WEBVTT 00:00:01.110 --> 00:00:03.549 Commissioner Christian, we're ready to begin when you 00:00:03.549 --> 00:00:04.375 are. 00:00:04.399 --> 00:00:06.900 Alright. This is Chairman Christian. This meeting 00:00:06.900 --> 00:00:09.089 of the Railroad Commission of Texas will come to order 00:00:09.089 --> 00:00:12.480 to consider matters which have been duly posted with 00:00:12.480 --> 00:00:17.820 Secretary of State for May 5, 2020. Under our public participation 00:00:17.820 --> 00:00:20.550 policy, anyone desiring to offer public testimony on 00:00:20.559 --> 00:00:23.890 any items that are not noticed on today's agenda was 00:00:23.890 --> 00:00:27.480 required to register in advance. We did not have anyone 00:00:27.480 --> 00:00:30.149 registered in advance for this meeting. The Commission 00:00:30.160 --> 00:00:32.689 will consider the items on the agenda as posted on 00:00:32.689 --> 00:00:34.990 the agenda. Before we move to the first item of the 00:00:34.990 --> 00:00:38.170 agenda, I'd like to make an opening statement. Callie, 00:00:38.170 --> 00:00:45.340 please call up the presenter for agenda item one. 00:00:45.340 --> 00:00:50.039 I guess I have a statement. 00:00:50.039 --> 00:00:54.311 I didn't want to make a statement. 00:00:54.335 --> 00:00:56.270 Just kidding. 00:00:56.270 --> 00:00:59.140 Thank you. Mr Kyle Lubbey will be presenting agenda 00:00:59.140 --> 00:01:08.739 item number one. Kyle, we already when you are. 00:01:08.739 --> 00:01:12.849 Good morning. I'm having an issue. It says my video 00:01:13.439 --> 00:01:17.420 cannot begin because the host has stopped it. And 00:01:17.420 --> 00:01:18.873 now we can do that. 00:01:18.897 --> 00:01:20.890 Okay. Looks like we fixed 00:01:20.890 --> 00:01:23.631 it for you. It looks like you're ready to go. 00:01:23.655 --> 00:01:27.299 Thank you. Good morning, Chairman, Commissioners. Kyle Lubbey, 00:01:27.299 --> 00:01:30.510 Administrative Law Judge. Item one is an application 00:01:30.510 --> 00:01:34.290 by Luminant Mining Company, LLC, requesting Phase 00:01:34.290 --> 00:01:38.950 One release of reclamation obligations for 969.7 acres 00:01:39.739 --> 00:01:42.950 within the Cossey Mine Permit Number 50C, located in 00:01:42.950 --> 00:01:46.829 Limestone and Robertson counties. The subject acreage 00:01:46.829 --> 00:01:50.319 is comprised of five parcels of land made up various tracts 00:01:50.319 --> 00:01:54.079 that are all owned by Luminant. The approved post-mine land 00:01:54.079 --> 00:01:58.280 uses for the 969.7 acres are pasture land and develop 00:01:58.280 --> 00:02:03.549 water resources. Luminant as demonstrated has confirmed 00:02:03.549 --> 00:02:07.510 by Commission records and analysis reclamation 00:02:07.510 --> 00:02:10.430 activities related to backfilling, regretting and draining 00:02:10.439 --> 00:02:13.300 control have been accomplished as required for Phase 00:02:13.300 --> 00:02:17.280 One release. After notice, no comments or request for 00:02:17.280 --> 00:02:20.110 hearing were received. Luminant and staff are the only 00:02:20.120 --> 00:02:23.349 parties to the proceedings. Neither filed exceptions. 00:02:24.340 --> 00:02:26.780 No changes to the current bond instrument are requested 00:02:26.780 --> 00:02:31.599 in this docket. As a result, the proposed order prescribes 00:02:31.680 --> 00:02:34.449 Luminant is eligible to reduced the bond for the permit 00:02:35.740 --> 00:02:38.560 by 60% of the amount that is attributable to the 00:02:38.560 --> 00:02:43.090 subject acreage in future bond adjustments base. Phase 00:02:43.090 --> 00:02:47.080 One release of the 969.7 acres is recommended, and I am 00:02:47.080 --> 00:02:48.897 available for questions. 00:02:48.921 --> 00:02:51.729 There any questions members? I move 00:02:51.729 --> 00:02:54.560 we approve the examiners recommendation. Is there a second? 00:02:55.240 --> 00:02:56.075 Second. 00:02:56.099 --> 00:02:58.629 Second by Commissioner Sitton. All in favor 00:02:58.629 --> 00:03:04.319 say aye. Motion passes. That item is approved. 00:03:04.319 --> 00:03:07.030 Callie, please call up the item for presenter, agenda 00:03:07.030 --> 00:03:12.189 item two. 00:03:12.189 --> 00:03:14.930 Good Morning, Chairman, Commissioners. Veronica Roberto 00:03:14.930 --> 00:03:16.949 Administrative Law Judge through the Hearings division. 00:03:17.439 --> 00:03:20.979 Item number two is an application by San Miguel Electric 00:03:20.979 --> 00:03:25.020 Cooperative Inc. for release of Phase One Reclamation obligations 00:03:25.030 --> 00:03:30.150 for 217 acres, Permit number 11T, within San Miguel 00:03:30.150 --> 00:03:33.750 Lignite Mine, located in Addis Cosa and McMullen counties. 00:03:34.169 --> 00:03:37.800 The approved post mine land use consists of pasture land. 00:03:38.439 --> 00:03:41.500 Evidence in the record supports San Miguel has satisfied 00:03:41.509 --> 00:03:43.840 all requirements for the requested release of the subject 00:03:43.840 --> 00:03:47.120 area. After notice, no comments or requests for a hearing 00:03:47.120 --> 00:03:50.000 were received. Staff and San Miguel are the only 00:03:50.000 --> 00:03:52.750 parties to the proceeding. No exceptions were filed. 00:03:53.240 --> 00:03:56.039 No eligible Bond reduction is attributable to the 00:03:56.039 --> 00:03:58.849 acreage requested for phase one release because the 00:03:58.849 --> 00:04:01.969 reclamation cost has been calculated using the worst 00:04:01.969 --> 00:04:06.009 case method. It is recommended the request for phase 00:04:06.009 --> 00:04:09.020 one release for the subject area be approved and that 00:04:09.020 --> 00:04:12.180 San Miguel not be eligible to reduce its bond amout 00:04:12.189 --> 00:04:15.590 at this time. I'm available for questions. 00:04:15.614 --> 00:04:16.850 Any questions? 00:04:18.040 --> 00:04:20.649 I move we approve the examiners recommendation? is there a second? 00:04:20.649 --> 00:04:23.339 second 00:04:23.339 --> 00:04:25.670 second by Commissioner Craddick. All in favor say 00:04:25.680 --> 00:04:31.350 aye. Any opposed? Motion passes, that item is approved. 00:04:31.870 --> 00:04:36.240 Please call up agenda items three and four. 00:04:36.240 --> 00:04:40.480 Thank you. Ezra Johnson will be presenting agenda 00:04:40.490 --> 00:04:44.009 items number three and four. Ezra, we are ready when you 00:04:44.009 --> 00:04:46.579 are? 00:04:46.579 --> 00:04:48.990 Good Morning, Germany Commissioners. For the record 00:04:48.990 --> 00:04:51.610 my name is Ezra Johnson, Administrative Law Judge 00:04:51.610 --> 00:04:54.160 with the Hearings division. I will be presenting items 00:04:54.160 --> 00:04:58.050 three and four today. Items three and four concern 00:04:58.050 --> 00:05:01.220 a complaint by Dwayne McQueen Trust, the Terri Lynn 00:05:01.220 --> 00:05:04.410 Smith Trust, and Kingdom of God Resources E&P 00:05:04.410 --> 00:05:08.240 Company, claiming that Czarvona Energy and Anadarko 00:05:08.240 --> 00:05:11.790 E & P OnShore, failed to comply with Commission Rules 00:05:11.790 --> 00:05:14.370 and Applicable law by providing the Commission with 00:05:14.379 --> 00:05:18.129 knowingly false statements in the drilling permit applications 00:05:18.129 --> 00:05:22.250 for the subject wells. Czarvona is the current operator 00:05:22.250 --> 00:05:26.500 of record. Dwayne McQueen claims ownership oven unleased 00:05:26.509 --> 00:05:29.490 interest in the subject wells on behalf of the Terri 00:05:29.490 --> 00:05:33.069 Lynn Smith Trust. He argues that this alleged unleased 00:05:33.079 --> 00:05:35.300 ownership interest should have been disclosed to the 00:05:35.300 --> 00:05:38.670 Commission when Anadarko, the prior operator of record, 00:05:38.870 --> 00:05:42.709 filed drilling permits for the subject wells. Mr McQueen 00:05:42.709 --> 00:05:45.949 complains that failure to disclose the alleged unleased 00:05:45.959 --> 00:05:49.120 interest is a violation of Chapter 91 of the National 00:05:49.120 --> 00:05:53.269 Resources code, Statewide Rule 37, the Mineral Interests 00:05:53.279 --> 00:05:56.600 Cooling Act. Czarvona and Anadarko claim that they hold 00:05:56.600 --> 00:05:59.430 or held at all relevant times a good faith claim to 00:05:59.430 --> 00:06:02.000 the subject wells and as such, can show that they 00:06:02.000 --> 00:06:05.089 complied in all material respects with applicable 00:06:05.100 --> 00:06:09.370 Commission rules and state law. Czarvona and Anadarko 00:06:09.370 --> 00:06:11.920 provided a reasonably satisfactory showing of a good 00:06:11.920 --> 00:06:15.189 faith claim to drill and operate the subject wells. Accordingly 00:06:15.199 --> 00:06:18.040 the failure to disclose any alleged mineral interest 00:06:18.040 --> 00:06:20.180 of the complaintantss in the drilling applications for 00:06:20.180 --> 00:06:23.199 the subject wells was not a breach of Commission rules 00:06:23.199 --> 00:06:26.439 or applicable law. Further, complaintants do not presently 00:06:26.439 --> 00:06:30.379 have standing to make claims under Statewide Rule 37 00:06:30.430 --> 00:06:33.290 or the Mineral Interest Cooling Act. The examiners 00:06:33.290 --> 00:06:36.009 recommended that the Commission deny the compliant 00:06:36.019 --> 00:06:38.829 and all the relief requested there in. Exceptions and 00:06:38.829 --> 00:06:41.850 replies were filed and I'm available for questions. 00:06:43.240 --> 00:06:46.399 For the record Commissioners, Mickey Olmstead, representing 00:06:46.399 --> 00:06:50.759 Czarvona Energy LLC and Dwayne McQueen representing the 00:06:50.759 --> 00:06:54.379 Terri Lynn Smith Trust have registered and are available 00:06:54.379 --> 00:06:56.268 for questions. 00:06:56.292 --> 00:06:59.540 Any questions, Members? 00:06:59.540 --> 00:07:02.370 Okay, I move we approve the examiners recommendation? Is there a 00:07:02.370 --> 00:07:06.199 second? Second. Second by Commissioner Sitton? All in favor 00:07:06.199 --> 00:07:11.709 say aye. Any opposed? Motion passes. That 00:07:11.709 --> 00:07:15.240 item is approved. 00:07:15.240 --> 00:07:17.627 Callie, please call agenda number five. 00:07:17.651 --> 00:07:18.439 Yes. Thank 00:07:18.439 --> 00:07:21.860 you. Mrs. Jennifer Cooke will be representing agenda 00:07:21.870 --> 00:07:25.850 item number five. Jennifer, we're ready when you are. 00:07:26.829 --> 00:07:29.430 Good morning, Chairman and Commissioners. I'm Jennifer 00:07:29.430 --> 00:07:32.550 Cooke, Administrative Law Judge with the Hearings division 00:07:33.139 --> 00:07:37.899 In Item five, CE Energy LLC seeks a determination 00:07:37.899 --> 00:07:40.709 contrary to Commission staff's prior determination 00:07:40.850 --> 00:07:43.110 that it is in compliance with the Commission's inactive 00:07:43.110 --> 00:07:46.089 well rule and should thus be allowed to renew its Commission 00:07:46.089 --> 00:07:50.019 form P5 organization report. After the issuance 00:07:50.019 --> 00:07:54.129 of the proposal for decision, CE Energy filed a withdrawal 00:07:54.139 --> 00:07:56.720 of its request for hearing because it has come into 00:07:56.720 --> 00:07:59.149 compliance with the Commission's inactive well rule. 00:07:59.839 --> 00:08:01.829 It is a recommended that the Commission dismiss 00:08:01.829 --> 00:08:05.439 this case as moot. No exceptions were filed and I'm 00:08:05.439 --> 00:08:07.541 available for questions. 00:08:07.565 --> 00:08:09.393 Any questions, Members? 00:08:09.417 --> 00:08:13.199 For the record, 00:08:13.199 --> 00:08:13.748 Yes? 00:08:13.772 --> 00:08:17.389 I apologize. Just kidding. 00:08:17.389 --> 00:08:18.402 Moving on. 00:08:18.426 --> 00:08:21.490 As good as my opening statement, okay? 00:08:21.490 --> 00:08:26.180 Okay are there any questions? Okay, I move we approve the examiners recommendation, 00:08:26.279 --> 00:08:30.069 is there a second? Second. <v Chairman Christian>Second by Commissioner Craddick 00:08:30.079 --> 00:08:36.029 All in favor say aye. Any opposed? Motion passes. 00:08:36.029 --> 00:08:38.289 That item is approved. Callie, please call up the 00:08:38.289 --> 00:08:40.873 present of items number six through eight. 