy Corporation seeking 00:21:31.620 --> 00:21:34.260 a determination contrary to Commission staff's 00:21:34.260 --> 00:21:36.670 prior determination that it be allowed 00:21:36.670 --> 00:21:38.320 to renew its form P five. 00:21:39.239 --> 00:21:42.350 Rickaway argues that it is entitled to a plugging extension 00:21:42.350 --> 00:21:44.840 for the subject inactive wells, because it brought 00:21:44.840 --> 00:21:47.990 into compliance at least 10% of the wells listed 00:21:47.990 --> 00:21:52.420 on its inactive well inventory as of September 1st, 2018, 00:21:52.420 --> 00:21:55.120 the date of their last annual renewal. 00:21:55.120 --> 00:21:57.920 However, the well actually restorative production 00:21:57.920 --> 00:22:00.540 was not on Rickaway's active well inventory 00:22:00.540 --> 00:22:03.880 as of September 1st, 2018 because the Commission did 00:22:03.880 --> 00:22:06.170 not approve the transfer of operatorship 00:22:06.170 --> 00:22:09.600 for that well until December of 2018. 00:22:09.600 --> 00:22:12.580 Accordingly Rickaway is not entitled to plugging extensions 00:22:12.580 --> 00:22:14.730 for the subject inactive wells. 00:22:14.730 --> 00:22:15.940 The examiners recommend that 00:22:15.940 --> 00:22:18.040 the Commission deny Rickaway's application 00:22:18.040 --> 00:22:21.460 to renew his form P five and order that Rick away bring 00:22:21.460 --> 00:22:24.770 the Wells into compliance with Statewide Rule 15. 00:22:24.770 --> 00:22:26.660 Exceptions and replies were filed 00:22:26.660 --> 00:22:28.780 and I'm available for questions. 00:22:28.780 --> 00:22:30.870 Are there any questions? 00:22:30.870 --> 00:22:33.040 I move we approve the examiners recommendation. 00:22:33.040 --> 00:22:34.354 Is there a second? 00:22:34.354 --> 00:22:35.187 Second. 00:22:35.187 --> 00:22:36.290 Second by Commissioner Craddick, 00:22:36.290 --> 00:22:38.280 all in favor, say aye. 00:22:38.280 --> 00:22:39.310 Aye. 00:22:39.310 --> 00:22:40.190 Any opposed? 00:22:40.190 --> 00:22:41.303 Motion passes, 00:22:43.880 --> 00:22:45.370 that item is approved. 00:22:45.370 --> 00:22:49.760 Callie, please call up presenter for agenda item 16 and 17. 00:22:49.760 --> 00:22:50.593 Yes, thank you. 00:22:50.593 --> 00:22:55.030 Ezra Johnson, will be continuing with agenda item 16 and 17. 00:22:55.030 --> 00:22:56.630 Ezra, we are ready when you are. 00:22:58.320 --> 00:23:01.620 Item 16 and 17 concern, a motion for rehearing 00:23:01.620 --> 00:23:04.160 of a final order issued by the Commission granting 00:23:04.160 --> 00:23:07.220 the applications of Boykin Energy, LLC, 00:23:07.220 --> 00:23:09.720 pursuant to Statewide Rule nine. 00:23:09.720 --> 00:23:11.470 None of the issues raised in the motion 00:23:11.470 --> 00:23:13.310 for rehearing are new. 00:23:13.310 --> 00:23:15.770 All issues raised in the motion were already raised 00:23:15.770 --> 00:23:18.630 by the protestants and considered by the Commission prior 00:23:18.630 --> 00:23:22.040 to the Commission issuing the final order in this case. 00:23:22.040 --> 00:23:24.450 In addition, there were clerical errors 00:23:24.450 --> 00:23:27.510 in the final order sign on April 21st, 2020 00:23:27.510 --> 00:23:29.480 of a non-material nature 00:23:29.480 --> 00:23:32.230 that should be corrected by amendment. 00:23:32.230 --> 00:23:34.630 The examiners recommend that the Commission amend 00:23:34.630 --> 00:23:37.250 the final order to correct the noted clerical errors 00:23:37.250 --> 00:23:39.840 and deny the motion for rehearing. 00:23:39.840 --> 00:23:42.310 The motion will be overruled by operation 00:23:42.310 --> 00:23:47.310 of law on July 30th, 2020, and I am available for questions. 00:23:47.600 --> 00:23:49.720 Commissioners, we also have George Neale 00:23:49.720 --> 00:23:53.370 and Steph Crawford, representing Boykin Energy, LLC 00:23:53.370 --> 00:23:56.540 and John Hicks, with Kogi operating in attendance today 00:23:56.540 --> 00:23:59.470 and available for questions or comments as well. 00:23:59.470 --> 00:24:00.770 Are there any questions? 00:24:02.711 --> 00:24:05.510 I move we approve the examiners recommendation. 00:24:05.510 --> 00:24:06.977 Is there a second? 00:24:06.977 --> 00:24:07.810 Second. 00:24:07.810 --> 00:24:10.850 Second by Commissioner Sitton, all in favor, say aye. 00:24:10.850 --> 00:24:11.980 Aye. 00:24:11.980 --> 00:24:12.813 Any opposed? 00:24:12.813 --> 00:24:15.360 Motion passes, those items are approved. 00:24:15.360 --> 00:24:18.073 Callie, please call it agenda item 18. 00:24:19.010 --> 00:24:20.840 Yes, thank you. 00:24:20.840 --> 00:24:24.370 Kristi reef, will be presenting agenda item 18. 00:24:24.370 --> 00:24:26.283 Kristi, we are ready when you are. 00:24:27.860 --> 00:24:30.430 Morning chairman and Commissioners, it's Kristi Reeve, 00:24:30.430 --> 00:24:32.960 Administrative Law Judge with the Hearings division. 00:24:32.960 --> 00:24:36.210 Item number 18 is a motion for rehearing. 00:24:36.210 --> 00:24:38.980 On April 21st, 2020, the Commission entered 00:24:38.980 --> 00:24:43.450 an order finding Geomeg Energy Operating Company, LLC does 00:24:43.450 --> 00:24:45.440 not have a good faith claim to operate 00:24:45.440 --> 00:24:48.130 the subject lease and order the wells club. 00:24:48.130 --> 00:24:51.090 The order was the result of a landowner complaint 00:24:51.090 --> 00:24:54.190 and Geomeg's failure to respond to the ALJs letter, 00:24:54.190 --> 00:24:57.510 requesting Geomeg either provide evidence supporting 00:24:57.510 --> 00:25:00.540 its good faith claim or request a hearing. 00:25:00.540 --> 00:25:02.350 On May 18th, 2020, 00:25:02.350 --> 00:25:03.880 the Commission received Geomeg's 00:25:03.880 --> 00:25:06.290 timely motion for rehearing. 00:25:06.290 --> 00:25:09.363 No response was filed by the complainant, by the deadline. 00:25:10.310 --> 00:25:13.780 Geomeg's motion fails all prongs of the Craddock test. 00:25:13.780 --> 00:25:16.460 It is recommended that the motion be denied. 00:25:16.460 --> 00:25:18.760 The motion will be overruled by operation of law 00:25:18.760 --> 00:25:21.120 on July 30th, 2020. 00:25:21.120 --> 00:25:23.380 I'm available for questions. 00:25:23.380 --> 00:25:25.656 Are there any questions. 00:25:25.656 --> 00:25:27.840 I move we approve the examiners recommendation. 00:25:27.840 --> 00:25:29.194 Is there a second? 00:25:29.194 --> 00:25:30.027 Second. 00:25:30.027 --> 00:25:31.350 Second by Commissioner Craddick. 00:25:31.350 --> 00:25:33.650 All in favor, say aye. 00:25:33.650 --> 00:25:34.860 Aye. 00:25:34.860 --> 00:25:35.693 Any opposed? 00:25:35.693 --> 00:25:38.260 Motion passes, that item is approved. 00:25:38.260 --> 00:25:41.173 Callie, agenda items 19 through 21. 00:25:42.090 --> 00:25:43.390 Yes, thank you. 00:25:44.520 --> 00:25:49.520 Jennifer Cook, will be presenting agenda item 19 through 21. 00:25:49.990 --> 00:25:51.740 Jennifer, we are ready when you are 00:25:53.521 --> 00:25:55.560 Good morning Chairman and Commissioners. 00:25:55.560 --> 00:25:57.610 I am Jennifer Cook, an Administrative Law Judge 00:25:57.610 --> 00:25:59.300 with the Hearings division. 00:25:59.300 --> 00:26:03.800 I will be presenting items 19 through 21 together. 00:26:03.800 --> 00:26:06.010 They regard a motion for rehearing. 00:26:06.010 --> 00:26:09.980 On April 21, 2020, the Commission issued 00:26:09.980 --> 00:26:13.530 an order ordering Votaw production company, LLC, 00:26:13.530 --> 00:26:16.540 to plug the subject wells and pay to the Commission 00:26:16.540 --> 00:26:20.880 an administrative penalty of $24,155 dollars. 00:26:20.880 --> 00:26:24.750 A timely motion for rehearing was received from Votaw. 00:26:24.750 --> 00:26:27.393 Staff fail to reply in opposition to the motion. 00:26:28.480 --> 00:26:30.350 None of the issues raised at the motion 00:26:30.350 --> 00:26:31.920 for rehearing are new. 00:26:31.920 --> 00:26:34.160 All issues raised in the motion were already raised 00:26:34.160 --> 00:26:37.150 by Votaw and considered by the Commission prior 00:26:37.150 --> 00:26:40.300 to the Commission issuing the order in these cases. 00:26:40.300 --> 00:26:42.770 It is recommended that the motion be denied. 00:26:42.770 --> 00:26:44.200 The motion will be overruled 00:26:44.200 --> 00:26:48.000 by operation of law on July 30, 2020. 00:26:48.000 --> 00:26:50.230 I'm available for questions. 00:26:50.230 --> 00:26:51.523 Any questions members? 00:26:52.978 --> 00:26:55.180 I move we approve examiners recommendation. 00:26:55.180 --> 00:26:56.701 Is there a second? 00:26:56.701 --> 00:26:57.534 Second. 00:26:57.534 --> 00:27:00.400 Second by Commissioner Sitton, all in favor, say aye. 00:27:00.400 --> 00:27:01.869 Aye. 00:27:01.869 --> 00:27:02.910 Any opposed? 00:27:02.910 --> 00:27:05.900 Motion passes, those items are approved. 00:27:05.900 --> 00:27:08.100 Callie, please call up the next agenda item. 00:27:09.420 --> 00:27:11.343 Yes, thank you. 00:27:11.343 --> 00:27:13.780 If we can just give a moment, 00:27:13.780 --> 00:27:17.233 it seems like we've lost Commissioner Sitton. 00:27:26.130 --> 00:27:29.563 Give me just a minute while we figure out what's going on. 00:27:32.156 --> 00:27:35.118 There he is, welcome back. 00:27:35.118 --> 00:27:37.820 You were in the opposite side of my screen, now you moved. 00:27:37.820 --> 00:27:40.073 I'm starting to take this personally, Callie. 00:27:40.073 --> 00:27:42.850 (laughing) 00:27:42.850 --> 00:27:46.040 No, no, no, no. (laughing) 00:27:46.040 --> 00:27:47.000 Well, thank you. 00:27:47.000 --> 00:27:50.382 Joe Menefe, will be presenting agenda item number 22. 00:27:50.382 --> 00:27:52.263 Joseph, we are ready when you are. 00:27:53.370 --> 00:27:55.670 Good morning chairman, Commissioners, 00:27:55.670 --> 00:27:57.017 for the record, Joe Menefe, 00:27:57.017 --> 00:27:59.630 Paralegal in the Hearings division. 00:27:59.630 --> 00:28:03.590 I'll be presenting items 22 through 25 00:28:03.590 --> 00:28:07.140 all of which are P5 motions for rehearing, 00:28:07.140 --> 00:28:10.720 all done as a result of honor orders, denying renewal 00:28:10.720 --> 00:28:14.600 of the operator P5 because of wells non-compliant 00:28:14.600 --> 00:28:16.283 with Statewide Rule 15. 00:28:17.200 --> 00:28:19.330 Item number 22. 00:28:19.330 --> 00:28:21.240 Subsequent to filing it's motion 00:28:21.240 --> 00:28:26.160 for rehearing Borden, Roland inc has come into compliance. 00:28:26.160 --> 00:28:29.190 Therefore it's recommended the motion be granted 00:28:29.190 --> 00:28:32.420 and the underlying docket dismissed as moved. 00:28:32.420 --> 00:28:34.410 I'm available for questions. 00:28:34.410 --> 00:28:36.580 Are there any questions 00:28:36.580 --> 00:28:39.030 I move we approve the examiners recommendation. 00:28:39.030 --> 00:28:40.338 Is there a second? 00:28:40.338 --> 00:28:41.171 Second. 00:28:41.171 --> 00:28:42.890 Second by Commissioner Craddick. 00:28:42.890 --> 00:28:44.620 Any opposed? 00:28:44.620 --> 00:28:46.806 All in favor, say aye. 00:28:46.806 --> 00:28:47.700 Aye. 00:28:47.700 --> 00:28:48.810 Any opposed? 00:28:48.810 --> 00:28:51.983 Motion passes and that item is approved. 00:28:53.400 --> 00:28:54.950 Next item. 00:28:54.950 --> 00:28:56.810 Thank you, Joe, will be continuing 00:28:56.810 --> 00:28:58.233 with agenda item 23. 00:28:58.233 --> 00:29:00.183 Joe, we're ready when you are. 00:29:01.177 --> 00:29:03.067 Item number 23. 00:29:03.067 --> 00:29:08.067 In its motion for rehearing, Lee-Walker Mineral, LLC states 00:29:08.700 --> 00:29:11.370 its failure to request a hearing was due 00:29:11.370 --> 00:29:15.350 to COVID-19 disruption of oil and gas operations 00:29:16.310 --> 00:29:20.610 that the filing of compliance documentation is eminent 00:29:20.610 --> 00:29:24.093 and that granting the motion will not injure the Commission. 00:29:24.930 --> 00:29:29.900 Staff proposes the motion, 14 wells remain noncompliant 00:29:29.900 --> 00:29:32.080 with Statewide Rule 15. 00:29:32.080 --> 00:29:34.700 It is recommended the motion be denied. 00:29:34.700 --> 00:29:37.630 The motion will be overruled by operation of law 00:29:37.630 --> 00:29:39.250 on July 30th. 00:29:39.250 --> 00:29:40.810 I'm available for questions. 00:29:40.810 --> 00:29:42.733 Are there any questions members. 00:29:44.080 --> 00:29:46.050 I move we approve the examiners recommendation. 00:29:46.050 --> 00:29:47.476 Is there a second? 00:29:47.476 --> 00:29:48.309 Second. 00:29:48.309 --> 00:29:51.360 Second by Commissioner Sitton, all in favor, say aye. 00:29:51.360 --> 00:29:52.410 Aye. 00:29:52.410 --> 00:29:53.410 Any opposed? 00:29:53.410 --> 00:29:56.090 Motion passes, that item is approved. 00:29:56.090 --> 00:29:58.280 Callie, please call up item 24. 00:29:58.280 --> 00:30:00.090 Yes, thank you, Joe will be continuing 00:30:00.090 --> 00:30:02.020 with agenda item 24. 00:30:02.020 --> 00:30:04.040 Joe, we are ready when you are. 00:30:04.040 --> 00:30:05.557 Item number 24. 00:30:05.557 --> 00:30:12.110 In its motion, M5 Standing Energy, LLC states 00:30:12.110 --> 00:30:14.750 its failure to request a hearing was due to 00:30:14.750 --> 00:30:17.850 its managing member being hospitalized during 00:30:17.850 --> 00:30:20.150 the extension period. 00:30:20.150 --> 00:30:24.260 That the filing of compliance documentation is eminent 00:30:24.260 --> 00:30:27.460 and that the Commission would not be impacted 00:30:27.460 --> 00:30:29.650 by granting its motion. 00:30:29.650 --> 00:30:31.970 Staff opposes the motion. 00:30:31.970 --> 00:30:36.410 Nine wells remain noncompliant with Statewide Rule 15. 00:30:36.410 --> 00:30:38.890 It is recommended the motion be denied. 00:30:38.890 --> 00:30:42.270 The motion will be overruled by operation of law 00:30:42.270 --> 00:30:44.150 on July 30th. 00:30:44.150 --> 00:30:46.170 I'm available for questions. 00:30:46.170 --> 00:30:47.870 Are there any questions members? 00:30:48.910 --> 00:30:51.200 I move we approve examiners recommendation. 00:30:51.200 --> 00:30:52.455 Is there a second? 00:30:52.455 --> 00:30:53.490 Second 00:30:53.490 --> 00:30:56.500 Second by Commissioner Craddick, all in favor, say aye. 00:30:56.500 --> 00:30:57.520 Aye. 00:30:57.520 --> 00:30:58.510 Any opposed? 00:30:58.510 --> 00:31:00.420 Motion passes, that item is approved. 00:31:00.420 --> 00:31:03.930 Now please present agenda item 25. 00:31:03.930 --> 00:31:04.920 Yes, thank you, 00:31:04.920 --> 00:31:08.270 Joe will be continuing with agenda item 25. 00:31:08.270 --> 00:31:09.890 Joe, we are ready when you are. 00:31:09.890 --> 00:31:11.313 Item number 25. 00:31:11.313 --> 00:31:13.571 In it's motion for rehearing, 00:31:13.571 --> 00:31:17.880 Subsurface Production, Inc states it's failure to request 00:31:17.880 --> 00:31:21.570 a hearing was due to COVID-19 disruption 00:31:21.570 --> 00:31:23.860 of oil and gas operations, 00:31:23.860 --> 00:31:27.640 that the filing of compliance documentation is eminent 00:31:27.640 --> 00:31:30.010 and that the Commission would not be injured 00:31:30.010 --> 00:31:32.170 by granting its motion. 00:31:32.170 --> 00:31:34.200 Staff opposes the motion. 00:31:34.200 --> 00:31:39.150 24 wells remain non-compliant with Statewide Rule 15. 00:31:39.150 --> 00:31:41.740 It is recommended the motion be denied. 00:31:41.740 --> 00:31:43.230 The motion will be overruled 00:31:43.230 --> 00:31:46.450 by operation of law on July 30th. 00:31:46.450 --> 00:31:48.420 I'm available for questions. 00:31:48.420 --> 00:31:50.406 Are there any question. 00:31:50.406 --> 00:31:52.550 I move we approve the examiners recommendation. 00:31:52.550 --> 00:31:53.910 Is there a second? 00:31:53.910 --> 00:31:54.743 Second. 00:31:54.743 --> 00:31:57.840 Second by Commissioner Sitton, all in favor, say aye. 00:31:57.840 --> 00:31:59.100 Aye. 00:31:59.100 --> 00:32:00.090 Any opposed? 00:32:00.090 --> 00:32:02.133 Motion passes, that item is approved. 00:32:03.460 --> 00:32:07.210 Let's move on to the Oil and Gas Consent Agenda. 00:32:07.210 --> 00:32:10.920 There are 59 items on the Oil and Gas Consent Agenda. 00:32:10.920 --> 00:32:15.920 I move we approve items 26 through 85 except item 54, 00:32:16.810 --> 00:32:20.020 which staff has requested to pass to the next conference. 00:32:20.020 --> 00:32:21.341 Is there a second? 00:32:21.341 --> 00:32:22.174 Second. 