WEBVTT 00:00:03.940 --> 00:00:06.990 Good morning, everybody. This meeting of the Railroad 00:00:06.990 --> 00:00:09.039 Commission of Texas will come to order to consider 00:00:09.039 --> 00:00:11.769 matters which have been duly posted with the Secretary 00:00:11.769 --> 00:00:16.390 of State for January 25, 2022. Under our public participation 00:00:16.390 --> 00:00:19.940 policy, anyone desiring to offer public testimony 00:00:19.940 --> 00:00:23.260 on any items that are not noticed on today's agenda 00:00:23.739 --> 00:00:27.410 was required to register in advance. We have one person, 00:00:27.420 --> 00:00:29.559 Ashley Watt, registered in advance for this meeting. 00:00:29.940 --> 00:00:32.189 The Commission will consider the items on the agenda 00:00:32.189 --> 00:00:36.600 as posted on the, agenda but before we start the meeting, 00:00:36.609 --> 00:00:39.689 we have some awards to present that are probably 00:00:39.689 --> 00:00:42.759 the most valuable part of this meeting to recognize 00:00:42.770 --> 00:00:45.119 our good staff that makes our Commission what it is 00:00:45.119 --> 00:01:05.239 today. 00:01:05.239 --> 00:01:07.469 Good morning. Chairman and Commissioners. I'm Wendy 00:01:07.469 --> 00:01:10.719 O'Neil, HR Director. This morning, we will be recognizing 00:01:10.730 --> 00:01:13.319 recognizing employees for their years of service with 00:01:13.319 --> 00:01:15.959 the Railroad Commission of Texas for the first quarter 00:01:15.959 --> 00:01:19.430 of Fiscal Year 2022. Collectively, these employees have 00:01:19.430 --> 00:01:24.290 served our agency for 110 years. First, celebrating 00:01:24.290 --> 00:01:27.849 five years of service is Jason Clarke with agency projects. 00:01:33.040 --> 00:01:55.239 (audience chatter) 00:01:55.239 --> 00:01:58.659 Next we have John Moore in the Hearings division, celebrating 00:01:58.659 --> 00:02:13.939 five years of service. 00:02:13.939 --> 00:02:25.539 (audience chatter) 00:02:25.539 --> 00:02:28.639 Also celebrating five years of service is Danny Sorrells 00:02:28.639 --> 00:02:30.098 from the oil and gas division. 00:02:30.122 --> 00:02:59.240 (audience chatter) 00:02:59.240 --> 00:03:02.500 Next we have Joseph Parks in the Surface Mining Division 00:03:02.500 --> 00:03:04.191 celebrating five years of service. 00:03:04.215 --> 00:03:23.187 (audience chatter) 00:03:23.211 --> 00:03:24.039 Also celebrating five 00:03:24.039 --> 00:03:26.469 years of service is Katherine Upem from the Surface 00:03:26.469 --> 00:03:27.508 Mining Division. 00:03:27.532 --> 00:03:44.319 (audience chatter) 00:03:44.343 --> 00:03:46.699 Celebrating 10 years of service is Veneta 00:03:46.699 --> 00:03:54.180 Jackson from Gas Service Audit. And I don't think she 00:03:54.180 --> 00:03:57.020 is here this morning. Okay, no worries. Celebrating 00:03:57.030 --> 00:04:00.639 20 years of service is Peter Pope from the oil and gas division. 00:04:00.663 --> 00:04:27.740 (audience chatter) 00:04:27.740 --> 00:04:31.550 Misty Dozier in Legal Enforcement is celebrating 00:04:31.560 --> 00:04:33.265 25 years of service. 00:04:33.289 --> 00:05:01.139 (audience chatter) 00:05:01.139 --> 00:05:04.160 And last but certainly not least, Arthur Korea in 00:05:04.160 --> 00:05:07.573 the oil and gas division is celebrating 30 years of service. 00:05:07.597 --> 00:05:48.139 (audience chatter) 00:05:48.139 --> 00:05:51.350 Okay, let's get started with agenda item number one. 00:05:54.839 --> 00:05:57.399 Good morning Commissioners Natalie Dubiel of the 00:05:57.399 --> 00:06:01.709 Office of General Counsel. Item number one is a status update 00:06:01.720 --> 00:06:07.639 on the Phase 2 proceeding of House Bill 1520. House 00:06:07.639 --> 00:06:10.769 Bill 1520 provides the procedure and mechanism to 00:06:10.769 --> 00:06:14.199 minimize the costs that end use natural gas customers 00:06:14.209 --> 00:06:17.360 would otherwise experience as a result of Winter Storm 00:06:17.360 --> 00:06:21.269 Yuri by providing securitization financing to enable 00:06:21.269 --> 00:06:24.889 utilities to recover those costs and most importantly 00:06:24.899 --> 00:06:29.230 to reduce the cost to customers. As you're aware, phase 00:06:29.230 --> 00:06:31.819 one of the proceeding was completed when the Commission 00:06:31.819 --> 00:06:35.199 issued the regulatory asset determination order on 00:06:35.199 --> 00:06:39.860 November 10, 2021. Since that time, Commission staff 00:06:39.860 --> 00:06:43.009 has been working very closely with our outside counsel, 00:06:43.019 --> 00:06:46.889 our financial advisor, and the Texas public financing 00:06:46.889 --> 00:06:50.769 authority and their advisers to draft and finalize 00:06:50.779 --> 00:06:54.540 a financing order for your consideration. We will continue 00:06:54.540 --> 00:06:58.089 to work on a draft order and expect to bring a final 00:06:58.089 --> 00:07:01.670 financing order to this Commission on the February 00:07:01.680 --> 00:07:05.839 8, 2022 open meeting. Mark Everts, director of the 00:07:05.839 --> 00:07:09.250 Market Oversight section, along with myself, are available 00:07:09.250 --> 00:07:11.500 to answer any questions you might have regarding the 00:07:11.500 --> 00:07:13.456 status update. Thank you. 00:07:13.480 --> 00:07:15.199 And Kate Norman, with Texas 00:07:15.199 --> 00:07:17.480 Gas Services, of course, is available for questions. 00:07:17.490 --> 00:07:19.533 Are there any questions, members? 