00:08:40.897 --> 00:08:41.750 Thank you 00:08:41.759 --> 00:08:44.710 Mrs Ashley Carell would be presenting agenda items 00:08:44.710 --> 00:08:48.759 number six through eight. Ashley, we are ready when 00:08:48.759 --> 00:08:52.590 you are. 00:08:52.590 --> 00:08:55.289 Good morning, Chairman and Commissioners. I am Ashley 00:08:55.289 --> 00:08:58.450 Carrell, Technical Examiner for the Hearings division. 00:08:59.039 --> 00:09:03.529 Items 6, 7, and 8 will be presented together. These items 00:09:03.529 --> 00:09:07.179 are the applications of NGL Water Solutions LLC for 00:09:07.179 --> 00:09:10.149 three commercial permits to dispose of fluid into a 00:09:10.149 --> 00:09:13.750 formation not productive of oil or gas in Reeves County. 00:09:14.440 --> 00:09:17.950 NGL proposes to drill three disposal wells and inject 00:09:17.950 --> 00:09:21.590 up to 20,000 barrels per day in each well into the 00:09:21.590 --> 00:09:25.120 Delaware Mountain Group. The proposed wells are located 00:09:25.120 --> 00:09:28.159 on a tract that already has an active disposal well 00:09:28.500 --> 00:09:32.399 permitted for 40,000 barrels per day. The protestant 00:09:32.429 --> 00:09:35.470 Correze Permian LLC, contends that the proposed 00:09:35.470 --> 00:09:38.960 disposal wells are not in the public interest and provided 00:09:38.970 --> 00:09:42.330 evidence that additional disposal capacity in the area 00:09:42.330 --> 00:09:45.789 is not needed and the proposed disposal operations 00:09:45.799 --> 00:09:48.889 will pressure the injection zone through which 00:09:48.889 --> 00:09:52.230 Correze must drill its wells causing future wells to be 00:09:52.230 --> 00:09:56.409 uneconomic. NGL states that there is a need for additional 00:09:56.409 --> 00:09:59.179 disposal capacity in the area, and the wells would 00:09:59.179 --> 00:10:02.679 provide the benefit of operational redundancy. The 00:10:02.679 --> 00:10:05.429 examiners find that the applications met three of the 00:10:05.429 --> 00:10:09.230 elements of the Texas Water Code, but NGL did not provide 00:10:09.230 --> 00:10:12.659 sufficient evidence that there is industry need. In the 00:10:12.659 --> 00:10:15.360 exceptions, NGO indicated that they would withdraw 00:10:15.360 --> 00:10:18.490 two of the applications if the remaining application 00:10:18.490 --> 00:10:22.690 is approved. The examiners recommend denial of the applications. 00:10:23.029 --> 00:10:25.929 Exceptions and replies were filed. I am available for 00:10:25.929 --> 00:10:30.059 questions. And for the record this time. Not kidding 00:10:30.769 --> 00:10:34.789 Doug White, Vice President of NGL Water Solutions Premium 00:10:35.070 --> 00:10:38.990 LLC, and George Kneale, attorney representing, 00:10:39.159 --> 00:10:42.100 have registered and are available for questions on Items 00:10:42.100 --> 00:10:45.370 six through eight. 00:10:45.370 --> 00:10:48.919 Are there any questions, Members? Okay, I'm gonna make 00:10:48.919 --> 00:10:50.789 a motion this a little bit different from the staff. 00:10:50.789 --> 00:10:53.950 So please take this. I moved to deny the applications 00:10:53.950 --> 00:10:57.909 for agenda item six and eight and grant application 00:10:57.909 --> 00:11:03.090 for agenda item seven. Is there a second? 00:11:03.090 --> 00:11:08.679 Second. Second All in favor, say aye. Any opposed? Motion 00:11:08.679 --> 00:11:12.570 passes. Agenda item six and eight are denied, agenda 00:11:12.570 --> 00:11:15.789 item seven is approved. Callie, please bring in item 00:11:15.799 --> 00:11:19.139 number nine. <v Callie Ferrar>Yes, 00:11:19.139 --> 00:11:21.970 thank you. 00:11:21.970 --> 00:11:24.899 Mr Joe Menefee will be presenting agenda item number 00:11:24.899 --> 00:11:27.647 nine. Joe, we are ready when you are. 00:11:27.671 --> 00:11:28.809 Good morning, 00:11:28.809 --> 00:11:31.990 Chairman, Commissioners. For the record, Joe Menefee, 00:11:31.990 --> 00:11:35.279 paralegal in the Hearings division, I'll be presenting 00:11:35.289 --> 00:11:40.649 items 9 through 11, all of which are P5 motions for rehearing 00:11:41.139 --> 00:11:45.039 filed as a result of a final order denying renewal 00:11:45.039 --> 00:11:48.779 of the operators' P5 because of wells non-compliant 00:11:48.779 --> 00:11:54.070 with Statewide Rule 15. Item number nine. In its motion 00:11:54.240 --> 00:11:58.820 NHRG Inc states its failure to request a hearing 00:11:58.820 --> 00:12:03.360 was due to mistake or accident, that compliance is imminent, 00:12:03.639 --> 00:12:07.029 and that the Commission would not be negatively impacted 00:12:07.029 --> 00:12:11.330 by granting its motion for rehearing. Staff opposes 00:12:11.330 --> 00:12:16.200 the motion. 63 wells remain non-compliant with Statewide 00:12:16.200 --> 00:12:21.029 Rule 15. It is recommended the motion be denied, the 00:12:21.029 --> 00:12:25.620 motion will be overruled by Operation of Law on May 21st. I'm 00:12:25.620 --> 00:12:30.480 available for questions. Any questions, members? I move 00:12:30.480 --> 00:12:33.149 we approve the examiner's recommendation? Is there a second? 00:12:33.539 --> 00:12:36.590 Second. Second by Commissioner Craddick. All in favor, say 00:12:36.590 --> 00:12:40.240 aye. 00:12:40.240 --> 00:12:43.519 Any opposed? Motion passes, that item's approved. Callie, 00:12:43.519 --> 00:12:46.799 please call up item number 10. Thank you. Mr Joe Menafee 00:12:46.799 --> 00:12:49.519 will be continuing with agenda item number 10. Joe, 00:12:49.519 --> 00:12:54.169 we're ready when you are. Item number 10. In its motion 00:12:54.179 --> 00:12:57.970 Property Development Group Inc states that all the 00:12:57.970 --> 00:13:01.370 proper forms for compliance have been filed and awaiting 00:13:01.370 --> 00:13:04.870 processing but does not give a reason for failure to 00:13:04.870 --> 00:13:10.559 request a hearing. Staff opposes the motion. 34 wells 00:13:10.559 --> 00:13:14.149 remain non-compliant with Statewide Rule 15. 00:13:14.639 --> 00:13:17.879 It's recommended the motion be denied, the motion will 00:13:17.879 --> 00:13:22.360 be overruled by Operation of Law on May 21st. I'm available 00:13:22.360 --> 00:13:26.340 for questions. Are there any questions? I move we approve 00:13:26.340 --> 00:13:30.090 the examiners recommendation? Is there a second? <v Commissioner Sitton>Second. Second 00:13:30.090 --> 00:13:32.519 by Commissioner Sitton. All in favor say Aye. 00:13:32.750 --> 00:13:37.899 Any opposed? Motion passes. That item was approved. Callie 00:13:37.899 --> 00:13:41.419 please call up Item 11. Yes, thank you. Once again 00:13:41.419 --> 00:13:44.029 Mr Joe Menafee will be continuing with agenda Item 00:13:44.029 --> 00:13:48.159 number 11. Joe, we're ready when you are. Item number 00:13:48.169 --> 00:13:53.460 11. In its motion for rehearing, US Fuels Inc states 00:13:53.460 --> 00:13:56.500 their failure to request a hearing was due to mistake 00:13:56.500 --> 00:14:00.220 or accident, that compliance is imminent and that 00:14:00.220 --> 00:14:03.159 the Commission would not be negatively impacted by 00:14:03.159 --> 00:14:07.250 granting its motion for rehearing. Staff opposes the 00:14:07.250 --> 00:14:11.889 motion. 6 wells remain non-compliant with Statewide 00:14:11.889 --> 00:14:15.899 Rule 15. It is recommended the motion be denied. The 00:14:15.899 --> 00:14:19.110 motion will be overruled by Operation of Law on May 00:14:19.110 --> 00:14:23.100 21st. I'm available for questions. Are there any questions? 00:14:24.240 --> 00:14:26.600 I move we approve the examiners' recommendation. Is there 00:14:26.600 --> 00:14:30.230 a second. Second. Second by Commissioner Craddick. All 00:14:30.230 --> 00:14:34.519 in favor aye. Any opposed? Motion passes, 00:14:34.519 --> 00:14:38.730 that item's approved. Move to the Oil and 00:14:38.730 --> 00:14:41.379 Gas Consent Agenda. Callie, I understand a witness is 00:14:41.379 --> 00:14:45.169 registered for some Consent Agenda items. Yes. Thank you 00:14:45.169 --> 00:14:47.590 For the record, Commissioners, Cyrus Reed with the 00:14:47.590 --> 00:14:50.080 Sierra Club has registered and is available for 00:14:50.080 --> 00:14:53.840 items number 13 through 18. And Robin Schneider with 00:14:53.840 --> 00:14:56.450 the Texas Campaign for the Environment is available 00:14:56.539 --> 00:15:01.100 for items number 13 through 19. <v Chairman Christian>Have any questions 00:15:01.100 --> 00:15:05.539 Members? Okay. There're 29 items on the 00:15:05.539 --> 00:15:10.120 consent agenda. I move we approve items 12 to 41. 00:15:10.250 --> 00:15:16.039 Except for item 19. Is there a second? Second. Second 00:15:16.039 --> 00:15:20.490 by Commissioner Craddick. All in favor, say aye. Any 00:15:20.490 --> 00:15:23.830 opposed? Motion passes. Those items are approved. Let's 00:15:23.830 --> 00:15:27.149 move on to the Master Default Orders. There are 21 Master 00:15:27.149 --> 00:15:30.889 Default Orders. I move we approve items 42 through 00:15:30.889 --> 00:15:36.149 62. Is there a second? Second. Second by Commissioner Sitton. 00:15:36.159 --> 00:15:40.980 All in favor, say aye. Any opposed? Motion 00:15:40.980 --> 00:15:43.600 passes. Those items were approved. Let's move to the 00:15:43.600 --> 00:15:48.149 Agreed Enforcement Orders. There are 125 Agreed Enforcement 00:15:48.159 --> 00:15:53.370 Orders. I move that we approve items 63 through 187. Is 00:15:53.370 --> 00:15:56.779 there a second? Second<v Chairman Christian>Second by Commissioner Craddick. All 00:15:56.779 --> 00:16:02.559 in favor, say aye. Any opposed? Motion passes. Those items 00:16:02.559 --> 00:16:04.980 were approved. That concludes the Hearing section. 00:16:04.980 --> 00:16:07.779 We will now take up our Administrative agendas. Callie 00:16:07.779 --> 00:16:12.289 please call up the presenters for Items 188. Yes, 00:16:12.289 --> 00:16:15.340 thank you. Mrs. Stephanie Wyman will be presenting 00:16:15.340 --> 00:16:19.460 agenda Item number 188. Stephanie, we are ready when 00:16:19.460 --> 00:16:22.509 you are. Good morning, Chairman and Commissioners. 00:16:22.509 --> 00:16:24.710 For the record, my name is Stephanie Wyman, Director 00:16:24.710 --> 00:16:27.190 of Pipeline Safety in the Oversight and Safety division. 00:16:27.409 --> 00:16:29.850 Item 188 is the Pipeline Safety Department's 00:16:29.850 --> 00:16:32.279 request for approval to adopt revisions to the form 00:16:32.279 --> 00:16:35.399 PS 48 for new construction reports. The amendments 00:16:35.399 --> 00:16:37.360 are related to Chapter 8 rule changes that went 00:16:37.360 --> 00:16:40.860 into effect January 6, 2020. The changes clarify the 00:16:40.870 --> 00:16:43.120 type of construction being performed and require the 00:16:43.120 --> 00:16:45.690 operator include information specific to the area of 00:16:45.690 --> 00:16:48.610 construction will take place. These changes will allow 00:16:48.610 --> 00:16:51.840 for inspectors to prioritize inspections based on proximity 00:16:51.840 --> 00:16:54.610 to the public. The proposed form changes were presented 00:16:54.610 --> 00:16:57.490 at conference on February 11, 2020, and posted on the 00:16:57.490 --> 00:17:00.399 Commission's website for public comment. Staff received 00:17:00.399 --> 00:17:02.929 comments to include references to the regulations where 00:17:02.929 --> 00:17:05.759 appropriate, as well as requests to amend wording to 00:17:05.759 --> 00:17:08.640 clarify that the information provided by the operator 00:17:08.869 --> 00:17:11.509 is approximate and may change slightly as construction 00:17:11.509 --> 00:17:14.410 commences. Staff agreed and incorporated these comments 00:17:14.410 --> 00:17:17.119 in this final version and I'm available for questions. 00:17:17.579 --> 00:17:20.339 Any questions, Members? 00:17:20.339 --> 00:17:24.190 I move we adopt the amendments to form PS 48. All in 00:17:24.190 --> 00:17:29.200 favor, say aye. Do we need a second, Wayne? 00:17:29.200 --> 00:17:33.420 Do a second, it wasn't on my page. So I didn't do it. It's okay, you can do 00:17:33.420 --> 00:17:36.680 whatever you want. I was just checking. <v Chairman Christian>We better do it. I move 00:17:36.680 --> 00:17:40.619 we adopt the amendments to form PS 48. Is there a second? 