Callie: Yes. Good morning.
I'm sorry.
I had technical difficulties right at the last minute.
Got to love those.
-: I know.
All right, whenever you're ready
we're ready to go.
Callie: Okay.
Good morning.
This is Callie Ferar, Commission secretary.
I'll be serving as the meeting moderator
for today's conference.
Just a few reminders, when it's your time to speak
you will be transferred over to (indistinct).
-: Callie, if you can hear us, you've got a problem.
-: Callie, we can't hear you.
-: I tell you what fellow Commissioners,
we're in bad shape if we have to come there
and fix the computer system.
-: That's right.
Well, I was going to say, I think she's gonna say,
you'll be transferred in when it's your turn
and she's gonna introduce me.
So how about we start?
And then we can-we'll start working.
How about that?
She'll get it figured out.
-: Sounds good.
-: All right.
So good morning.
This is Chairman Craddick, this meeting
of the Railroad Commission
of Texas will come to order to consider matters
which have been duly posted with the secretary of state
for February 9th, 2021 under a public participation policy.
Anyone desiring to offer public testimony
on any items that are not noticed
on today's agenda was required to register in advance.
We didn't have anyone register in advance
so the Commission will consider the items
on the agenda as posted on the agenda.
So we're ready for item number one, Callie,
if you're on, great, and if you aren't,
whoever's supposed to be up for item number one
we're ready for you, John, I think it's you.
Good morning.
-: Thank you.
Good morning, Chairman and Commissioners.
I'm administrative law
Judge John Dotson with the Hearings division.
Agenda item 1OS4347 consolidated
is a gas utility rate case that resulted
in a settlement by the parties.
West Texas gas seeks a rate increase
for the utility service it provides
its Texas customers based on the cost
of providing service.
Commission staff intervened,
as well as a coalition of several effected cities
served by West Texas Gas.
Ultimately, the parties reached a settlement
resolving all issues and agreeing
to a reduced settled increase
for West Texas Gas totaling $2,187,500.
On January 15th, the PFD was issued
and no exceptions were filed.
Consistent with the PFD,
the recommendation is to approve the settlement,
and today is the last scheduled conference prior
to the deadline for Commission action.
I'm available for questions.
-: Thank you, John.
And I think we've got one person.
Isn't that correct?
Callie? That has pre-write.
Deanna: We have Kate Norman representing West Texas Gas
also available for questions.
-: Thank you, Deanna.
Does anybody have any questions
of Ms.Norman or John Dotson?
All right.
I move, we approve the examiners recommendation,
is there a second?
-: Second.
-: Second by Commissioner Christian.
All those in favor, say aye.
-: Aye.
-: Motion passes that aye was approved.
Thank you.
All right.
Presenter for number two and three.
Callie: I'm sorry.
Thank you.
Jennifer Cook will be presenting agenda item two
through three, Jennifer, we're ready when you are.
-: Morning, Jennifer.
-: Good morning.
Good morning Chairman and Commissioners.
I'm Jennifer Cook,
an Administrative Law Judge with the Hearings division.
I am presenting items two and three separately.
Item two is a motion
for rehearing filed by the protestants
of an application of HR Martin County Landfill LLC
for a waste facility.
On December 8, 2020,
the Commission issued an order approving an application
of HR Martin.
Two timely motions for rehearing were filed.
One filed by John W. Maybe and Joseph Guy Maybe,
and one filed by Edward Frank Kelton,
Betty and Kelton Howell,
Jeffrey M. Johnston, and Sandra K. Johnston.
HR Martin filed a reply
in opposition to the motions.
In the motions, the protestants
alleged the following four points of error.
One, they claimed the additional permit requirements added
by the Commission in its final order, have not
been subjected to Commission staff technical review
and the protestants did not have an opportunity to review
and protest those additions.
Two, the protestants complained
there was undue reliance on three other permits
that were used to support granting the application
as consistent with those permits.
The protestants assert that those other permits,
based on Commission data,
are different from the HR Martin proposed permit
and should not be considered as precedent.
Three, the protests claim heir
and argued the only evidence of the record
controverts the claim that the three permits
referenced service precedent,
Four and last, the protestants assert the revisions
to the permit in the final order did not
address the unlined areas of the proposed facility.
HR Martin asserts none of the issues
raised in the motions consists of new information.
All issues raised in the motions were already considered
by the Commission prior to the Commission
issuing an order in the case.
