-: All right. Good morning.
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
September 14th, 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've had several people registering in advance.
The Commissioner considers items on the agenda
as posted on the agenda.
Number one. Good morning, John.
-: Good morning, Chairman and Commissioners.
Chairman: Good morning.
John: I'm Administrative Law Judge John Dodson
with the Hearings division.
Agenda item one, GUD 10606
was presented most recently at the previous
conference and was passed.
I remain available for questions if there are any.
-: Thank you.
Are there any questions of John?
And we also have representatives from
SINOC and Williamson Mockingbird here available for
questions as well.
Have any questions of any of those three people?
-: I have none.
-: Alright.
If not, Madam Chairman, Commissioners,
our last open meeting on August 24th,
I distributed an alternative final order in this case,
and I have four copies. If anybody needs it.
Now, that you've had time to review that order,
I would like to answer any questions you have.
Are there any questions regarding this?
Jim: I have none.
-: If there are no questions, I'd like to make a
motion adopting that final order.
Based on the evidence in the record,
I respectfully disagree with some of the findings of
fact and conclusions of law contained in the final order,
presented with the proposal for decision by the
Administrative Law Judge.
I moved to substitute the final order proposed
by the Administrative Law Judge
with the final order I distributed to the Commissioners at
the Commissioners' open meeting on August 24th.
I further move that the Commission adopt that final order as
substituted.
Christi: Are there any discussions?
I second that.
All in favor, say aye.
-: Aye.
Motion passes, that aye is approved.
Thank you, John, for your work on this.
All right.
Item number two.
Peter: Good morning, Chairman, Commissioners.
My name is Peter Buva, Technical Examiner,
with the Hearings division.
Item number two, is the application of
Overflow Energy Permian, LLC.
Pursuant to Statewide Rule 46, to inject fluid into
a formation productive of boiler gas
for the Valkyrie SWD lease, well number one,
Sandbar (Bone Spring) Field in Reeves County, Texas.
The application is protested by NGL Water Solutions,
Permian, LLC.
NGL contends that the proposed injection well is not
in the public interest and yellows or
expressed concerns that the proposed Valkyrie SWD
will endanger it's seven fresh water wells.
All within four and a half mile radius
from the proposed well.
Overflow protest presented evidence addressing each of the
requirements in Statewide Rule 46 regarding protestants
claims about the lack of public interest.
The examiners find that overflow provided evidence in
support of the industry need for the proposed well.
NGL's claim, that the protestants own operations are
sufficient to address the industry need.
To the exclusion of
other disposable operators in the particular area.
It's not an argument in favor of the public interest,
but against market competition.
Overflow also showed evidence that the proposed well
will not endanger fresh water resources.
The examiners recommend approval of the application,
exceptions and replies have been filed,
and I'm available for any questions.
Christi: Thank you, Peter.
Are there any questions?
Chairman: No.
Christi: Alright, I move we approve
the examiners recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Christian.
All in favor, say aye.
Chairmen: Aye.
-: Aye.
Motion passes. That item's approved.
Thank you.
Item number three.
-: Good morning, Chairman and Commissioners.
For the record, my name is Ezra Johnson,
Administrative Law Judge with the Hearings division.
Item three concerns the application of TEP Barnett USA, LLC
to amend the original drilling permit for
the Princeton lease, well, number one,
in the Newark East (Barnett Shale) field
in Tarrant County, Texas.
The well was originally permitted and drilled by Chesapeake
Operating Inc. in 2010 on the pooled Princeton units,
with a no perforation zone, or NPZ,
totaling 1,099 feet of horizontal lateral
between the penetration point in the permitted
corelative interval, and the first take point in the well.
TEP Barnett seeks removal of the NPZ designation
and requests a new exception to Statewide Rule 37,
to re-complete the well with take points closer
than allowed by the applicable field rule
to unleash tracks within the Princeton unit.
TEP Barnett claims that an exception to Statewide Rule 37
is needed to prevent waste of a significant volume of
hydrocarbons or in the alternative to prevent confiscation.
Janet Ketter, who owns an unleashed track
approximately eighty-five feet from the NPZ
filed a protest to the application.
Ms. Ketter protested, in this case, because she felt
that TEP Barnett would continue to damage
her community in the manner that
she felt that other operators had done by drilling wells and
operating pipelines in the area.
TEP Barnett provided evidence sufficient to show that
re-completion of the well remove the NPZ is necessary to
prevent confiscation of property.