00:17:41.339 --> 00:17:44.519 Second. Second by Commissioner Craddick, All in favor 00:17:44.519 --> 00:17:49.289 say ye. Any opposed? Motion passes. That item is 00:17:49.289 --> 00:17:52.799 approved. Thank you, Commissioner Craddick. Good to have an attorney 00:17:52.799 --> 00:17:55.789 on board to keep us straight. You know it takes a lot 00:17:55.789 --> 00:17:58.470 for this group. Some days. Does that, you know. 00:17:58.500 --> 00:18:02.710 Chain us in. Okay. Agenda Item 189 is the consideration 00:18:02.710 --> 00:18:06.009 of issues and possible actions related to the COVID-19 00:18:06.009 --> 00:18:10.099 Pandemic, including, but not limited to potential 00:18:10.099 --> 00:18:13.210 waiver or suspensions of the applicable statutes, rules, 00:18:13.380 --> 00:18:17.589 final orders or other regulatory requirements and announces 00:18:17.589 --> 00:18:19.990 of potential relief or other economic development 00:18:19.990 --> 00:18:23.140 initiatives. Callie? 00:18:23.140 --> 00:18:26.589 Yes, For the record, I do want to state who is here 00:18:26.599 --> 00:18:30.609 representing and available to speak. Ed Longnecker 00:18:30.609 --> 00:18:34.250 with Tipro, Todd Staples with Texoga, and Car Ingram with 00:18:34.250 --> 00:18:37.940 Texas Alliance of Energy Products, all who are also 00:18:37.950 --> 00:18:41.309 members of the Blue Ribbon Task Force, along with Robin 00:18:41.309 --> 00:18:43.750 Schneider with Texas Campaign for the Environment and 00:18:43.750 --> 00:18:48.700 David Rosen with Rosen Oil and Asset Trust. Okay, At 00:18:48.700 --> 00:18:51.279 the last meeting, I instructed staff to reach out to 00:18:51.289 --> 00:18:54.400 industry to determine the unfilled storage capacity 00:18:54.400 --> 00:18:58.519 for common carrier pipelines and refineries. Paul Duboss 00:18:58.519 --> 00:19:02.490 uh, can you take a moment to report on what the 00:19:02.490 --> 00:19:06.900 staff has found out? 00:19:06.900 --> 00:19:10.539 Good morning Chairman and Commissioners. For the record, 00:19:11.390 --> 00:19:16.940 this is Paul DuBois with Oil and Gas division. 00:19:16.940 --> 00:19:19.809 Chairman Christian, at conference on April 21, you directed 00:19:19.809 --> 00:19:22.440 staff to determine the unfilled storage capacity for 00:19:22.440 --> 00:19:27.829 crude oil as of April 20th. The request of refineries 00:19:27.829 --> 00:19:31.890 was made pursuant to the authority in section 85.058 00:19:31.900 --> 00:19:34.759 of the Natural Resource Code, and the request of common 00:19:34.759 --> 00:19:37.200 carriers was made pursuant to the authority in Section 00:19:37.200 --> 00:19:41.869 111.139 of the Natural Resource Code. 00:19:41.869 --> 00:19:45.710 As of this morning, 78% of refineries have responded 00:19:45.720 --> 00:19:49.400 and reported unfilled crude oil storage capacity of 00:19:49.410 --> 00:19:58.009 18,414,733 barrels. About 73% of common carriers have 00:19:58.009 --> 00:20:01.809 responded and reported unfilled crude oil storage capacity 00:20:02.299 --> 00:20:09.930 of 52,770,925 barrels. The staff determined the unfilled 00:20:09.930 --> 00:20:13.150 crude oil storage capacity hs reported from both source 00:20:13.150 --> 00:20:18.349 categories on April 20th was about 71.2 million barrels 00:20:19.740 --> 00:20:22.809 Staff continues to receive responses and we are following 00:20:22.809 --> 00:20:25.440 up with refineries and common carriers who have not 00:20:25.440 --> 00:20:29.049 yet responded to the inquiry. I'm available for questions. 00:20:30.309 --> 00:20:34.150 Any questions right now? 00:20:34.150 --> 00:20:36.829 Okay. Yesterday we received a report from the Blue 00:20:36.829 --> 00:20:40.009 Ribbon Task Force. I want to thank them for their long 00:20:40.009 --> 00:20:43.839 hours identifying solutions in a matter of days. This 00:20:43.839 --> 00:20:46.859 is what makes me proud of Texas, the business community 00:20:46.859 --> 00:20:49.950 working together to solve problems by developing solutions 00:20:50.490 --> 00:20:52.660 This is how our government, I believe, should operate 00:20:52.660 --> 00:20:56.220 but rarely, or least not enough does, as explained 00:20:56.220 --> 00:20:59.210 by former congressman Bob McEwen, which I love his 00:20:59.210 --> 00:21:02.529 analysis as an economist. When people make first party 00:21:02.529 --> 00:21:05.339 decisions for themselves, they tend to look for the 00:21:05.339 --> 00:21:08.950 highest quality product and the lowest possible price. 00:21:10.430 --> 00:21:14.349 When government takes as third party purchaser that decision 00:21:14.349 --> 00:21:17.390 they don't really care about the quality of times or 00:21:17.390 --> 00:21:19.910 the price because they're not, it's not something they're 00:21:19.910 --> 00:21:22.609 gonna use nor is it their money gonna be used for it. 00:21:23.579 --> 00:21:25.569 They don't really care about quality of price because 00:21:25.569 --> 00:21:28.089 they're not paying for it with, they're paying with other 00:21:28.089 --> 00:21:30.569 people's money for something they really won't directly 00:21:30.569 --> 00:21:33.410 use. Through this task force, we are avoiding making 00:21:33.410 --> 00:21:36.799 third party decision on behalf of the industry. Our task 00:21:36.799 --> 00:21:40.829 force's identified about four dozen items for industry 00:21:40.829 --> 00:21:43.410 and government work home together to bring relief to small 00:21:43.410 --> 00:21:46.380 operators and the broader industry. I understand the 00:21:46.380 --> 00:21:50.039 recommendation is that small operators, defined as 00:21:50.039 --> 00:21:53.839 producing 1000 barrels per day, should be getting priority 00:21:54.349 --> 00:21:57.039 and that if there's a judgment call on cost or impact 00:21:57.039 --> 00:22:00.109 to agency operations the recommendation is to 00:22:00.109 --> 00:22:03.490 move forward to provide relief with smaller operators 00:22:03.519 --> 00:22:07.230 first. Upon receiving the report, I instructed staff 00:22:07.230 --> 00:22:10.180 to put together some motions with regulatory relief 00:22:10.190 --> 00:22:13.380 we can implement today at the Railroad Commission. Also 00:22:13.380 --> 00:22:17.009 went ahead and sent letters with the report to various other 00:22:17.009 --> 00:22:20.450 agencies mentioned in the report, as well as the Texas 00:22:20.450 --> 00:22:22.849 Congressional delegation and the Texas Legislature. 00:22:23.440 --> 00:22:26.259 I've asked the task force to share some comments today. 00:22:26.769 --> 00:22:29.960 Ed Longenecker with Cipro will give a short overview with 00:22:29.960 --> 00:22:33.470 Car Ingram with the Alliance and Todd Staples with 00:22:33.470 --> 00:22:36.549 Texoga on the line to answer any questions. If any. 00:22:37.109 --> 00:22:39.609 My goal today is not to dig into the report, but just 00:22:39.609 --> 00:22:43.349 lay it out (inaudible) task force to work with each Commissioner 00:22:43.779 --> 00:22:47.920 and Wei and his team to bring, try to see if we can bring together 00:22:48.940 --> 00:22:52.680 and implement theese policies if possible. And I'll now recognize 00:22:52.730 --> 00:22:55.039 Ed. 00:22:55.039 --> 00:22:57.930 Thank you, Chairman Christian and Good Morning Commissioners. 00:22:58.069 --> 00:23:01.119 Again Ed Longenecker, president of the Texas Independent 00:23:01.119 --> 00:23:04.089 Producers and Royalty Owners Association. I'm pleased 00:23:04.089 --> 00:23:06.309 to provide brief remarks on behalf of the Blue Ribbon 00:23:06.309 --> 00:23:09.799 Task force for oil economic recovery. And, as you indicated 00:23:09.799 --> 00:23:12.109 Chairman, we do have additional task force members 00:23:12.119 --> 00:23:15.220 available on the phone. For the Commission's consideration, 00:23:15.220 --> 00:23:17.980 our task force has compiled a list of recommendations 00:23:17.980 --> 00:23:20.940 that we believe will help keep oilfield workers employed 00:23:21.119 --> 00:23:23.750 and help companies very literally survive through 00:23:23.750 --> 00:23:26.930 these exceptionally difficult circumstances. The focus 00:23:26.930 --> 00:23:29.809 of our recommendations, as you indicated, is to provide 00:23:29.819 --> 00:23:33.569 small producers with regulatory relief. When possible 00:23:33.569 --> 00:23:36.029 relief should be granted to all operators, regardless 00:23:36.029 --> 00:23:39.039 of size, as this crisis does not discriminate and it's 00:23:39.039 --> 00:23:41.549 negatively impacting every sector of the industry. 00:23:42.039 --> 00:23:45.430 Our review is comprehensive and explored not only items 00:23:45.430 --> 00:23:48.640 under the Commission's jurisdiction but includes recommendations 00:23:48.640 --> 00:23:51.670 for other state agencies, addresses some federal 00:23:51.670 --> 00:23:54.740 policy issues, and includes items that will require 00:23:54.740 --> 00:23:57.450 legislative action. And we realize the Legislature 00:23:57.450 --> 00:24:00.259 doesn't convene until January. But unfortunately, this 00:24:00.259 --> 00:24:03.670 market disruption is so severe that the recovery process 00:24:03.670 --> 00:24:06.440 will certainly not be concluded by then, and additional 00:24:06.440 --> 00:24:09.259 actions to support this industry will undoubtedly be 00:24:09.259 --> 00:24:12.190 needed. The proactive efforts already taken by the 00:24:12.190 --> 00:24:14.990 Commission is an example of swift leadership, and we're 00:24:14.990 --> 00:24:18.099 very grateful. Given the extreme market conditions 00:24:18.099 --> 00:24:20.480 currently facing producers, we are hopeful for action 00:24:20.480 --> 00:24:23.339 on some of these new items in order to bring additional 00:24:23.339 --> 00:24:26.700 and immediate relief, we pledge to work collaboratively 00:24:26.700 --> 00:24:30.130 with each Commissioner and staff to help answer questions 00:24:30.130 --> 00:24:33.069 and obtain needed information. And we fully recognize 00:24:33.069 --> 00:24:35.599 this report is just the beginning. We will need to 00:24:35.599 --> 00:24:38.819 continue to identify obstacles to recover and respond 00:24:38.819 --> 00:24:41.299 accordingly. So our recommendations are designed to 00:24:41.299 --> 00:24:45.349 be broad and comprehensive, including fee relief, relaxing 00:24:45.349 --> 00:24:48.609 reporting requirements, additional deadline extensions 00:24:48.720 --> 00:24:51.440 and mechanisms to provide additional storage capacity 00:24:51.440 --> 00:24:54.589 in Texas. You and Commission staff, we believe, are 00:24:54.599 --> 00:24:57.309 well suited to determine which items could be done 00:24:57.309 --> 00:25:00.150 the most expeditiously and which ones will require 00:25:00.150 --> 00:25:03.099 additional information or time to evaluate. Also, in 00:25:03.099 --> 00:25:05.680 all of our recommendations, we in no way want to compromise 00:25:05.680 --> 00:25:08.589 safety or the environment, and we know you share in 00:25:08.589 --> 00:25:11.480 that sentiment. Commissioners, these are just a few high 00:25:11.480 --> 00:25:14.829 level elements of our report and the task force efforts 00:25:14.829 --> 00:25:18.720 thus far, we are committed to continue developing ideas 00:25:18.720 --> 00:25:21.299 for your consideration to support the Texas oil and 00:25:21.299 --> 00:25:25.609 gas industry, a cornerstone of the state economy, and 00:25:25.609 --> 00:25:27.259 we look forward to meeting with agency staff at the 00:25:27.259 --> 00:25:30.240 earliest opportunity to discuss our report and recommendations 00:25:30.240 --> 00:25:33.009 in greater detail, and we certainly appreciate your 00:25:33.009 --> 00:25:36.420 ongoing leadership and for the opportunity to participate 00:25:36.420 --> 00:25:39.410 in this process. Thank you very much. <v Chairman Christian>Commissioners 00:25:39.410 --> 00:25:44.140 Do you have any questions of the witnesses here? 00:25:44.140 --> 00:25:49.019 Oh, Ed, and all of you with your commit, with the task 00:25:49.019 --> 00:25:53.269 force, I want to thank you for coming up with four 00:25:53.269 --> 00:25:56.750 times the, four dozen, I think it is, is the number if 00:25:56.750 --> 00:25:59.549 I heard correctly, suggestions that you've been working 00:25:59.549 --> 00:26:02.930 with our agency and other members of the industry. 