00:07:19.557 --> 00:07:20.272 No, sir. 00:07:20.296 --> 00:07:23.459 Thank you for your work on this. 00:07:23.459 --> 00:07:28.259 It saved Texans a lot of heartbreak on that storm, 00:07:28.639 --> 00:07:32.259 we were seeing $600 and $700 bills, and had people very 00:07:32.269 --> 00:07:35.529 hurt, and this allows with nobody making a profit that 00:07:35.529 --> 00:07:40.740 I know of, spreading that over 30 years. It's a, it 00:07:40.740 --> 00:07:42.639 helps the folks out, and I think it was a great work 00:07:42.639 --> 00:07:46.079 that you have done, and the Legislature's ideas, so anyhow. 00:07:46.089 --> 00:07:51.430 Are there any questions, members? Hearing none, let's 00:07:51.430 --> 00:07:58.439 move to agenda item number two. 00:07:58.439 --> 00:08:00.540 Good morning, Chairman and Commissioners. My name is 00:08:00.540 --> 00:08:03.230 Austin Gascamp, Technical Examiner for the Hearings 00:08:03.230 --> 00:08:06.839 Division. Item number two is the application of Parsley Energy 00:08:06.839 --> 00:08:11.160 Operations, LLC, pursuant to Statewide Rule 46 for amendment 00:08:11.160 --> 00:08:14.379 of its existing permit to inject fluid into a reservoir 00:08:14.379 --> 00:08:17.550 productive of oil or gas for the Cox University Lease, 00:08:17.550 --> 00:08:21.060 well number one, Block 17, Cherry Canyon Field in Ward 00:08:21.060 --> 00:08:24.899 County Texas. Parsley request the maximum daily injection 00:08:24.899 --> 00:08:27.209 volume of the permit to be amended from 20,000 barrels 00:08:27.209 --> 00:08:30.519 per day to 48,000 barrels per day with all other parameters 00:08:30.519 --> 00:08:34.360 remaining unchanged. The well remains noncommercial 00:08:35.039 --> 00:08:39.299 The application is protested by Manzanita Operating 00:08:39.299 --> 00:08:43.690 LLC. Manzanita, an adjacent operator, is concerned about 00:08:43.690 --> 00:08:46.570 the possible influx of injected water to its productive 00:08:46.570 --> 00:08:49.840 zones. Specifically, Manzanita stated the basis of 00:08:49.840 --> 00:08:52.840 its protest is water influx at its Laguna five number 00:08:52.899 --> 00:08:57.159 two well. In the area, the Ramsey sands are the predominant 00:08:57.159 --> 00:08:59.960 produced interval near the top of the Bell Canyon Formation. 00:09:00.440 --> 00:09:03.379 Approximately 5 - 700 ft separates the injection interval 00:09:03.379 --> 00:09:06.309 from the Ramsey Sands. Between these intervals are 00:09:06.309 --> 00:09:08.570 silt stones which prevent upward migration within the 00:09:08.570 --> 00:09:11.470 Delaware Mountain group, partially performed step rate 00:09:11.470 --> 00:09:13.799 testing to assess whether the increased rates would 00:09:14.100 --> 00:09:17.090 fracture the reservoir. Service company found no evidence 00:09:17.090 --> 00:09:20.509 of fracturing at the requested rate. The subject well 00:09:20.509 --> 00:09:22.940 has casing designed to adequately protect groundwater 00:09:22.950 --> 00:09:26.070 according to the ground water advisory units recommendations. 00:09:26.679 --> 00:09:29.539 The examiners recommend approval of Parsley's application. 00:09:29.899 --> 00:09:32.309 No exceptions were filed and I'm available for questions. 00:09:32.840 --> 00:09:34.454 Any questions members? 00:09:34.478 --> 00:09:36.610 You said it's below the Bell 00:09:36.610 --> 00:09:38.166 Canyon, this injection? 00:09:38.190 --> 00:09:38.808 Yes, sir. 00:09:38.832 --> 00:09:39.966 Okay, thank you. 00:09:39.990 --> 00:09:40.360 Okay 00:09:40.840 --> 00:09:44.179 I move we approve the examiner's recommendation. 00:09:44.179 --> 00:09:44.985 Is there a second? 00:09:45.009 --> 00:09:45.607 Second. 00:09:45.631 --> 00:09:47.450 Second by Commissioner Craddick. All in favor 00:09:47.450 --> 00:09:51.279 say aye. Any opposed? Motion passes. That item is 00:09:51.279 --> 00:09:55.350 approved. Agenda items three through 5. Thank you much. 00:10:00.340 --> 00:10:03.000 Good morning, Chairman and Commissioners. My name is 00:10:03.000 --> 00:10:05.799 John Moore, hearing, a Technical Examiner in the Hearings division. 00:10:06.129 --> 00:10:12.639 He's one of the inexperienced new people. 00:10:12.639 --> 00:10:15.970 Items three, four, and five are the three applications of Owl 00:10:15.980 --> 00:10:20.820 SWD Operating LLC, Pursuant to Statewide Rule 46 to 00:10:20.820 --> 00:10:23.580 inject fluids into a reservoir productive of oil and 00:10:23.580 --> 00:10:28.600 gas in Loving County, Texas. Namely, the proposed Aphrodite, 00:10:29.090 --> 00:10:32.659 the Erme, and the Poseidon saltwater disposal wells. 00:10:33.539 --> 00:10:36.019 The three injection applications were consolidated 00:10:36.019 --> 00:10:39.909 into a single hearing and proposed final order as they 00:10:39.909 --> 00:10:43.559 share common facts, parties and legal issues. Only 00:10:43.559 --> 00:10:46.559 one vote is required for the proposed final order. 00:10:47.649 --> 00:10:50.860 The applications are protested by Z & T Cattle Company 00:10:51.240 --> 00:10:54.259 who contends that the wells are not in the public interest. 