HR Martin maintains there is no due process
violation caused by the Commission requiring more
stringent permit conditions than in the application
to address concerns weight raised by the protests.
It is recommended that the Commission deny the motions,
the motions will be overruled by operation
of law on March 18, 2021.
And I'm available for questions.
Callie: Good morning, Commissioners.
I think I am back and running now and good timing.
'Cause we also have Dustin Bailey, CEO
Luke Garrett, COO, general counsel, George Pig,
(dog bark)
with HR Martin County Landfill, George Neil,
and Tim George local attorneys all
for application HR Morton County landfill, LLC.
We also have Olga Khobar, Zahra,
I'm sorry, I butchered that,
and John Soul for protestants
Maybe ranch available for questions.
-: Thank you, Deanna and Callie, are there any questions
of the witness of the council of witnesses?
Are there any questions of Jennifer?
-: No.
-: Okay.
All right.
-: Madame Chairman,
I move we approve the examiners recommendation.
-: And I second it.
-: All right.
We have a motion and a second.
All those in favor, say aye.
-: Aye. -: Aye.
-: The motion passes, that item's approved.
Thank you, Jennifer.
Number three.
-: Item three is a motion
for rehearing filed by MT Energy LLC.
On December 8, 2020,
the Commission issued an order denying the renewal
of MT Energy's form P-5.
A timely motion for rehearing was received from MT Energy.
Staff filed a reply to the motion stating
that MT Energy has resolved all outstanding issues
with its form P-5.
Staff request that the motion be granted
and the case be dismissed as moot.
It is recommended that the motion be granted
and the case be dismissed as moot.
The motion will be overruled
by operation of law on March 18, 2021.
And I'm available for questions.
Craddick: Thank you.
Are there any questions?
And I move we approve the examiners recommendation,
Is there a second?
Christian: Second.
-: Second by Commissioner Christian, I wasn't looking,
I didn't hear very good.
Sorry.
All in favor, say aye.
-: Aye. -: Aye.
-: Motion passes, that item is approved.
Thank you, Jennifer.
All right, Callie,
if you could hear us, number 4 through 19.
And if not, we'll hear from Deanna.
Whoever wants to talk to us this morning.
That'd be great.
Deanna: Thank you.
Christie Reeve will be presenting the agenda items
4 through 9, Christie we're ready when you are.
-: Good morning Chairman, Commissioners.
I'm Christie Reeve, Administrative Law Judge
with the Hearings division.
Items number 4 through 9 will be presented together
as are all, all are derived from
the same motion for rehearing.
On December 8th, 2020, the Commission signed final orders
and numerous single signature P-4 dockets
transferring the subject wells from TKP petroleum
to Borderline operating.
On December 30th, 2020, prior to the
final orders becoming final,
Borderline filed a motion for rehearing.
In its motion, Borderline states,
subsequent to the signing of the final orders,
it learned that a Commission contractor had plugged two
of the subject wells.
Borderline alleges one well was damaged beyond repair
when the casing was cut
and unintentionally dropped down whole.
Borderline filed the motion seeking to reverse
the final orders.
It is recommended that the motion be granted.
The motion will be overruled
by operation of law on March 18th, 2021.
I'm available for questions.
-: Thank you, Christie.
Are there any questions?
-: Yes, I do have a question.
-: Commissioner, go ahead.
-: I assume this means,
and this is for you the examiner, Christie,
I assume this means that the well that ended
up being plugged had an order to be plugged
but that we didn't timely get the message
that a new operator was taking over the wells,
is that correct?
-: I don't know if there is an actual order,
but the wells were on the orphan well list,
so they can be on that list without
actually having a plug order on them.
But when an operator files a single signature P-4,
we do send notice to the district office.
But because some of those do not always come to fruition,
it's my understanding that the district,
if they already have a contract,
don't stop what they're doing
until they get a final order
from the Commission saying the wells have been transferred.
-: Okay.
So does that mean we'll be looking
at the original operator for reimbursement
of the plugging expenses?
-: Yes, sir.
-: Okay.
Is there any recommendations we can have
from you guys about not letting this occur in the future?
-: I'm certain there a possibility.
I think it would require some additional things.
I'm going to say with management
to some notification and coordination
between the oil and gas division and the Hearings division.
-: Okay.
Thank you very much for explaining that to me.
-: You're welcome, sir.
-: Chairman, that's all my questions.
-: Do you have any questions?
Okay.
Thank you.
All right.
I move we approve the examiners recommendations
for items four through nine.