00:26:03.210 --> 00:26:06.549 And I think it's just a great example of Texans being 00:26:06.549 --> 00:26:09.539 Texans and taking it where the folks that built 00:26:09.539 --> 00:26:12.829 the world's greatest oil and gas industry footprint 00:26:13.099 --> 00:26:17.730 on planet Earth here in Texas are stepping forward 00:26:17.730 --> 00:26:21.269 to help solve the problem and assisting us at the government 00:26:21.279 --> 00:26:23.900 agency to understand what our correct position is to 00:26:23.900 --> 00:26:26.470 support our citizens. Rather, than us tell you what 00:26:26.470 --> 00:26:31.259 to do. Oh, before you leave, I have one other suggestion 00:26:31.500 --> 00:26:36.000 of the committee. We have a ongoing problem of oil 00:26:36.000 --> 00:26:39.680 and gas industry and particularly that has been a problem 00:26:39.680 --> 00:26:43.839 of flaring. The perception is caused a lot of financial 00:26:44.009 --> 00:26:48.700 questions in the past and it's not something that's 00:26:48.700 --> 00:26:51.079 going to go away when the industry rebounds, unless 00:26:51.079 --> 00:26:54.890 we do something about it now. I've been waiting for 00:26:54.890 --> 00:26:57.039 the industry feedback before addressing the problem 00:26:57.039 --> 00:26:59.759 but time is ticking. I don't want our agency to miss 00:26:59.759 --> 00:27:02.490 this opportunity to address the problem as we address 00:27:02.500 --> 00:27:07.210 a lot of other agency functions. My ask of you is 00:27:07.210 --> 00:27:10.259 that the blue ribbon task force continue to be and 00:27:10.259 --> 00:27:13.509 come back prior to our June 16th Open meeting 00:27:13.509 --> 00:27:15.680 with ideas on how the Railroad Commission could better 00:27:15.680 --> 00:27:19.019 regulate flaring. As production rebounds that goes 00:27:19.019 --> 00:27:22.029 to drastically reduce flaring in the state outside 00:27:22.029 --> 00:27:24.849 of emergency situations, complications and other rare 00:27:24.849 --> 00:27:27.730 circumstances. Much like you were able to come through 00:27:27.730 --> 00:27:30.750 with answers of the report presented today, I'm leaving 00:27:30.750 --> 00:27:33.549 you the same issues and the same work on the issue 00:27:33.549 --> 00:27:37.400 of Flaring. I want to be clear. This is an ask. It's 00:27:37.400 --> 00:27:42.230 not a demand, but in my time, I always find out that 00:27:42.230 --> 00:27:44.519 the industry does a lot better job, you can live with 00:27:44.519 --> 00:27:47.460 the results if they come up with solutions rather than 00:27:47.470 --> 00:27:50.349 government telling the industry what to do and for 00:27:50.349 --> 00:27:54.640 that purpose that I really request the task force 00:27:54.640 --> 00:27:58.130 to look into this flaring issue and report back. But 00:27:58.130 --> 00:28:00.279 thank you again for the work that you're doing. And 00:28:00.279 --> 00:28:02.390 God bless you for being the Texans that we can all 00:28:02.390 --> 00:28:07.950 be proud of. Thank you. Chairman Christian? Yes, sir. You mind if I, I appreciate 00:28:07.950 --> 00:28:11.150 the request you just made. Would you mind if I add 00:28:11.150 --> 00:28:15.549 my own two cents on it? Certainly, I agree that flaring 00:28:15.549 --> 00:28:19.440 has been a pretty big challenge for us. And it's 00:28:19.440 --> 00:28:21.400 it's one that I really tried to dig into the data as 00:28:21.400 --> 00:28:24.380 you know, and understand what level flaring is out 00:28:24.380 --> 00:28:27.450 there and where is it coming from? And how is it tied 00:28:27.450 --> 00:28:31.420 oil production? And one thing I found really striking 00:28:31.420 --> 00:28:34.319 as we explored the topic of prorationwas the level to 00:28:34.319 --> 00:28:39.779 which most of the industry folks, essentially, that 00:28:39.779 --> 00:28:41.380 the message was pretty clear that they thought the 00:28:41.380 --> 00:28:44.910 Railroad Commission was not in the position to evaluate 00:28:44.910 --> 00:28:49.380 economics. And I thought that was a pretty big, that 00:28:49.380 --> 00:28:52.349 was new to me. To think about waste in that capacity. 00:28:52.740 --> 00:28:55.130 So my request is as you're following the Chairman's 00:28:55.140 --> 00:28:58.859 request to consider what we do about flaring, my 00:28:58.859 --> 00:29:01.859 add to that, or for my two cents is if 00:29:01.859 --> 00:29:04.589 we're not supposed to consider economics when it comes 00:29:04.589 --> 00:29:08.279 to waste. And we're only supposed to consider physical 00:29:08.279 --> 00:29:10.710 waste. Which a couple of people who testified from 00:29:10.710 --> 00:29:14.500 industry did in our proration hearing, then should we, should 00:29:14.500 --> 00:29:17.890 we adopt a new stance on flaring, which is simply look 00:29:17.950 --> 00:29:20.849 any flaring that's not an emergency is no longer okay 00:29:21.339 --> 00:29:23.430 because that's physical waste, and we should ignore 00:29:23.430 --> 00:29:26.160 the economic? So it's a very specific question, but 00:29:26.160 --> 00:29:29.380 that represented a shift for me in Railroad 00:29:29.380 --> 00:29:33.150 Commission policy that I'd like to understand because 00:29:33.150 --> 00:29:37.660 that was, if I take the testimony on proration 00:29:38.089 --> 00:29:40.480 and apply it to flaring then it would drive us in 00:29:40.480 --> 00:29:42.250 a different direction. I'd like to understand that. 00:29:43.049 --> 00:29:46.400 Given the messages that we heard. So so once again appreciate 00:29:46.400 --> 00:29:48.569 your leadership on that, Mr Chairman and I'd like to 00:29:48.579 --> 00:29:52.549 get some specific feedback on that. <v Chairman Christian>Thank you very 00:29:52.559 --> 00:29:56.440 much. Yes. And again we will appreciate the any comments 00:29:56.440 --> 00:29:59.710 and I think another thing just to mention that I appreciate 00:29:59.759 --> 00:30:02.059 that I think has been made hopefuly we make clear 00:30:02.059 --> 00:30:05.359 at Railroad Commission today. Now there's been some controversy 00:30:05.359 --> 00:30:09.339 in the press of we've involved politics in some of 00:30:09.339 --> 00:30:13.079 our decisions here, and I really question that. I think 00:30:13.319 --> 00:30:16.029 the evidence of the industry participating here, I 00:30:16.029 --> 00:30:20.559 think, is research policy. We've asked for work between 00:30:20.559 --> 00:30:23.950 our agency and our staff who has stepped forward. I think 00:30:23.950 --> 00:30:28.089 the industry has above expectations, come forward 00:30:28.089 --> 00:30:31.029 with numerous ideas and has been very open to it. So 00:30:31.029 --> 00:30:34.210 I think it's refreshing to see us address an issue 00:30:34.430 --> 00:30:37.130 that, I understand anything can become political in this 00:30:37.130 --> 00:30:40.609 day and age. But I'm glad, and I just want to put in my two 00:30:40.609 --> 00:30:43.730 bits to thank the industry, thank our staff. I think 00:30:43.730 --> 00:30:47.359 this is demonstrating policy above politics. I 00:30:47.359 --> 00:30:51.730 think that's a great, great statement that we as a 00:30:51.730 --> 00:30:54.710 Railroad Commission of Texas can make today, you know. 00:30:54.710 --> 00:30:58.839 Any other comments? Okay. Well, based on the recommendations 00:30:58.839 --> 00:31:01.660 from the staff and the task force, I have two motions 00:31:02.069 --> 00:31:04.890 I would like to make. My motion will provide much 00:31:04.890 --> 00:31:07.599 needed regulatory relief, large and small operators 00:31:07.599 --> 00:31:11.609 across the state. The first order of waves, fees, and surcharges 00:31:11.609 --> 00:31:19.470 associated with Items P17, W14, H1, H4, W3C, 00:31:19.619 --> 00:31:23.789 for the rest of the calendar year, second order 00:31:23.789 --> 00:31:27.829 grants an exception to Statewide Rule 95 to allow storage 00:31:27.839 --> 00:31:31.049 of crude oil in formations that are not salt formations. 00:31:31.640 --> 00:31:34.339 An application to store crude oil in a formation rather than 00:31:34.339 --> 00:31:37.920 an underground salt formation will need to show 00:31:37.920 --> 00:31:41.299 that the formation's confined to prevent the waste of 00:31:41.299 --> 00:31:44.960 uncontrolled escape of crude oil. This orders did not 00:31:44.960 --> 00:31:49.069 suspend any rule that protects public safety, health 00:31:49.230 --> 00:31:52.829 or the prevention of pollution. All it does is allow 00:31:52.839 --> 00:31:56.369 operators to begin storing crude oil and oil formations 00:31:56.369 --> 00:32:00.200 where it may make sense to do so. This exception will last 00:32:00.210 --> 00:32:04.329 one year, all oil stored in the formation of than a salt 00:32:04.329 --> 00:32:09.650 formation, must be removed within five years. Are there 00:32:09.650 --> 00:32:12.339 any questions? 00:32:12.339 --> 00:32:14.799 I second 00:32:14.799 --> 00:32:18.000 I move we adopt order waiving fees and surcharges 00:32:18.000 --> 00:32:22.799 for forms P17, W13 H1, H4, and 00:32:22.799 --> 00:32:25.470 W3C for the rest of the calendar year. Is there a 00:32:25.470 --> 00:32:30.660 second? Second All in favor say aye. Mr. Chairman. Sorry, I was 00:32:30.660 --> 00:32:33.569 trying to say I had a 00:32:33.589 --> 00:32:38.519 question. So right now you're moving on the the temporary 00:32:38.519 --> 00:32:41.769 exception to the fees? Yes? That's the one? Yes, correct 00:32:42.240 --> 00:32:46.789 A question about this one. We only got these yesterday 00:32:46.789 --> 00:32:51.099 so I haven't had a chance to to explore these at all 00:32:51.099 --> 00:32:54.390 yet with anybody outside of our staff. But in the second 00:32:54.390 --> 00:32:58.160 paragraph of this motion of this, uh, this motion, 00:32:58.940 --> 00:33:01.519 it says the Commission carefuly identified the fees 00:33:01.519 --> 00:33:04.160 described here in with the intention of incentivizing 00:33:04.160 --> 00:33:07.029 the construction of additional storage facility. So 00:33:07.029 --> 00:33:10.509 this is the one about fees and down below 00:33:10.509 --> 00:33:15.819 it says these that that we would waive, uh, these fee 00:33:15.819 --> 00:33:19.660 required to be filed with a form P17. Well, that's 00:33:20.039 --> 00:33:23.059 that's for commingling. And then the next two bullets 00:33:23.059 --> 00:33:26.500 are fees with W14 and form H1, which have 00:33:26.500 --> 00:33:30.230 to do with disposal wells. So my, Joe, I don't really 00:33:30.230 --> 00:33:32.980 have a big challenge with waiving fees, I mean, I think 00:33:32.980 --> 00:33:35.849 we're gonna be a bit constrained at the Commission financially 00:33:35.849 --> 00:33:38.450 so I'm a bit concerned about that. But at the end of day 00:33:38.450 --> 00:33:41.259 so is the rest of industry. So we'll, you have to 00:33:41.259 --> 00:33:43.319 go back to the Legislature and ask for support. When 00:33:43.319 --> 00:33:47.259 that's a, that's a problem, a challenge for next year. 00:33:47.839 --> 00:33:52.769 My question is, I'm struggling to tie those, those fees 00:33:52.769 --> 00:33:55.910 with incentivizing construction of additional storage 00:33:55.910 --> 00:33:59.819 facilities. Thoughts on that. Am I missing 00:33:59.819 --> 00:34:02.440 something? 