00:32:22.174 --> 00:32:25.500 Second by Commissioner Craddick, all in favor, say aye. 00:32:25.500 --> 00:32:26.580 Aye. 00:32:26.580 --> 00:32:27.430 Any opposed? 00:32:27.430 --> 00:32:30.280 Motion passes, those items are approved. 00:32:30.280 --> 00:32:32.790 Let's move on to Master Default Orders. 00:32:32.790 --> 00:32:35.360 There are only 20 Master Default Orders. 00:32:35.360 --> 00:32:38.300 I move we approve items 86 and 105. 00:32:38.300 --> 00:32:39.663 Is there a second? 00:32:39.663 --> 00:32:41.040 Second. 00:32:41.040 --> 00:32:42.550 All in favor say aye. 00:32:42.550 --> 00:32:45.380 Second by Commissioner Sitton, all in favor say aye. 00:32:45.380 --> 00:32:46.410 Aye. 00:32:46.410 --> 00:32:47.590 Any opposed? 00:32:47.590 --> 00:32:48.803 Motion passes. 00:32:51.730 --> 00:32:54.460 Let's move to the Agreed Enforcement Orders. 00:32:54.460 --> 00:32:57.470 There are 201 Agreed Enforcement Orders. 00:32:57.470 --> 00:33:01.170 I move we approve items 106 through 306. 00:33:01.170 --> 00:33:02.633 Is there a second? 00:33:02.633 --> 00:33:03.466 Second. 00:33:03.466 --> 00:33:04.960 Second by Commissioner Craddick. 00:33:04.960 --> 00:33:06.890 All in favor say aye. 00:33:06.890 --> 00:33:07.723 Aye. 00:33:07.723 --> 00:33:09.030 Any opposed? 00:33:09.030 --> 00:33:11.670 Motion passes, those items are approved. 00:33:11.670 --> 00:33:13.170 That concludes the hearing section. 00:33:13.170 --> 00:33:15.880 We'll now take up our Administrative Agendas. 00:33:15.880 --> 00:33:19.057 Callie, please call up the item and the presenter 00:33:19.057 --> 00:33:20.803 for agenda item 307. 00:33:21.680 --> 00:33:23.350 Yes, thank you. 00:33:23.350 --> 00:33:27.170 Randall Collins, will be presenting agenda item 307. 00:33:27.170 --> 00:33:29.710 Randall, we are ready when you are. 00:33:29.710 --> 00:33:31.040 Good morning Commissioners, for the record, 00:33:31.040 --> 00:33:33.430 I'm Randall Collins, Chief Operating Officer. 00:33:33.430 --> 00:33:36.550 For the record item number 307 on the agenda pertains 00:33:36.550 --> 00:33:39.700 to the Commission's approval of certain contracts pursuant 00:33:39.700 --> 00:33:41.580 to the Commission's delegation of authority 00:33:41.580 --> 00:33:46.580 and section 2261.25 for the Texas Government Code. 00:33:46.610 --> 00:33:48.730 The Commission's internal delegation authority 00:33:48.730 --> 00:33:53.170 and section 2261.254 requires Commissioner approval 00:33:53.170 --> 00:33:56.420 of contracts associated amendments greater than 00:33:56.420 --> 00:33:59.040 or equal to $1 million dollars. 00:33:59.040 --> 00:34:00.410 And the issue today is amendment 00:34:00.410 --> 00:34:05.080 for an existing IT contract for services. 00:34:05.080 --> 00:34:06.840 Approval of the item today will ensure 00:34:06.840 --> 00:34:09.260 the agency's operations remain on schedule, 00:34:09.260 --> 00:34:11.960 the necessary approvals will be in place pursuant 00:34:11.960 --> 00:34:15.340 to the Commission's delegation of authority and state law. 00:34:15.340 --> 00:34:17.770 Summary of the amendment is included along 00:34:17.770 --> 00:34:20.920 with the contract number and the amount in your notebook. 00:34:20.920 --> 00:34:23.470 Staff ask the Commission to approve the amendment pursuant 00:34:23.470 --> 00:34:25.220 to the Commissioner's delegation of authority 00:34:25.220 --> 00:34:27.290 and I'm available if you have any questions. 00:34:27.290 --> 00:34:28.993 Are there any questions? 00:34:29.910 --> 00:34:34.670 I move we approve these agendas, these agency contracts. 00:34:34.670 --> 00:34:36.315 Is there a second? 00:34:36.315 --> 00:34:37.148 Second. 00:34:37.148 --> 00:34:38.180 Second by Commissioner Sitton, 00:34:38.180 --> 00:34:40.080 all in favor, say aye. 00:34:40.080 --> 00:34:41.370 Aye. 00:34:41.370 --> 00:34:42.360 Any opposed? 00:34:42.360 --> 00:34:45.170 Motion passes, that item is approved. 00:34:45.170 --> 00:34:47.850 Callie, please call it the agenda item 308. 00:34:47.850 --> 00:34:49.150 Yes, thank you. 00:34:49.150 --> 00:34:52.900 David Cooney, will be presenting agenda item number 308. 00:34:52.900 --> 00:34:54.693 David, we are ready when you are. 00:34:55.560 --> 00:34:56.810 Thank you, Callie. 00:34:56.810 --> 00:34:59.330 Good morning, Mr. Chairman, Commissioners. 00:34:59.330 --> 00:35:03.840 My name's David Cooney, from the Office of General Counsel. 00:35:03.840 --> 00:35:06.400 Item number 308 is staff's recommendation 00:35:06.400 --> 00:35:09.860 to adopt amendments to the Railroad Commission MOU, 00:35:09.860 --> 00:35:12.730 memorandum of understanding with the TCEQ 00:35:12.730 --> 00:35:14.550 to conform with recent legislation, 00:35:14.550 --> 00:35:17.960 including House Bill 2230 from the 84th session 00:35:17.960 --> 00:35:22.810 and House Bill 2771 from the 86th legislature 00:35:22.810 --> 00:35:25.050 and update the definition of underground source 00:35:25.050 --> 00:35:27.290 of drinking water in the MOU. 00:35:27.290 --> 00:35:29.561 House Bill 2230 authorized 00:35:29.561 --> 00:35:33.770 the Railroad Commission disposal wells 00:35:33.770 --> 00:35:37.210 to accept certain TCEQ waste related 00:35:37.210 --> 00:35:40.320 to desalination and water treatment. 00:35:40.320 --> 00:35:44.560 House Bill 2771 transfers from the Railroad Commission 00:35:44.560 --> 00:35:48.180 to the TCEQ Authority to regulate discharges 00:35:48.180 --> 00:35:51.440 of produced water, hydrostatic test water 00:35:51.440 --> 00:35:54.760 and gas plant effluent into surface waters of the state. 00:35:54.760 --> 00:35:58.750 The transfer occurs upon TCEQ receiving EPA approval 00:35:58.750 --> 00:35:59.810 of amendments to 00:35:59.810 --> 00:36:04.460 its Texas Pollutant Discharge Elimination System Program 00:36:04.460 --> 00:36:07.020 to capture those oil and gas discharges. 00:36:07.020 --> 00:36:09.880 Amending the MOU is a necessary element 00:36:09.880 --> 00:36:13.520 to TCEQ receiving EPA approval. 00:36:13.520 --> 00:36:15.470 The amendments were proposed at conference 00:36:15.470 --> 00:36:18.500 on February 11th, 2020 and published 00:36:18.500 --> 00:36:21.110 in the February 28th Texas Register. 00:36:21.110 --> 00:36:22.860 The Commission received no comments. 00:36:22.860 --> 00:36:25.120 The Railroad Commission received no comments. 00:36:25.120 --> 00:36:27.290 The only change from the proposal specifies 00:36:27.290 --> 00:36:30.300 a July 15th, 2020 effective date, 00:36:30.300 --> 00:36:33.450 which was coordinated with the TCEQ 00:36:33.450 --> 00:36:35.610 and which keeps us well ahead 00:36:35.610 --> 00:36:39.560 of agency action deadlines in 2771. 00:36:39.560 --> 00:36:41.150 Staff recommends adoption. 00:36:41.150 --> 00:36:42.783 I am available for questions. 00:36:44.140 --> 00:36:45.840 Are there any questions members? 00:36:47.760 --> 00:36:51.600 David, one question, and this may not affect. 00:36:51.600 --> 00:36:53.370 I know we've talked before 00:36:53.370 --> 00:36:57.150 about of course the discharge of water and 00:36:58.557 --> 00:37:00.200 the Feds were quite adamant 00:37:00.200 --> 00:37:02.217 that they would meet about every 10 years 00:37:02.217 --> 00:37:04.220 and I gave approval that it has 00:37:04.220 --> 00:37:06.530 to be done a certain way, certain desks. 00:37:06.530 --> 00:37:09.370 And we approached them with the idea of just tell us 00:37:09.370 --> 00:37:12.930 the finished product you want so that we can take the water 00:37:12.930 --> 00:37:16.890 and put it into the surface waters. 00:37:16.890 --> 00:37:18.500 What do you want it to be in condition? 00:37:18.500 --> 00:37:20.210 And they finally said, well, we'll come back 00:37:20.210 --> 00:37:22.580 basically distilled waters that came back. 00:37:22.580 --> 00:37:25.900 Is this gonna affect anything that's having to wait on TCEQ 00:37:25.900 --> 00:37:28.920 to eliminate that water that's been up, 00:37:28.920 --> 00:37:30.820 that we do according to Fed standards. 00:37:31.760 --> 00:37:33.280 Not that I'm aware of Commissioner, 00:37:33.280 --> 00:37:37.160 but I mean, it may put into TCEQ's lap, 00:37:37.160 --> 00:37:39.650 put that problem into TCEQ lap 00:37:40.660 --> 00:37:43.740 because they will be responsible for discharges. 00:37:43.740 --> 00:37:45.810 If the discharge you're talking about fits 00:37:45.810 --> 00:37:49.730 into one of the category, well, it's pretty broad category. 00:37:49.730 --> 00:37:54.730 TCEQ is gonna take authority over pretty much all discharges 00:37:55.990 --> 00:37:57.803 from oil and gas activities. 00:37:58.940 --> 00:38:00.260 Okay, thank you very much. 00:38:00.260 --> 00:38:01.093 Yes, sir. 00:38:01.093 --> 00:38:02.600 Are there any other questions? 00:38:03.710 --> 00:38:06.030 I move we approve these agency contracts. 00:38:06.030 --> 00:38:06.993 Is there a second? 00:38:08.611 --> 00:38:09.970 (mumbles) 00:38:09.970 --> 00:38:14.023 I'm sorry, I move we adopt amendment 16 TAC 3.30 relating 00:38:14.870 --> 00:38:16.610 to the moratorium of understanding 00:38:16.610 --> 00:38:19.160 between the Railroad Commission and TCEQ. 00:38:19.160 --> 00:38:20.440 Is there a second? 00:38:20.440 --> 00:38:21.300 Second. 00:38:21.300 --> 00:38:23.190 Second by Commissioner Craddick. 00:38:23.190 --> 00:38:25.483 All in favor say aye. 00:38:25.483 --> 00:38:27.100 Aye. 00:38:27.100 --> 00:38:28.060 Any opposed? 00:38:28.060 --> 00:38:30.965 That motion passes, that item is approved. 00:38:30.965 --> 00:38:34.730 Callie, please call up presenter for agenda item 309. 00:38:34.730 --> 00:38:35.590 Yes thank you. 00:38:35.590 --> 00:38:39.030 Clay Woodul, will be presenting agenda item 309. 00:38:39.030 --> 00:38:41.353 Clay, good morning, we are ready when you are. 00:38:42.580 --> 00:38:44.520 Good morning chairman and Commissioners. 00:38:44.520 --> 00:38:46.010 For the record I am Clay Woodul, 00:38:46.010 --> 00:38:48.990 Assistant Director for Field Operations. 00:38:48.990 --> 00:38:52.230 Item 309 is the Commission's oil and gas monitoring 00:38:52.230 --> 00:38:56.060 and enforcement plan for fiscal year 2021. 00:38:56.060 --> 00:39:00.170 A draft of this plan was presented to you on April 20th 00:39:00.170 --> 00:39:01.470 and was then made available 00:39:01.470 --> 00:39:04.770 for public comment until May 21st. 00:39:04.770 --> 00:39:06.710 During that period, the Commission received 00:39:06.710 --> 00:39:09.470 a total of eight comments from the public, 00:39:09.470 --> 00:39:12.180 environmental and industry groups. 00:39:12.180 --> 00:39:14.620 The final version of the plan includes items 00:39:14.620 --> 00:39:16.680 that support the goals of demonstrating 00:39:16.680 --> 00:39:18.580 the Commissions oil and gas monitoring 00:39:18.580 --> 00:39:21.940 and enforcement activities, and the strategic use 00:39:21.940 --> 00:39:25.270 of Commission resources to ensure public safety 00:39:25.270 --> 00:39:27.370 and protecting the environment. 00:39:27.370 --> 00:39:30.130 This plan must be posted to the Commission's website 00:39:30.130 --> 00:39:32.150 no later than July 1st. 00:39:32.150 --> 00:39:34.990 That deadline will be met with your approval today. 00:39:34.990 --> 00:39:37.190 May I answer any questions? 00:39:37.190 --> 00:39:38.490 Are there any questions? 00:39:39.520 --> 00:39:41.510 I'll move we approve the oil and gas monitoring 00:39:41.510 --> 00:39:44.860 and enforcement plan for fiscal year 2021. 00:39:44.860 --> 00:39:45.823 Is there a second? 00:39:46.740 --> 00:39:48.260 Second. 00:39:48.260 --> 00:39:49.310 Second by Commissioner Sitton. 00:39:49.310 --> 00:39:51.420 All in favor, say aye. 00:39:51.420 --> 00:39:52.330 Aye. 00:39:52.330 --> 00:39:53.350 Any opposed? 00:39:53.350 --> 00:39:56.180 Motion passes, that item is approved. 00:39:56.180 --> 00:39:58.780 Callie, please call up the presenter for the next item. 00:39:58.780 --> 00:39:59.910 Yes, thank you. 00:39:59.910 --> 00:40:03.313 April Richardson, will be presenting agenda item 310. 00:40:04.290 --> 00:40:06.680 April, we are ready when you are. 00:40:06.680 --> 00:40:10.477 It looks like you just need to start your video and unmute. 00:40:16.613 --> 00:40:19.017 Here we go, good morning. 00:40:19.017 --> 00:40:20.750 Good morning, Mr. Chairman, Commissioners, 00:40:20.750 --> 00:40:22.700 for the record, my name is April Richardson, 00:40:22.700 --> 00:40:24.480 Director of Alternative Fuel Safety 00:40:24.480 --> 00:40:26.880 in the Oversight and Safety Division. 00:40:26.880 --> 00:40:30.700 Item 310 is the alternative fuel safety department's request 00:40:30.700 --> 00:40:33.170 for approval to publish proposed revisions 00:40:33.170 --> 00:40:37.380 to the LPG form one and the new LPG form 1M 00:40:37.380 --> 00:40:39.750 on the Commission's website for review 00:40:39.750 --> 00:40:41.310 through the end of June. 00:40:41.310 --> 00:40:44.620 We are also requesting that if no comments are received 00:40:44.620 --> 00:40:48.510 or only comments in support with no suggested revisions, 00:40:48.510 --> 00:40:50.870 that the forms automatically go into effect 00:40:50.870 --> 00:40:53.750 on July 1st, 2020. 00:40:53.750 --> 00:40:55.690 If comments are received that are not in support 00:40:55.690 --> 00:40:58.490 of the revisions, then the forms will be proposed 00:40:58.490 --> 00:41:01.080 for adoption at a future conference. 00:41:01.080 --> 00:41:05.020 The changes to LPG form one application for LPG license 00:41:05.020 --> 00:41:07.020 or license renewal are related 00:41:07.020 --> 00:41:08.970 to the Chapter nine rule changes 00:41:08.970 --> 00:41:11.840 that went into effect January 6, 2020 00:41:11.840 --> 00:41:14.080 and add fields to assist with the processing 00:41:14.080 --> 00:41:16.540 of the application when received, 00:41:16.540 --> 00:41:20.620 which will also make the process more efficient for staff. 00:41:20.620 --> 00:41:22.540 Division and department names were updated 00:41:22.540 --> 00:41:24.910 as well as contact information. 00:41:24.910 --> 00:41:28.990 The instructions page of the LPG form one was also updated 00:41:28.990 --> 00:41:32.310 to provide instructions on the edit fields 00:41:32.310 --> 00:41:33.630 and some existing fields 00:41:33.630 --> 00:41:35.710 that either didn't have instructions 00:41:35.710 --> 00:41:37.893 or the instructions needed to be updated. 00:41:38.860 --> 00:41:41.310 LPG form one M, application 00:41:41.310 --> 00:41:44.960 for LPG container manufacturer registration 00:41:44.960 --> 00:41:47.930 was created as a result of the Chapter nine rule changes 00:41:47.930 --> 00:41:50.740 that went into effect January 6, 2020. 00:41:50.740 --> 00:41:55.010 This forms of out allows LPG container manufacturers 00:41:55.010 --> 00:41:57.940 to apply for a registration or use their form 00:41:57.940 --> 00:42:00.350 to renew an existing registration. 00:42:00.350 --> 00:42:02.350 May I answer any questions? 00:42:02.350 --> 00:42:04.270 Are there any questions? 00:42:04.270 --> 00:42:08.360 I move we approve the new LP gas form one M 00:42:08.360 --> 00:42:11.360 and amendments to LP gas form one. 00:42:11.360 --> 00:42:13.320 Is there a second? 00:42:13.320 --> 00:42:14.153 Second. 00:42:14.153 --> 00:42:17.370 Second by Commissioner Craddick, all in favor, say aye. 00:42:17.370 --> 00:42:18.700 Aye. 00:42:18.700 --> 00:42:19.533 Any opposed? 00:42:19.533 --> 00:42:21.403 Motion passes, that item is approved. 00:42:22.600 --> 00:42:27.130 Agenda item 311 is a discussion on the issue of flaring. 00:42:27.130 --> 00:42:29.590 I've arranged for several panels of interested parties 00:42:29.590 --> 00:42:32.000 to help facilitate this discussion. 00:42:32.000 --> 00:42:35.410 Please save your questions to the end of each panel. 00:42:35.410 --> 00:42:38.513 The first panel will be from our environmental groups. 00:42:39.620 --> 00:42:41.200 Callie, please call up the panelist 00:42:41.200 --> 00:42:43.670 one at a time in this order. 00:42:43.670 --> 00:42:45.970 Mr. Trammell Crow, with EarthX, 00:42:45.970 --> 00:42:49.560 Mr. Colin Leyden, with the Environmental Defense Fund 00:42:49.560 --> 00:42:51.883 and Cyrus Reed, with Sierra Club. 00:42:53.310 --> 00:42:54.610 Yes, thank you. 00:42:56.470 --> 00:42:58.950 Looks like we're still kind of bringing everybody up, 00:42:58.950 --> 00:43:01.123 we're waiting on a one more. 00:43:01.123 --> 00:43:05.023 Trammel Crow, with EarthX will be presenting at this time. 00:43:06.400 --> 00:43:10.211 Trammel, trauma or Trammel, I'm so sorry,-- 00:43:10.211 --> 00:43:11.044 Trammel. 