Is there a second?
-: I second.
-: Second by Commissioner Wright?
All those in favor, say aye.
-: Aye. -: Aye.
-: Motion passes.
Those items are approved.
Thank you.
-: Thank you.
-: All right.
We're moving to the Consent Agenda.
There are 177 items on the Consent Agenda.
I know Commissioner Christian, you had maybe a couple
of comments about some things we have on here.
-: So you're trying to limit me to a couple
that means you're trying to say shut up, Christian.
-: No, a couple.
Just a few.
How about a few? I'll expand it.
More than three! How's that?
-: No, I think it's important for us to realize
and our constituents to realize
across the state that the Railroad Commission has
been very active in addressing the flaring issue.
And one of these items addresses that,
and I mentioned that, that's why I bring it up,
is we appointed a blue ribbon task force to address that,
that the industry would look into that.
And my philosophy on regulation generally is
that all changes should be consistent, predictable,
and based on science.
With the industry on its knees right now
financially due to the demand drop associated with COVID,
I realize that any changes we make must be done
in a way that is thoughtful and deliberate.
If not, we risk killing jobs and harming
our economy in Texas.
I'm also cognizant
that any policies that decreased production in Texas
will increase and our less environmentally friendly regions
of Texas in the world.
On a lifecycle basis, Russia
natural gas produced 40% more carbon emissions
than American natural gas.
Natural gas.
Producing in America is good for the world.
We are the cleanest in the world.
Our flaring emissions went from 2.7% prior
to the pandemic down to less than
a half a percent as of today.
I'm also cognizant
that any policy that decreased production in Texas
are a problem for that world.
There has been a dramatic decrease
in the volume of flaring over the last year.
Our agency announced those returns,
and that means that 99.5%
of our natural gas went to beneficial use.
That being said, we can always do better and want to.
We must phase out flaring for economic reasons alone.
Decreasing flaring allows more natural gas to be used
for its intended purpose, providing affordable,
reliable energy for Texans.
It also helps companies get back on their feet
and employ Texan workers.
A woman: Hello?
-: Are we not being heard?
Craddick: You are being heard.
-: Okay.
Somebody said hello!
Okay.
That being said, we can do better.
The decreasing firings allows
for natural gas to be used for its intended purpose.
Providing affordable
reliable energy for Texans also gets companies back
on their feet to employ Texas workers,
making them more attractive on Wall Street, the investments.
Getting an exception to our flaring rules
should not be easy.
Staff should ask tougher questions, follow up questions,
and generally just dig deeper
into reasons why an exception is being sought.
I'm supporting and supportive
of Commissioner Pratt's request
to ensure staff includes greater detail
about a company's need to flare
and their timeline for having infrastructure
to place to move their gas to market and future PFDs.
This will help us make better rulings on flaring exceptions
while the Commission evaluates the new data obtained
for our recent changes to form R-32.
With this new data, we will be able
to work with stakeholders
to determine a path forward to reduce,
or even eliminate, routine flaring.
It's also amazing to me that we live
in a day and age where we've actually had the best decade
in human history.
I think we should digest that.
We've just lived
through the best decade in recorded human history.
Poverty around the world has gone
from 40% to less than 10% today,
even after the COVID pandemic.
We also have the cleanest environment in history.
EPA says 30 over the past 50 years
we've reduced every poisonous chemical,
as identified by the EPA, by over 75%.
We are sitting here looking
at the panic that sometimes is used
by special interests and basically both
consist of, sad to say,
when everything is good, even Rex Tillerson
former secretary of state, former chair of Exxon,
and the Railroad Commission agree
that on flaring, as he said it,
he can't identify one place
water had been contaminated and water was a big issue to us.
The Railroad Commission did that study,
and it showed that we couldn't identify
neither primary or secondary sources for disposal wells
or injection wells of water that had been contaminated.
So the truth of the history is, we've done a darn good job.
Our industry, our, in state of Texas,
has done the best job in history doing that.
But we keep seeing these red flares come
up from the folks that want to change things
and stop the production of oil and gas.
I'm looking just at the national issue that most can see
in 1973 Time magazine, the big three, then '77
the big three, and how to survive the coming Ice Age.
Then all of a sudden we found that didn't work
because they sent a ship of sactus
and I'm afraid that UT
was participating in that one, if I remember right,
down to look at the way the icebergs were all melting
at the poles, and their ship got thrown in
and had to call a tanker, (laughs) a Naval vessel to
come break them out because it was not, not melting.