00:34:02.440 --> 00:34:04.650 Of course. I'm going by the recommendations that 00:34:04.650 --> 00:34:07.950 they our Blue Ribbon task force. And the industry 00:34:07.950 --> 00:34:11.199 has come together and our agencies come together and 00:34:11.199 --> 00:34:16.730 perhaps up what I'm seeing is, if I understand right, the fee 00:34:16.730 --> 00:34:20.420 for the underground storage is Rule 95. But also 00:34:20.420 --> 00:34:23.599 this motion waives other fees too. And, of course, it's 00:34:23.599 --> 00:34:27.539 just what we asked, and Brian as a petroleum 00:34:27.539 --> 00:34:29.690 engineer can understand the details much better. But 00:34:29.920 --> 00:34:34.489 our staff has presented these items as appropriate 00:34:34.719 --> 00:34:36.940 for the current situation they discussed with our task 00:34:36.940 --> 00:34:39.989 force. Oh, 00:34:39.989 --> 00:34:43.389 anybody, Wei or Paul, that might have a comment ir 00:34:43.570 --> 00:34:48.320 answer to this? Yes, chairman. Wei? Good morning, Chairman 00:34:48.320 --> 00:34:51.039 Commissioner, this is Wei Wang, Executive 00:34:51.039 --> 00:34:55.050 Director, for the record. So these proposal came from 00:34:55.050 --> 00:34:57.960 our staff and I reviewed it with oil and gas division 00:34:58.440 --> 00:35:02.079 The P17, a comingling permit is required for all these 00:35:02.079 --> 00:35:05.809 storage tanks. So waiving that fee, the idea is 00:35:05.809 --> 00:35:10.210 to provide incentive for additional off lease 00:35:10.210 --> 00:35:16.199 storage tanks, and, um, the other fee for injection 00:35:16.199 --> 00:35:18.619 and disposal wells that will provide some financial 00:35:18.619 --> 00:35:22.210 relief and also for underground storage, they typically 00:35:22.210 --> 00:35:26.559 the wellbore to inject the crude under, for, to the 00:35:26.559 --> 00:35:31.559 underground storage information, and also W3c, 00:35:31.559 --> 00:35:35.389 this is the fee for, I believe is for removing 00:35:35.400 --> 00:35:38.840 surface equipment. So by waiving the fee, we provide 00:35:38.840 --> 00:35:41.739 some incentive for for operators to quickly remove 00:35:41.739 --> 00:35:45.590 those, uh, surface equipment during this period because 00:35:45.659 --> 00:35:48.550 the fee has been waived for the remainder of the calendar. 00:35:51.639 --> 00:35:53.539 Wei, it sounds like what you're saying is that, yes, 00:35:53.539 --> 00:35:56.280 these are, these are somewhat tied to storage, but in 00:35:56.280 --> 00:35:58.889 general, that sounds like this is more just a financial 00:35:58.889 --> 00:36:02.929 incentive. This is just basically, hey we're just trying 00:36:02.929 --> 00:36:06.590 to waive some financial weights in general, some of 00:36:06.590 --> 00:36:09.489 it's directly tied to storage, some is not directly tied 00:36:09.489 --> 00:36:12.289 to storage, but in general, it's (inaudible crosstalk) 00:36:12.360 --> 00:36:15.789 proposal? These are directly tied to the storage, whether 00:36:15.789 --> 00:36:18.369 the storage tanks on these were off lease storage tanks 00:36:18.369 --> 00:36:21.780 for underground storage. And there are one or two of 00:36:21.780 --> 00:36:25.409 these fees that are just general incentives. Understood 00:36:25.420 --> 00:36:30.190 Okay. Thank you. Okay, there is a motion. Any further comments? 00:36:30.829 --> 00:36:33.309 If not, there is a motion and a second on the floor. 00:36:33.429 --> 00:36:38.360 All in, all in favor say aye. Any opposed? 00:36:38.489 --> 00:36:42.610 Motion passes. Now for my second motion. I move adoption 00:36:42.610 --> 00:36:45.269 of the order granting an exception to Statewide Rule 00:36:45.269 --> 00:36:49.869 95 for a period of one year. Is there a second? Second 00:36:52.219 --> 00:36:54.940 Yes. Commissioner Sitton? <v Commissioner Sitton>Sorry discussion on this one 00:36:54.940 --> 00:37:00.250 too. Um, this one, I wanna understand. So all right 00:37:00.250 --> 00:37:05.170 So we're, the purpose of this motion is to waive, is to apply 00:37:05.170 --> 00:37:08.679 Rule 95 now to any underground storage facility, whether 00:37:08.679 --> 00:37:13.630 it's a salt dome or not, salt domes, um, 00:37:13.630 --> 00:37:17.840 it's the same rules just not salt domes. And I, 00:37:17.840 --> 00:37:20.210 my question here and maybe this is for staff or whoever 00:37:20.210 --> 00:37:25.840 drafted this motion that we still require the applicants 00:37:26.230 --> 00:37:30.719 to, uh, to demonstrate that these whatever, wherever 00:37:30.719 --> 00:37:33.219 it is, will be created, operated and maintained in 00:37:33.219 --> 00:37:35.739 a manner that will prevent waste to stored crude oil, 00:37:36.130 --> 00:37:38.420 uncontrolled escape of crude oil, pollution of 00:37:38.420 --> 00:37:42.130 subsurface water and danger, life or property. 00:37:42.130 --> 00:37:47.090 In the next paragraph of this, the Commission hereby grants 00:37:47.090 --> 00:37:50.559 an exception of the hearing requirement. So my question 00:37:50.559 --> 00:37:54.500 is we're opening up now to any type of under, we don't 00:37:54.510 --> 00:37:57.039 we don't preclude any type of underground storage, 00:37:57.829 --> 00:38:01.900 which is, that's kind of big deal, and we no longer 00:38:01.900 --> 00:38:05.940 require a hearing to demonstrate that they've met all 00:38:05.940 --> 00:38:09.440 these requirements. Is that that what we're saying? 00:38:10.219 --> 00:38:13.409 That is what we're saying. It's a, these are emergency items, 00:38:13.409 --> 00:38:16.309 Commissioner, I understand, an applicant would still have 00:38:16.309 --> 00:38:19.530 to administratively be approved by the staff but its 00:38:19.530 --> 00:38:23.260 kinda, this is a trust in the staff to take care of 00:38:23.260 --> 00:38:25.780 this and follow the current rules still there. We're 00:38:25.780 --> 00:38:28.949 not, we're not suspending the safety requirements. 00:38:28.949 --> 00:38:32.150 The environmental requirements or others for safety. We're 00:38:32.150 --> 00:38:35.329 entrusting. And the reason we're doing that is to expedite 00:38:35.820 --> 00:38:38.619 this being done. 00:38:38.619 --> 00:38:43.239 (inaudible crosstalk) more a technical question 00:38:43.239 --> 00:38:46.949 here. A hearing would be required if the 00:38:46.949 --> 00:38:49.980 staff denies it or someone protests. So you still have 00:38:49.980 --> 00:38:54.219 that place in there, but if there's no protest and staff 00:38:55.489 --> 00:38:59.980 but we would require if the staff denies it or it 00:38:59.980 --> 00:39:02.659 could take, and it makes no sense to require hearing when a 00:39:02.659 --> 00:39:05.559 hearing could take a year or two. Okay. And that's 00:39:05.559 --> 00:39:08.510 why I'm trying to get the timeline of these hearings out of 00:39:08.510 --> 00:39:10.730 the way during this emergency situation where we could 00:39:10.730 --> 00:39:14.300 put storage in this emergency time. <v Commissioner Sitton>I understand 00:39:14.300 --> 00:39:18.110 and I appreciate the urgency but still this 00:39:18.110 --> 00:39:20.679 is a pretty big deal. I want to understand this, you say 00:39:20.679 --> 00:39:22.559 that if there's a protest there could be a hearing, but 00:39:22.559 --> 00:39:25.179 we have no notice requirement anymore. We alleviated 00:39:25.179 --> 00:39:27.750 that too. So how would there be a protest if there 00:39:27.750 --> 00:39:29.171 was no notice? 00:39:29.195 --> 00:39:30.780 Okay. Is there a staff member that might? 00:39:33.619 --> 00:39:37.320 Yes, sir. Chairman, Commissioner. So currently in Rule 00:39:37.320 --> 00:39:41.989 95, all underground liquid storage facilities require 00:39:41.989 --> 00:39:45.619 a hearing period. So even a staff if satisfied with 00:39:45.619 --> 00:39:49.010 the application. Even if there's no protestants, the 00:39:49.010 --> 00:39:52.170 applications have to go to hearing. Okay? And there 00:39:52.170 --> 00:39:56.820 has to be notice. What this exception is doing is 00:39:56.820 --> 00:40:02.219 saying if staff is satisfied with the application and 00:40:02.219 --> 00:40:05.820 if there are no protests than a hearing is not necessary, 00:40:06.809 --> 00:40:10.340 that staff can make the administrative decision to 00:40:10.340 --> 00:40:14.800 recommend and adopt a permit for the facility. If there 00:40:14.800 --> 00:40:17.719 is a protest, there will be a hearing. It staff is 00:40:17.719 --> 00:40:22.199 not satisfied, there is a hearing. I will say that 00:40:22.210 --> 00:40:27.000 even though this is in Rule 95, the Natural Resource 00:40:27.000 --> 00:40:30.320 Code specifically mentions underground storage of liquid 00:40:30.320 --> 00:40:35.690 hydrocarbons, waste includes a loss of liquid hydrocarbons 00:40:35.690 --> 00:40:39.539 of underground storage. So applicants would still 00:40:39.539 --> 00:40:42.460 need to demonstrate they're not going to be wasting 00:40:42.469 --> 00:40:45.750 or losing oil, either as retained by the formation 00:40:45.750 --> 00:40:51.070 or as by lost. in some other way, they will have 00:40:51.070 --> 00:40:54.409 to demonstrate protection of fresh water through the 00:40:54.409 --> 00:40:59.309 groundwater advisory unit letter and, um, 00:40:59.309 --> 00:41:02.389 all the other technical requirements in Chapter 3 00:41:02.539 --> 00:41:07.539 of the Texas Administrative Code. <v Commissioner Sitton>Paul, do I understand 00:41:07.539 --> 00:41:09.989 right that we've, but we are alleviating the notice 00:41:09.989 --> 00:41:12.260 requirements as well. Do I understand that correctly? 00:41:14.510 --> 00:41:18.239 Because when, when we, when we grant the exception of 00:41:18.239 --> 00:41:20.750 the hearing requirements and forget a little code here, 00:41:21.309 --> 00:41:27.320 the hearing requirement, it includes the notice requirements. 00:41:28.710 --> 00:41:32.519 So that's probably a notice of hearing that I can pull 00:41:32.519 --> 00:41:45.010 that up. Um, 00:41:45.010 --> 00:41:47.719 we still have the notice requirements in E1, even 00:41:47.719 --> 00:41:50.190 though there we're gonna alleviate them in E4. Is that 00:41:50.190 --> 00:41:51.231 what you're saying? 00:41:51.255 --> 00:41:52.960 That's correct. E1 stands 00:41:53.159 --> 00:41:57.079 and what gets pulled aside is the hearing that's 00:41:57.079 --> 00:42:00.989 required is not going to be required, but application 00:42:00.989 --> 00:42:05.250 of the notice would still be required, so all the parties 00:42:05.250 --> 00:42:08.889 who are entitled to notice under the exisitng rule 00:42:08.960 --> 00:42:13.510 would still be entitled to notice (inaudible) protest. Okay 00:42:13.900 --> 00:42:17.619 I mean, obviously, Paul, I've got, I've got, this 00:42:17.619 --> 00:42:19.769 is a big deal, and I appreciate that you're doing the 00:42:19.769 --> 00:42:22.739 work on it, I mean when we're, salt domes are a pretty specific 00:42:22.739 --> 00:42:25.400 type of formation, they are a specific type of mine, 00:42:25.400 --> 00:42:27.199 want a lot similarities in how they're mined, how they're 00:42:27.199 --> 00:42:29.880 developed when you start broadening into any type underground 00:42:29.880 --> 00:42:31.889 storage, I want to make sure we're being cautious, sounds 00:42:31.889 --> 00:42:35.380 like you are. And I wanna make sure that, it's great 00:42:35.380 --> 00:42:37.730 that we're moving quickly and allowing some additional 00:42:37.730 --> 00:42:40.710 storage capacity quickly. But I don't wanna hear a 00:42:40.710 --> 00:42:44.349 story in three months that we put oil in some sort 00:42:44.349 --> 00:42:46.639 of cave somewhere and ended up having groundwater pollution, 00:42:46.639 --> 00:42:48.400 so sound like you're on top of it. So I'm gonna support 00:42:48.400 --> 00:42:52.199 this, but I wanted to make sure thank you. Thank you. 00:42:52.920 --> 00:42:56.000 Mr Chairman, Could I, Paul, can I clarify? I think in 00:42:56.000 --> 00:43:00.380 our rule today on Rule 95. It's not quite as broad as 00:43:00.380 --> 00:43:03.199 the statute, is that correct? Today we've only have 00:43:03.199 --> 00:43:06.119 salt domes and what, part of what we're trying to do 00:43:06.119 --> 00:43:10.599 today is broaden this to reflect what the statute says 00:43:10.599 --> 00:43:13.670 which is all underground storage, not just salt domes. 00:43:13.670 --> 00:43:16.480 Would that be a good clarif, a better clarif, a somewhat of 00:43:16.480 --> 00:43:18.980 a clarification as why we're doing some of this 00:43:18.980 --> 00:43:24.440 as well. Yes, Commissioner. The, uh, the natural resource 00:43:24.440 --> 00:43:26.949 code allows underground storage of both liquids and 00:43:26.949 --> 00:43:32.389 gas. Rule 96 covers underground storage of gas. Rule 00:43:32.389 --> 00:43:35.809 95 covers underground storage of liquids in salt domes 00:43:36.300 --> 00:43:39.269 but we don't have a rule specifically for underground 00:43:39.269 --> 00:43:42.900 storage of liquids outside of salt Dome, but it is 00:43:42.900 --> 00:43:46.670 authorized in the natural resource code. <v Commissioner Craddick>Thank you for clarifying 00:43:48.599 --> 00:43:50.880 Thank you, Commissioners, for clarifying this because 00:43:50.880 --> 00:43:55.329 I think this is important, and, uh, it's somewhat unprecedented 00:43:55.340 --> 00:43:58.329 but I think it is exciting that we're affording as 00:43:58.329 --> 00:44:01.500 much opportunity possible in this emergency situation. 