The Examiners recommend the
Commission approve the application.
No exceptions or replies were filed,
and I'm available for questions.
Christi: Thank you. Are there any questions?
Wayne: No.
-: All right, I move we approve the Examiners recommendation.
Is there a second?
Jim: Second.
-: Second by Commissioner Wright.
All in favor. Say aye.
Wayne And Jim: Aye.
-: Aye. Motion passes, that item is approved.
Thank you, Ezra.
Item number four, Commissioners,
I'd like to take some more time to review this,
so I'd just like to pass this item this morning if that's
okay.
Jim: That's good with me.
-: Okay.
All right, let's move on to the oil and gas Consent Agenda.
There are 32 items on this, items five through 36.
I move we approve items five through 36.
Is there a second?
Wayne: Second.
-: Second by Commissioner Christian, all in favor, say aye.
Wayne And Jim: Aye.
-: Aye, motion passes. Those items are approved.
I'm sorry, I forgot to ask if there were any
comments or questions.
Jim: I would like to make some comments,
if you don't mind.
-: I apologize.
-: Yes sir.
-: As we like to see, there's some good news again.
There are multiple operators, which have reduced
the reaffirming volume, some by as much as 92%.
Other operators, who are not connected
to a Midstream Takeaway Operator,
are in the process of doing so.
This is good progress, because the gas is now
being used for a marketable purpose.
In addition, the examiners are continuing to do a great job
of reducing requested two year exception terms
down to shorter terms.
Unfortunately, there is at least one operator
who is not connected to a Midstream Takeaway Operator,
and represents to the Commission
that is not economical to do so.
However, the examiner in that matter correctly notes
that the operator fails to take into consideration
the value of the produced oil
or the produced other commodities in that equation,
as the oil is the primary source of revenue
for the operator.
The examiner has correctly recommended
that the requested two year exception term
be reduced to one year,
which should give the operator more than enough time
to consider and implement a solution
that reduces or eliminates the unnecessary waste
of our natural resources.
I think that's the right call.
I would strongly suggest
that if operators in these situations
cannot fully utilize the stranded gas for lease use
and who refuse to connect to a midstream takeaway provider
for economic reasons,
that they contact a third party vendor
to help utilize otherwise flowed gas for a
useful purpose.
There are more and more vendors out there who will be able
to fully utilize stranded gas for a variety of purposes,
including electrical generation, Bitcoin mining,
hydrogen production, and graphene production.
Many of these vendors processes eliminate
the vast majority of emissions that
flooding producers and even pay the operator for the gas.
If the gas is simply being wasted, however,
I'm not inclined to vote to consistently approve a flowing
exception where no improvement is shown.
That's all the comments I have. Thank you.
-: Thank you, and I am sorry I forgot
to do the comments before.
Wayne: Madam Chairman?
-: Yes, sir.
-: Can I say something?
I just want to.
-: No, no comments for you.
(laughing)
-: No, I want to compliment Commissioner Wright
for following through on this issue.
And I think it's, it's encouraging
and I want to remind all of us that this is,
what he's watching is that the private industry
is correcting the problem.
It's not the, we are monitoring,
We are encouraging, the Railroad Commission is watching,
which our staff is tremendous at that.
But by and large,
last last I heard was flaring in Texas,
was down according to Rubber Commission currently
to 7/10 of a percent of, of natural gas.
That means 99.3% is going to its intended purpose,
clean and usable.
So I just commend Commissioner Wright for keeping up on
this issue and commend our industry and let the public know
that maybe some of this that you're hearing in the press is
not quite as drastic as they present,
but when the entire problem that the have created
in the financial markets, these environmental, social,
and governance funds,
but the state of Texas has passed our legislature against
any dollars from Texas doing it are based on such things as
7/10 of 1%.
And that's not exactly catastrophic.
It's not climate catastrophe.
It's simply an issue that the market is taking care of.
-: I couldn't agree more.
I think the industry in itself has done a wonderful job
about reducing any, any type of flaring and or emissions.
We continue to have technologies that's improving that,
and can continue to expand those markets.
I just want to continue to try to encourage everyone to look
for markets that are developing, that are taking this gas.
I think it's a great thing. We've seen a huge reductions,
especially this year.
-: Yeah. Thank you both for your comments.
I agree.
We're moving the right direction and thank you for keeping
tabs on it for us, Fisher.
Okay. We're back to Rule 15 inactive well items,
numbers 37 through 68.