It was frozen then.
So then they changed the global warming 2001
be worried, be worried.
Time magazine said of 2008
"How to win the global war on warming".
Well, that didn't really take place.
So all of a sudden they started throwing
up environmental changes.
Then they went to water was going to be polluted.
Then we went through, now flaring is an issue,
and all of these issues are important,
but the fact is our industry, our nation
our technology addressed them
and they've moved off the center stage.
And now we're back to flaring, now,
there's a big flare that's up
to our legislators saying,
"Oh, we must do something about this".
Well, as I mentioned, we've done something about that.
The industry is decreasing as we intend to.
It's a waste of our resources.
But we right now are looking at the idea
that wind and solar are getting 1,212 times more
than solar gets into oil and gas in federal tax subsidies.
It's just scary and frightening
when you see 1 out of 10 jobs, 30% of our Texas budget,
all the rainy day fund, 50 to one return
to the taxpayer from the funds
they give the Railroad Commission,
job refineries and all that are under attack.
When we, as an industry should be darn proud
of what we've done in this country.
And as a Railroad Commission,
our folks have done an excellent job.
And I'm just kind of tired
of the Commissioner of seeing us be put down
as polluting the world when the facts are in opposition.
In other words, fellow Commissioners and constituents,
they're lying to us when they say
that we're destroying the environment.
We have seen a 99% decrease environmental deaths
since the industrial revolution started.
99%.
So with that, I'll rest my loud mouth.
-: Thank you, Commissioner Christian
for your comments and for your thoughts.
You know, I think that we're obviously
addressing flaring this morning,
and there are lots of issues that I think this agency
and this industry does a good job with
and we can always have opportunity to improve, obviously
and flaring being one of them.
Thank you for your leadership
on getting our new flaring data sheet.
I think we're all ready to get more data
and have be more transparent about what's going on.
And I do appreciate the staff,
you mentioned that as well,
that they've really been thoughtful about looking at things.
And I think we, it's helpful to look wholistically
at every case instead of just one issue or not
and maybe beef those up, which we're talking about today.
But look, it's not just one part of the industry,
it's the whole industry who really needs to think
about flaring.
It's not that we aren't connected in a lot of places,
in fact, I'd say most of our pipeline,
our pipeline challenges are we don't have enough volume
of ability and instead of and take away
capacity instead of takeaway capacity, we aren't
we're connected a lot of places
but have capacity issues and outages as well.
So I appreciate that staff and industry
are both trying to be more thoughtful about it.
'Cause I agree.
We don't want to flare just to flare.
So I know Commissioner Wright,
You've got some comments
and I appreciate your thoughtfulness as well.
Since you've been on the Commission, working on this issue.
-: Fellow Commissioners, I guess take a deep seat
'cause mine is kind of lengthy also.
And in fact, I have a few statements that I'd like to say.
I know as Commissioners, it is my duty
to ensure we are doing everything possible
to utilize our natural gas as a reliable energy source.
I also know flaring exception requests have been allowed
for a host of reasons, including system failures,
emergency and pipeline issues
when equated to its economic viability.
I realized the practice of obtaining two year plans
become expected for those reasons.
And that decisions by our producers
have been based on the ability
of obtaining these lengthy, lengthy exceptions.
It is certainly not my intent to penalize our
industry that drives most of our economy here in Texas.
I'll always make decisions based
on what is best for Texas.
In this regard, I want to ensure
I have the ability to understand each effort issues
and thus ensure these applicants continue to do their
utmost best to utilize our produced gas as energy.
It is again, not my intent to change the process midway
through, when investments made have been made based
on our historical actions.
I do however, want to let staff
and the industry know that I intend to continue to explore
how we can allow for flaring exceptions due
to unforeseen issues while limiting
or eliminating your request for routine flaring.
I stand committed to working along side
the industry and our experts to reach this goal.
And will strive to encourage this henceforth.
As you may recall, I looked
to pass on some of the Statewide rule 32 exceptions
through request at our last open meeting.
I did so in order to familiarize myself
with the information we require from applicants
when considering their request.
As I stated in January,
when someone requests an exception to the Statewide
Rule 32,
I want to know if and how they are working
to reduce flaring
but what I see is wasting our state's natural resource.
I applaud the staff's efforts tremendously
to continue to push for greater transparency.
We need to flare and find that information through us.
As we continue to work to identify ways alongside industry
to reduce flaring.