00:44:02.130 --> 00:44:07.179 Okay, I think do we have a motion yet? let me see what the 00:44:07.179 --> 00:44:11.750 wording is? I move we accept. 00:44:11.750 --> 00:44:15.269 Over here. We're already moved. I think we just take 00:44:15.269 --> 00:44:19.550 a vote. Which and I seconded, so we just need a vote. Okay, All 00:44:19.550 --> 00:44:25.250 in favor, say Aye. All opposed? No opposed. Motion passes. 00:44:25.789 --> 00:44:28.820 Okay. Before we move on from this agenda, are there any 00:44:28.820 --> 00:44:31.969 comments on, this is pretty historic, I think. From either 00:44:31.969 --> 00:44:35.059 Commissioner. No, Wayne, I've got a couple more if I 00:44:35.059 --> 00:44:37.159 could. I didn't know if you were finished. It's your go. 00:44:38.269 --> 00:44:41.429 Okay, then I want to say thank you to you and the 00:44:41.429 --> 00:44:44.840 task force. I think we've got some really good proposals 00:44:44.840 --> 00:44:47.119 to move forward. And I appreciate all the work and 00:44:47.119 --> 00:44:51.079 we look forward to moving, finding out some other 00:44:51.079 --> 00:44:54.179 ideas and trying to move this Board as well. Let me 00:44:54.179 --> 00:44:57.449 echo, you know, my office has been working on flaring 00:44:57.449 --> 00:45:00.349 for about nine months too, and I think these, that's 00:45:00.349 --> 00:45:03.579 an important conversation we need to continue, and 00:45:03.579 --> 00:45:05.960 I know staff's been working on some things as well 00:45:05.960 --> 00:45:10.000 so I hope to to see some recommendations as we go forward. 00:45:10.230 --> 00:45:14.099 I always feel like as we're in some reset times that 00:45:14.099 --> 00:45:16.949 there are some opportunities to put best practices in place 00:45:16.949 --> 00:45:20.110 so. Not just that, but other issues. So I look forward 00:45:20.110 --> 00:45:24.059 to continuing those conversations, but I've got a few 00:45:24.059 --> 00:45:27.420 other rules that I like, that I know staff has been working 00:45:27.420 --> 00:45:30.800 on, separate from your task force,I'd like to 00:45:31.570 --> 00:45:35.030 waive and or have some temporary rule exceptions 00:45:35.030 --> 00:45:38.250 So I appreciate the Commission staff in the Oil and Gas 00:45:38.250 --> 00:45:41.849 division. They've identified some other areas to provide 00:45:41.849 --> 00:45:45.480 additional relief, and certainly to operators. I think 00:45:45.480 --> 00:45:48.610 certainty, while difficult in them in this market, 00:45:48.610 --> 00:45:51.159 should be something that the Commission strives for. 00:45:51.590 --> 00:45:54.710 And with that said, I've got something about, I've got 00:45:54.710 --> 00:46:01.349 four things that I'd like to have, look at 00:46:01.349 --> 00:46:05.360 for adoption as well. First a statewide Rule 8D or H. 00:46:05.369 --> 00:46:11.230 It would allow operators with authorized pits 00:46:11.409 --> 00:46:14.309 to submit identification to the appropriate district 00:46:14.309 --> 00:46:17.900 office on an extension to the deadline to de-Water 00:46:17.900 --> 00:46:22.269 Backfill and Compact Authorized pits. This exception would 00:46:22.280 --> 00:46:25.800 expire one year from today's date unless earlier terminated 00:46:25.800 --> 00:46:29.650 or extended. The stack it with a Statewide Rule 13D 00:46:29.659 --> 00:46:35.579 which would extend the 180 day limitation on administrative 00:46:35.590 --> 00:46:39.090 approvals of alternative casing and tubing programs 00:46:39.480 --> 00:46:43.300 to allow administrative approvals exceeding 180 days. 00:46:43.309 --> 00:46:46.449 Again, this would expire a year from today's date unless 00:46:46.449 --> 00:46:50.989 earlier terminated or extended. The 3rd 1 is Statewide 00:46:50.989 --> 00:46:55.429 Rule 14B2. Which would expend the 00:46:55.429 --> 00:46:59.900 one year deadline to plug wells to two years for wells 00:46:59.900 --> 00:47:04.059 reporting production in February 2020 and subsequently 00:47:04.059 --> 00:47:08.889 shut in with no reported production from March 1st 00:47:08.889 --> 00:47:13.849 2022 to March 1st 2021. I do think it's important to 00:47:13.849 --> 00:47:17.179 note that this exception would not limit our authority 00:47:17.179 --> 00:47:20.670 to require an operator to plug a leaking well, that 00:47:20.670 --> 00:47:24.590 might be a serious pollution threat. And the 4th 00:47:24.590 --> 00:47:29.579 one is the Statewide Rule 107B, which would allow, which 00:47:29.579 --> 00:47:34.070 allows our legal enforcement section to exercise discretion 00:47:34.289 --> 00:47:37.500 in assessing penalties for violations of Commission 00:47:37.500 --> 00:47:41.639 rules occurring between March 1st 2020 and March 1st 00:47:41.639 --> 00:47:46.730 2021 that do not implicate health, safety or environmental 00:47:46.730 --> 00:47:50.000 concerns. And again, that exception would expire one 00:47:50.000 --> 00:47:53.420 year from today's date unless earlier terminated or 00:47:53.429 --> 00:47:57.769 extended. So these proposals for my concern 00:47:57.769 --> 00:48:01.679 I think very well on protecting the environment but 00:48:01.679 --> 00:48:04.929 allowing operational flexibility during this time. 00:48:04.929 --> 00:48:07.980 And I do have an order reflecting these and have a motion 00:48:08.050 --> 00:48:11.170 if anybody's got any questions, I'll be glad to answer 00:48:11.170 --> 00:48:14.739 questions before I state my motion. <v Chairman Christian>Are there any questions? 00:48:14.750 --> 00:48:18.510 Mr Sitton? Yeah, I do. Thank you. Uh, I guess I don't 00:48:18.510 --> 00:48:21.380 have a a question about the intent. That look, that 00:48:21.380 --> 00:48:26.090 seems pretty clear. Um, same type thing. I got 00:48:26.090 --> 00:48:28.469 this yesterday afternoon. So still, some time digesting 00:48:28.469 --> 00:48:31.369 my, I guess, my question is not about the intent but about 00:48:31.369 --> 00:48:36.199 the ramifications, uh, for the exceptions to Statewide 00:48:36.199 --> 00:48:39.150 Rule 8 and 14 we're basically. we're pushing out 00:48:39.150 --> 00:48:41.420 requirements by one year on both of those, we're pushing 00:48:41.429 --> 00:48:44.469 requirement on pits for one year and then onplugging 00:48:44.469 --> 00:48:48.619 wells. Seems to me that the, absolutely to benefit to 00:48:48.630 --> 00:48:53.730 industry, they get more time to take action. Um, the 00:48:53.739 --> 00:48:57.190 flip side is that we know it's gonna be a really challenging 00:48:57.190 --> 00:48:59.960 environments and that I believe this means that the 00:48:59.960 --> 00:49:03.489 Railroad Commission, um, will end up having more wells 00:49:03.489 --> 00:49:05.269 that we have to plug. We'll have more pits that we 00:49:05.269 --> 00:49:07.809 have to handle because if somebody pushes out by a 00:49:07.809 --> 00:49:11.019 year and then declares bankruptcy, that means it goes 00:49:11.030 --> 00:49:14.300 on to us. I don't have a good sense of how big that's going to 00:49:14.300 --> 00:49:18.349 be, and I'm not gonna be here anyway, so you guys will 00:49:18.349 --> 00:49:22.260 have to, have to deal with it. But I guess I'd ,like 00:49:22.269 --> 00:49:26.210 I don't know if, which, how our staff drew this up. Did we give thought 00:49:26.210 --> 00:49:29.010 to what's gonna be the financial implications of the 00:49:29.010 --> 00:49:32.280 Railroad Commission taking on additional risk of more 00:49:32.280 --> 00:49:34.489 plugged wells and more pits that we have to manage 00:49:34.570 --> 00:49:37.070 as a result of this? 00:49:37.070 --> 00:49:39.409 Wei. If you don't mind or Paul, either one of you, 00:49:39.409 --> 00:49:41.469 know I mean, you know, look, these, I think these are good 00:49:41.469 --> 00:49:45.250 ideas, we're obviously having, trying to keep people around 00:49:45.250 --> 00:49:48.679 and to me, you don't need to plug a well today if 00:49:48.679 --> 00:49:52.650 it might be available to be operated a year, so I think 00:49:52.650 --> 00:49:57.460 that makes sense. But I don't, on the, on the ramifications 00:49:57.460 --> 00:50:00.389 we've always say of bonding, and we're going to see 00:50:00.400 --> 00:50:03.170 if possible, people in my mind if they can stay in 00:50:03.170 --> 00:50:06.150 business for a year. Hopefully they continue to operate 00:50:06.159 --> 00:50:08.699 these. So you know. But I don't know if Wei, you or 00:50:08.699 --> 00:50:11.170 Paul have a no additional comment so that I think these 00:50:11.170 --> 00:50:13.659 are important, obviously, to try to keep operators 00:50:13.659 --> 00:50:16.360 in businesses at this point. 00:50:16.360 --> 00:50:21.510 any comments? Wei? Paul? Yeah, We have Paul on the line. 00:50:21.590 --> 00:50:28.739 Just quick comments on the, on the United Wells. The 00:50:28.750 --> 00:50:31.860 financial risk security assurance requirement is still in 00:50:31.860 --> 00:50:36.739 place and on the pits, again, you know, this 00:50:36.750 --> 00:50:41.190 order will say, is directing anything that related to safe 00:50:41.239 --> 00:50:44.599 health, waste and environmental protection requirements 00:50:44.599 --> 00:50:47.650 are still in place. And also I'm reading the order 00:50:47.809 --> 00:50:50.679 it requires a notification toward district office. If 00:50:50.679 --> 00:50:54.159 the operator's intent is to, uh, extend the deadline 00:50:54.159 --> 00:50:57.239 for backfilling the pit. So our district office 00:50:57.239 --> 00:51:00.710 inspectors be notified and they are aware of what's 00:51:00.710 --> 00:51:02.780 going on in the districts, and they can go out there 00:51:02.789 --> 00:51:08.139 and conduct inspections to monitor the progress of these pits. And with 00:51:08.139 --> 00:51:11.159 that, I'll turn over Paul. 00:51:11.159 --> 00:51:15.550 So Commissioners, I would say, probably if we looked 00:51:15.550 --> 00:51:18.860 at the Historical Review. Any time there's been a downturn, 00:51:18.900 --> 00:51:23.380 the Commission has taken on some degree more of, 00:51:24.059 --> 00:51:28.809 um, abandoned wells or other facilities. I think that's 00:51:28.809 --> 00:51:33.159 a risk we face. We have not enumerated that risk 00:51:33.159 --> 00:51:36.090 or figured out exactly what it is going to be. But we 00:51:36.090 --> 00:51:39.360 also believe that providing certain degrees of flexibilities 00:51:40.460 --> 00:51:43.110 allows operators to keep their heads above water 00:51:43.110 --> 00:51:45.900 longer to attend to these things. So with regard to 00:51:45.900 --> 00:51:50.300 the pits, they are still subject to inspection, 00:51:50.750 --> 00:51:54.199 there are still standards for behavior, whether there's 00:51:54.199 --> 00:51:58.460 harm to birds or they're causing pollution, and our 00:51:58.460 --> 00:52:01.840 district staff will still be attuned to inspecting 00:52:02.179 --> 00:52:04.869 those issues. 00:52:04.869 --> 00:52:07.949 Paul, do I understand, right? Your point is, yeah, we 00:52:07.949 --> 00:52:11.380 may have some negative financial impacts if more of 00:52:11.380 --> 00:52:13.789 these things come under, become our responsibility, 00:52:13.789 --> 00:52:16.739 But the flip side we also allow some operators enough 00:52:16.739 --> 00:52:19.349 flexibility to last longer. So we're trying. We're making 00:52:19.349 --> 00:52:21.789 a judgment call to balance those. We hope this is 00:52:21.789 --> 00:52:24.869 gonna have a net positive versus an net negative. Yes, sir 00:52:25.449 --> 00:52:28.820 Okay. I appreciate that analysis. Thank you. Thank 00:52:28.820 --> 00:52:31.219 you both and Paul, Look, I really do you think if 00:52:31.219 --> 00:52:33.710 you look at the history, we we always acquire some 00:52:33.719 --> 00:52:37.019 additional environmental whatever it is, whether it's 00:52:37.019 --> 00:52:40.199 abandoned wells or other environmental cleanups, that's 00:52:40.199 --> 00:52:43.349 part of the cycle. But my goal is to try to keep 00:52:43.349 --> 00:52:45.699 operators in business for as long as possible. And 00:52:45.699 --> 00:52:48.670 I think this gives them some good options. So I appreciate 00:52:48.670 --> 00:52:52.349 the staff working on this. Mr. Chairman, I've got a motion when 00:52:52.349 --> 00:52:57.139 you're ready. We're ready. <v Commissioner Craddick>I move to adopt the proposed 00:52:57.139 --> 00:53:02.650 temporary exceptions to Statewide rules 8, 13, 14, and 00:53:02.650 --> 00:53:04.949 107. 