00:43:12.032 --> 00:43:14.200 You are invited to speak. 00:43:14.200 --> 00:43:17.040 Thank you and you can hear me and you can see me. 00:43:17.040 --> 00:43:18.783 We can, yes thank you. 00:43:19.750 --> 00:43:20.903 Thank you very much. 00:43:23.530 --> 00:43:25.800 I'd like to share what I've learned in a decade 00:43:25.800 --> 00:43:29.000 of total immersion in sustainability. 00:43:29.000 --> 00:43:33.120 I'm not going to testify as a scientist, industry expert 00:43:34.370 --> 00:43:37.830 or even a typical environmental activist, EarthX is the 00:43:37.830 --> 00:43:41.940 most conservative major environmental event in the world. 00:43:41.940 --> 00:43:44.810 In the business world, I've seen companies make decisions 00:43:44.810 --> 00:43:48.123 that are short-term and miss out on long-term profits. 00:43:49.610 --> 00:43:53.080 In the environmental arena, I've been disappointed by NGOs, 00:43:53.080 --> 00:43:55.710 which too often oppose realistic solutions 00:43:55.710 --> 00:43:57.280 that are 100% of victories 00:43:57.280 --> 00:44:00.250 for everything they think is wrong in the world. 00:44:00.250 --> 00:44:03.210 By bringing together thousands of business 00:44:03.210 --> 00:44:06.760 and environmental organizations for 10 years now, 00:44:06.760 --> 00:44:11.433 it's clear to me that the natural world is in dire straits, 00:44:12.290 --> 00:44:15.450 but that there are realistic economic solutions. 00:44:15.450 --> 00:44:18.230 Some future thinking companies already flare gas 00:44:18.230 --> 00:44:22.010 to fuel generators power to reuse or produce water 00:44:22.010 --> 00:44:23.530 and technology already exists 00:44:23.530 --> 00:44:26.540 to compress the flare gas for resale. 00:44:26.540 --> 00:44:30.383 Let's think of flare gas as a resource and a commodity. 00:44:31.300 --> 00:44:36.020 $750 million dollars of it was flared in Texas in 2018. 00:44:38.280 --> 00:44:40.390 This issue is the lowest hanging fruit 00:44:40.390 --> 00:44:42.390 in the entire energy sector 00:44:42.390 --> 00:44:45.890 of renewables and alternatives, oil and gas. 00:44:45.890 --> 00:44:47.240 I recommend that the Commission 00:44:47.240 --> 00:44:50.710 probably gather representatives from all points of view, 00:44:50.710 --> 00:44:54.850 industry, investors, scientists and environmental groups 00:44:54.850 --> 00:44:56.923 to set goals and timetables. 00:44:57.870 --> 00:45:01.100 As a real estate developer, my father knew 00:45:01.100 --> 00:45:04.853 he didn't really own the land, we're stewards of the land. 00:45:05.880 --> 00:45:08.910 Personally, I'm as committed to free enterprise 00:45:08.910 --> 00:45:12.380 as I am to my native state and my country. 00:45:12.380 --> 00:45:16.370 But Adam Smith, the author of "The Wealth of Nations" 00:45:16.370 --> 00:45:21.370 the Bible of capitalism devised an economic system in 1776 00:45:21.700 --> 00:45:23.670 that he admitted would never work 00:45:23.670 --> 00:45:26.253 without a common value system. 00:45:27.450 --> 00:45:32.450 And this day of Free thought, the conservation of nature 00:45:32.500 --> 00:45:34.953 is one of our greatest value systems. 00:45:36.160 --> 00:45:38.720 I think everybody in this Zoom knows 00:45:38.720 --> 00:45:41.570 that our natural resources are bountiful, but not eminent 00:45:42.409 --> 00:45:45.580 and have a certain value, with today's technology 00:45:45.580 --> 00:45:47.910 it could be easily exploited. 00:45:47.910 --> 00:45:50.470 To waste it is shortsighted. 00:45:50.470 --> 00:45:54.350 We are leaders in Texas and we're the energy capital. 00:45:54.350 --> 00:45:55.303 So let's lead. 00:45:56.210 --> 00:45:57.622 Thank you. 00:45:57.622 --> 00:45:58.455 Thank you Mr. Crow, 00:45:58.455 --> 00:45:59.760 and again, members if you'll hold 00:45:59.760 --> 00:46:02.290 your questions till the end of the panel. 00:46:02.290 --> 00:46:05.480 And Mr. Crow, if you'd stay with us, we'd appreciate it. 00:46:05.480 --> 00:46:08.690 Next is Mr. Colin Leyden, 00:46:08.690 --> 00:46:10.490 with the Environmental Defense Fund. 00:46:11.790 --> 00:46:13.820 Yes, good morning Commissioners. 00:46:13.820 --> 00:46:15.570 My name is Colin Leyden, speaking 00:46:15.570 --> 00:46:18.900 on behalf of Environmental Defense Fund. 00:46:18.900 --> 00:46:21.120 Thank you for the opportunity to speak today 00:46:21.120 --> 00:46:22.810 and to the Commission for hearing 00:46:22.810 --> 00:46:26.460 the many diverse voices calling for progress on flaring 00:46:26.460 --> 00:46:28.260 and putting the issue on the agenda. 00:46:29.310 --> 00:46:31.750 Recently, you've heard a chorus of voices, 00:46:31.750 --> 00:46:36.300 industry, both large and small, mineral owners, investors, 00:46:36.300 --> 00:46:40.520 academics, and environmental groups, all calling for an end 00:46:40.520 --> 00:46:44.770 to the wasteful environmental damaging practice 00:46:44.770 --> 00:46:46.470 of routine flaring. 00:46:46.470 --> 00:46:48.350 Of course, this is not a new issue 00:46:48.350 --> 00:46:49.800 for the Railroad Commission. 00:46:49.800 --> 00:46:52.460 In fact, the Commission took a tough stand against flaring 00:46:52.460 --> 00:46:55.710 during the Oil Boom in the 1930s and 40s. 00:46:55.710 --> 00:46:59.710 More recently in the Shale Era, Commissioner Porter, tried 00:46:59.710 --> 00:47:01.950 to focus on the enormous flaring waste 00:47:01.950 --> 00:47:04.030 and pollution in the Eagleford. 00:47:04.030 --> 00:47:06.453 Unfortunately, that effort didn't get far. 00:47:07.510 --> 00:47:10.480 So we're here talking about the problem again today 00:47:10.480 --> 00:47:13.450 because it hasn't been fixed, but a new day means 00:47:13.450 --> 00:47:15.833 a new opportunity to finally get it right. 00:47:17.400 --> 00:47:20.960 Fundamentally the flaring problem is an incentive problem. 00:47:20.960 --> 00:47:23.420 Okay, I just gave it. 00:47:23.420 --> 00:47:26.860 The economics of the oil field are just around liquids-- 00:47:26.860 --> 00:47:28.093 But thank you for that. 00:47:28.093 --> 00:47:29.403 All right sorry.. 00:47:29.403 --> 00:47:32.730 With the dry gas often treated as a waste product. 00:47:32.730 --> 00:47:36.190 Too often, flaring is the cheapest option. 00:47:36.190 --> 00:47:39.430 It's no wonder then that operators in Texas have burned off 00:47:39.430 --> 00:47:43.220 roughly a trillion cubic feet of natural gas since 2013, 00:47:43.220 --> 00:47:45.300 enough to meet the yearly needs 00:47:45.300 --> 00:47:47.553 of every Texas home three times over. 00:47:48.590 --> 00:47:50.840 In thinking about what I wanted to say today 00:47:50.840 --> 00:47:54.780 to the Commission, I kept landing on a simple truth, 00:47:54.780 --> 00:47:56.660 the practice of routine flaring 00:47:56.660 --> 00:47:59.370 just doesn't reflect our values. 00:47:59.370 --> 00:48:02.980 Nobody likes waste and nobody likes pollution. 00:48:02.980 --> 00:48:05.850 And most folks in and around industry will tell you 00:48:05.850 --> 00:48:08.813 that they don't like routine flaring either, 00:48:09.670 --> 00:48:11.210 but it's not going away because 00:48:11.210 --> 00:48:13.500 we haven't changed the incentives. 00:48:13.500 --> 00:48:16.600 And in this case, we can't change the incentives 00:48:16.600 --> 00:48:19.030 until the Commission acts to change them. 00:48:19.030 --> 00:48:22.540 That's why EDF urges the Commissioners to adopt 00:48:22.540 --> 00:48:26.020 the concrete goal of ending routine flaring in Texas 00:48:26.020 --> 00:48:29.770 by 2025 and instruct Commission staff 00:48:29.770 --> 00:48:32.560 to develop a plan to achieve this goal. 00:48:32.560 --> 00:48:34.220 We know this can be done 00:48:34.220 --> 00:48:36.770 because many of the leading operators are 00:48:36.770 --> 00:48:40.940 either already doing it or quickly working to achieve it. 00:48:40.940 --> 00:48:43.950 EDF recently sponsored a Gaffney Cline report, 00:48:43.950 --> 00:48:46.320 profiling five of these leading companies 00:48:46.320 --> 00:48:49.120 and their journey to end routine flaring. 00:48:49.120 --> 00:48:52.670 Each producer success was due almost entirely 00:48:52.670 --> 00:48:55.340 to intentional decisions to preventing flaring 00:48:55.340 --> 00:48:58.480 in the first place and ensuring a destination 00:48:58.480 --> 00:49:00.350 and use for the gas is in place 00:49:00.350 --> 00:49:03.730 before bringing a well online, and a willingness 00:49:03.730 --> 00:49:06.253 to shut a well in that isn't achieving this. 00:49:07.340 --> 00:49:10.780 We can be inspired and guided by the strong flaring work 00:49:10.780 --> 00:49:12.870 of companies at the leading edge, 00:49:12.870 --> 00:49:15.740 but to put routine flaring in the rear view mirror, 00:49:15.740 --> 00:49:18.340 we need to include all operators. 00:49:18.340 --> 00:49:21.730 In my time, working in and around state government, 00:49:21.730 --> 00:49:25.130 I know that most elected officials and staff 00:49:25.130 --> 00:49:27.130 are in it for the right reasons. 00:49:27.130 --> 00:49:31.030 They wanna do right by the people of Texas. 00:49:31.030 --> 00:49:34.200 Right now, the Commission has the opportunity to do that. 00:49:34.200 --> 00:49:38.890 Let's work together to end routine flaring in Texas by 2025. 00:49:38.890 --> 00:49:39.723 Thank you. 00:49:39.723 --> 00:49:41.380 I'm happy to answer any questions. 00:49:42.350 --> 00:49:43.940 Thank you, Callie, I'm sorry, 00:49:43.940 --> 00:49:45.750 I imposed myself the last time. 00:49:45.750 --> 00:49:47.220 It's your turn. 00:49:47.220 --> 00:49:52.220 No worries, we go with the flow here. (laughing) 00:49:52.390 --> 00:49:54.250 Thank you Cyrus, very much. 00:49:54.250 --> 00:49:56.910 I'm sorry, thank you Colin, very much. 00:49:56.910 --> 00:50:01.910 So Commissioners, Cyrus Reed, see, I'm all thrown off now. 00:50:02.120 --> 00:50:04.636 I messed you, I'm sorry, my fault. 00:50:04.636 --> 00:50:05.710 (laughing) 00:50:05.710 --> 00:50:06.543 Cyrus Reed, 00:50:06.543 --> 00:50:09.323 with the Sierra Club will be presenting at this time. 00:50:09.323 --> 00:50:11.790 Cyrus, you're invited to speak. 00:50:11.790 --> 00:50:12.980 Yes, thank you so much. 00:50:12.980 --> 00:50:14.370 Can you hear me all? 00:50:14.370 --> 00:50:16.270 Yes sir. We can, thank you. 00:50:16.270 --> 00:50:18.000 This Cyrus Reed, with the Lone Star captain 00:50:18.000 --> 00:50:21.170 of the Sierra club and first of all, I wanted to thank 00:50:21.170 --> 00:50:24.530 the Chairman Wayne Christian, for inviting me to speak. 00:50:24.530 --> 00:50:28.190 I view this as very much, the first step in discussion 00:50:28.190 --> 00:50:30.660 and I believe you'll be well served by opening up 00:50:30.660 --> 00:50:32.790 this discussion to all stakeholders, industry, 00:50:32.790 --> 00:50:36.880 environmental groups, land owners, mineral owners. 00:50:36.880 --> 00:50:41.110 I will echo Colin's statement that I think setting 00:50:41.110 --> 00:50:44.380 a long-term goal of ending routine flaring 00:50:44.380 --> 00:50:47.300 by a date like 2025 is a good way 00:50:47.300 --> 00:50:49.780 to get us going in the right direction. 00:50:49.780 --> 00:50:52.713 And so I'll echo his statement. 00:50:53.550 --> 00:50:58.020 I'll also note that there are large disparities in flaring. 00:50:58.020 --> 00:51:00.423 So not all companies are equal, 00:51:01.300 --> 00:51:03.610 but we do know that flaring has increased. 00:51:03.610 --> 00:51:06.490 We know that from the number of permits 00:51:06.490 --> 00:51:09.010 that were nearly 7,000 last year, 00:51:09.010 --> 00:51:11.870 that in some cases covered many wells, but there 00:51:11.870 --> 00:51:15.330 are great disparities between the amount of gas flared. 00:51:15.330 --> 00:51:17.980 We also know based on some of the work that EDF 00:51:17.980 --> 00:51:19.380 and others have done, 00:51:19.380 --> 00:51:22.730 that some of the flaring is not being done correctly. 00:51:22.730 --> 00:51:24.740 There are some unlit flares, 00:51:24.740 --> 00:51:26.790 there were some malfunctioning flares. 00:51:26.790 --> 00:51:29.760 Those really need to be a major focus 00:51:29.760 --> 00:51:31.350 of the Railroad Commission. 00:51:31.350 --> 00:51:33.480 The third point I'll make is, 00:51:33.480 --> 00:51:36.090 and I did send you very exhaustive comments, 00:51:36.090 --> 00:51:37.610 which I will not read. 00:51:37.610 --> 00:51:39.670 You guys have a lot of authority. 00:51:39.670 --> 00:51:43.250 You have authority under Chapter 31, Chapter 85, 00:51:43.250 --> 00:51:45.900 where it declares waste is illegal 00:51:46.860 --> 00:51:50.280 and Chapter 86, there's a prohibition against gas 00:51:50.280 --> 00:51:53.310 in the atmosphere and Chapter 91, 00:51:53.310 --> 00:51:56.100 you have a lot of authority on prevention of waste. 00:51:56.100 --> 00:51:59.253 So you have the authority to do a lot as the Commissioners. 00:52:00.800 --> 00:52:02.460 The fourth point I'll make is 00:52:03.770 --> 00:52:06.040 you can't ignore pollution. 00:52:06.040 --> 00:52:09.950 I know that the Railroad Commission is charged with waste 00:52:09.950 --> 00:52:13.100 and TCEQ is charged with air pollution, 00:52:13.100 --> 00:52:16.680 but we have a strange situation going on where 00:52:16.680 --> 00:52:19.870 the TCEQ says, it's the Railroad Commission's job 00:52:19.870 --> 00:52:23.570 to do these flaring permits and the Railroad Commission says 00:52:23.570 --> 00:52:26.550 it's TCEQ's job to make sure they don't violate 00:52:26.550 --> 00:52:27.960 the Clean Air Act. 00:52:27.960 --> 00:52:32.520 But within the very rule itself, rule 32 under B, 00:52:32.520 --> 00:52:35.430 you already say very explicitly that 00:52:35.430 --> 00:52:38.440 you must follow the Clean Air Act. 00:52:38.440 --> 00:52:41.160 And we believe and this is Sierra club's perspective 00:52:41.160 --> 00:52:44.140 that in some cases, some of the flaring permits 00:52:44.140 --> 00:52:46.810 you're giving are violating the Clean Air Act. 00:52:46.810 --> 00:52:50.260 How, because the amount of pollution, 00:52:50.260 --> 00:52:53.290 not the actual methane, but associated byproducts 00:52:53.290 --> 00:52:55.950 like sulfur dioxide and hydrogen sulfide 00:52:55.950 --> 00:52:59.540 are exceeding the permit levels of the very operators. 00:52:59.540 --> 00:53:02.080 And so as a first step, we think there should be 00:53:02.080 --> 00:53:04.740 some sort of a check to make sure the amounts 00:53:04.740 --> 00:53:07.840 and volumes that that are being flared do not 00:53:07.840 --> 00:53:10.130 actually violate the Clean Air Act. 00:53:10.130 --> 00:53:13.540 And we think it's easy to create a check with TCEQ 00:53:13.540 --> 00:53:16.290 to make sure that the amounts that could be flared would 00:53:16.290 --> 00:53:19.670 not violate their permit levels. 00:53:19.670 --> 00:53:21.260 We think it's a serious problem. 00:53:21.260 --> 00:53:23.033 So we agree with EDF 00:53:24.610 --> 00:53:27.560 on setting a long-term goal, 00:53:27.560 --> 00:53:29.860 we think there are steps you can do in the meantime 00:53:29.860 --> 00:53:31.880 to help us get there. 00:53:31.880 --> 00:53:35.140 One is, let's end this practice 00:53:35.140 --> 00:53:39.140 of extending permits past the six months. 00:53:39.140 --> 00:53:42.550 Six months is in the rule but as a practice, 00:53:42.550 --> 00:53:46.320 the Commission has been granting folks flaring permits 00:53:46.320 --> 00:53:48.010 for a year or two years. 00:53:48.010 --> 00:53:50.810 So we think six months should really be enough time 00:53:50.810 --> 00:53:53.870 for anyone to get their house in order 00:53:53.870 --> 00:53:55.493 and find infrastructure. 00:53:56.400 --> 00:53:59.140 We think you could set an overall state-wide goal 00:53:59.140 --> 00:54:02.100 for the state of 2% 00:54:02.100 --> 00:54:05.960 and then also set individual operator goals 00:54:05.960 --> 00:54:09.090 so that within a year or two, we're not allowing flaring 00:54:09.090 --> 00:54:12.040 of more than five or 10% of the total amount 00:54:12.040 --> 00:54:13.850 of gas produced for those operators. 