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