00:53:04.949 --> 00:53:08.840 I'll second. Motion and second, all in favor, say aye. 00:53:09.070 --> 00:53:14.469 Any opposed? Motion passes. Those, that item is 00:53:14.469 --> 00:53:18.059 approved. Anymore items or motions for this agenda? 00:53:20.050 --> 00:53:23.710 Okay, Now let's go on to Item Number 190 which is 00:53:23.710 --> 00:53:26.340 a motion by Pioneer Natural Resource and Partially 00:53:26.349 --> 00:53:30.110 Energy and related proposed order by Commissioner Sitton. 00:53:31.250 --> 00:53:37.480 For the record, can you, Callie? 00:53:37.480 --> 00:53:40.079 It's Callie and for the record, Ed Longnecker with 00:53:40.079 --> 00:53:44.239 Tipro, Todd Staples with Texoga and Car 00:53:44.250 --> 00:53:48.039 Ingram with Texas Alliance of Energy Products. Okay 00:53:48.039 --> 00:53:50.239 and we're going to restart this. Sorry, let's start 00:53:50.239 --> 00:53:55.849 again. This is Callie and for the record, 00:53:55.849 --> 00:53:59.230 for the record, James Man with the Texas Pipeline Association 00:53:59.230 --> 00:54:02.309 John Arnold with Texoga, Scott Anderson with the 00:54:02.309 --> 00:54:05.739 Environmental Defense Fund, Robin Schneider with Texas 00:54:05.739 --> 00:54:08.269 Campaign from the Environment, along with Professor 00:54:08.269 --> 00:54:12.400 James Coleman, Stephen Meltzer and Krista Castaneda 00:54:12.409 --> 00:54:15.199 representing themselves, are all available for questions 00:54:15.210 --> 00:54:19.869 and or comment. Thank you. <v Chairman Christian>Let me, before we 00:54:19.869 --> 00:54:22.329 start this discussion, let me say, I'm gonna just thank 00:54:22.559 --> 00:54:27.730 the initial 10.5 hour session we had, since 00:54:27.730 --> 00:54:31.489 that time, and including that time, it's been reported 00:54:31.489 --> 00:54:34.449 to us as Commission. We've had literally thousands of 00:54:34.449 --> 00:54:40.130 comments from big, small, moms, dads. It's exciting to 00:54:40.130 --> 00:54:45.130 see, sadly, but it is good to see that many people participating 00:54:45.130 --> 00:54:48.539 in comments on this tremendously important time in 00:54:48.539 --> 00:54:52.559 our industry, uh, I just like take a moment to thank 00:54:52.570 --> 00:54:56.619 everyone who participated in the process and even more 00:54:56.619 --> 00:55:00.050 form letters on this issue, had over 50 people testifying, 00:55:00.539 --> 00:55:03.289 whether folks were for or against proration, it's obvious 00:55:03.289 --> 00:55:07.070 to me that Texans care about getting our once thriving 00:55:07.079 --> 00:55:10.340 energy sector back on top. By the end of the day, it's 00:55:10.340 --> 00:55:13.150 my goal to ensure that industry has the certainty it 00:55:13.150 --> 00:55:17.590 needs to begin heading toward recovery, on my constituents, 00:55:17.719 --> 00:55:20.389 the moms and dads that rely on the only gas industry 00:55:20.389 --> 00:55:23.309 for paycheck, to know that the Railroad Commission, 00:55:23.340 --> 00:55:25.530 all of our Commissioners, all of our folks across the 00:55:25.530 --> 00:55:30.440 state, are doing everything it possibly can stabilize 00:55:30.440 --> 00:55:33.469 the oil market and get people back to work. As I stated 00:55:33.469 --> 00:55:35.929 last week in the Houston Chronicle don't believe proration 00:55:35.929 --> 00:55:39.489 is the magic bullet that will save the industry. A 00:55:39.489 --> 00:55:42.079 lot has changed is our state last prorated oil back 00:55:42.079 --> 00:55:45.510 in 1950. Texas controlled about 20% of the world's 00:55:45.510 --> 00:55:50.070 oil supply. Today we control roughly 5%. Given this 00:55:50.070 --> 00:55:53.239 a government mandating cutting oil production 20% across 00:55:53.239 --> 00:55:56.849 the board will not have a significant impact on world supply. 00:55:58.739 --> 00:56:03.309 And also I wasn't alone in the statement. Even Pioneer's 00:56:03.429 --> 00:56:07.079 Scott Sheffield echoed the thoughts that we can't go 00:56:07.079 --> 00:56:10.730 this alone. In fact, he said, quote, maybe put everything 00:56:10.730 --> 00:56:12.949 on hold and see what Oklahoma does. See what North 00:56:12.949 --> 00:56:16.059 Dakota does. See what G20 does. See if Saudi comes 00:56:16.059 --> 00:56:19.340 back and ask for a second cut. That's my recommendation. 00:56:20.530 --> 00:56:23.940 Since the start of this pandemic, I've been in regular 00:56:23.940 --> 00:56:26.289 contact with my counterparts in regulatory agencies 00:56:26.289 --> 00:56:29.480 from Lynn Helms with North Dakota Department of Mineral 00:56:29.639 --> 00:56:33.150 Resources. In fact, I talked with Lynn both right 00:56:33.150 --> 00:56:37.159 after our 10 hour meeting. Then last meeting we had 00:56:37.159 --> 00:56:39.500 I was talking with him at eight o'clock in the morning 00:56:39.809 --> 00:56:41.789 and his Commission or his group was about 00:56:41.789 --> 00:56:43.860 to meet with the governor at noon that day after our 00:56:43.860 --> 00:56:46.710 meeting, last meeting, to make a decision on what North 00:56:46.710 --> 00:56:48.980 Dakota was gonna do so I called him again and told 00:56:48.980 --> 00:56:50.960 him where we sat on that day. So I've been working 00:56:50.960 --> 00:56:56.130 careful with him, and our IOGCC, the 31 states 00:56:56.130 --> 00:56:59.969 that produce oil and gas plus Canada. I also had some very 00:56:59.969 --> 00:57:02.889 interesting 30 minute conversations with 00:57:02.889 --> 00:57:06.739 Alberta Canada's Minister of Energy, Sonya Savage 00:57:07.159 --> 00:57:09.980 about the sands of what they've been doing. Between 00:57:09.980 --> 00:57:12.690 these discussions and media reports, I don't, I don't 00:57:12.690 --> 00:57:15.820 see how we could reach the four million barrels cuts 00:57:15.820 --> 00:57:18.559 necessary for Commissioner Sitton's motion to take 00:57:18.559 --> 00:57:21.510 effect because other states just have not received, 00:57:21.510 --> 00:57:24.590 unless comebody can tell me any reply, except we're on 00:57:24.590 --> 00:57:27.800 our own with this. This means the motion passed, the 00:57:27.800 --> 00:57:31.139 oil and gas industry would be living in limbo and dealing 00:57:31.139 --> 00:57:33.739 with regulatory uncertainty for the foreseeable future. 00:57:34.329 --> 00:57:38.809 I know that the thing is, my almost 35 years in 00:57:38.809 --> 00:57:42.860 the industry of finance. One of the greatest threats 00:57:42.860 --> 00:57:46.369 to market is uncertainty, not knowing an answer. And 00:57:46.380 --> 00:57:49.320 that's why every election year, you find you have 00:57:49.929 --> 00:57:52.980 a up and down market, pretty volatile. We've combined 00:57:52.980 --> 00:57:56.670 that this time with all types of political 00:57:56.670 --> 00:57:59.360 problems that I think out of the norm. But then this 00:57:59.360 --> 00:58:03.769 collapsed pandemic, the the the, all of this has come 00:58:03.769 --> 00:58:07.039 to fruition to make it a very uncertain market, and 00:58:07.039 --> 00:58:09.929 I believe that we owe the market, owe our companies, owe our 00:58:10.159 --> 00:58:12.840 constituents to say the Railroad Commission has come to 00:58:12.840 --> 00:58:16.460 a darn decision and give certainty to what we've done here 00:58:16.460 --> 00:58:18.719 for several weeks, and the thousands of people that 00:58:18.719 --> 00:58:21.769 have given witness to this fact, I believe we owe it 00:58:21.769 --> 00:58:28.920 to them a certainty. Um. 00:58:28.920 --> 00:58:31.210 By allowing the free market to work, producers can 00:58:31.210 --> 00:58:34.260 determine for themselves what level of production is 00:58:34.260 --> 00:58:37.250 economical. As the last couple of months we've shown 00:58:37.260 --> 00:58:40.239 for many that requires voluntary cuts in productions. 00:58:40.820 --> 00:58:43.369 Some have argued that proration debate is a conflict 00:58:43.389 --> 00:58:46.480 large and small operators. As someone who likes to stand 00:58:46.480 --> 00:58:49.239 up for the little guy, I've just not found that to 00:58:49.239 --> 00:58:52.340 be the case. Virtually every major trade association 00:58:52.340 --> 00:58:54.880 has come out against this policy from Texas Oil and 00:58:54.880 --> 00:58:58.219 Gas Association, which represents both small and large 00:58:58.219 --> 00:59:01.269 companies, spanning every sector of the industry to 00:59:01.269 --> 00:59:03.869 the Texas Alliance for Energy Producers who stated 00:59:03.869 --> 00:59:07.309 in its testimony against proration that a vast majority 00:59:07.309 --> 00:59:12.570 of its 2600 members employed 20 people or less. Those in 00:59:12.570 --> 00:59:14.969 favour of proration are trying to use every tool at our 00:59:14.969 --> 00:59:21.579 disposal to turn this thing around, however, I refused 00:59:21.579 --> 00:59:24.090 to implement an antiquated policy simply because it 00:59:24.090 --> 00:59:27.510 exists. As tempting it is to do something just to say I 00:59:27.510 --> 00:59:31.690 took action, I believe that the four dozen items that 00:59:31.690 --> 00:59:34.860 we've addressed and the other this morning are a statement 00:59:34.860 --> 00:59:37.139 that the Railroad Commission is actually doing something 00:59:37.139 --> 00:59:40.980 with industry. I cannot agree to take this wrong action 00:59:40.980 --> 00:59:44.090 because it could actually make things worse. As we 00:59:44.090 --> 00:59:47.500 discussed in the previous agenda item, instead of simply 00:59:47.500 --> 00:59:50.019 going down the road of more government mandates, I established 00:59:50.030 --> 00:59:53.190 the Blue Ribbon Task Force for economic recovery to 00:59:53.190 --> 00:59:55.340 give our agency's others recommendations on how to 00:59:55.340 --> 00:59:59.239 help the industry weather this storm. The cold, hard truth 00:59:59.820 --> 01:00:02.409 of this situation is the price a oil is not going 01:00:02.409 --> 01:00:05.760 to stabilize until the pandemic is behind us and the 01:00:05.760 --> 01:00:08.960 world is once again open for business. WhileSaudi Arabia 01:00:08.960 --> 01:00:12.079 and Russia have exasperated the situation by flooding 01:00:12.079 --> 01:00:16.019 the market, this problem is 90% demand. It's not going 01:00:16.019 --> 01:00:18.929 to be solved until people are on the roads or in the skies again. 01:00:19.659 --> 01:00:23.429 This is not the first crashes our nation's faced, nor 01:00:23.429 --> 01:00:27.230 it will be the last, but I can tell you as an old stockbroker again 01:00:27.710 --> 01:00:31.760 they tell me that past performance cannot be an indicator 01:00:31.760 --> 01:00:35.409 of future returns, and I have to obey that law in advice 01:00:35.409 --> 01:00:39.389 to my clients for decades. I tell you one statistic 01:00:39.389 --> 01:00:43.329 I'll tell you to take a bet on and it's that every 01:00:43.329 --> 01:00:47.019 time the United States, the oil and gas industry or the state 01:00:47.019 --> 01:00:51.199 of Texas has faced a situation like this, whatever 01:00:51.199 --> 01:00:56.409 its its consequences. 100% of time when we entered 01:00:56.409 --> 01:01:00.110 one of these problems, we come out stronger, richer, 01:01:00.219 --> 01:01:03.429 more successful and better off than we did the time 01:01:03.429 --> 01:01:05.920 before. And I can tell the markets and everybody 01:01:05.920 --> 01:01:08.880 else they can roll the dice on this one. Because the 01:01:08.880 --> 01:01:12.519 history is and not some during model that's fed ifs 01:01:12.519 --> 01:01:16.159 and buts and comes out with some predetermined result, 01:01:16.380 --> 01:01:19.889 this is the facts of history. Texas and the United 01:01:19.889 --> 01:01:22.429 States have come out of 100% stronger from a problem. 