00:54:13.850 --> 00:54:16.880 That's something that Commissioner Sitton mentioned 00:54:16.880 --> 00:54:19.620 in his report, as it's possible for you guys 00:54:19.620 --> 00:54:21.910 to set overall goals and then goals 00:54:21.910 --> 00:54:24.300 for individual operators. 00:54:24.300 --> 00:54:28.070 We think you could require vapor recovery units 00:54:28.070 --> 00:54:32.810 on storage tanks, which would nearly eliminate flaring 00:54:32.810 --> 00:54:35.930 on storage tanks, which could be important. 00:54:35.930 --> 00:54:40.140 The six point I'll make is inspections and enforcement. 00:54:40.140 --> 00:54:44.480 You guys have done a good job in terms of getting 00:54:44.480 --> 00:54:46.610 more inspectors and increasing 00:54:46.610 --> 00:54:48.730 the amount of inspections you're doing. 00:54:48.730 --> 00:54:53.730 But we could say for those who are getting a 32H exception, 00:54:55.110 --> 00:54:57.660 that an extra inspection is required to make sure they're 00:54:57.660 --> 00:55:01.570 actually flaring correctly and meeting the parameters, 00:55:01.570 --> 00:55:03.490 that is something we could do. 00:55:03.490 --> 00:55:07.090 We do agree with the decision you just adopted, 00:55:07.090 --> 00:55:08.370 the Enforcement Report. 00:55:08.370 --> 00:55:10.650 We agree that you should look at drone technology. 00:55:10.650 --> 00:55:14.710 That can be very important so we're supportive of that. 00:55:14.710 --> 00:55:17.690 And we do want you to use your full enforcement power 00:55:17.690 --> 00:55:20.703 for those folks who are violating their permit limits, 00:55:21.570 --> 00:55:24.990 or either exceeding the limits or venting the gas. 00:55:24.990 --> 00:55:27.240 Let's be strong 00:55:28.170 --> 00:55:30.140 and send a message to the industry. 00:55:30.140 --> 00:55:31.540 Aligned with two more points, 00:55:31.540 --> 00:55:34.300 which are more on the incentive side, 00:55:34.300 --> 00:55:38.830 you guys, again, under Chapter 91 are required 00:55:38.830 --> 00:55:42.090 to come up with programs for waste minimization 00:55:42.090 --> 00:55:44.400 and you've done that on your website. 00:55:44.400 --> 00:55:46.210 I don't see that you've done it specific 00:55:46.210 --> 00:55:47.330 to the issue of flaring. 00:55:47.330 --> 00:55:50.400 So I think you could work with industry and others 00:55:50.400 --> 00:55:53.300 to put best practices and provide trainings 00:55:53.300 --> 00:55:55.480 to operators about what are the best practices 00:55:55.480 --> 00:55:59.070 for hopefully avoiding routine flooring altogether, 00:55:59.070 --> 00:56:02.230 or where you can't, what are some of the best practices. 00:56:02.230 --> 00:56:03.330 And finally I'll mention, 00:56:03.330 --> 00:56:05.150 and this is really a legislative issue, 00:56:05.150 --> 00:56:07.760 but I worked with a number of people, 00:56:07.760 --> 00:56:11.550 including at some of the oil and gas associations 00:56:11.550 --> 00:56:16.250 to create a program within the Texas Emission Reduction Plan 00:56:16.250 --> 00:56:19.640 for a new implementation technology 00:56:19.640 --> 00:56:21.950 that includes the oil and gas fields. 00:56:21.950 --> 00:56:23.930 We believe that program, 00:56:23.930 --> 00:56:26.320 it's got a very little amount of money in it. 00:56:26.320 --> 00:56:28.380 We believe working with the Texas legislature 00:56:28.380 --> 00:56:32.020 we could expand that program and make incentives available 00:56:32.020 --> 00:56:35.020 to operators who go beyond the law 00:56:35.020 --> 00:56:38.110 to clean up their existing or new sites 00:56:38.110 --> 00:56:42.190 and avoid flaring, venting and methane emissions overall. 00:56:42.190 --> 00:56:46.200 And so I do think there's a role for regulation, 00:56:46.200 --> 00:56:49.420 enforcement and incentives to help us with these problems. 00:56:49.420 --> 00:56:50.970 And with that, sorry, I went on a little long, 00:56:50.970 --> 00:56:52.880 with that I'll end my comments 00:56:52.880 --> 00:56:54.570 and happy to answer questions. 00:56:54.570 --> 00:56:55.920 Okay, thank you, gentlemen. 00:56:55.920 --> 00:56:58.370 Members, do you have any questions of this panel? 00:57:00.730 --> 00:57:02.500 Yes, I've got a question. 00:57:02.500 --> 00:57:03.333 Mr. Sitton. 00:57:05.600 --> 00:57:08.743 Gents, I appreciate your, Trammell, Cyrus, Colin, 00:57:08.743 --> 00:57:11.060 I appreciate your well thought out comments 00:57:12.250 --> 00:57:14.470 and I appreciate the fact that, 00:57:14.470 --> 00:57:16.380 especially in the age that we're in today, 00:57:16.380 --> 00:57:17.660 we're all being really thoughtful about 00:57:17.660 --> 00:57:19.913 how to make changes like this. 00:57:21.910 --> 00:57:24.410 Cyrus, in particular I really appreciated 00:57:24.410 --> 00:57:26.680 your level of technical detail, you went to several 00:57:26.680 --> 00:57:29.040 of our rules and talked about what our abilities are, 00:57:29.040 --> 00:57:31.520 and we've all spent some time wrapping 00:57:31.520 --> 00:57:32.620 our heads around that. 00:57:34.040 --> 00:57:36.837 Let me ask you a question and you brought up specifically, 00:57:36.837 --> 00:57:39.750 you know, pollutants other than methane 00:57:39.750 --> 00:57:42.460 and combusting methane, and you mentioned sulfur dioxide 00:57:42.460 --> 00:57:43.850 and one other one, I don't remember 00:57:43.850 --> 00:57:46.840 which other one you mentioned it might be, (clears throat) 00:57:46.840 --> 00:57:50.070 you know, might be specific pollutants that are listed 00:57:50.070 --> 00:57:54.556 as such outside of normal organic substances 00:57:54.556 --> 00:57:57.670 like methane or CO2, 00:57:57.670 --> 00:57:59.440 let's assume that those were handled. 00:57:59.440 --> 00:58:02.390 So that is a good issue but let's park that 00:58:02.390 --> 00:58:05.350 for just a second and go back to simply 00:58:05.350 --> 00:58:07.440 the combustion of methane. 00:58:07.440 --> 00:58:08.590 And here's my question. 00:58:10.090 --> 00:58:13.600 You mentioned like vapor recovery units on storage tanks. 00:58:13.600 --> 00:58:15.900 Give me your thoughts on 00:58:15.900 --> 00:58:19.240 how we should consider the economics. 00:58:19.240 --> 00:58:20.750 Say for example, storage tanks, 00:58:20.750 --> 00:58:22.360 where you're talking very low amounts 00:58:22.360 --> 00:58:23.540 of natural gas leak came up, 00:58:23.540 --> 00:58:26.750 we could require vapor recovery units, 00:58:26.750 --> 00:58:29.560 but the economics of that would, there are lots 00:58:29.560 --> 00:58:31.690 of situations where the economics would never play out. 00:58:31.690 --> 00:58:34.940 So we would be asking a company to spend, 00:58:34.940 --> 00:58:38.180 you know, or even capturing in vapor recover units 00:58:38.180 --> 00:58:40.730 or something, we'll be asking a companies to spend millions 00:58:40.730 --> 00:58:43.200 when the gas that can be captured is worth thousands, 00:58:43.200 --> 00:58:46.690 I mean, I'm just curious your thoughts on this. 00:58:46.690 --> 00:58:49.000 So there is always a balance. 00:58:49.000 --> 00:58:53.360 I will say that without, I'll get to your specific question, 00:58:53.360 --> 00:58:54.970 I mean, a number of states, 00:58:54.970 --> 00:58:57.790 Texas is not the only oil and gas producing state. 00:58:57.790 --> 00:59:02.197 You know, we're the biggest. We're number one. 00:59:03.476 --> 00:59:05.060 We're the biggest producer 00:59:05.060 --> 00:59:06.490 and the biggest polluter in my view. 00:59:06.490 --> 00:59:10.840 But other States, New Mexico, as you may know, 00:59:10.840 --> 00:59:13.227 is going through a process where they're looking at methane 00:59:13.227 --> 00:59:15.610 and flaring and they're in the middle of that process, 00:59:15.610 --> 00:59:16.710 they haven't finished. 00:59:17.740 --> 00:59:21.160 Wyoming and Colorado is now looking at existing sources, 00:59:21.160 --> 00:59:23.770 they've already handled new sources. 00:59:23.770 --> 00:59:25.924 And so I think this is something, a number of states 00:59:25.924 --> 00:59:29.930 are trying to figure out and struggling with, 00:59:29.930 --> 00:59:31.040 what's the right level 00:59:31.040 --> 00:59:34.190 of environmental regulation versus economics. 00:59:34.190 --> 00:59:36.260 But you know, I work for Sierra Club, 00:59:36.260 --> 00:59:37.863 so that's where I'm coming from. 00:59:39.030 --> 00:59:42.740 And my feeling is if you're an industry 00:59:42.740 --> 00:59:44.533 and you have storage tanks, 00:59:45.739 --> 00:59:48.930 particularly storage tanks that may be located close to 00:59:48.930 --> 00:59:52.373 the workers or communities or schools, 00:59:53.340 --> 00:59:55.850 we should be recovering that vapor, we should not allow 00:59:55.850 --> 00:59:59.720 that to impact nearby communities or ultimately our climate. 00:59:59.720 --> 01:00:02.910 So again, I don't run an oil and gas company, 01:00:02.910 --> 01:00:06.190 so it's hard for me to know the economics, 01:00:06.190 --> 01:00:10.340 but in my view, we should be requiring vapor recovery units. 01:00:10.340 --> 01:00:13.460 And if we can't require them for everybody, 01:00:13.460 --> 01:00:17.510 if somebody wants to flare let's instead, say, no, 01:00:17.510 --> 01:00:20.520 you've got to first recover that gas. 01:00:20.520 --> 01:00:23.803 If you wanna flare at the well head, 01:00:24.690 --> 01:00:26.250 well, at least you've gotta use 01:00:26.250 --> 01:00:28.710 this pollution control equipment over here. 01:00:28.710 --> 01:00:30.750 I don't have all the answers, 01:00:30.750 --> 01:00:33.520 but I think if we were to open up the rule 01:00:33.520 --> 01:00:34.880 and start the discussion, I bet you 01:00:34.880 --> 01:00:36.590 a lot of good ideas would come out. 01:00:36.590 --> 01:00:41.150 I don't know what the right balance's exactly, 01:00:41.150 --> 01:00:44.870 but I do think, it just seems wrong to me to waste gas 01:00:44.870 --> 01:00:48.650 and allow it to sift off these storage tanks. 01:00:48.650 --> 01:00:52.580 And you know, honestly the new, you know, 01:00:52.580 --> 01:00:55.360 the newer operators who are putting in storage tanks now, 01:00:55.360 --> 01:00:56.960 for the most part, 01:00:56.960 --> 01:00:59.000 the leading operators are already doing this. 01:00:59.000 --> 01:01:02.803 So it's not, I don't think it's unreasonable. 01:01:04.760 --> 01:01:08.173 Let me ask, the question I was asking is, 01:01:09.640 --> 01:01:11.867 historically you go back for the last 100 years, 01:01:11.867 --> 01:01:15.980 our approach at the Commission has been 01:01:15.980 --> 01:01:18.750 that we consider economics in waste. 01:01:18.750 --> 01:01:21.180 And when we say, when someone says, well, hey, 01:01:21.180 --> 01:01:25.810 by 2025, we need to simply do away with flaring altogether 01:01:25.810 --> 01:01:29.720 then there is and my question to that is, 01:01:29.720 --> 01:01:31.670 okay, let's suppose we consider that, 01:01:31.670 --> 01:01:33.900 the question is, do we ignore economics? 01:01:33.900 --> 01:01:35.900 Do we say it doesn't matter if we're asking you 01:01:35.900 --> 01:01:40.510 to spend millions to prevent, on the spectrum 01:01:41.430 --> 01:01:43.000 that, no, do you believe that we should 01:01:43.000 --> 01:01:44.000 just ignore economics 01:01:44.000 --> 01:01:46.960 and only consider the molecules and you can go away 01:01:46.960 --> 01:01:50.660 from tanks or talk about flanges and other very small areas. 01:01:50.660 --> 01:01:51.940 We're talking very small amounts of gas, 01:01:51.940 --> 01:01:55.780 or should we take into account economics and consider when, 01:01:55.780 --> 01:01:58.190 yeah, sometimes it just doesn't make sense to talk about 01:01:58.190 --> 01:02:00.430 such a small amount of gas and such a large cost 01:02:00.430 --> 01:02:02.290 that we should permit that. 01:02:02.290 --> 01:02:04.523 Or do you think that we should ignore economics? 01:02:05.940 --> 01:02:07.830 I don't think I'm asking the Railroad Commission 01:02:07.830 --> 01:02:12.770 to ignore economics, but I would also ask you to consider 01:02:15.080 --> 01:02:18.547 the impacts of not dealing with methane pollution 01:02:18.547 --> 01:02:19.430 and other pollutants. 01:02:19.430 --> 01:02:22.760 The other pollutants I mentioned were sulfur dioxide 01:02:22.760 --> 01:02:24.380 and hydrogen sulfide, 01:02:24.380 --> 01:02:27.320 and also in lower amounts, nitrogen oxide. 01:02:27.320 --> 01:02:31.400 And I do not want the Railroad Commission to become TCEQ, 01:02:31.400 --> 01:02:33.720 that's not your job, but what I'm suggesting 01:02:33.720 --> 01:02:36.610 is there should be some sort of a check with TCEQ. 01:02:36.610 --> 01:02:41.270 Because what happens is operators flare 01:02:41.270 --> 01:02:44.250 because you've given them the permission to flair. 01:02:44.250 --> 01:02:47.790 They then report that to TCEQ as upset emissions. 01:02:47.790 --> 01:02:49.840 And if you look at the total amount of pollutants, 01:02:49.840 --> 01:02:54.810 they're often busting through their normal pollution limits. 01:02:54.810 --> 01:02:59.703 And we just think that there has to be some sort of check. 01:03:00.640 --> 01:03:03.370 Commissioner, if you don't mind if I jump in 01:03:03.370 --> 01:03:04.963 on the economics question, 01:03:06.300 --> 01:03:09.130 I mean, as you know, there's different timeframes, right? 01:03:09.130 --> 01:03:10.840 To look at economics. 01:03:10.840 --> 01:03:14.050 I think in my discussions with industry on flaring, 01:03:14.050 --> 01:03:18.237 a vast majority of the gas capture technologies 01:03:18.237 --> 01:03:21.880 they admittedly have an upfront capital costs, 01:03:21.880 --> 01:03:25.340 end up having a relatively decent return on investment. 01:03:25.340 --> 01:03:27.300 And, you know, I understand that, 01:03:27.300 --> 01:03:30.070 that can be a burden on smaller operators. (clears throat) 01:03:30.070 --> 01:03:32.610 But to Cyrus's point, I think if we started to have 01:03:32.610 --> 01:03:36.012 these discussions, we'd learned from industry quite a bit 01:03:36.012 --> 01:03:40.360 more about the economics specifically, I'm not surprised, 01:03:40.360 --> 01:03:42.170 a lot of them are hesitant to share 01:03:42.170 --> 01:03:44.790 that kind of information, you know, for competitive reasons 01:03:44.790 --> 01:03:47.640 but I think what we'd find out is quite a bit of them have 01:03:47.640 --> 01:03:49.990 a return on investment that's not unreasonable. 01:03:52.410 --> 01:03:53.660 Let me be candid, I mean, 01:03:53.660 --> 01:03:55.700 we're not here to get my opinions, we're here to get yours, 01:03:55.700 --> 01:03:58.720 but I believe that there are opportunities 01:03:58.720 --> 01:04:00.010 and I like the way Trammell, put it. 01:04:00.010 --> 01:04:01.350 I think there is, especially in 01:04:01.350 --> 01:04:04.425 a challenging price environment, there's a temptation 01:04:04.425 --> 01:04:08.770 for some operators to make short-term decisions 01:04:08.770 --> 01:04:10.911 and miss the long-term opportunities. 01:04:10.911 --> 01:04:12.090 I think that there's absolutely opportunity there. 01:04:12.090 --> 01:04:17.010 My question is when we start talking about black 01:04:17.010 --> 01:04:19.230 and white ultimatums, like zero flaring 01:04:19.230 --> 01:04:22.110 by a certain timeline, then the message that, 01:04:22.110 --> 01:04:23.550 that sends is to ignore economics. 01:04:23.550 --> 01:04:25.420 So that's why I'm asking, in principle, 01:04:25.420 --> 01:04:27.840 should we consider economics or not? 01:04:27.840 --> 01:04:31.760 It sounds like, Colin, you didn't say this, 01:04:31.760 --> 01:04:33.020 but go back to it, Cyrus said, it sounds like 01:04:33.020 --> 01:04:35.250 you're not saying that we should ignore economics, 01:04:35.250 --> 01:04:39.430 simply that the economics might be favorable 01:04:39.430 --> 01:04:42.360 for some instances, in which case we could, 01:04:42.360 --> 01:04:43.260 I don't wanna put words in your mouth, 01:04:43.260 --> 01:04:46.760 sounds what you're saying, we could change our rules 01:04:46.760 --> 01:04:48.330 that would not have a negative effect 01:04:48.330 --> 01:04:49.860 on economics in the long run. 01:04:49.860 --> 01:04:51.340 That's your speculation. 01:04:51.340 --> 01:04:53.800 I think it just comes down to a matter of reasonableness 01:04:53.800 --> 01:04:57.210 and what you mean by interpreting economics. 