00:10:55.039 --> 00:10:59.019 The wells, located within a mile of each other, are proposed 00:10:59.019 --> 00:11:02.559 to be similar in construction and injection zone with 00:11:02.559 --> 00:11:06.710 the injection capacity for each well limited to 35,000 00:11:06.710 --> 00:11:10.450 barrels per day. The proposed injection interval for 00:11:10.450 --> 00:11:13.360 the three wells is into the non productive segments 00:11:13.370 --> 00:11:17.879 of the Delaware Mountain Group formation. The applicant 00:11:17.889 --> 00:11:22.600 owl owns and operates a 500 mile water transfer pipeline 00:11:22.610 --> 00:11:25.730 which extends between southern New Mexico and Loving 00:11:25.730 --> 00:11:29.730 County Texas. With existing injection wells in both 00:11:29.730 --> 00:11:35.269 new Mexico and Texas. Owl testified that it 00:11:35.269 --> 00:11:38.700 will need about 100,000 barrels per day of additional 00:11:38.700 --> 00:11:43.110 injection capacity to handle its contractual obligations 00:11:43.279 --> 00:11:47.909 from the state of Texas. The protest in Z & T does 00:11:47.909 --> 00:11:51.269 not dispute that Owl has a contract to provide disposal 00:11:51.269 --> 00:11:56.210 services in the area of the proposed wells. The examiners 00:11:56.210 --> 00:11:59.210 find that the three injection applications meet the 00:11:59.210 --> 00:12:03.080 requirements of Statewide Rule 46 and the Texas Water 00:12:03.080 --> 00:12:07.620 Code and recommend approval of the applications. Exceptions 00:12:07.620 --> 00:12:10.759 and replies were filed. I'm available for questions. 00:12:11.340 --> 00:12:13.620 Thank you. Commissioner Wright, I believe you have some 00:12:13.629 --> 00:12:15.003 comments or questions. 00:12:15.027 --> 00:12:16.779 I do. I have some concerns and 00:12:16.779 --> 00:12:19.250 I appreciate it, Mr Chairman. For what it's worth, I 00:12:19.250 --> 00:12:21.750 agree with the protestants these matters that if 00:12:21.759 --> 00:12:24.360 an operator is bringing in large amounts of waste from 00:12:24.360 --> 00:12:28.000 another state for disposal here in Texas, that is generally 00:12:28.000 --> 00:12:31.409 not within the public interest of Texans. However, 00:12:31.409 --> 00:12:33.919 I don't think there are any statutes, and I don't think 00:12:33.919 --> 00:12:37.100 that we have any rules that would require us 00:12:37.100 --> 00:12:41.059 to deny these applications based solely on that possibility. 00:12:42.539 --> 00:12:45.309 Moreover, I don't think it's entirely clear how much, 00:12:45.320 --> 00:12:48.389 if any, of the produced water in these applications 00:12:48.389 --> 00:12:51.649 will originate in New Mexico. Therefore, I intend to 00:12:51.649 --> 00:12:54.899 vote to approve these applications. That said I have 00:12:54.899 --> 00:12:58.149 grave concerns in allowing massive amounts of produced 00:12:58.149 --> 00:13:01.769 water from other states to be disposed of here in Texas, 00:13:02.059 --> 00:13:05.259 particularly from New Mexico, which is a date adjacent 00:13:05.259 --> 00:13:08.840 to regions in Texas that are currently undergoing significant 00:13:08.840 --> 00:13:12.429 seismic activity, due to at least in part to injection 00:13:12.429 --> 00:13:15.720 and disposal. I intend to keep an eye on this matter 00:13:16.539 --> 00:13:19.210 and expect to have the ability to better identify when 00:13:19.210 --> 00:13:22.120 operators try to use Texas as a dumping ground for 00:13:22.120 --> 00:13:24.870 produced water from other states. So I just want to 00:13:24.870 --> 00:13:28.759 make sure that we're watching that. And I have 00:13:28.759 --> 00:13:31.870 a huge concern of bringing in other states 00:13:31.870 --> 00:13:38.960 water, especially in seismic induced areas. So thank you. 00:13:38.984 --> 00:13:41.529 I appreciate it, Commissioner, and you know, interesting, 00:13:41.529 --> 00:13:44.750 of course war stories. But I've lived and I was state 00:13:44.750 --> 00:13:47.440 rep while we had the water problem coming from Louisiana, 00:13:47.440 --> 00:13:50.120 the same situation, and they were tearing the roads 00:13:50.120 --> 00:13:53.429 up, tearing things up, dumping in ditches, everything 00:13:53.429 --> 00:13:56.789 else you can imagine because Louisiana, they were bringing 00:13:56.789 --> 00:13:59.720 the water over, and Jim, working with the feds, would find 00:13:59.720 --> 00:14:02.500 out that there is interstate, at least was at the time, this was 00:14:03.840 --> 00:14:07.379 15 years ago. And the law was, we couldn't discriminate 00:14:07.389 --> 00:14:10.809 because of the cargo of the truck. So there was no 00:14:10.809 --> 00:14:13.429 law to discriminate. And the Railroad Commission at 00:14:13.440 --> 00:14:17.000 that time, which was years ago, worked with us. And 00:14:17.009 --> 00:14:21.000 we decreased that by, you know, permitting limitations, 00:14:21.000 --> 00:14:23.379 other things like that. So you might go back and dust 00:14:23.379 --> 00:14:26.129 off the book of what happened with the Louisiana situation 00:14:26.129 --> 00:14:29.269 and see if there's any applicable adjustments we can 00:14:29.279 --> 00:14:32.080 look at for that. But the Commission at that time helped 00:14:32.080 --> 00:14:34.460 the citizens out and really did a great job, historically, 00:14:34.840 --> 00:14:38.980 and changed some of the rules, really a good time that 00:14:38.980 --> 00:14:41.750 shows good points in the history. So once again dust 00:14:41.750 --> 00:14:43.740 off the old books, if you would and see if there's anything 00:14:43.750 --> 00:14:47.149 that we can do about other states doing that. I think 00:14:47.159 --> 00:14:49.860 it was a problem then, it's a problem now and the Feds 00:14:49.870 --> 00:14:53.409 aren't helping us with it for sure. But I move we 00:14:53.409 --> 00:14:55.299 approve the examiner's recommendation. Is there 00:14:55.299 --> 00:14:56.047 a second? 00:14:56.071 --> 00:14:56.626 Second. 00:14:56.650 --> 00:14:58.340 Second by Commissioner Wright. All 00:14:58.340 --> 00:15:03.250 in favor say aye. Any opposed? Motion passes. Those 00:15:03.250 --> 00:15:06.149 items are approved. Let's move to agenda items six and seven. 