Flaring is a necessary last resort during an upset,
and we have work to do internally,
and at the Commission, to ensure
that we are not approving requests that go beyond that.
To that end, I have a rather long motion.
I move that we remand items
number 135, 136, 138 through 142, 145, 151,
and 158 for the following reasons.
I move that we remand numbers 135 and 136
back to the Hearings division
for the express and limited purpose
of reviewing the information in the record
to determine the possibility of getting the gas to market
and or if calculations were made to determining
if a pipeline can be constructed
for less than the amounts asserted by the operator.
The proposed file of orders for these two items
collectively state that the operator proposes to flare
over $1 million in natural gas
because it will be too expensive to build a pipeline.
That seems worthy of further investigation.
Further, I move that we remand number
138 through 142, 145, and 151 to the areas of division
to investigate why these flaring exceptions
over the last four years have increased,
some of them dramatically, rather than decreased.
Finally, I move to remand number 158
to the Hearings division to further investigate
the possibility of either treating the CO2 rich gas
and getting it to market, or the safety
of attempting to flare the CO2 rich acid
if it turns out it can not be efficiently treated.
Since CO2 injection programs are becoming more popular,
I personally don't want this sort of flaring exception
authority to become routine.
Thank you.
-: So we have a motion.
Is there a second?
-: Second.
-: Second by Commissioner Christian.
All those in favor, say aye.
-: Aye. -: Aye.
-: Motion passes.
Items 135, 136, 138 through 142,
145, 151, and 158 are remanded.
Okay.
Now, back to items 10 through 186,
I move we approve items 10 through 186
except for the items which have just been remanded.
Is there a second?
-: Second.
-: Second by Commissioner Wright.
All in favor, say aye.
-: Aye. -: Aye.
-: Motion passes that those items are approved.
Thank you all for your work on this.
Let's move to master default orders.
There are 7 master default orders.
I move we approve items 187 through 193.
Is there a second?
-: Second.
-: Second by Commissioner Christian.
All in favor, say aye.
-: Aye. -: Aye.
-: Motion passes.
Those items are approved,
and we're going to agree to enforcement orders.
There were 111 agreed enforcement orders.
I move we approve items 194 through 304.
Is there a second?
-: Second.
-: Second by Commissioner Wright.
All in favor, say aye.
-: Aye. -: Aye.
-: Motion passes.
Those items for approved.
That concludes the hearing section matters,
and we'll now take up our administrative agenda
and Callie if you can, call up April,
and April, if not, come on.
We're ready for you on item 305, please.
-: Good morning, Mr. Chairman and Commissioners.
For the record, my name is April Richardson,
director of alternative fuel safety in the oversight,
excuse me, oversight and safety division.
Item 305 is the alternative fuel safety department's request
for approval to post proposed revisions to C
and G form 1001 and L and G form 2001
and the new C and G form 1001 M
and L and G form 2001 M
on the Commission website for public review and comment
through the end of February.
We are also requesting that if no comments are received,
or only comments in support with no suggested revisions,
that the forms automatically go into effect
on March 1st of 2021.
If comments are received that are not
in support of the revisions,
or otherwise require changes,
then the forms will be proposed for adoption
at a future conference.
C and G form 1001 and L and G form 2001
are the applications for C and G
and L and G license or license renewal.
The changes proposed to these forms are related
to the Chapter 13 and 14 rule changes that were approved
at conference on January 26, 2021.
They add fields to assist
with the processing of the application.
The changes also include updates
to division and department names, contact information,
and the form instructions.
C and G form 1001 M and L and G form 2001 M
are proposed new forms created as a result
of the Chapter 13 and 14 rule changes that were approved
at conference on January 26.
These forms allow C and G and L and G
container manufacturers to apply for a registration
or use the form to renew an existing registration.
May I answer any questions?
-: Thank you.
Are there any questions?
-: I don't.
_ All right.
I move we approve the staff's recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Christian,
all in favor, say aye.
-: Aye. -: Aye.
-: Motion passes.
That item's approved.
Thank you, April.
Item 306 is public participation,
and I don't have anyone registered indicating
they wish to speak on any non-posted items.
Item 307 is our executive session,
which we won't be going into today.
Are there any other duly posted matters
to be brought before the Commission?
Did I miss anything this morning?
All right, hearing none, this meeting
of the Railroad Commission of Texas is adjourned.
Thank you all.
Have a great week.
-: Thank you.