01:04:57.210 --> 01:05:00.110 Like for instance, there's been an argument recently about 01:05:01.200 --> 01:05:03.690 when you're considering economics, 01:05:03.690 --> 01:05:05.640 do you include the oil or just the gas? 01:05:05.640 --> 01:05:08.470 I mean, you know, there was a lawsuit filed, 01:05:08.470 --> 01:05:09.940 an active lawsuit over that. 01:05:09.940 --> 01:05:14.790 So, you know, that's someone asking a different way 01:05:14.790 --> 01:05:16.260 of interpreting the economics. 01:05:16.260 --> 01:05:19.450 So I think you're gonna get into those sorts of questions, 01:05:19.450 --> 01:05:21.329 it's not simply sort of a black and white, 01:05:21.329 --> 01:05:23.380 do we consider economics or not? 01:05:23.380 --> 01:05:25.760 Yes, but how do we look at economics 01:05:25.760 --> 01:05:28.110 and how is that sort of framed in the big picture? 01:05:28.110 --> 01:05:31.210 And yes, there are going to be decisions that are made 01:05:31.210 --> 01:05:34.790 that cost operators money, we do that all the time. 01:05:34.790 --> 01:05:38.170 And we've done it historically in oil and gas regulations. 01:05:38.170 --> 01:05:41.120 And it's sort of the history of regulations of industry 01:05:41.120 --> 01:05:43.640 in general, we have a fight over 01:05:43.640 --> 01:05:45.600 how much this is gonna cost, 01:05:45.600 --> 01:05:47.620 environmentalist and others say one thing, 01:05:47.620 --> 01:05:50.600 industry has another, eventually technology 01:05:50.600 --> 01:05:54.480 and innovation end up making a lot of these arguments moot. 01:05:54.480 --> 01:05:57.180 And I suspect that we're headed that way pretty quickly 01:05:57.180 --> 01:05:58.540 when it comes to flaring, 01:05:58.540 --> 01:06:03.380 as well as other gas capture circumstances. 01:06:03.380 --> 01:06:05.790 And don't forget my last point, which were, 01:06:05.790 --> 01:06:08.210 my last two points, which is one, 01:06:08.210 --> 01:06:11.610 the Commission absolutely can also provide best practices 01:06:11.610 --> 01:06:14.765 and training to help industry 01:06:14.765 --> 01:06:18.630 and the leading industry can help other industry on this. 01:06:18.630 --> 01:06:20.740 Obviously that's hard in a competitive environment, 01:06:20.740 --> 01:06:24.340 but also we do have incentive programs at the state 01:06:24.340 --> 01:06:26.250 through CHAP that could be expanded. 01:06:26.250 --> 01:06:30.500 So obviously we wouldn't wanna give industry money 01:06:30.500 --> 01:06:33.180 for just meeting the rules, but to the extent 01:06:33.180 --> 01:06:36.260 we have incentive programs where companies are willing 01:06:36.260 --> 01:06:38.590 to go beyond the current rules, I think 01:06:38.590 --> 01:06:40.790 that's something that we'd be supportive of. 01:06:45.910 --> 01:06:47.510 Any further questions members? 01:06:49.300 --> 01:06:52.427 Okay, one question I have just to the panel, 01:06:52.427 --> 01:06:54.880 one of our big problems is of course the takeaway 01:06:55.750 --> 01:06:57.153 and doing such, 01:06:58.278 --> 01:07:02.590 would there be significant opposition from your groups 01:07:02.590 --> 01:07:05.290 for additional pipeline capacity 01:07:05.290 --> 01:07:08.730 to the LNG facility construction we're doing 01:07:08.730 --> 01:07:12.250 in order to, you know, provide a means that economically 01:07:12.250 --> 01:07:16.857 we could use this gas some more profitably 01:07:17.710 --> 01:07:21.260 and in a better manner, but it would require more pipelines 01:07:21.260 --> 01:07:23.890 and to make sure these LNG facilities we're planning 01:07:23.890 --> 01:07:26.520 to export from become more functional. 01:07:26.520 --> 01:07:29.173 Is there objection in that from your groups? 01:07:30.430 --> 01:07:32.670 I can only speak for the Sierra Club 01:07:32.670 --> 01:07:34.873 and I'll just say, I'll admit there is. 01:07:36.110 --> 01:07:38.970 We have been opposing those LNG facilities 01:07:39.940 --> 01:07:43.650 because of the overall climate impact of... 01:07:45.650 --> 01:07:49.490 Exporting gas overseas, burning it overseas. 01:07:49.490 --> 01:07:52.160 So I'll just say we have been opposing 01:07:52.160 --> 01:07:55.260 some of the major pipelines to those LNG facilities. 01:07:55.260 --> 01:07:58.100 So, you know, that's the organization I work for, 01:07:58.100 --> 01:07:59.320 that's our position. 01:07:59.320 --> 01:08:03.710 I don't know if that's a EDF's position. 01:08:03.710 --> 01:08:05.840 So that's not necessarily because we 01:08:05.840 --> 01:08:08.900 or the United States are doing something wrong, is 01:08:08.900 --> 01:08:12.370 you're not trusting the use of that 01:08:12.370 --> 01:08:15.040 to those we export to, is that correct? 01:08:15.040 --> 01:08:16.750 It's the overall impacts. 01:08:16.750 --> 01:08:20.360 So, and part of that, honestly, 01:08:20.360 --> 01:08:24.080 part of those overall impacts are all of the flaring 01:08:24.080 --> 01:08:25.890 and fugitive methane emissions. 01:08:25.890 --> 01:08:29.430 If we were to solve the problems in the oil field, 01:08:29.430 --> 01:08:32.490 that would lessen the impacts 01:08:32.490 --> 01:08:34.700 of that pollution overall, right? 01:08:34.700 --> 01:08:39.340 If we could get to zero, zero flaring, zero emissions 01:08:39.340 --> 01:08:44.280 in the oil and gas field, that would make those products 01:08:44.280 --> 01:08:46.960 much cleaner than they are today in terms of their impact. 01:08:46.960 --> 01:08:49.840 Okay, so you're saying it might be more acceptable 01:08:49.840 --> 01:08:54.080 if the pipelines and LNG, we reduce the flaring, 01:08:54.080 --> 01:08:57.200 then that would, you know, if did one, 01:08:57.200 --> 01:09:00.520 if that accomplishes one, you all might be more friendly 01:09:00.520 --> 01:09:04.210 toward us allowing the pipelines and the LNG? 01:09:04.210 --> 01:09:05.892 I can't speak for the Board of directors 01:09:05.892 --> 01:09:07.290 of the Sierra Club, 01:09:07.290 --> 01:09:09.564 so I think I'll just be quiet on that one. 01:09:09.564 --> 01:09:10.397 Okay. 01:09:11.551 --> 01:09:12.943 Any other statements? 01:09:15.750 --> 01:09:18.290 Okay, very good though. 01:09:18.290 --> 01:09:19.810 Gentlemen, I thank you, 01:09:19.810 --> 01:09:23.830 Mr. Crow, Mr. Leyden and Mr. Reed, I thank you 01:09:23.830 --> 01:09:26.960 for your excellent presentation and 01:09:27.880 --> 01:09:30.130 the Railroad Commission is definitely concerned 01:09:30.130 --> 01:09:32.670 about this issue and appreciate y'all's input 01:09:32.670 --> 01:09:35.460 and hope you will continue to voice your opinion to us. 01:09:35.460 --> 01:09:38.300 So we make the best, I know there is no such a thing, 01:09:38.300 --> 01:09:41.521 in most cases there is a perfect decision for everybody 01:09:41.521 --> 01:09:44.040 so this is gonna be quite a large issue, 01:09:44.040 --> 01:09:46.260 that we are very much wanting everybody on Board 01:09:46.260 --> 01:09:49.530 to make sure we come out with the best decision possible. 01:09:49.530 --> 01:09:51.873 So thank you very much, and, 01:09:54.550 --> 01:09:58.340 Callie, please call up our next group of panelists. 01:09:58.340 --> 01:10:00.300 Okay, thank you. 01:10:00.300 --> 01:10:01.770 The second panel will be oil 01:10:01.770 --> 01:10:03.883 and gas companies, and operators. 01:10:05.150 --> 01:10:08.420 Kirk Edwards, with Latigo Petroleum, 01:10:08.420 --> 01:10:10.850 Stephanie Reed, with Parsley Energy 01:10:10.850 --> 01:10:15.480 and Mike Starrett, with Occidental Petroleum. 01:10:15.480 --> 01:10:19.730 Kirk, with Latigo Petroleum will be presenting at this time. 01:10:19.730 --> 01:10:22.310 Kirk, you are invited to speak. 01:10:22.310 --> 01:10:24.960 Thank you, Callie, can you see and hear me okay? 01:10:24.960 --> 01:10:26.801 We can and thank you. 01:10:26.801 --> 01:10:27.634 Great, thank you. 01:10:27.634 --> 01:10:28.850 For the records, I'm Kirk Edwards, 01:10:28.850 --> 01:10:32.080 President of Latigo Petroleum here, Odessa. 01:10:32.080 --> 01:10:33.653 Thank you, Chairman Christian, 01:10:35.220 --> 01:10:37.350 Commissioners Craddick and Sitton, for having me today. 01:10:37.350 --> 01:10:38.650 I just wanna read you 01:10:38.650 --> 01:10:41.640 the Texas Railroad Commission mission statement right quick. 01:10:41.640 --> 01:10:44.430 Our mission is to serve Texas power stewardship 01:10:44.430 --> 01:10:46.690 of natural resources and the environment, 01:10:46.690 --> 01:10:49.370 our concern for personal and community safety, 01:10:49.370 --> 01:10:51.100 and our support of enhanced development 01:10:51.100 --> 01:10:54.093 and economic vitality for the benefit of Texans. 01:10:55.090 --> 01:10:57.170 In order to reduce the flaring of newly drilled wells 01:10:57.170 --> 01:11:00.170 in the Permian basin and other areas of Texas, 01:11:00.170 --> 01:11:01.530 I believe the Railroad Commission 01:11:01.530 --> 01:11:04.380 of Texas should immediately study the implementation 01:11:04.380 --> 01:11:07.270 of limiting production land rules in areas 01:11:07.270 --> 01:11:10.260 where there is no gas plant capacity 01:11:10.260 --> 01:11:13.100 to take it in the newly drilled wells gas. 01:11:13.100 --> 01:11:15.290 In a situation where an operator is not drilling 01:11:15.290 --> 01:11:18.680 the first well in a new field that has a gas plant 01:11:18.680 --> 01:11:20.290 that's currently taking gas 01:11:20.290 --> 01:11:23.380 from the operator's gathering system, I would pose 01:11:23.380 --> 01:11:27.810 that an operator that permits well after say July 1st, 2020, 01:11:27.810 --> 01:11:30.600 that has no market because of plant capacity 01:11:30.600 --> 01:11:34.610 for its natural gas be placed in an allowable situation. 01:11:34.610 --> 01:11:36.940 The Railroad Commission would then have the authority 01:11:36.940 --> 01:11:39.087 to limit the calendar days an operator can produce 01:11:39.087 --> 01:11:41.253 in the well, along with any other wells 01:11:41.253 --> 01:11:44.360 that operator has going into that gas plant. 01:11:44.360 --> 01:11:47.110 This allowable mechanism would last until 01:11:47.110 --> 01:11:50.190 the plant can take all the room, has the room 01:11:50.190 --> 01:11:52.350 for all the operators wells natural gas 01:11:52.350 --> 01:11:55.340 that are connected to that one gas plant. 01:11:55.340 --> 01:11:57.050 In a situation where new wells are drilled 01:11:57.050 --> 01:12:01.730 in an existing field with no immediate gas plant access, 01:12:01.730 --> 01:12:03.440 I would request the Commission and only allow 01:12:03.440 --> 01:12:06.680 the maximum number of dice for that operator to flare 01:12:06.680 --> 01:12:10.530 it's natural gas production to 90 days with no extensions 01:12:10.530 --> 01:12:12.690 and the operator must then shut the well 01:12:12.690 --> 01:12:14.330 until an adequate market is found 01:12:14.330 --> 01:12:16.483 for the well to produce into. 01:12:17.340 --> 01:12:19.870 The reenactment of allowables in these unique cases 01:12:19.870 --> 01:12:23.490 where there's no gas plant capacity will immediately stop 01:12:23.490 --> 01:12:27.120 the current waste of our precious natural gas commodity 01:12:27.120 --> 01:12:29.370 and at the same time increase the safety 01:12:29.370 --> 01:12:30.910 in our oil and gas fields 01:12:30.910 --> 01:12:35.230 for all the well that were drilled after July 1st, 2020. 01:12:35.230 --> 01:12:37.500 This will also allow for the initial recovery 01:12:37.500 --> 01:12:39.940 of the natural gas class in certain areas, 01:12:39.940 --> 01:12:43.360 and they are bound state taxes for county schools 01:12:43.360 --> 01:12:45.440 and the State of Texas overall. 01:12:45.440 --> 01:12:47.240 Together these three accomplishments, 01:12:47.240 --> 01:12:49.230 the accomplishments fit perfectly into 01:12:49.230 --> 01:12:51.870 the Railroad Commission mission statement I quoted earlier. 01:12:51.870 --> 01:12:54.377 Wells permitted before July 1st, 2020 and completed, 01:12:54.377 --> 01:12:57.800 and producing say before October 1st, 2020, 01:12:57.800 --> 01:13:01.260 will be grandfathered to flare as current statutes allow. 01:13:01.260 --> 01:13:04.040 So no negative economics will affect any well 01:13:04.040 --> 01:13:07.070 that has already been permitted, drilled and completed 01:13:07.070 --> 01:13:08.610 before that timeframe. 01:13:08.610 --> 01:13:10.310 But on these grandfathers wells, 01:13:10.310 --> 01:13:12.523 the operators should not be allowed 01:13:12.523 --> 01:13:15.020 an unlimited number for flaring stitches 01:13:15.020 --> 01:13:16.820 without showing some deadline 01:13:16.820 --> 01:13:19.760 of getting the wells natural gas to the market. 01:13:19.760 --> 01:13:21.770 After agreeing to deadline, the operator should 01:13:21.770 --> 01:13:23.340 then shut in their well, if they've 01:13:23.340 --> 01:13:27.420 not secured natural gas takeaway for the newly drilled well. 01:13:27.420 --> 01:13:29.560 And in this, I would say it does not apply, 01:13:29.560 --> 01:13:31.860 this does not apply to wells designated 01:13:31.860 --> 01:13:35.097 as new-field wildcat Wells as defined by the Commission. 01:13:35.097 --> 01:13:36.731 And thank you for allowing me to speak to you today 01:13:36.731 --> 01:13:39.290 and I'll take any questions you might have 01:13:39.290 --> 01:13:40.610 after the other speakers. 01:13:40.610 --> 01:13:41.443 Thank you. 01:13:43.570 --> 01:13:44.980 Thank you, Kirk. 01:13:44.980 --> 01:13:45.820 Stephanie Reed, 01:13:45.820 --> 01:13:48.420 with Parsley Energy will be presenting at this time. 01:13:48.420 --> 01:13:50.643 Stephanie, you are invited to speak. 01:13:52.010 --> 01:13:53.470 Good morning, I'm Stephanie Reed, 01:13:53.470 --> 01:13:56.510 of Parsley Energy speaking on item 311. 01:13:56.510 --> 01:13:58.540 Chairman Christian, Commissioner Craddick, 01:13:58.540 --> 01:14:00.250 and Commissioner Sitton, I wanna thank you 01:14:00.250 --> 01:14:02.760 for the opportunity to provide comments today 01:14:02.760 --> 01:14:04.590 on this important issue of flaring. 01:14:04.590 --> 01:14:07.530 First, I'd like to start by thanking you three 01:14:07.530 --> 01:14:09.660 and the staff of the Railroad Commission for all the work 01:14:09.660 --> 01:14:12.150 that you've already done on the issue of flaring, 01:14:12.150 --> 01:14:14.900 elevating this discussion from administrative staff, 01:14:14.900 --> 01:14:18.230 hearings examiners, inspectors in the field. 01:14:18.230 --> 01:14:20.100 It's evident that the entire Commission 01:14:20.100 --> 01:14:22.060 is taking the issue seriously, 01:14:22.060 --> 01:14:24.810 and it's absolutely led to reduce flaring 01:14:24.810 --> 01:14:28.040 and positive outcomes for Texas, so I thank you. 01:14:28.040 --> 01:14:30.190 At Parsley, we believe that the key 01:14:30.190 --> 01:14:33.500 to eliminating routine flaring is prioritization, 01:14:33.500 --> 01:14:35.890 foresight and advanced planning. 01:14:35.890 --> 01:14:39.260 For some historical context, Parsley flared less than 3% 01:14:39.260 --> 01:14:44.260 of total produced volumes in 2019 and in 2020 following 01:14:44.320 --> 01:14:46.670 the acquisition of a company that was flaring 01:14:46.670 --> 01:14:49.670 more than 20% at the time of acquisition, 01:14:49.670 --> 01:14:54.020 we are now as a combined company flaring less than 1% 01:14:54.020 --> 01:14:56.850 of our proforma produced volumes in June. 01:14:56.850 --> 01:14:59.750 This did not happen by accident, but rather required 01:14:59.750 --> 01:15:03.000 a methodical approach to reduce the flared volumes, 01:15:03.000 --> 01:15:05.490 including spending millions of dollars 01:15:05.490 --> 01:15:07.223 in necessary infrastructure. 01:15:08.220 --> 01:15:10.890 As producers of critical energy we recognize 01:15:10.890 --> 01:15:14.120 that it is our responsibility to minimize emissions 01:15:14.120 --> 01:15:17.640 and take proactive steps to do so each and every day. 01:15:17.640 --> 01:15:20.330 To that end, we have enacted the following steps 01:15:20.330 --> 01:15:23.170 as our roadmap to reduce emissions. 01:15:23.170 --> 01:15:26.930 First we set an aggressive corporate goal for flaring 01:15:26.930 --> 01:15:30.490 and tied that metric to our corporate compensation. 01:15:30.490 --> 01:15:33.160 This incentivizes key stakeholders and sends 01:15:33.160 --> 01:15:35.470 a very strong message of leadership. 