00:15:12.639 --> 00:15:15.379 Good morning, Chairman, Commissioners. Kristie Reeve, 00:15:15.379 --> 00:15:17.559 Administrative Law Judge with the Hearings division. 00:15:18.039 --> 00:15:21.820 Items six and seven will be presented together. They require 00:15:21.820 --> 00:15:25.730 one vote as they are one order. 00:15:25.730 --> 00:15:28.600 These items are the result of a good faith claim initiated 00:15:28.600 --> 00:15:31.649 by the surface and partial mineral owner where the 00:15:31.649 --> 00:15:34.740 subject wells are located. Against Minexprod, the 00:15:34.740 --> 00:15:37.570 owner of record of the leases seeking plugging of 00:15:37.570 --> 00:15:41.289 the wells. Minexprod contends it has a good faith 00:15:41.289 --> 00:15:45.240 claim by virtue of the leases being pulled and ongoing 00:15:45.240 --> 00:15:48.360 operations consistent with the operation savings clause 00:15:48.740 --> 00:15:52.559 and one of the mineral leases. The Vardells argue Minexprod 00:15:52.559 --> 00:15:55.990 activities occurring on one of the leases is not 00:15:55.990 --> 00:15:58.980 consistent with the operation savings clause and the 00:15:58.990 --> 00:16:03.429 mineral leases are no longer in effect. The examiners 00:16:03.429 --> 00:16:06.309 found the Minexprod failed to provide a reasonably 00:16:06.309 --> 00:16:08.730 satisfactory showing of a good faith claim to operate 00:16:08.730 --> 00:16:11.840 the wells. Therefore, it is recommended that the Commission 00:16:11.840 --> 00:16:14.870 find Minexprod does not have a good faith claim 00:16:15.149 --> 00:16:17.860 and order Minexprod to plug and abandon the wells. 00:16:18.440 --> 00:16:20.899 Exceptions and replies were filed. I'm available for 00:16:20.899 --> 00:16:21.930 questions. 00:16:21.954 --> 00:16:25.070 Any questions, members? Mr. Rob Hargrove, 00:16:25.070 --> 00:16:27.889 representing Joe and Jackie Vardell is available for 00:16:27.889 --> 00:16:31.789 questions also. Are there any questions? Okay, hearing 00:16:31.789 --> 00:16:34.450 none. I move we approve the examiner's recommendation. 00:16:34.460 --> 00:16:35.283 Is there a second? 00:16:35.307 --> 00:16:35.755 Second. 00:16:35.779 --> 00:16:37.149 Second by Commissioner Craddick. 00:16:37.179 --> 00:16:41.490 All in favor say aye. Any opposed? Motion passes. Those 00:16:41.490 --> 00:16:46.039 items are approved. Oil and Gas Consent Agenda. 00:16:46.039 --> 00:16:49.470 I believe Commissioner Wright, you may have some questions. 00:16:49.940 --> 00:16:52.509 I do. I've got some comments that I'd like to make. 00:16:52.509 --> 00:16:56.360 Let's wait and let her present here, and then. It's my fault. 00:16:57.139 --> 00:16:57.860 Say what? 00:16:57.884 --> 00:16:58.418 Nothing to-- 00:16:58.442 --> 00:17:00.070 Nothing to report on that? So there's 00:17:00.070 --> 00:17:02.470 nothing. So Commissioner Wright, you have some statements? 00:17:02.480 --> 00:17:05.160 Yeah, I just want to say. I think over this past year 00:17:05.160 --> 00:17:08.130 we've done a wonderful job of looking at flaring permits 00:17:08.140 --> 00:17:10.700 within the state of Texas. You can see it on the decrease 00:17:10.700 --> 00:17:12.700 in the amount of flaring that we've done just 00:17:12.700 --> 00:17:16.339 particularly in this past year. So with that I have 00:17:16.339 --> 00:17:20.480 some concerns in this one, with specific 00:17:20.490 --> 00:17:23.569 regard to item number 15 in the Consent Agenda in which 00:17:23.569 --> 00:17:26.670 UniTex was the applicant for a flaring exception. 00:17:27.230 --> 00:17:31.130 I want to note two things. First UnTex as well as 00:17:31.140 --> 00:17:34.359 other operators who used to be connected to West Texas 00:17:34.359 --> 00:17:37.180 gas pipeline appeared to have been left in a lurch 00:17:37.180 --> 00:17:40.630 when West Texas pulled up stakes and so I understand 00:17:40.630 --> 00:17:44.359 their frustration. However, that was two years ago. 00:17:44.839 --> 00:17:47.519 Second, the flaring exception requested by UniTex 00:17:47.549 --> 00:17:50.009 will expire in March of this year just two months from 00:17:50.009 --> 00:17:53.759 now. I want to see that UniTex and all other operators 00:17:53.759 --> 00:17:57.359 have a plan going further, going forward other than 00:17:57.359 --> 00:18:00.990 flaring 100% of their gas. From the conference materials 00:18:00.990 --> 00:18:03.769 that I was given, it appears that there were a total 00:18:03.769 --> 00:18:08.009 of 216 wells connected to West Texas gas pipeline. Each 00:18:08.009 --> 00:18:10.549 and every operator of those wells needs a plan going 00:18:10.549 --> 00:18:13.549 forward to minimize the waste of our natural gas resources. 00:18:14.140 --> 00:18:17.420 Whether that plan is to connect or contract with a 00:18:17.420 --> 00:18:20.240 third party vendor to utilize the gas on site or if 00:18:20.240 --> 00:18:22.480 the plan is for the operators in the field to band 00:18:22.480 --> 00:18:25.460 together and connect with another takeaway provider, 00:18:25.470 --> 00:18:29.069 whatever best works for the operators. If no plan is 00:18:29.069 --> 00:18:32.250 made, however, I will be less likely to approve even 00:18:32.250 --> 00:18:34.960 shorter flaring exceptions. I encourage the operators 00:18:34.970 --> 00:18:38.500 not to put me in that position. Thank you, Mr. Chairman. 00:18:38.680 --> 00:18:43.910 Thank you. (crosstalk) I appreciate it. There are 21 items on the 00:18:43.910 --> 00:18:48.220 Consent Agenda. And I move we approve these 00:18:48.220 --> 00:18:50.616 items 8 through 28. Is there a second? 00:18:50.640 --> 00:18:51.670 Second. 