And I understand that number 65 is in compliance.
Yes ma'am, all right.
Are there any comments on these?
All right, I move we approve items 37 through 68,
except for item number 65.
Is there a second?
-: Second.
-: Second by Commissioner Wright.
All in favor. Say aye.
-: Aye
-: Aye. Motion passes. Those items are approved.
Master default orders.
There are 37 master default orders, Items 69 through 105.
I move that we approve Items 69 through 105.
Is there a second?
Wayne: Second.
-: Second by Commissioner Christian.
All in favor, say aye.
Wayne and Jim: Aye.
-: Aye, motion passes. Those items are approved.
Let's go to agreed enforcement orders.
There are 155 of these items, 106 through 260.
I move that we approve items 106 through 260.
Is there a second?
-: Second.
-: Second by Commissioner Wright.
All in favor, say aye.
Wayne And Jim: Aye.
-: Aye, motion passes. Those items are approved.
That concludes hearing sections matters.
I will now take up administrative agenda,
and we've got 261.
Good morning.
-: Good morning, Chairman and Commissioners.
For the record, I am Wei Wang, Executive Director.
As we start a new fiscal year,
I thought I would just give y'all a highlight on our
performance from last year.
And first I could speak to some of the performance measures.
I am glad to report all four departments exceeded their
inspection performance target set by the legislature,
specifically pipeline for specialized inspection.
The goal was 1,200 and we have conducted over 2,000
specialized inspections for standard comprehensive,
comprehensive pipeline inspections that go with 3,129.
And we ended the year with 3,598 for oil and gas.
The target was 189,000.
And our inspector completed over
300,000 inspections.
[Commissioner] Wow!
Significantly exceeding that goal.
For few safety department, the goal was 20,000 inspections
and we have finished 20,604.
And lastly, for our mining department,
the goal with 400 inspections and we finished the year with
416.
Now, on the well plugging front, our performance target
with 14 hand-rolled orphaned wells plugged.
And as of August 31st, we have plugged,
paid and completed the files
for 1,453 wells.
Now, in addition to meeting,
we're exceeding performance targets.
I'm also pleased to report that we completely re-vamped our
website.
We have a brand new website and that not only has
a complete new look,
we also added feature to make it easier for people to
navigate through our website and make it easier to find
informations.
We also added a few new tools to our website
to make it more transparent,
including a new pipeline inspection permitting evaluation
system, which we call PIPES.
This will allow our inspectors to put their inspection
reports and that information is available to the public as
soon as it's complete.
And also making data query available on our website.
So, in closing,
I look forward to another great year in 2022,
and also I'd like to take the opportunity to thank our staff
for their hard work during last year.
Wayne: Excellent job, Wei.
-: Thank you, Wei.
We've gotten some of the best staff going.
So I appreciate the report. Thank you for your work.
262, Good morning.
-: Good morning Chairman, Commissioners.
David Cooney from the Office of General Counsel,
standing in for Alex Shock with a report on federal
developments, nothing specific, just general news.
The Waters of the United States rule is looming coming from
the federal government.
We're looking for that, EPA and
the U.S. Army Corps of Engineers recently announced
that returning to using pre-2015
Waters of the United States rule,
and we will be monitoring or we're on the lookout for,
we expect a rule-making proposal to come from them.
And we're also on the lookout for the proposal on the oil
and gas methane rule.
We are maintaining contact with our
sister agencies and the Office of Attorney General.
So we can assure coordination.
That's the report on the federal front.
Christi: Thank you. Any questions?
-: On the methane side, have you, have you heard anything?
I also think I saw an article this morning that was saying
that they were looking at possibly taxing that.
Have you heard anything in that regard?
David: All I've heard is that they're expecting
some pretty tight standards in the proposal.
-: Thank you, David.
-: Thank you for continuing to monitor. Here they come again.
Thank you.
(coughing)
All right.
Item 263.
Good morning.
-: Good morning. Chairman, Commissioners.
Haley Cochran with the Office of General Counsel.
Item number 263 is staff's recommendation
to publish proposed new Rule 16,
Texas Administrative Code Section 3.65 and published
proposed amendments to Section 3.107.
Section 3.65 is proposed pursuant to House Bill 3648 and
Senate Bill 3 from the 87th Regular Session.
House Bill 3648 and Senate Bill 3
added Section 81.073 to the Natural Resources Code,
which requires the Commission to adopt rules,
to designate natural gas facilities as critical customers
and critical gas suppliers during an energy emergencies.