01:15:35.470 --> 01:15:38.040 Secondly, we created more transparency 01:15:38.040 --> 01:15:41.840 around our flared volumes, both internally and externally. 01:15:41.840 --> 01:15:44.550 We issue daily reports to employees, 01:15:44.550 --> 01:15:46.770 including our executive team that outline 01:15:46.770 --> 01:15:49.840 our flaring percentage every day. 01:15:49.840 --> 01:15:52.870 These reports detail what operational occurrence led 01:15:52.870 --> 01:15:57.490 to that flare as well as a plan to mitigate that flare. 01:15:57.490 --> 01:16:00.610 And finally, we work closely with our ministering partners 01:16:00.610 --> 01:16:02.500 to ensure that takeaway is secure 01:16:02.500 --> 01:16:05.480 before we place any new wells on production. 01:16:05.480 --> 01:16:07.940 This requires advanced planning and foresight 01:16:07.940 --> 01:16:10.520 because it sometimes requires 12 to 18 months 01:16:10.520 --> 01:16:12.800 to secure a proper infrastructure. 01:16:12.800 --> 01:16:16.310 We view takeaway as a constraint and not a barrier. 01:16:16.310 --> 01:16:19.280 Ultimately we believe operating responsibly is a function 01:16:19.280 --> 01:16:22.120 of advanced planning and working with local communities 01:16:22.120 --> 01:16:24.300 and regulators to ensure we are protecting 01:16:24.300 --> 01:16:25.920 our shared environment. 01:16:25.920 --> 01:16:29.110 We understand that every operator has unique environmental 01:16:29.110 --> 01:16:31.500 and economic realities to consider, 01:16:31.500 --> 01:16:33.160 but we believe that committing 01:16:33.160 --> 01:16:37.140 to eliminating routine flaring is a critical first step. 01:16:37.140 --> 01:16:40.150 At Parsley we're proud to continue to work on this effort 01:16:40.150 --> 01:16:42.980 with TXOGA and other organizations and companies 01:16:42.980 --> 01:16:45.540 that make up the Methane and Flaring Coalition. 01:16:45.540 --> 01:16:47.510 And we look forward to continued dialogue 01:16:47.510 --> 01:16:48.650 and progress on this issue. 01:16:48.650 --> 01:16:51.073 And with that, I'm happy to take your questions. 01:16:51.940 --> 01:16:54.420 Thank you, Stephanie, I appreciate that. 01:16:54.420 --> 01:16:57.160 We're gonna hold questions to the very end. 01:16:57.160 --> 01:17:00.780 Mike Starrett, with Occidental Petroleum will be presenting 01:17:00.780 --> 01:17:02.110 at this time. 01:17:02.110 --> 01:17:03.853 Mike, you're invited to speak. 01:17:04.830 --> 01:17:07.560 Good morning, Mr. Chairman and Commissioners. 01:17:07.560 --> 01:17:10.070 Thank you for this opportunity to provide comments. 01:17:10.070 --> 01:17:11.310 My name is Mike Starrett, 01:17:11.310 --> 01:17:12.800 and I'm Occidental's Vice President 01:17:12.800 --> 01:17:14.070 of Health Safety Environment 01:17:14.070 --> 01:17:16.580 for domestic law and gas operations. 01:17:16.580 --> 01:17:18.950 Occidental's committed to reduce flaring. 01:17:18.950 --> 01:17:20.960 We were the first U.S. oil and gas company 01:17:20.960 --> 01:17:22.640 to join the World Bank Initiative 01:17:22.640 --> 01:17:26.880 to achieve zero routine flaring by 2030. 01:17:26.880 --> 01:17:29.060 We believe that achieving these goals requires 01:17:29.060 --> 01:17:31.590 that a consistent workflow process be applied 01:17:31.590 --> 01:17:33.770 to site specific challenges presented 01:17:33.770 --> 01:17:35.850 at each operating locations. 01:17:35.850 --> 01:17:38.250 While we were taking action to reduce flaring, 01:17:38.250 --> 01:17:40.490 we are also preparing our business for the future 01:17:40.490 --> 01:17:43.170 to sustainably operate by addressing direct 01:17:43.170 --> 01:17:44.880 and indirect emissions. 01:17:44.880 --> 01:17:48.190 Our world carbon ventures team is taking a leadership role 01:17:48.190 --> 01:17:50.420 in creating more carbon solutions. 01:17:50.420 --> 01:17:52.300 Our teams are working with organizations 01:17:52.300 --> 01:17:55.350 from various sectors to develop carbon capture, use 01:17:55.350 --> 01:17:57.760 and sequestration projects. 01:17:57.760 --> 01:18:00.770 These projects will source manmade CO2 for use 01:18:00.770 --> 01:18:02.560 in enhanced oil recovery to produce 01:18:02.560 --> 01:18:05.770 a lower carbon for carbon neutral barrel of oil. 01:18:05.770 --> 01:18:09.110 LCV is exploring zero emission power sources 01:18:09.110 --> 01:18:11.580 and partnering with others to lower emissions. 01:18:11.580 --> 01:18:14.020 This work is being done across other industries 01:18:14.020 --> 01:18:17.640 to capture CO2 emissions and sequester them underground, 01:18:17.640 --> 01:18:19.860 and not an oil producing reservoirs. 01:18:19.860 --> 01:18:23.210 These initiatives provide a promising lower carbon future, 01:18:23.210 --> 01:18:25.520 but we know today that we must continue 01:18:25.520 --> 01:18:27.470 our work to reduce flaring. 01:18:27.470 --> 01:18:28.940 Occidental is a founding member 01:18:28.940 --> 01:18:30.690 of the Environmental Partnership, 01:18:30.690 --> 01:18:33.940 which currently consists of 83 operators representing 01:18:33.940 --> 01:18:37.150 greater than 90% of the top U.S gas producers. 01:18:37.150 --> 01:18:39.280 The partnership mission is to improve 01:18:39.280 --> 01:18:41.360 the industry's environmental performance. 01:18:41.360 --> 01:18:43.280 In March Occidental sponsored 01:18:43.280 --> 01:18:46.650 a flaring best practice workshop in Midland. 01:18:46.650 --> 01:18:50.290 The process to reduce flaring requires executive commitment 01:18:50.290 --> 01:18:53.780 and employee buy-in in order to reach our goals. 01:18:53.780 --> 01:18:56.430 The four main elements of our workflow process 01:18:56.430 --> 01:18:59.550 are number one, site specific planning, 01:18:59.550 --> 01:19:02.850 which includes identifying and evaluating gas takeaway 01:19:02.850 --> 01:19:05.310 and facility design options. 01:19:05.310 --> 01:19:08.600 Number two, routine surveillance, maintenance and repair 01:19:08.600 --> 01:19:11.690 of well operations and emissions and pro-equipment. 01:19:11.690 --> 01:19:14.250 Number three, focus training for engineers 01:19:14.250 --> 01:19:15.620 and operations personnel. 01:19:15.620 --> 01:19:17.370 And number four, accurate 01:19:17.370 --> 01:19:19.910 and timely reporting of flare events. 01:19:19.910 --> 01:19:22.693 Consistent with these goals, Occidental has taken 01:19:22.693 --> 01:19:26.000 a leadership role in the Texas Methane and Flaring Coalition 01:19:26.000 --> 01:19:28.490 and is committed to continue working with industry 01:19:28.490 --> 01:19:31.840 to get solutions and best practices to minimize flaring. 01:19:31.840 --> 01:19:34.250 Occidental believes in recommendations put forward 01:19:34.250 --> 01:19:37.520 by the coalition and the Blue-Ribbon Task Force 01:19:37.520 --> 01:19:40.570 are an effective first step to improving the quality 01:19:40.570 --> 01:19:42.190 of the Commission's flare engagement, 01:19:42.190 --> 01:19:44.030 which will facilitate an understanding 01:19:44.030 --> 01:19:46.870 of two critical pieces of information. 01:19:46.870 --> 01:19:49.970 Number one, why is flaring occurring in Texas, 01:19:49.970 --> 01:19:52.810 and number two, how much flaring is occurring? 01:19:52.810 --> 01:19:55.130 Once the Commission understands these critical pieces 01:19:55.130 --> 01:19:58.030 of information, it will be well positioned to focus 01:19:58.030 --> 01:20:01.600 on specific solutions to address each issue identified. 01:20:01.600 --> 01:20:04.183 Thank you for the opportunity to provide comments. 01:20:05.240 --> 01:20:07.919 Thank you, Mike. Thank you very much. 01:20:07.919 --> 01:20:09.860 Commissioners, let's complete panel number two, 01:20:09.860 --> 01:20:12.342 are there any questions at this time? 01:20:12.342 --> 01:20:14.042 Are there any questions members? 01:20:15.640 --> 01:20:18.180 We certainly appreciate each of you for being here 01:20:18.180 --> 01:20:20.710 and appreciate, and hope that you will continue 01:20:20.710 --> 01:20:24.900 to work with us as we seek the imperfect answer 01:20:24.900 --> 01:20:26.190 that will eventually arise, 01:20:26.190 --> 01:20:28.560 but we appreciate so much the effort you've given, 01:20:28.560 --> 01:20:30.980 your companies, your individual efforts 01:20:30.980 --> 01:20:31.813 and we do appreciate it. 01:20:31.813 --> 01:20:33.460 Thank you for being with us. 01:20:33.460 --> 01:20:34.480 Thank you. Callie, please call 01:20:34.480 --> 01:20:35.823 our next panel. 01:20:36.710 --> 01:20:38.340 Yes, thank you. 01:20:38.340 --> 01:20:41.963 The third and final panel, the Oil and Gas Industry Groups. 01:20:42.810 --> 01:20:44.630 This includes, Ed Longanecker, 01:20:44.630 --> 01:20:46.790 the Texas Independent Producers 01:20:46.790 --> 01:20:50.063 and Royalty Owners Association also known as TIBRO. 01:20:51.090 --> 01:20:54.750 Todd Staples, with the Texas Oil and Gas Association. 01:20:54.750 --> 01:20:58.610 Jason Modglin, with Texas Alliance of Energy Producers 01:20:58.610 --> 01:21:00.583 and Ben Shepperd, with PBBO, 01:21:02.020 --> 01:21:04.173 say this three times fast, PBPA. 01:21:07.730 --> 01:21:10.923 Ed, thank you for being here today. 01:21:10.923 --> 01:21:14.220 We will be presenting at this time. 01:21:14.220 --> 01:21:16.040 You are invited to speak. 01:21:16.040 --> 01:21:18.780 It looks like we're still kind of transferring people on 01:21:18.780 --> 01:21:20.363 so give them just a moment. 01:21:21.930 --> 01:21:24.460 Jason, aren't you on the wrong side of the camera here, 01:21:24.460 --> 01:21:28.627 didn't you leave from this office, what's going on? 01:21:28.627 --> 01:21:30.460 Yes, sir. 01:21:30.460 --> 01:21:32.140 Congratulations to you. 01:21:32.140 --> 01:21:34.030 Thank you very much. 01:21:34.030 --> 01:21:36.519 See, now you get to be in front of us, it'll be special. 01:21:36.519 --> 01:21:38.769 (laughing) 01:21:40.670 --> 01:21:43.341 Well, Jason, maybe go on first, (laughing) 01:21:43.341 --> 01:21:44.174 give me just a moment. You brought Todd 01:21:44.174 --> 01:21:45.610 on Board, I see. 01:21:45.610 --> 01:21:49.690 Now there comes Ed, now there we go. 01:21:49.690 --> 01:21:51.310 Good morning, Ed. 01:21:51.310 --> 01:21:53.840 You can get started whenever you're ready. 01:21:53.840 --> 01:21:55.690 Thank you, good morning, Chairman Christian, 01:21:55.690 --> 01:21:59.587 and Commissioners again, for the record, Ed Longanecker. 01:21:59.587 --> 01:22:00.840 For some reason, my video, 01:22:00.840 --> 01:22:02.820 it doesn't look like it's working. 01:22:02.820 --> 01:22:03.653 I'm the president of-- 01:22:03.653 --> 01:22:04.486 Yeah, we're seeing you. 01:22:04.486 --> 01:22:07.670 Oh, you do, excellent, President of TIPRO. 01:22:07.670 --> 01:22:10.850 I appreciate the opportunity to testify today 01:22:10.850 --> 01:22:12.820 on the requested recommendations 01:22:12.820 --> 01:22:16.320 that we recently provided to the Commission for review. 01:22:16.320 --> 01:22:19.020 As you know, the organizations on this panel 01:22:19.020 --> 01:22:21.120 are working together diligently through 01:22:21.120 --> 01:22:22.740 the Blue Ribbon Task Force 01:22:22.740 --> 01:22:26.920 and the Texas Methane Flaring Coalition on this task. 01:22:26.920 --> 01:22:29.950 And I wanted to, for my remarks continue with a theme really 01:22:29.950 --> 01:22:32.520 that was addressed by the two previous panels. 01:22:32.520 --> 01:22:35.530 And that is to highlight some of the proactive efforts 01:22:35.530 --> 01:22:39.090 of the U.S. oil and gas industry to reduce energy emissions 01:22:39.090 --> 01:22:41.770 and provide just a few statistics to help illustrate, 01:22:41.770 --> 01:22:43.930 and quantify its progress. 01:22:43.930 --> 01:22:46.760 On the larger topics that energy production emissions 01:22:46.760 --> 01:22:49.140 in the environment, we clearly should recognize 01:22:49.140 --> 01:22:52.060 that our country is a leader in clean air, 01:22:52.060 --> 01:22:55.280 water and environmental stewardship, while leading 01:22:55.280 --> 01:22:57.640 the world in oil and natural gas production. 01:22:57.640 --> 01:22:59.490 Thanks to Texas, of course. 01:22:59.490 --> 01:23:02.730 In fact, methane emissions from oil and natural gas systems 01:23:02.730 --> 01:23:07.630 are down 23% since 1990, according to 2020 data 01:23:07.630 --> 01:23:10.200 from the Environmental Protection Agency. 01:23:10.200 --> 01:23:11.870 And also since 2005, 01:23:11.870 --> 01:23:14.130 total U.S. greenhouse gas emissions have dropped 01:23:14.130 --> 01:23:17.020 by 12% percent and total greenhouse gas emissions 01:23:17.020 --> 01:23:19.340 from fossil fuel combustion have decreased 01:23:19.340 --> 01:23:21.470 by approximately 15%. 01:23:21.470 --> 01:23:24.770 Increased use of natural gas to fuel power generation 01:23:24.770 --> 01:23:28.370 is also the key factor in the reduction of U.S. emissions 01:23:28.370 --> 01:23:32.360 of carbon dioxide to the lowest levels in a generation. 01:23:32.360 --> 01:23:35.830 These and other positive energy emission trends 01:23:35.830 --> 01:23:38.990 are in large part due to or attributable 01:23:38.990 --> 01:23:41.720 to voluntary actions taken by U.S. oil 01:23:41.720 --> 01:23:44.210 and natural gas companies, including investment 01:23:44.210 --> 01:23:46.710 of over $300 billion dollars 01:23:46.710 --> 01:23:49.020 in greenhouse gas mitigating technologies 01:23:49.020 --> 01:23:51.000 over the past 20 plus years. 01:23:51.000 --> 01:23:52.740 There are also numerous examples 01:23:52.740 --> 01:23:56.060 of multi-stakeholder initiatives designed to improve 01:23:56.060 --> 01:23:58.550 the environmental performance of the oil and gas industry. 01:23:58.550 --> 01:24:01.590 And Steve mentioned one, the environmental partnership, 01:24:01.590 --> 01:24:04.980 as well as one future, which are focused in part 01:24:04.980 --> 01:24:07.490 on sharing industry best practices, 01:24:07.490 --> 01:24:10.350 utilizing new technologies to reduce emissions 01:24:10.350 --> 01:24:13.270 and collectively improving environmental performance 01:24:13.270 --> 01:24:15.770 throughout the oil and gas value chain. 01:24:15.770 --> 01:24:18.040 And of course as the largest producer of oil and gas 01:24:18.040 --> 01:24:22.090 in the country, Texas operators are leading these efforts. 01:24:22.090 --> 01:24:24.440 Despite this progress of our industry 01:24:24.440 --> 01:24:26.700 and clearly measurable results, 01:24:26.700 --> 01:24:28.920 we understand that more can be done. 01:24:28.920 --> 01:24:32.030 It's this ongoing commitment and desire again, 01:24:32.030 --> 01:24:35.270 to better assess the issues related to methane emissions, 01:24:35.270 --> 01:24:39.110 flaring and industry-led solutions in our state that led to 01:24:39.110 --> 01:24:42.190 the development of the Texas Methane and Flaring Coalition. 01:24:42.190 --> 01:24:45.400 This yet again, voluntary effort comprised 01:24:45.400 --> 01:24:47.840 of the leading industry trade associations in Texas 01:24:47.840 --> 01:24:52.310 and over 40 prominent operators will help to identify 01:24:52.310 --> 01:24:55.820 and promote operational and environmental best practices 01:24:55.820 --> 01:25:00.010 to minimize flaring and methane emissions in our state. 01:25:00.010 --> 01:25:02.880 And Commissioners, this coalition has been very hard 01:25:02.880 --> 01:25:05.750 at work over the past six months and again, we were pleased 01:25:05.750 --> 01:25:08.080 to provide our report for your review, 01:25:08.080 --> 01:25:10.930 including our recommendations, and I'll let 01:25:10.930 --> 01:25:14.010 my fellow panelists touch a little on that process, 01:25:14.010 --> 01:25:17.510 some of the materials that we provided, our recommendations, 01:25:17.510 --> 01:25:20.410 as well as our next step, because we do see this 01:25:20.410 --> 01:25:23.310 as a longterm process and commitment. 01:25:23.310 --> 01:25:24.143 Thank you. 01:25:25.060 --> 01:25:27.740 Thank you, Ed, appreciate that. 01:25:27.740 --> 01:25:31.420 Todd Staples of the TXOGA will be presenting at this time. 01:25:31.420 --> 01:25:33.200 Todd, thank you for being here this morning. 01:25:33.200 --> 01:25:35.470 You are invited to speak. 01:25:35.470 --> 01:25:36.303 Thank you, Callie. 