00:18:51.670 --> 00:18:55.259 Second by Commissioner Wright, All in favor say aye. 00:18:55.269 --> 00:18:58.349 Any opposed? Motion passes. Those items are approved. 00:18:58.839 --> 00:19:01.779 Let's move to the Master Default Orders. There are 00:19:01.779 --> 00:19:05.380 nine Master Default Orders. I move we approve 00:19:05.380 --> 00:19:08.334 items 29 through 37. Is there a second? 00:19:08.358 --> 00:19:09.082 Second. 00:19:09.106 --> 00:19:13.829 Second by Commissioner. Craddock. All in favor say aye. Any 00:19:13.829 --> 00:19:17.170 opposed? Motion passes. Those items are approved. Let's 00:19:17.170 --> 00:19:19.559 move to the Agreed Enforcement Orders. There are 121 00:19:19.559 --> 00:19:22.750 Agreed Enforcement Orders. I move we approve 00:19:22.759 --> 00:19:25.813 items 38 through 158. Is there a second? 00:19:25.837 --> 00:19:26.566 Second. 00:19:26.590 --> 00:19:27.319 Second by 00:19:27.319 --> 00:19:31.019 Commissioner Wright. All in favor say aye. Any opposed? 00:19:31.029 --> 00:19:33.970 Motion passes. Those items are approved. That concludes 00:19:33.970 --> 00:19:36.599 the Hearing sections. We will now take up our Administrative 00:19:36.599 --> 00:19:40.410 agendas. Agenda Item 159 is an update from the Office 00:19:40.410 --> 00:19:41.548 of General Counsel. 00:19:41.572 --> 00:19:43.799 Good morning, Chairman, Commissioners. 00:19:43.809 --> 00:19:46.640 David Cooney from the Office of General Counsel. Just 00:19:46.640 --> 00:19:50.920 a brief report that staff is provided its input 00:19:50.920 --> 00:19:53.849 to TCEQ for comments on the oil and gas methane 00:19:53.849 --> 00:19:58.960 rules that are due January 31st. TCEQ is to provide us with 00:19:58.960 --> 00:20:01.829 the final draft in time for executive directors of 00:20:01.829 --> 00:20:05.289 both agencies to sign and turn in before the comment 00:20:05.289 --> 00:20:09.759 deadline of January 31. On the Waters of the United 00:20:09.759 --> 00:20:14.230 States Rule comments that are due February 7, the 00:20:14.230 --> 00:20:17.920 day before our next conference, final draft is under 00:20:17.920 --> 00:20:20.960 review circulating in the agency and we'll be prepared 00:20:20.960 --> 00:20:25.170 to file under executive director's signature by or 00:20:25.170 --> 00:20:26.516 before the deadline. 00:20:26.540 --> 00:20:27.225 Thank you. 00:20:27.249 --> 00:20:27.962 Thank you. 00:20:28.710 --> 00:20:30.954 Thank you appreciate that. 00:20:30.978 --> 00:20:32.509 It's a lot of work, too. 00:20:32.519 --> 00:20:35.119 Before I forget it, we have one of our, we 00:20:35.119 --> 00:20:37.880 had one of our PUC Commissioners that was here 00:20:37.880 --> 00:20:40.990 and that I visited with and want to thank him for taking 00:20:40.990 --> 00:20:43.359 the time to be with us today. I can't see you from 00:20:43.359 --> 00:20:45.279 wherever, but thank you and the good work that you're 00:20:45.279 --> 00:20:48.400 doing, the PUC is really on the ball correcting some 00:20:48.400 --> 00:20:52.240 problems that we had and I commend our friends there, 00:20:52.250 --> 00:20:54.430 the good work they're doing and the work they're doing 00:20:54.430 --> 00:20:56.759 and relationship with them and appreciate the Commissioner 00:20:56.759 --> 00:21:01.309 being here. I'm blind, maybe, I think that he ran away. 00:21:01.309 --> 00:21:05.460 Okay. But we do commend them. Agenda item 00:21:05.460 --> 00:21:09.250 233 is our public participation item and Miss Ashley 00:21:09.250 --> 00:21:12.059 Watt has registered indicating that she wishes to speak 00:21:12.059 --> 00:21:15.690 on a non-posted item. Mrs Watt happy to, Miss Watt, happy 00:21:15.690 --> 00:21:19.680 to see you here today and please take a couple of minutes 00:21:19.680 --> 00:21:20.920 to (indistinct). 00:21:20.944 --> 00:21:24.140 Good morning. My name is Ashley Williams Watt 00:21:24.140 --> 00:21:26.359 and I last spoke to you in September about the 00:21:26.359 --> 00:21:28.769 ongoing series of blowouts that have contaminated the 00:21:28.769 --> 00:21:31.259 freshwater aquifers underneath my West Texas cattle 00:21:31.259 --> 00:21:34.420 ranch in Ward and Crane counties. At that time we did 00:21:34.420 --> 00:21:36.480 not know exactly what was causing these blowouts, but 00:21:36.480 --> 00:21:40.309 it's now more clear. For decades, Chevron and only Chevron 00:21:40.329 --> 00:21:42.859 operated the field underneath my land as a water flood. 00:21:43.240 --> 00:21:45.500 However, they recklessly disregarded their Railroad 00:21:45.500 --> 00:21:48.670 Commission permits and over injected past their authorized 00:21:48.680 --> 00:21:51.930 limits by millions and millions of barrels. They were 00:21:51.930 --> 00:21:55.460 never cited nor fined. Over time this excess of salt 00:21:55.460 --> 00:21:58.069 water dissolved through casing and cement on wells 00:21:58.069 --> 00:22:01.119 both active and plugged, allowing produced water to 00:22:01.119 --> 00:22:05.130 contaminate freshwater zones via confirmed casing failures. 