01:01:23.539 --> 01:01:27.190 And so that's my comments on this. And before I do 01:01:27.190 --> 01:01:29.809 anything, 01:01:29.809 --> 01:01:32.329 Christie, I think Christie, Commissioner Craddick has 01:01:32.329 --> 01:01:34.539 asked to have some comments, and then it will be open 01:01:34.539 --> 01:01:38.070 for Commissioner Sitton. Thank you, Mr Chairman, and 01:01:38.070 --> 01:01:41.969 I echo your comments that I think we've, the little 01:01:41.969 --> 01:01:44.269 guy's really important, and I think that's been very 01:01:44.269 --> 01:01:47.400 important for this agency, part of your task force, 01:01:47.400 --> 01:01:50.389 part of what we've done today, and moving forward we 01:01:50.389 --> 01:01:53.949 are trying to keep this industry and keep jobs 01:01:53.960 --> 01:01:56.389 available. I think that will continue to be a real 01:01:56.389 --> 01:01:59.920 focus. My other focus has been regulatory certainty 01:01:59.920 --> 01:02:02.780 and making sure we're following the rules to, been given 01:02:02.780 --> 01:02:05.480 people an opportunity, and if you don't mind 01:02:05.480 --> 01:02:07.730 Mr. Chairman, If I could call it Alex for just a minute, 01:02:07.730 --> 01:02:12.159 I had some questions last time that he has done some 01:02:12.159 --> 01:02:14.889 research on, if I could just come and clarify where 01:02:14.889 --> 01:02:20.070 we are. I appreciate that moment. Alex Schott is our 01:02:20.070 --> 01:02:22.900 General Counsel. 01:02:22.900 --> 01:02:26.039 coming up, I've got my sound and camera activated. 01:02:26.039 --> 01:02:27.880 I don't know if something else has to do something. 01:02:29.099 --> 01:02:32.519 Okay, well, I can you hear you so can I just ask you? I'm 01:02:32.519 --> 01:02:37.630 sorry I can't see. But the, but but but Alex, I had a lot of 01:02:37.630 --> 01:02:40.119 questions last meeting, yes sir, you and I have talked 01:02:40.119 --> 01:02:44.880 about them a few times. <v Alec Schott>Correct. I'm sorry 01:02:44.949 --> 01:02:46.889 I should have said. For the record 01:02:46.900 --> 01:02:49.039 this is Alex Schott. General Counsel of the Railroad Commission 01:02:49.039 --> 01:02:54.000 Texas. Sorry, I didn't let you say that. I'm sorry. So, since then 01:02:54.000 --> 01:02:56.719 you and I have talked, our offices have talked several 01:02:56.719 --> 01:02:59.239 times and you've given me answers on my questions, 01:02:59.239 --> 01:03:02.780 I have about five of them last time. Correct? Correct 01:03:03.019 --> 01:03:06.199 Yes, sir. And so I really do appreciate that. And so 01:03:06.409 --> 01:03:09.429 you also, I think consulted with the Attorney General's 01:03:09.429 --> 01:03:12.389 office as well. Is that correct? <v Commissioner Craddick>That's correct. 01:03:12.389 --> 01:03:17.559 great. And so I appreciate you doing that. And so we 01:03:17.559 --> 01:03:20.340 have given us some guidelines and some guidance based 01:03:20.340 --> 01:03:23.219 on what you've found out from them and also just a 01:03:23.219 --> 01:03:26.199 research. And I appreciate that. And, um, you know 01:03:26.199 --> 01:03:29.179 that, those, I wanted to clarify that, Mr Chairman, and 01:03:29.309 --> 01:03:33.349 look as we go forward down this road, I think our regulatory 01:03:33.349 --> 01:03:35.760 certainty has been important, but also continuing to 01:03:35.760 --> 01:03:39.309 hear from people how we can help them, the directions 01:03:39.309 --> 01:03:43.090 we need to go. I think that always the challenges we're 01:03:43.099 --> 01:03:45.800 doing any kind of rule making or anything from 01:03:45.800 --> 01:03:49.099 a regulatory perspective. It seems to me the industry 01:03:49.099 --> 01:03:52.070 and the market move a lot faster than we can as a 01:03:52.070 --> 01:03:55.179 a regulatory body. That's not necessarily a bad thing 01:03:55.650 --> 01:03:57.909 because they do a better job most of the time than 01:03:57.909 --> 01:04:01.750 we do as a regulatory world, and I think I appreciate 01:04:01.750 --> 01:04:05.269 the prudent work that we've done as an agency 01:04:05.269 --> 01:04:08.119 And Alex also that your, uh, staff has done as well 01:04:08.119 --> 01:04:10.880 So, Mr Chairman, I appreciate you letting me have a few 01:04:10.880 --> 01:04:15.510 minutes and I cede the floor.<v Chairman Christian> Thank you. Any 01:04:15.650 --> 01:04:18.889 comments, Mr Sitton? 01:04:18.889 --> 01:04:22.289 Yes. Thank you, Chairman. First of all, make 01:04:22.289 --> 01:04:24.789 clear. I don't have a motion. I did ask staff to 01:04:24.789 --> 01:04:27.260 prepare an order, but I haven't made a motion, so I 01:04:27.260 --> 01:04:30.340 wanna make sure there's, from a matter of process, that's 01:04:30.340 --> 01:04:33.929 clear. And I'm not gonna make a motion today because 01:04:33.929 --> 01:04:38.670 I don't think there's one to make. My comments 01:04:38.670 --> 01:04:42.750 on this more speak to the fact that in the end, the 01:04:42.750 --> 01:04:46.820 primary message in statute in the Natural Resources 01:04:46.820 --> 01:04:50.030 Code is that we have to consider waste. And my disappointment 01:04:50.039 --> 01:04:54.420 is that we never really did that. We didn't calculate 01:04:54.429 --> 01:04:58.070 how much waste was out there. We didn't determine if 01:04:58.300 --> 01:05:01.920 proration could prevent waste. And if so, how? We didn't 01:05:01.920 --> 01:05:07.139 look in detail or examine mechanisms for which we 01:05:07.139 --> 01:05:10.769 might do things that would, from a waste perspective 01:05:11.019 --> 01:05:13.539 affect the little guy, you talk about that. In the 01:05:13.539 --> 01:05:15.230 end, proration may not have been the right answer 01:05:15.280 --> 01:05:19.099 Maybe proration could not have prevented waste and perhaps 01:05:19.210 --> 01:05:23.269 there's nothing we could have done. But my my big fear 01:05:23.269 --> 01:05:26.730 is that in 01:05:26.730 --> 01:05:29.780 two or three years as market demand comes back. I don't 01:05:29.780 --> 01:05:31.719 think it's going to reach 100 million barrels a day 01:05:31.719 --> 01:05:34.579 I think it's probably gonna be notably smaller than 01:05:34.579 --> 01:05:37.909 that for a while. And there's a lot of economists and 01:05:38.289 --> 01:05:40.860 oil analysts who are talking about the same thing, 01:05:40.869 --> 01:05:43.599 that we may be in a world where oil demand is 5 01:05:43.599 --> 01:05:47.610 to 10 million barrels a day less than it is, um, today, 01:05:47.610 --> 01:05:51.210 or at least it waas in February, and my concern is 01:05:51.210 --> 01:05:54.599 that most of that demand, most of that production loss 01:05:54.599 --> 01:05:57.690 will come out of the United States. And as we sit here 01:05:57.690 --> 01:06:02.179 in two or three years and we evaluate what what happened 01:06:02.190 --> 01:06:05.119 and why is the U. S really lost out in this 01:06:05.130 --> 01:06:11.159 in this COVID-19 environment, it will be, it will 01:06:11.159 --> 01:06:14.139 be sad to me that we couldn't evaluate wasted and 01:06:14.139 --> 01:06:16.969 we couldn't do what the law, that's what the law was pretty 01:06:16.969 --> 01:06:20.210 specific. So that's my disappointment. In the end, may Have, 01:06:20.210 --> 01:06:22.090 proration may not have been the answer. I 01:06:22.090 --> 01:06:25.039 would have liked to have had a more analytical answer 01:06:25.039 --> 01:06:28.500 as opposed to philosophical one. So, uh, thank you 01:06:28.500 --> 01:06:32.139 for giving me a chance to speak. <v Chairman Christian>Appreciate it. Are 01:06:32.139 --> 01:06:35.789 there any more comments? Members, if not, I have a motion 01:06:35.849 --> 01:06:39.539 to make at this time. I move to dismiss the motion 01:06:39.539 --> 01:06:43.130 for Commission called Hearing on the verified Complaint 01:06:43.139 --> 01:06:46.250 of Pioneer Natural Resources and Partially Energy 01:06:46.250 --> 01:06:49.389 to determine the reasonable market demand for oil in 01:06:49.389 --> 01:06:54.289 the state of Texas. Is there a second? Second. Second 01:06:54.980 --> 01:06:58.570 Any discussion? Just a comment on that motion. Because 01:06:58.570 --> 01:07:03.150 Parson and Pioneer asked us to determine 01:07:03.150 --> 01:07:06.010 reasonable market demand, which is I think what we 01:07:06.010 --> 01:07:09.090 didn't do, that's what I'm I'm look for, so I'm gonna oppose 01:07:09.090 --> 01:07:11.659 this motion not because I'm in favor of proration, 01:07:11.659 --> 01:07:13.679 but because that's what I would like for us to have 01:07:13.679 --> 01:07:17.900 done. I appreciate that. But just for my comments, 01:07:18.090 --> 01:07:21.420 I can assure you that we call probably a historical 01:07:21.420 --> 01:07:28.159 10.5 hour meeting and took in thousands of testimonies 01:07:28.170 --> 01:07:31.800 at the request of those two companies. So I think we 01:07:31.800 --> 01:07:34.099 honored their request above and beyond any time in 01:07:34.099 --> 01:07:36.599 history. Number two, I can assure you that I think 01:07:36.610 --> 01:07:41.449 all of us spent the last few weeks, at least I did, 01:07:41.449 --> 01:07:44.989 calling other states to see if we could get them on 01:07:44.989 --> 01:07:47.360 board with the request that those companies had made 01:07:47.360 --> 01:07:50.570 of us to see if it was possible. And I think we 01:07:50.570 --> 01:07:53.579 At least I made the calls, did the contacts and 01:07:53.579 --> 01:07:55.929 could not confirm any other state that would join us 01:07:55.940 --> 01:07:59.289 And there was a prerequisite for the motion. So I think 01:07:59.780 --> 01:08:02.949 uh, I think if ever we have honored the request of 01:08:02.949 --> 01:08:06.619 two companies, I think this has been a time and glad 01:08:06.619 --> 01:08:09.480 that we did, because this is important enough and legitimate 01:08:09.480 --> 01:08:12.800 enough that the Railroad Commission, I think, has done 01:08:12.800 --> 01:08:15.929 everything possible and I think, recognizing again, 01:08:15.940 --> 01:08:19.920 what industry is coming forefront to us and recommended 01:08:19.920 --> 01:08:23.729 and the motions we passed today, I think, show the 01:08:23.729 --> 01:08:27.149 world that the Railroad Commission is not taking action, 01:08:27.350 --> 01:08:31.090 we're calling our folks to war, and we're gonna win 01:08:31.090 --> 01:08:34.250 this thing. So I think we've honored the request of the 01:08:34.250 --> 01:08:37.369 two companies. But the reason I make this motion is 01:08:37.369 --> 01:08:40.180 put certainty back in the market. So the producers, 01:08:40.180 --> 01:08:42.489 the companies can know what the heck the future holds, 01:08:42.869 --> 01:08:45.289 secondly, that the markets could know the Railroad Commission is 01:08:45.300 --> 01:08:48.529 definite and this issue, for the immediate time 01:08:48.829 --> 01:08:52.670 is behind us, 01:08:52.670 --> 01:08:55.859 Right? The most has been made and seconded. All in 01:08:55.859 --> 01:09:02.579 favor, say, aye. All opposed? No. One opposed, two 01:09:02.579 --> 01:09:06.159 for. Motion passes. The motion by Pioneer and Parsley 01:09:06.170 --> 01:09:10.920 is dismissed. Agenda item 191 is our public participation 01:09:10.920 --> 01:09:15.000 item. Commissioner Christian? Chairman Christian? I would 01:09:15.000 --> 01:09:19.340 just like to say that we are, I'm back, we will work 01:09:19.340 --> 01:09:22.310 with the Hearings division to prepare an appropriate 01:09:22.310 --> 01:09:25.289 order that reflects the motion you just made. And will 01:09:25.289 --> 01:09:29.159 circulate it for signature afterwards. Thank you, Alex 01:09:29.159 --> 01:09:33.020 Appreciate that. Okay, agenda item 191 01:09:33.020 --> 01:09:35.840 is our public participation item. No one is registered 01:09:35.840 --> 01:09:38.470 indicating that they wish to speak on any non-posted 01:09:38.470 --> 01:09:42.310 items. Agenda 192 is our executive session item which 01:09:42.310 --> 01:09:44.939 we will not be going into today. Are there any other 01:09:44.939 --> 01:09:47.229 duly posted matters to be brought before the Commission 01:09:47.229 --> 01:09:50.619 at this time? Hearing none the meeting of the Railroad 01:09:50.619 --> 01:09:53.609 Commission of Texas is adjourned. Thank you all