The rules must provide that those designated critical
provide critical customer information as defined by the
Commission to the electric entities.
Commission staff collaborated with staff
from the Public Utility Commission of Texas,
while drafting the proposed rule,
which implements Section 4 of Senate Bill 3 and
Section 1 of House Bill 3648.
The proposed new rule specifies the criteria and process by
which entities associated with providing natural gas
in Texas are designated as critical customers during
an energy emergency.
In accordance with Senate Bill 3,
the proposed rule requires that only facilities that are
prepared to operate during a weather emergency may be
designated as critical customers.
Designation as a critical customer prompts
a requirement for the facilities operator
to directly provide electric entities with critical customer
information.
Providing the information positions,
a critical customer to receive power during an energy
emergency so that it can continue to supply natural gas for
power generation or other important uses.
The proposed amendments to Section 3.107,
add references to the requirements of
proposed new Section 3.65.
Staff requests the Commission's approval to publish
the new rule and amendments
and the Texas Register for a 30 comment period.
If approved today,
the proposal should appear in the October 1st issue of the
Texas Register.
The proposal in an online comment forum would also be made
available on the Commission's website,
giving people additional time to review and submit comments.
House Bill 3648 requires that the Commission adopt the new
rules not later than December 1st of this year.
May answer any questions?
Christi: Thank you. Are there questions?
Chairman: Nope.
-: I appreciate staff's work on this and PUC.
I know we are going to hear from them in a few minutes,
but I appreciate that, and that we were up and going, right?
All right. I move, we approve the staff's recommendation.
Is there a second?
-: Second.
-: Second by Commissioner Christian.
All those in favor, say aye.
-: Aye.
-: Aye. Motion passes.
That item is approved.
Thank you, Haley.
All right, and item 264 as our Public Participation item,
we have several who've registered.
So, I think we'll start with Thomas Gleason.
If he, since we're, we'll just go right into his,
since we just finished this issue.
And thanks for being here today,
we appreciate working with you all.
-: Yes ma'am.
Thank you Madam Chair, Commissioners.
For the record, Thomas Gleason Executive Director
of the Public Utility Commission of Texas.
And as your staff just stated, we've,
we've worked collaboratively on the rule that was just
proposed and other rules and projects dealing with
weatherization of infrastructure, communications,
information, sharing a number of,
of items coming out of a session.
I think it's clear from the legislative session that that
was our mandate was to work more collaboratively together to
find solutions to the issues that came to bear from winter
storm Uri.
And I'm, from the PUC perspective, I'm practicing,
I think, I think we're meeting that mark.
We have multiple project teams that meet one to three times
a week.
I meet with your executive director once a week to talk
holistically about issues facing our two agencies and any
industries that we regulate.
And so I think it is fair to say at this point that we're
moving in the right direction to meet the mandate from the
legislature to produce the results that the people of Texas
deserve.
And I want to thank you all and your executive director and
your staff for, for the great work
that we've been able to do together.
You all have been more than willing to share your resources,
your ideas and information with us.
And we really appreciate it.
Christi: Thank you. Anybody?
-: And thank you guys for opening your doors
and getting our two agencies
to work really strongly on these issues.
Thomas: Yes, sir.
I mean the winter storm showed the real interdependence
between our two systems.
And so I think this is a long time coming and I'm proud to
say that we're, we're getting there.
-: Thank you.
-: And I, I appreciate the leadership y'all
are doing in this and commend you for
taking the bull by the horns.
And it was a terrible thing that happened.
And I hope we step up.
Like we in Texas always have, and come through
for the people and your agency is doing it.
Thank you for listening to us.
-: Yes, sir. Thank you.
Christi: Thank you, Thomas, for working with us.
We look forward to continued collaboration.
-: Thank you.
-: It's easy in the building.
Thanks for coming down up and however,
whichever direction we go.
Thanks.
All right, we also have, I've got one, two, three,
I think four people that have registered.
So I'm just going to start with (indistinct).
Ashley Williams Watt, who is the landowner
from, for Antifa.
Okay.
Sarah Stogner?
William Burch?
Raymond Strop?
Okay.
We don't, they aren't here.
They've registered.
So please note that they've registered, but we're not here.
As we've got to them.
Item 265 is our executive items session,
which we won't be going into today.
Are there any other matters to be brought before the
Commission at this time?
Hearing none.
This meeting of the Railroad Commission was adjourned.
Thank you all very much.