00:22:05.349 --> 00:22:09.079 This problem continues to reveal itself as just last 00:22:09.079 --> 00:22:13.000 month, another shallow water well on my land began 00:22:13.000 --> 00:22:16.990 bubbling up salty radioactive brine to surface on its 00:22:16.990 --> 00:22:20.480 own without a pump. I have informed you of all this 00:22:20.480 --> 00:22:23.549 already. In December, I sent each of you a five page 00:22:23.549 --> 00:22:26.230 letter detailing these facts with attached exhibits 00:22:26.230 --> 00:22:29.099 and data. Commissioner Wright to his credit, even agreed 00:22:29.099 --> 00:22:32.279 to come see the issues on the ground. But then another 00:22:32.289 --> 00:22:35.849 old Chevron well blew out, creating 150 ft tall 00:22:35.849 --> 00:22:38.630 brine geyser in my neighbor's pasture and Commissioner 00:22:38.630 --> 00:22:40.880 Wright suddenly had anywhere else in the world to be. 00:22:41.640 --> 00:22:44.259 As a Commission, you owe it to me and to all Texans 00:22:44.259 --> 00:22:48.099 to enforce the existing laws, namely Title 16, Part 00:22:48.099 --> 00:22:53.279 1, Chapter 3, Rule 3.8(b) which states that, quote, 00:22:53.289 --> 00:22:55.849 no person conducting activities subject to regulation 00:22:55.849 --> 00:22:59.859 by the Commission may cause or allow pollution of surface 00:22:59.859 --> 00:23:03.900 or subsurface water in the state, end quote. It's now clear, 00:23:03.910 --> 00:23:06.680 it's now clear that this aquifer pollution is occurring 00:23:06.680 --> 00:23:09.950 on a colossal scale in West Texas across at least tens 00:23:09.960 --> 00:23:13.440 of thousands of acres. The question is, will you do 00:23:13.440 --> 00:23:16.190 your job and enforce the existing regulations already 00:23:16.190 --> 00:23:19.250 on the books? Will you require these bad actors, namely 00:23:19.250 --> 00:23:21.960 Chevron, to remediate the damage they have done to the 00:23:21.960 --> 00:23:25.640 freshwater aquifers? Don't let a California oil company 00:23:25.640 --> 00:23:28.559 permanently ruin the best part of Texas on your watch. 00:23:29.039 --> 00:23:31.410 Make them play by the same rules as anyone else and 00:23:31.410 --> 00:23:36.000 clean up their mess. Do your job. Thank you very much. 00:23:36.490 --> 00:23:39.509 Are there any questions, Members? Okay, thank you so 00:23:39.509 --> 00:23:42.049 much for caring enough to come and bring your views. 00:23:42.440 --> 00:23:44.779 You know, and I am concerned about that. If that 00:23:44.779 --> 00:23:47.619 is correct, there is a problem that we, as Commissioners, 00:23:47.619 --> 00:23:50.779 have a responsibility to the public and law and just 00:23:50.779 --> 00:23:53.829 wondering if we might get some type of update on this. 00:23:53.839 --> 00:23:56.490 Clay, are you available? Maybe? You or somebody 00:23:56.490 --> 00:23:59.970 from the staff to, could you come and maybe respond 00:23:59.970 --> 00:24:02.859 and informed the Commissioners here of any 00:24:03.339 --> 00:24:10.039 updates or... 00:24:10.039 --> 00:24:13.740 Good morning Chairman, Commissioners. For the record, 00:24:13.750 --> 00:24:16.250 I'm Clay Woodal, Assistant Director of Oil and Gas, 00:24:16.250 --> 00:24:22.950 for field operations. So on January 2 this year, 00:24:23.009 --> 00:24:26.269 the middle and district office was contacted by a landowner 00:24:26.849 --> 00:24:30.480 stating there was a leak on his property. Within 24 00:24:30.480 --> 00:24:33.250 hours, Railroad Commission inspectors were dispatched 00:24:33.250 --> 00:24:37.250 to investigate. The inspectors did indeed find a leak 00:24:37.259 --> 00:24:39.940 spraying what appeared to be brine and or produced 00:24:39.940 --> 00:24:43.400 water into the air. The inspectors and our Midland 00:24:43.400 --> 00:24:46.950 District Office staff immediately began contacting 00:24:47.339 --> 00:24:51.299 pipeline and oil and gas operators in the area to inspect 00:24:51.299 --> 00:24:55.339 their facilities and operations in an attempt to identify 00:24:55.339 --> 00:24:57.849 the source. 00:24:57.849 --> 00:25:02.720 No source was identified. District staff, simultaneously, 00:25:02.720 --> 00:25:06.500 district staff started research into the RRC Public 00:25:06.500 --> 00:25:09.700 GIS Viewer and the Texas Water Development Board 00:25:09.700 --> 00:25:14.789 GIS System. We did not find a well showing up 00:25:14.789 --> 00:25:19.779 at this location of the leak. Additionally, the RRC 00:25:19.779 --> 00:25:23.200 GIS viewers showed the closest injection 00:25:23.200 --> 00:25:26.660 wells were approximately 1.2 miles away from 00:25:26.670 --> 00:25:31.329 this leak. While all of this was going on by Midland 00:25:31.329 --> 00:25:34.599 staff, our district state managed plugging staff was 00:25:34.599 --> 00:25:38.769 in contact with my staff, here in Austin, field operations, 00:25:39.140 --> 00:25:42.190 and my staff was in contact with contract management. 00:25:42.640 --> 00:25:46.559 Contract Management issued an emergency purchase order, 00:25:47.039 --> 00:25:51.640 and district staff contacted code well control to respond 00:25:51.640 --> 00:25:55.470 to the emergency situation, which was a threat to both 00:25:55.470 --> 00:26:00.809 the environment and public safety. In fact, that evening 00:26:00.819 --> 00:26:06.069 around 7 or 8 PM, Commission staff and CUD representatives 00:26:06.079 --> 00:26:10.460 went out to location to get a view of what was happening. 