01:25:36.303 --> 01:25:38.110 Chairman Christian, Commissioner Craddick, 01:25:38.110 --> 01:25:39.830 Commissioner Sitton, thank you for allowing us 01:25:39.830 --> 01:25:41.100 to present to you today. 01:25:41.100 --> 01:25:42.530 For the record, I'm Todd Staples, 01:25:42.530 --> 01:25:45.023 President of the Texas Oil and Gas Association, 01:25:45.989 --> 01:25:49.270 the coalition that is the heart and brains 01:25:49.270 --> 01:25:51.650 of the recommendations to you today, 01:25:51.650 --> 01:25:55.260 represent truly scientists and engineers in the world. 01:25:55.260 --> 01:25:57.470 Thankfully, they're operating right here 01:25:57.470 --> 01:25:59.170 in the Lone Star State. 01:25:59.170 --> 01:26:02.790 We believe that the recommendations that are presented in 01:26:02.790 --> 01:26:07.310 the report that we're providing to you will reduce flaring. 01:26:07.310 --> 01:26:12.300 In fact, we share the goal to end routine flaring in Texas 01:26:12.300 --> 01:26:14.990 and these recommendations that lead toward that. 01:26:14.990 --> 01:26:18.620 In fact, there's a couple of key changes 01:26:18.620 --> 01:26:20.010 that I wanna highlight. 01:26:20.010 --> 01:26:23.450 The first one is that reductions in flaring will occur 01:26:23.450 --> 01:26:27.210 by reducing the administratively approved time to flare 01:26:27.210 --> 01:26:31.920 by in most cases, 50% and higher and others. 01:26:31.920 --> 01:26:34.990 And secondly, enhanced data submissions that will allow 01:26:34.990 --> 01:26:38.270 for increased accountability through the analysis 01:26:38.270 --> 01:26:41.730 of the progress of these flaring reductions. 01:26:41.730 --> 01:26:44.100 These reductions in the complete report 01:26:44.100 --> 01:26:46.100 are made available right now to the public, 01:26:46.100 --> 01:26:49.710 they're on the Texas Methane and Flaring Coalition website, 01:26:49.710 --> 01:26:53.576 Texasmethaneflaringcoalition.org, 01:26:53.576 --> 01:26:55.970 Texasmethaneflaringcoalition.org. 01:26:55.970 --> 01:26:58.980 We want everyone to have those because we need input 01:26:58.980 --> 01:27:02.130 and we need ideas, and we need to continue this progress. 01:27:02.130 --> 01:27:05.630 I wanna just real quickly touch six key elements 01:27:05.630 --> 01:27:08.960 of these recommendations that we're making to you, 01:27:08.960 --> 01:27:12.140 that we would like to work with you and other stakeholders 01:27:12.140 --> 01:27:13.940 to continue to refine. 01:27:13.940 --> 01:27:16.950 The first one, see as a proposed flaring matrix 01:27:16.950 --> 01:27:21.290 that will guide the application of Statewide Rule 32. 01:27:21.290 --> 01:27:25.480 Secondly enhancements to Statewide Rule 32 data sheet 01:27:25.480 --> 01:27:29.420 to aid the Commission in its oversight and data collection. 01:27:29.420 --> 01:27:30.960 The third element is the development 01:27:30.960 --> 01:27:33.990 of a proposed new report, (mumbles) 01:27:33.990 --> 01:27:35.680 pretty two subsequent report 01:27:35.680 --> 01:27:39.060 that will provide increased information 01:27:39.060 --> 01:27:42.600 and require submission of clear and usable data, 01:27:42.600 --> 01:27:44.960 and provide for greater accountability. 01:27:44.960 --> 01:27:48.320 The fourth thing is as a proposed updates 01:27:48.320 --> 01:27:51.420 to the production report form instructions 01:27:51.420 --> 01:27:53.430 that recommends the delineation 01:27:53.430 --> 01:27:57.380 in reporting of vented and flared volumes. 01:27:57.380 --> 01:28:00.910 Then there's an established best practices section. 01:28:00.910 --> 01:28:05.730 And then finally, a firm commitment to continually refine 01:28:05.730 --> 01:28:08.780 and assess where we are, and moving forward. 01:28:08.780 --> 01:28:13.210 This report that is submitted to you goes into deep detail 01:28:13.210 --> 01:28:15.210 about each one of these recommendations. 01:28:15.210 --> 01:28:17.480 I certainly won't jump into all of those now, 01:28:17.480 --> 01:28:18.870 but a couple of the highlights. 01:28:18.870 --> 01:28:22.200 If you look at the, what we believe is the key item 01:28:22.200 --> 01:28:24.410 in this package is the matrix, 01:28:24.410 --> 01:28:28.480 which identifies the situations when flaring is necessary 01:28:28.480 --> 01:28:31.030 and provides recommendations to the Commission 01:28:31.030 --> 01:28:34.474 for the application of rule 32, that will resolve 01:28:34.474 --> 01:28:36.180 and overall flaring reductions 01:28:36.180 --> 01:28:38.480 because of the shortened timeframe 01:28:38.480 --> 01:28:41.390 for administrative proposals of flaring. 01:28:41.390 --> 01:28:44.470 For example, if there is a lack of infrastructure 01:28:44.470 --> 01:28:48.040 or no pipeline available, there will be several options 01:28:48.040 --> 01:28:49.970 in that matrix that you can look at 01:28:49.970 --> 01:28:54.080 to reduce flaring based on the particular situation. 01:28:54.080 --> 01:28:57.620 The point is that operations are different 01:28:57.620 --> 01:28:59.400 and operators are different, 01:28:59.400 --> 01:29:03.580 but these steps will lead to reduced flaring. 01:29:03.580 --> 01:29:05.380 Importantly, a part of that 01:29:05.380 --> 01:29:08.120 is to embrace emerging technology. 01:29:08.120 --> 01:29:10.250 We believe that innovation and technology 01:29:10.250 --> 01:29:13.237 is what has made Texas the energy capital of the world, 01:29:13.237 --> 01:29:16.810 and we think that will drive environmental progress 01:29:16.810 --> 01:29:18.060 in everything that we do. 01:29:19.590 --> 01:29:22.580 The subsequent report is also an important feature. 01:29:22.580 --> 01:29:25.150 This is a new report that we're recommending 01:29:25.150 --> 01:29:26.133 to the Commission. 01:29:27.550 --> 01:29:31.440 This recognizes the technological challenges 01:29:31.440 --> 01:29:33.110 in accessing data. 01:29:33.110 --> 01:29:36.590 The report would provide actual volumes and durations 01:29:36.590 --> 01:29:40.830 of permitted flared events, 01:29:40.830 --> 01:29:43.330 subsequent to the initial permit. 01:29:43.330 --> 01:29:45.440 The goal is for the Commission to have this data 01:29:45.440 --> 01:29:50.320 in a usable format to enable us all to accomplish our goals. 01:29:50.320 --> 01:29:53.290 There are also improvements to Statewide Rule 32 data sheet 01:29:53.290 --> 01:29:55.050 that we believe will be important. 01:29:55.050 --> 01:29:59.140 And really just to wrap up this whole process, 01:29:59.140 --> 01:30:03.380 we believe that we can get to the end of routine flaring. 01:30:03.380 --> 01:30:05.590 We believe that more data is better data. 01:30:05.590 --> 01:30:06.870 It will enable the Commission 01:30:06.870 --> 01:30:10.160 to do its job easier and more efficiently. 01:30:10.160 --> 01:30:13.420 We believe that these recommendations will reduce 01:30:13.420 --> 01:30:15.490 the days of flaring in Texas. 01:30:15.490 --> 01:30:18.040 And we look forward to working with the stakeholders, 01:30:18.040 --> 01:30:20.640 with you to make certain it's done the right way. 01:30:20.640 --> 01:30:23.490 And importantly, in this process, we need to be 01:30:23.490 --> 01:30:27.210 very sensitive to enabling technology and innovation. 01:30:27.210 --> 01:30:29.330 And some of our companies have mentioned already 01:30:29.330 --> 01:30:31.530 on this presentation today that has led 01:30:31.530 --> 01:30:34.360 to tremendously good results that we want to make certain 01:30:34.360 --> 01:30:36.250 are incorporated as we move forward. 01:30:36.250 --> 01:30:38.200 Thank you for letting us present today. 01:30:39.290 --> 01:30:40.640 Thank you, Todd. 01:30:41.550 --> 01:30:43.800 Jason Modglin, with the Texas Alliance 01:30:43.800 --> 01:30:46.550 of Energy Producers will be presenting at this time. 01:30:46.550 --> 01:30:48.503 Jason, you're welcome to speak. 01:30:49.396 --> 01:30:50.229 Good morning. 01:30:50.229 --> 01:30:52.060 My name is Jason Modglin, President of 01:30:52.060 --> 01:30:53.980 the Texas Alliance of Energy Producers. 01:30:53.980 --> 01:30:55.770 Chairman Christian, Commissioner Craddick, 01:30:55.770 --> 01:30:58.230 and Commissioner Sitton, thank you for the opportunity 01:30:58.230 --> 01:31:01.320 to provide comments today regarding flaring and venting. 01:31:01.320 --> 01:31:03.840 The Texas Alliance of Energy Producers represents 01:31:03.840 --> 01:31:07.070 nearly 3000 individuals and member companies 01:31:07.070 --> 01:31:10.340 from across Texas with a focus on independent operators 01:31:10.340 --> 01:31:12.100 from small family owned businesses 01:31:12.100 --> 01:31:14.300 to large publicly traded companies. 01:31:14.300 --> 01:31:16.700 They are committed to advancing the standards 01:31:16.700 --> 01:31:19.100 of the domestic oil and gas industry. 01:31:19.100 --> 01:31:20.960 It's an honor to be with you. 01:31:20.960 --> 01:31:22.130 The alliance participates 01:31:22.130 --> 01:31:24.510 in the Texas Methane and Flaring Coalition 01:31:24.510 --> 01:31:26.260 and supports its goals. 01:31:26.260 --> 01:31:28.410 We know these recommendations represent 01:31:28.410 --> 01:31:31.650 a good starting point for dialogue to continue with you 01:31:31.650 --> 01:31:34.070 and other stakeholders to show reductions 01:31:34.070 --> 01:31:37.630 in the number, duration and frequency of events. 01:31:37.630 --> 01:31:40.830 We have made good progress, but there's more work to do. 01:31:40.830 --> 01:31:43.170 The alliance stands ready to assist the Commission 01:31:43.170 --> 01:31:46.140 with developing tools, to compile and analyze flaring 01:31:46.140 --> 01:31:49.190 and venting data, to improve transparency, 01:31:49.190 --> 01:31:52.200 and allow for the public and industry to better understand 01:31:52.200 --> 01:31:54.760 and prioritize the areas to improve. 01:31:54.760 --> 01:31:56.680 The mainframe transformation project 01:31:56.680 --> 01:31:59.810 along with continued improvements to the website, 01:31:59.810 --> 01:32:01.600 putting more forms online 01:32:01.600 --> 01:32:05.570 and publicly accessible data will create efficiencies 01:32:05.570 --> 01:32:09.360 that benefit the Commission, operators and the public. 01:32:09.360 --> 01:32:12.590 The coalitional report builds on industry best practices 01:32:12.590 --> 01:32:14.900 to alternative solutions, to venting or flaring 01:32:14.900 --> 01:32:17.610 during exploration and production activities. 01:32:17.610 --> 01:32:19.390 Technology utilization 01:32:19.390 --> 01:32:22.700 and better planning practices help achieve reductions. 01:32:22.700 --> 01:32:24.400 Or one of the most important tools 01:32:24.400 --> 01:32:26.590 is more pipeline infrastructure in the field 01:32:26.590 --> 01:32:29.240 to reduce congestion and capacity issues. 01:32:29.240 --> 01:32:33.060 And one-size-fits-all approach to this issue does not work 01:32:33.060 --> 01:32:36.540 for all operators or all fields and we believe 01:32:36.540 --> 01:32:39.990 the proposed matrix does a good job of providing flexibility 01:32:39.990 --> 01:32:42.200 for these operational realities. 01:32:42.200 --> 01:32:43.750 As new pipelines are built 01:32:43.750 --> 01:32:46.560 and gas processing facilities come online, 01:32:46.560 --> 01:32:49.850 there will be more opportunities to move this gas to market, 01:32:49.850 --> 01:32:50.870 which your leadership 01:32:50.870 --> 01:32:54.580 to provide regulatory certainty makes possible. 01:32:54.580 --> 01:32:57.710 You along with Commission staff should be applauded 01:32:57.710 --> 01:33:00.120 for the incredible work you all are engaged in 01:33:00.120 --> 01:33:03.890 during the ongoing response to COVID-19, staff continued 01:33:03.890 --> 01:33:06.450 to inspect wells, process permits 01:33:06.450 --> 01:33:08.550 and review applications timely, 01:33:08.550 --> 01:33:11.180 and the alliance is grateful for their service. 01:33:11.180 --> 01:33:14.080 Your encouragement to find ways to open back up 01:33:14.080 --> 01:33:17.790 to allow for economic activity to resume is essential. 01:33:17.790 --> 01:33:18.920 Thank you for the recent work 01:33:18.920 --> 01:33:21.900 to reopen alternative fuels testing and the reopening 01:33:21.900 --> 01:33:24.160 of central records, which is critical 01:33:24.160 --> 01:33:28.420 to industry acquisition and exploration activities. 01:33:28.420 --> 01:33:30.820 The industry and public have greatly benefited 01:33:30.820 --> 01:33:32.610 from robust permitting, compliance 01:33:32.610 --> 01:33:34.880 and enforcement actions by the Commission. 01:33:34.880 --> 01:33:37.020 The policies implemented by the Commission at work 01:33:37.020 --> 01:33:39.060 to shorten the duration of flaring 01:33:39.060 --> 01:33:42.690 and volume of flaring limit venting extensions, 01:33:42.690 --> 01:33:46.490 and deploy new technology to the field, like drones 01:33:46.490 --> 01:33:49.150 to increase the efficiency of inspectors. 01:33:49.150 --> 01:33:51.980 The alliance supports the Commission's continued action 01:33:51.980 --> 01:33:54.670 to further monitoring and enforcement abilities 01:33:54.670 --> 01:33:57.690 and your efforts related to Statewide Rule 32. 01:33:57.690 --> 01:33:58.920 Thank you again, Mr. Chairman, 01:33:58.920 --> 01:34:01.067 on behalf of the Texas Alliance for Energy Producers, 01:34:01.067 --> 01:34:04.883 for the invitation and opportunity to provide comments. 01:34:05.950 --> 01:34:07.350 Thank you, Jason. 01:34:09.620 --> 01:34:14.380 Ben Shepperd, with PBPA will be presenting at this time. 01:34:14.380 --> 01:34:17.100 Ed, you are invited to speak. 01:34:17.100 --> 01:34:19.793 I mean, I'm sorry, Ben, on my apologies. 01:34:21.830 --> 01:34:23.000 Thank you, Callie. 01:34:23.000 --> 01:34:26.950 For the record, Mr. Chairman, members, I'm Ben Shepperd, 01:34:26.950 --> 01:34:29.630 President of the Permian Basin Petroleum Association, 01:34:29.630 --> 01:34:32.900 say that three times, right in a row, 01:34:32.900 --> 01:34:35.710 greatly appreciate the invitation to speak today 01:34:35.710 --> 01:34:37.400 and the opportunity to work 01:34:38.960 --> 01:34:41.347 with such a broad spectrum of industry 01:34:41.347 --> 01:34:44.580 on the Texas Methane Flaring Coalition. 01:34:44.580 --> 01:34:47.010 This is truly an unprecedented effort 01:34:47.010 --> 01:34:48.800 that we are proud to be a part of 01:34:48.800 --> 01:34:52.660 and bringing in all facets of the oil and gas industry, 01:34:52.660 --> 01:34:57.563 we will meet our goals of reducing flaring. 01:34:58.410 --> 01:35:00.510 We firmly believe the efforts being done 01:35:00.510 --> 01:35:02.580 at the Commission currently and the efforts 01:35:02.580 --> 01:35:06.790 of the energy industry currently are making meaningful steps 01:35:06.790 --> 01:35:09.773 in reducing flaring volumes across the state. 01:35:11.160 --> 01:35:14.860 Just to remind everybody that we did not get here overnight. 01:35:14.860 --> 01:35:18.010 In the last 10 years, production in the Permian Basin 01:35:18.010 --> 01:35:20.290 was quadruple, more than quadruple, 01:35:20.290 --> 01:35:22.090 and much of our infrastructure struggled 01:35:22.090 --> 01:35:24.920 under the strain of that growth. 01:35:24.920 --> 01:35:27.240 Or currently as has been mentioned, 01:35:27.240 --> 01:35:30.010 there are over $4 1/2 billion dollars worth 01:35:30.010 --> 01:35:33.740 of pipelines coming online within the next year 01:35:33.740 --> 01:35:36.170 and those will continue to help with 01:35:36.170 --> 01:35:40.250 our transportation needs and should assist 01:35:40.250 --> 01:35:41.903 in reducing flaring as well. 01:35:41.903 --> 01:35:44.870 It's our strong belief that the PBPA, 01:35:44.870 --> 01:35:45.970 that energy development 01:35:45.970 --> 01:35:50.260 and environmental stewardship can go hand in hand. 01:35:50.260 --> 01:35:52.870 This report is evidence of those efforts. 01:35:52.870 --> 01:35:56.410 Through the countless hours, the coalition member companies 01:35:56.410 --> 01:35:58.490 and staff had worked collaboratively 01:36:00.714 --> 01:36:03.330 to develop very fast and so this report, 01:36:03.330 --> 01:36:06.880 and this set of recommendations, it's just the first step 01:36:06.880 --> 01:36:08.980 in changing the culture in the industry 01:36:08.980 --> 01:36:10.978 as it relates to flaring. 