00:26:11.640 --> 00:26:15.650 On Tuesday, January 4, CUD representatives arrived 00:26:15.720 --> 00:26:18.710 on site with equipment and began to dig pits 00:26:18.720 --> 00:26:21.519 to divert water away from the well bore and to contain 00:26:21.519 --> 00:26:24.819 the water. As a precaution, two injection wheels, both 00:26:24.819 --> 00:26:29.450 approximately 1.2 miles away were requested to cease 00:26:29.450 --> 00:26:34.650 operations until further notice. Site security was established 00:26:34.710 --> 00:26:39.000 to prevent unauthorized access and vacuum trucks began 00:26:39.000 --> 00:26:43.450 hauling water from the site. Depending on the time of 00:26:43.450 --> 00:26:48.000 day, we had anywhere between 8 and 25 vacuum trucks 00:26:48.339 --> 00:26:55.279 running, and this was day after day. A Commission 00:26:55.279 --> 00:26:59.849 drone pilot was dispatched to the location and conducted 00:27:00.059 --> 00:27:03.990 a reconnaissance mission on that same day. On January 00:27:03.990 --> 00:27:08.849 5, dirt work and water management activities continued, 00:27:09.539 --> 00:27:13.470 a specialty casing cutting tool from 00:27:13.480 --> 00:27:17.339 from Houston arrived on site. 00:27:17.339 --> 00:27:22.539 On January 6, a no fly zone was established at the 00:27:22.539 --> 00:27:26.369 request of code because drones and an air craft of unknown 00:27:26.369 --> 00:27:30.390 origin were flying low, causing a safety concern for 00:27:30.390 --> 00:27:35.259 workers, landowner on the location, and Commission employees. 00:27:36.539 --> 00:27:42.529 Okay. I authorized my drone pilot to contact the FAA 00:27:42.529 --> 00:27:46.140 and get that no fly zone implemented out of safety 00:27:46.140 --> 00:27:51.740 concerns for the personnel on location. 00:27:51.740 --> 00:27:56.160 Continuing operations on that day were the roads, 00:27:56.170 --> 00:28:02.799 pits, berms, fence, these were being built to facilitate 00:28:02.799 --> 00:28:06.359 ingress and egress from the location and to assist 00:28:06.359 --> 00:28:09.559 in diverting the brine or produced water away from 00:28:09.559 --> 00:28:14.490 the well. Also on that day a crane was brought in by 00:28:14.500 --> 00:28:18.589 by CUD to assist in the movement of equipment that 00:28:18.589 --> 00:28:21.240 was out there. 00:28:21.240 --> 00:28:24.490 From January 7 to January 9, the pad 00:28:24.490 --> 00:28:27.690 for the crane and the well site was completed. CUD 00:28:27.690 --> 00:28:31.039 began the final preparations to begin cutting away 00:28:31.039 --> 00:28:34.829 the casings and at that time a water sample was sent 00:28:34.839 --> 00:28:40.049 by the RRC for lab analysis. On Monday, January 10, 00:28:40.839 --> 00:28:44.450 the well was identified as the possible Gulf Oil Corporation 00:28:44.450 --> 00:28:50.460 W. N. Waddell, et al, Lease core test well number 112. 00:28:51.599 --> 00:28:55.880 This was identified using Commission records. The Commission 00:28:55.880 --> 00:29:00.390 contacted Chevron which acquired Gulf Oil Corporation, 00:29:00.569 --> 00:29:04.799 to discuss transfer of operations. Tuesday morning, 00:29:04.809 --> 00:29:09.559 January 11, Chevron assumed operations at the site. 00:29:10.240 --> 00:29:13.240 Water management and well-controlled activities continued 00:29:13.250 --> 00:29:17.289 through Saturday, January 15, when new wellheads and 00:29:17.289 --> 00:29:20.460 a blowout preventer were installed and the flow was 00:29:20.460 --> 00:29:24.869 diverted into pits. Operations continued Sunday by 00:29:24.869 --> 00:29:29.329 installing diverter equipment and casing risers. Backfilling 00:29:29.329 --> 00:29:32.440 efforts around the well began and continued through 00:29:32.440 --> 00:29:37.470 Monday, January 17, when the area was backfilled and 00:29:37.470 --> 00:29:40.960 compacted and could accommodate plugging equipment, 00:29:41.440 --> 00:29:45.410 the well was shut in and no flow was observed from 00:29:45.410 --> 00:29:47.539 the well. 00:29:47.539 --> 00:29:51.769 During this time, water sample results were received, 00:29:52.539 --> 00:29:56.430 and it's noted that there was no indication of the 00:29:56.430 --> 00:30:02.609 presence of hydrocarbons. On Tuesday, January 18, while 00:30:02.609 --> 00:30:06.680 performing operations, Chevron excavated around the 00:30:06.690 --> 00:30:13.440 area and located the core test 112 well. This well 00:30:13.440 --> 00:30:17.329 was located approximately 10 ft away from the leaking 00:30:17.329 --> 00:30:19.940 well. 00:30:19.940 --> 00:30:22.750 The Commission's Central Records Department was contacted 00:30:22.750 --> 00:30:26.690 to resume research into Commission records 00:30:26.700 --> 00:30:30.640 in an attempt to identify this well. 00:30:30.640 --> 00:30:35.289 We have not been able to identify the well yet. Chevron 00:30:35.289 --> 00:30:39.119 continues operations on the well. A coiled tubing 00:30:39.130 --> 00:30:43.569 unit was utilized and was able to get down to 715 ft 00:30:43.579 --> 00:30:47.130 before tagging up and after several attempts, the coiled 00:30:47.130 --> 00:30:53.480 tubing unit was able to get down to 1229 ft. On January 00:30:53.480 --> 00:30:57.210 21, Chevron performed a camera run into the well bore, 00:30:57.220 --> 00:31:04.420 and the cameras showed parted casing at 721 ft. 00:31:04.420 --> 00:31:12.750 Of note, about the 721 ft, this seems to coincide with 00:31:12.759 --> 00:31:18.539 the Salado Salt Formation, which 00:31:18.539 --> 00:31:21.759 our GAU Department provided me the information, they 00:31:21.759 --> 00:31:23.930 did the research into it. And they indicate that the 00:31:23.930 --> 00:31:28.390 top of the Salado salt is at 370 ft and the bottom 00:31:28.390 --> 00:31:33.069 of the salt Seletto salt is approximately 770 ft at 00:31:33.069 --> 00:31:37.039 the core test well 112. 00:31:37.039 --> 00:31:41.740 Chevron's continuing operations out there, 00:31:41.740 --> 00:31:45.490 logging operations are continuing. We want to know 00:31:45.490 --> 00:31:48.039 what's going on with the well. Chevron wants to know what's 00:31:48.039 --> 00:31:51.190 going on with the well. Do I have answers this morning 00:31:51.190 --> 00:31:56.259 for you? No sir, I don't. But we are looking 00:31:56.259 --> 00:32:00.200 into this. Chevron is looking into this, and we're 00:32:00.200 --> 00:32:02.950 going to do our best to figure out what's going on. 00:32:03.839 --> 00:32:06.047 May I answer any questions? 00:32:06.071 --> 00:32:08.279 Any question members? You 00:32:08.279 --> 00:32:11.509 know, one thing that I want us to address, are you aware of 00:32:11.509 --> 00:32:14.470 any pollution of aquifers to any large extent or any 00:32:14.470 --> 00:32:19.240 extent there? 00:32:19.240 --> 00:32:24.549 Preliminary test results that that I have been given 00:32:26.039 --> 00:32:30.660 indicate that the fluid out of this well has a high 00:32:30.660 --> 00:32:34.990 chloride concentration to almost to the point of saturation 00:32:34.990 --> 00:32:39.819 levels. I knew you were going to ask that 00:32:39.819 --> 00:32:45.170 question. I believe it's 180,000 parts per million. 00:32:46.539 --> 00:32:50.440 174,000 parts per million. 00:32:50.440 --> 00:32:56.349 Of note, sodium parts per million out of this water 00:32:56.740 --> 00:33:04.430 is 100, roughly, 100 thousand parts per million. Additionally, what 00:33:04.430 --> 00:33:08.880 I can tell you from the preliminary test results is 00:33:08.890 --> 00:33:14.920 none of the, the samples were tested for TBS, B Tex, 00:33:14.920 --> 00:33:19.079 PHs and TPHs. 00:33:19.109 --> 00:33:23.190 None of the hydrocarbon constituents. BTX, TPH, PAH, 00:33:23.190 --> 00:33:30.269 were detected in these samples. Okay. So we do have 00:33:30.740 --> 00:33:36.400 an extremely high chloride and sodium flow from this 00:33:36.400 --> 00:33:40.930 well. We also know where the salt formations are in 00:33:40.930 --> 00:33:45.859 this well. What's driving that? I'm unable to answer 00:33:45.859 --> 00:33:47.227 that question at this time. 00:33:47.251 --> 00:33:48.619 So you said that Salado 00:33:48.619 --> 00:33:52.960 salt formation was 370 top, 770 bottom. And y'all 00:33:52.960 --> 00:33:57.554 saw the wells, I guess cut at 725? 00:33:57.578 --> 00:34:00.079 That's where the, 00:34:00.089 --> 00:34:03.720 yes sir, let me double check my numbers. Yeah. 00:34:03.730 --> 00:34:09.730 The camera showed parted casing at 721. 00:34:09.739 --> 00:34:13.820 And the Salado salt is like you said 370 top and 00:34:13.820 --> 00:34:17.440 bottom 770. 00:34:17.440 --> 00:34:21.699 Any other questions, Members. Okay. Thank you. And 00:34:21.710 --> 00:34:24.760 let me just say, we appreciate so much Clay, the 00:34:24.769 --> 00:34:29.150 report and, the good work that you're doing and 00:34:29.150 --> 00:34:31.190 the Railroad Commission is doing and that Chevron 00:34:31.190 --> 00:34:33.909 has partnered with you I think is, is doing their part 00:34:33.909 --> 00:34:36.739 in this. And we'll look forward to the report on what 00:34:36.739 --> 00:34:41.630 the status is on this. And, let me, tell Ms. 00:34:41.630 --> 00:34:44.590 Watt, we appreciate her being here and bringing this 00:34:44.590 --> 00:34:48.679 to our attention and we as the Commissioners, at least 00:34:48.690 --> 00:34:53.000 I'll speak as chairman, we do not intend, and 00:34:53.010 --> 00:34:56.119 this agency, I don't think has any proof in the past, 00:34:56.130 --> 00:35:00.440 but if there's any doubt we direct our staff to 00:35:00.449 --> 00:35:04.199 follow the laws, follow the rules, follow the, and if 00:35:04.199 --> 00:35:06.869 there's anything there number one is water. I was, 00:35:06.880 --> 00:35:11.010 I was privileged to represent the largest inland freshwater 00:35:11.019 --> 00:35:13.329 in the United States of America during my 14 years 00:35:13.329 --> 00:35:17.659 in the House and I'm well aware of the risk, the safety, 00:35:17.659 --> 00:35:20.960 the desire, the importance of water and West 00:35:20.960 --> 00:35:22.960 Texas even more because they didn't have the excess 00:35:22.960 --> 00:35:26.039 that we had in East Texas. And so I'm much familiar 00:35:26.039 --> 00:35:28.909 and appreciate the your work, Clay, and your and 00:35:28.920 --> 00:35:31.920 all the folks out there with the Commission. We charge 00:35:31.920 --> 00:35:35.320 you to make sure and obey the law. Obey any statistics 00:35:35.329 --> 00:35:38.480 we find that can make sure that we are protecting the 00:35:38.480 --> 00:35:42.650 citizens. I think a couple of the first charges we 00:35:42.650 --> 00:35:45.420 give in as the Railroad Commission is for the safety 00:35:45.420 --> 00:35:49.230 of our public and water safety, preserve water, and 00:35:49.230 --> 00:35:52.380 those two things just, we just restate that that 00:35:52.380 --> 00:35:55.050 you already know and already practiced to assure the 00:35:55.050 --> 00:35:57.750 citizens of the state that these Commissioners have 00:35:57.760 --> 00:36:00.760 addressed that issue or concern of the issue and continue 00:36:01.239 --> 00:36:03.679 the good work of the Commission and our friends in 00:36:03.679 --> 00:36:07.210 the industry to encourage that be followed and done, 00:36:07.210 --> 00:36:09.860 every law, every regulation to protect the public. 00:36:09.969 --> 00:36:12.869 That's our desire. So thank you Clay for that report 00:36:13.059 --> 00:36:18.480 and move ahead, Agenda item 161 is our executive session 00:36:18.489 --> 00:36:21.789 item which will not be going into today. Are there 00:36:21.800 --> 00:36:24.099 any other duly posted matters to be brought before 00:36:24.099 --> 00:36:27.489 the Commission at this time? Hearing none, this meeting 00:36:27.489 --> 00:36:30.139 of the Railroad Commission of Texas is adjourned. 00:36:30.139 --> 00:36:30.969