01:36:10.978 --> 01:36:12.770 The industry is committed through these practices 01:36:12.770 --> 01:36:15.980 to create a culture and a regulatory process 01:36:15.980 --> 01:36:18.730 that keeps these situations to a minimum, 01:36:18.730 --> 01:36:21.673 both in terms of volume and in terms of duration. 01:36:22.520 --> 01:36:24.770 As I've said, and it has been said before, 01:36:24.770 --> 01:36:28.160 this is only the beginning of our joint work 01:36:28.160 --> 01:36:30.260 in developing a data-driven process 01:36:30.260 --> 01:36:33.190 that takes into account actual lines of flaring 01:36:33.190 --> 01:36:35.620 that operators are engaging in, 01:36:35.620 --> 01:36:38.160 as well as the efforts that the Commission could take 01:36:38.160 --> 01:36:41.230 that would provide greater transparency for operators, 01:36:41.230 --> 01:36:43.383 regulators, and the public. 01:36:45.060 --> 01:36:47.770 We believe this data sheet and the subsequent reports 01:36:47.770 --> 01:36:49.790 that Todd mentioned, will allow us all to see 01:36:49.790 --> 01:36:53.420 the progress made by operators over time and demonstrate 01:36:53.420 --> 01:36:57.770 the results of the technologies in overall operations. 01:36:57.770 --> 01:37:00.610 We will continue to use the data collected 01:37:00.610 --> 01:37:04.050 and other information to report on these successes, 01:37:04.050 --> 01:37:07.470 and continue to develop best practices. 01:37:07.470 --> 01:37:11.073 We intend to continue the work of this coalition. 01:37:12.620 --> 01:37:14.690 We're not going away after this, 01:37:14.690 --> 01:37:16.180 with feedback from the Commission, 01:37:16.180 --> 01:37:19.230 we intend to have additional workshops, 01:37:19.230 --> 01:37:22.713 continue to meet and discuss best practices. 01:37:24.840 --> 01:37:29.840 Our goal is to reduce flaring 01:37:29.920 --> 01:37:31.390 as has been stated before. 01:37:31.390 --> 01:37:32.223 And I think we have 01:37:32.223 --> 01:37:35.920 a strong industry association commitment to that. 01:37:35.920 --> 01:37:39.630 Some of them, the other next steps that are contained 01:37:39.630 --> 01:37:42.130 in the report that we expect to finish 01:37:42.130 --> 01:37:44.130 before the end of the year include 01:37:44.130 --> 01:37:47.720 a methane emissions report, a flaring report, 01:37:47.720 --> 01:37:49.550 assisting in the aerial surveys 01:37:49.550 --> 01:37:52.320 and continue with the data collection efforts. 01:37:52.320 --> 01:37:56.240 We think these combined efforts will help bring real results 01:37:56.240 --> 01:37:59.070 to the industry and to the state. 01:37:59.070 --> 01:38:02.200 Thank you for allowing me the opportunity to testify today. 01:38:02.200 --> 01:38:04.500 I'm happy to answer any questions. 01:38:04.500 --> 01:38:06.000 Thank you, Ben. 01:38:06.000 --> 01:38:08.280 Commissioners, this completes our third panel. 01:38:08.280 --> 01:38:10.670 Are there any questions at this time? 01:38:10.670 --> 01:38:13.170 Members, do you have any questions of our panel? 01:38:17.070 --> 01:38:19.760 Man, y'all have done great, you've answered every question 01:38:19.760 --> 01:38:23.280 that could possibly come to mind here, so what a great job. 01:38:23.280 --> 01:38:25.760 I thank you all for being a part of this. 01:38:25.760 --> 01:38:27.666 I thank you for being our Blue Ribbon Panel 01:38:27.666 --> 01:38:31.200 that's helped in other issues and look forward to hopefully 01:38:31.200 --> 01:38:35.280 in days ahead that you will continue to give consideration 01:38:35.280 --> 01:38:38.123 to advising the Railroad Commission at different times. 01:38:39.790 --> 01:38:42.810 I think one good thing that I hope we bring 01:38:42.810 --> 01:38:45.450 on the three panels that have presented today is that 01:38:45.450 --> 01:38:47.420 there is a certainty, 01:38:47.420 --> 01:38:50.320 I'm big on certainty to the market. 01:38:50.320 --> 01:38:53.500 I believe last time we gave a decision on proration, 01:38:53.500 --> 01:38:55.480 some lacked, some did it, but at least I think 01:38:55.480 --> 01:38:58.510 it brought some certainty to at least the markets. 01:38:58.510 --> 01:39:02.360 And quite frankly, the Railroad Commission will take credit 01:39:02.360 --> 01:39:06.930 for the growth of the price of West Texas, WTI 01:39:06.930 --> 01:39:08.160 ever since that decision. 01:39:08.160 --> 01:39:10.560 So I think the Railroad Commission 01:39:10.560 --> 01:39:12.850 is a good part of bringing that certainty. 01:39:12.850 --> 01:39:16.040 And this time, I think it's been a big concern of mine 01:39:17.240 --> 01:39:20.800 that the lack of financing we see as a problem in the future 01:39:20.800 --> 01:39:23.900 to development of our share price. 01:39:23.900 --> 01:39:27.760 We have a lot of folks, I was with a group up in Dallas 01:39:27.760 --> 01:39:31.120 that the person from Wall Street expressed 01:39:31.120 --> 01:39:34.400 that their people were bailing out on financing, 01:39:34.400 --> 01:39:37.690 or they were starting different mutual funds 01:39:37.690 --> 01:39:41.990 that do anything but fossil fuels and a large part 01:39:41.990 --> 01:39:45.580 of that they were using was the vision of flaring 01:39:45.580 --> 01:39:47.130 in West Texas banned. 01:39:47.130 --> 01:39:50.340 They were showing all the flaring being done. 01:39:50.340 --> 01:39:53.010 And while we at the Commission say the industry has done 01:39:53.010 --> 01:39:55.300 a good job, that message has not been, 01:39:55.300 --> 01:39:58.310 I think, adequately expressed to the markets. 01:39:58.310 --> 01:40:01.470 And I appreciate that we've brought everybody together, 01:40:01.470 --> 01:40:04.190 the good work that you've done and looking forward 01:40:04.190 --> 01:40:06.710 to making sure that based on this day 01:40:06.710 --> 01:40:10.540 that we can tell Wall Street, the markets, the nation, 01:40:10.540 --> 01:40:13.310 all of the different organizations who represent 01:40:13.310 --> 01:40:17.030 the environmental movement and all of the industry that 01:40:17.030 --> 01:40:21.880 the Texas industry has and is working toward 01:40:21.880 --> 01:40:25.630 definitely being a solving issue 01:40:25.630 --> 01:40:27.610 of solving this flaring problem. 01:40:27.610 --> 01:40:29.190 We're on that direction, that movement. 01:40:29.190 --> 01:40:31.680 I thank all of you for the work that you've done 01:40:31.680 --> 01:40:33.680 in your organizations for doing this. 01:40:33.680 --> 01:40:36.110 So we appreciate you very much. 01:40:36.110 --> 01:40:39.740 Again, any other questions before we dismiss this panel? 01:40:39.740 --> 01:40:42.150 If not, thank you all so much for the work you do 01:40:42.150 --> 01:40:43.703 and for the advice you've been giving. 01:40:43.703 --> 01:40:46.807 One other thing here, here's another thought 01:40:46.807 --> 01:40:49.300 and people get half when I do this, 01:40:49.300 --> 01:40:51.510 but we had a group from North Dakota come in 01:40:52.750 --> 01:40:56.950 and spoke to Wei, and the staff here and it's was working 01:40:56.950 --> 01:41:00.170 from North Dakota and it's a group of the industry 01:41:00.170 --> 01:41:01.150 that had come together. 01:41:01.150 --> 01:41:03.230 We have a problem, I think at least in my office, 01:41:03.230 --> 01:41:05.000 I'm sure the other Commissioners do, 01:41:05.000 --> 01:41:07.380 that there's some great new technologies brought 01:41:07.380 --> 01:41:09.360 to the Railroad Commission. 01:41:09.360 --> 01:41:11.810 And you know, we're sitting here saying, man, 01:41:11.810 --> 01:41:13.363 that sounds like a great technology 01:41:13.363 --> 01:41:15.970 and they bring it to our office and talk to us and 01:41:17.650 --> 01:41:19.330 we really don't have a place in 01:41:19.330 --> 01:41:22.180 the governmental Railroad Commission to approve 01:41:22.180 --> 01:41:24.670 or disapprove, or give a seal of approval 01:41:24.670 --> 01:41:27.530 to specific new techniques, new industry 01:41:27.530 --> 01:41:30.300 and that's what you all are involved in. 01:41:30.300 --> 01:41:31.550 What they've done in North Dakota is 01:41:31.550 --> 01:41:35.730 the Governor's put together a panel like a shark tank 01:41:35.730 --> 01:41:40.070 and that shark tank reviews new technology 01:41:40.070 --> 01:41:41.560 and then of course, in that state, 01:41:41.560 --> 01:41:43.500 and we've been talking with Governor Abbott, 01:41:43.500 --> 01:41:46.420 there's a matching fund the industry kind of matches 01:41:46.420 --> 01:41:50.340 with the state and awards those projects 01:41:50.340 --> 01:41:53.643 that the industry approves of as potentially good. 01:41:54.660 --> 01:41:57.870 The lassens to go ahead and develop their technology. 01:41:57.870 --> 01:42:01.720 So it expedites good ideas to the industry. 01:42:01.720 --> 01:42:04.620 So that's just what we've been presented. 01:42:04.620 --> 01:42:06.540 I hope that you'll get with way 01:42:06.540 --> 01:42:08.910 and a look over what North Dakota has done 01:42:08.910 --> 01:42:11.480 and perhaps, just give us an opinion on that. 01:42:11.480 --> 01:42:14.090 'Cause issues like flaring and this other things, 01:42:14.090 --> 01:42:16.670 and there's many others, there's new technologies 01:42:16.670 --> 01:42:20.970 that as a Commissioner I feel very inadequate number one, 01:42:20.970 --> 01:42:24.150 but we don't have the capacity for sharing these good ideas. 01:42:24.150 --> 01:42:25.810 Well, who do they go to? 01:42:25.810 --> 01:42:28.950 Who do we send them to, this great new idea? 01:42:28.950 --> 01:42:31.030 And yet we had them come to our offices regularly. 01:42:31.030 --> 01:42:34.460 So I'll repeat myself, but you might consider looking 01:42:34.460 --> 01:42:36.790 at the method North Dakota has used. 01:42:36.790 --> 01:42:38.090 I think it's worked real well there 01:42:38.090 --> 01:42:41.010 in getting technology started to solve issues 01:42:41.010 --> 01:42:42.910 such as flaring and other issues. 01:42:42.910 --> 01:42:45.880 So thank you again, that's just me with my ideas, 01:42:45.880 --> 01:42:47.653 but thank you for the work that you've done 01:42:47.653 --> 01:42:50.860 and the work that you are doing and appreciate all 01:42:50.860 --> 01:42:54.690 of the panelists today coming together to approve flaring. 01:42:54.690 --> 01:42:55.793 Thank y'all so much. 01:42:56.870 --> 01:42:58.560 And as I stated I the last meeting, 01:42:58.560 --> 01:43:00.280 this is now the opportunity time 01:43:00.280 --> 01:43:03.060 to implement meaningful reforms to reduce flaring 01:43:03.060 --> 01:43:06.663 before oil and gas production climbs back to previous highs. 01:43:07.520 --> 01:43:09.310 Wei, between now and the next meeting, 01:43:09.310 --> 01:43:12.170 can you have your staff look into the report provided 01:43:12.170 --> 01:43:16.280 by the Blue Ribbon Task Force and the other groups 01:43:16.280 --> 01:43:18.230 that have presented to us today 01:43:18.230 --> 01:43:22.290 and Wei, if you would make sure we can see how much of this 01:43:22.290 --> 01:43:26.867 we can implement this fall and a tip to join the industry 01:43:26.867 --> 01:43:30.630 and all of us together weigh and what the Commission can do 01:43:30.630 --> 01:43:33.873 to reduce flaring in Texas. 01:43:35.100 --> 01:43:37.220 Mr. Chairman, may I make one comment, 01:43:37.220 --> 01:43:38.970 please, for this panel? 01:43:38.970 --> 01:43:39.803 Commissioner Craddick. 01:43:39.803 --> 01:43:40.636 If you don't mind. 01:43:40.636 --> 01:43:42.380 So I wanna thank you one for your leadership 01:43:42.380 --> 01:43:44.950 and thank you for the Blue Ribbon Panel 01:43:44.950 --> 01:43:47.320 for being involved with this for the last nine months. 01:43:47.320 --> 01:43:50.500 We've been looking at this as well in my office, 01:43:50.500 --> 01:43:53.270 and I appreciate you moving it forward and getting us, 01:43:53.270 --> 01:43:56.900 trying to get some solutions and some thoughts. 01:43:56.900 --> 01:43:59.403 One of the keys that we found, and I think this, 01:44:01.460 --> 01:44:03.295 the recommendations in this, 01:44:03.295 --> 01:44:05.180 we've got one of the challenges that we've had, 01:44:05.180 --> 01:44:07.750 one of the priorities we've all had as an agency 01:44:07.750 --> 01:44:10.130 is to make sure our data's improved. 01:44:10.130 --> 01:44:13.300 And one of the things that I realized after sitting 01:44:13.300 --> 01:44:18.230 in some meetings and sitting on a workshop all day long 01:44:18.230 --> 01:44:21.540 as the only regulator one day at the end of January, 01:44:21.540 --> 01:44:23.570 is that people want our data. 01:44:23.570 --> 01:44:25.460 And I think that data and figuring out 01:44:25.460 --> 01:44:28.740 how to continue to improve that will be a priority, 01:44:28.740 --> 01:44:32.240 updating our worksheets and the information 01:44:32.240 --> 01:44:36.350 we collect will be very important as we go forward, 01:44:36.350 --> 01:44:39.250 not just so people can see what we do, 01:44:39.250 --> 01:44:41.757 transparency's been very important to us. 01:44:41.757 --> 01:44:43.680 And I know that we've communicated that, 01:44:43.680 --> 01:44:47.060 but I appreciate industry continuing to understand that 01:44:47.060 --> 01:44:50.080 as well as frankly, the environmental community want 01:44:50.080 --> 01:44:53.910 our data and so as we go forward, IT upgrades, and I know 01:44:53.910 --> 01:44:56.133 we're gonna have an interesting session going forward, 01:44:56.133 --> 01:44:59.230 I think will be and should be a priority for us, 01:44:59.230 --> 01:45:03.250 as well as having inspectors and funding our inspectors. 01:45:03.250 --> 01:45:07.150 I think that's will be, in my opinion, be priorities 01:45:07.150 --> 01:45:08.740 for us going forward. 01:45:08.740 --> 01:45:11.400 And like, I wanna commend our staff as well. 01:45:11.400 --> 01:45:14.380 Frankly, they've seen and understood that we had some issues 01:45:14.380 --> 01:45:16.790 and have been looking at this at least 01:45:16.790 --> 01:45:19.080 in the Hearings division for the last six months, 01:45:19.080 --> 01:45:22.010 nine months, a year and are doing smarter things. 01:45:22.010 --> 01:45:25.210 So those are some good recommendations 01:45:25.210 --> 01:45:28.040 from this Blue Ribbon Panel as we go forward 01:45:28.040 --> 01:45:30.650 on some things we should be looking for. 01:45:30.650 --> 01:45:33.170 So thank you for being a leader on this, 01:45:33.170 --> 01:45:35.803 and I appreciate you giving me just a minute. 01:45:37.640 --> 01:45:39.730 Thank you very much, Commissioner. 01:45:39.730 --> 01:45:43.020 Okay, Wei, I hope between now and our next meeting, 01:45:43.020 --> 01:45:45.330 can you have the staff look into the report prepared 01:45:45.330 --> 01:45:49.230 by these Blue Ribbon Panel and these other two groups 01:45:49.230 --> 01:45:52.650 that have reported today and their recommendation, 01:45:52.650 --> 01:45:57.080 and see if we can implement something this fall, 01:45:57.080 --> 01:46:00.560 that will drastically reduce flaring in Texas. 01:46:00.560 --> 01:46:01.970 Yes, sir, we'll do. 01:46:01.970 --> 01:46:04.050 As a matter of fact, we already started looking 01:46:04.050 --> 01:46:07.930 at the data sheet and to make it more user friendly, 01:46:07.930 --> 01:46:10.640 and additional information 01:46:10.640 --> 01:46:12.620 that will aid our permitting process. 01:46:12.620 --> 01:46:14.379 So we'll look into that 01:46:14.379 --> 01:46:16.329 and report back in the next conference. 01:46:17.300 --> 01:46:18.133 Thank you. 01:46:19.070 --> 01:46:22.720 Agenda item 312 is our public participation item. 01:46:22.720 --> 01:46:25.250 We have Emma Pabst, with the Environment Texas 01:46:25.250 --> 01:46:27.700 and Kate Norman, with Texas Gas Service, 01:46:27.700 --> 01:46:29.370 both registered to speak. 01:46:29.370 --> 01:46:31.293 Does anyone want to hear from them? 01:46:33.220 --> 01:46:37.777 If no one does let's move on to agenda item 313. 01:46:39.120 --> 01:46:42.270 Agenda item 313 is our executive session item, 01:46:42.270 --> 01:46:45.030 which we will not be going into today. 01:46:45.030 --> 01:46:48.280 Are there any other matters, duly posted matters 01:46:48.280 --> 01:46:50.680 to be bought before the Commission at this time? 01:46:51.930 --> 01:46:52.870 Hearing none, this meeting 01:46:52.870 --> 01:46:55.320 of the Railroad Commission of Texas is adjourned.