By adminmonitor.com will begin momentarily. Thank
you for your patience. Morning, happy June. This meeting
of the Railroad Commission of Texas will come to order.
To consider matters which have been duly posted with
the Secretary of State for June 20, 2023. Under our Public
Participation Policy, anyone desiring to offer public
testimony on any items that are not noticed on today's
Agenda. Was required to register in advance and we had
one person do so. The Commission will now consider
Items on the Agenda as posted on the Agenda. Number
one.
Good morning. Good morning.
Good morning, Chairman and Commissioners. Good morning.
For the record, my name is Gary Gardner. Representing
the Market Oversight Section, the Oversight and Safety
Division. I will be presenting Items 1 and 2 today.
Item No. 1 is Case No. 00012762. The application
with Hooks Gas Pipeline, LLC for a Test Year in December
22, 2022, Annual Interim Rate Adjustment. This case is
the 2nd interim rate adjustment to company files. Since
the final order was issued in the most recent Statement
of Intent Docket No. OS20000866. This adjustment
represents an increase of $660,693 which is recoverable
from the company's transportation customers. Staff
recommends approval of interim rate adjustment as advised. And I'm available for questions.
Thank you. Are there any questions? No. I move that we approve the Examiner's
recommendation. Is there a second? Second. Second by Commissioner
Christian? All in favor, say aye. Aye. Motion passes, that
item's approved. Number two. Agenda Item No. 2 is Case No. 00012782. The application of
CenterPoint Energy Entex for Test Year 2022 Annual
Interim Rate Adjustment for the unincorporated areas
of the Beaumont/East Texas Division and the cities
that have ceded jurisdiction to the Railroad Commission
of Texas. This case is the 3rd Interim Rate Adjustment
the company has filed since the final order was issued.
In the most recent Statement of Intent Gas Utilities
Docket No. 10920. This adjustment represents an
increase of $7,279,247 of which $2,714,238 is allocated
to customers, subject to the order of this case. The
Staff recommends approval of the Interim Rate Adjustment.
I'm available for questions. Thank you. Are there any questions?
No. All right. I move we approve the Examiner's recommendations.
Is there a second? Second. Second by Commissioner Wright. Don't mess me up, already. I mean. Okay, I'm trying.
Um all in favor, say aye. Aye. Motion passes, that item's approved.
Thank you. Golly, I had it down. I was trying to
the initials right here. Messed up.
Number three, good morning. Good morning, Chairman and Commissioners. For the record,
my name is Mimi Winetroub and I'm representing the Market Oversight
Section in the Oversight and Safety Division. Agenda
Item No. 3 is Case No. 12779. The application
of CenterPoint Energy Entex for the Test Year 2022
Annual Interim Rate Adjustment for the unincorporated
areas of the Houston Division and cities that are ceded
jurisdiction to the Commission. This case is the 6th
interim rate adjustment the company has filed for the Houston
Division. Since the final order was issued in the most
recent Statement of Intent Gas Utility Docket No.
10567. This adjustment represents an increase of $35,528,207
of which $18,221,554 is recoverable from customers,
subject to the order of this case. Staff recommends
approval of the interim rate adjustment as filed. I'm available
for questions. Thank you. Are there any questions? I
move we approve the Examiner's recommendations. Is
there a second? Second. Second by Commissioner Christian. All in favor, say
aye. Aye. Motion passes, that item's approved. Thank you, Mimi.
Item No. 4.
Good morning, Chairman and Commissioners. For the record,
My name is David Bauman. I am representing the Market
Oversight Section of the Oversight and Safety Division.
Agenda No. 4 is Case No. 12780. The application
of CenterPoint Energy Entex for Test Year 2022 Annual
Interim Rate Adjustment for the unincorporated areas
of the Texas coast, uh Texas Coast Division and the
cities that have ceded jurisdiction to the Railroad
Commission of Texas. This case represents the 6th
interim rate adjustment. Since the company's last Rate
Case of Gas Utility Docket 10567. This adjustment represents
an incremental increase of $9,449,108. Of which
$3,630,117 is recoverable to customers, subject to the
order in this case. The Staff recommends approval
of the interim rate adjustment. I'm available for questions.
Thank you. Are there any questions? I move we approve
the Examiner's recommendations. Is there a second? Second. Second by Commissioner
Wright. All in favor, say aye. Aye. Motion passes, that
item's approved. Thank you.
Good morning. Good morning. Uh for the record. My name
is (inaudible) representing the Oversight and Safety Division
Agenda Item No. 5 is Case No., uh 00012781.
Application of CenterPoint Energy Entex for Test
Year 2022 Annual Interim Rate Adjustment. For the unincorporated
areas of the South Texas Division and cities that have
ceded jurisdiction to the Railroad Commission of Texas.
This case is the 5th interim rate adjustment the
company has filed for the South Texas Division. Since
the final order was issued in the most recent Statement
of Intent Gas Utility Docket No. 10669. Um, the
adjustment represented in this IRA filing is $7,723,694
of which $2,944,181 is recoverable from the customers
in the South Texas Division, subject to Commission uh,
jurisdiction. I recommend approval of the interim rate
adjustment as filed and I'm available for any questions. Thank you.
Are there any questions? All right. I move we approve the
Examiner's recommendations. Is there a second? Second. Second by Commissioner
Christian. All in favor, say aye. Aye. Motion passes, that
item's approved. Thank you. Item No. 6.
Good morning, Chairman and Commissioners.
For the record, my name is Claudia Godoy. I'm representing
the Market Oversight Section of the Oversight and Safety
Division. I will be, I will be presenting Agenda Items
Nos. 6-7 this morning. Agenda Item No.
6 is Case No. 12763. The application of Universal
Natural Gas Inc., for Test Year 2022 Annual
Interim Rate Adjustment for the unincorporated service
areas. This case represents the 2nd interim rate adjustment.
Since the company's most recent Statement of Intent
Docket No. OS-204865. This adjustment represents
an incremental increase of $3,366,785 of which
$3,209,250 is allocated to customers, subject to the
order in this case. Staff recommends approval of the
interim rate adjustment as, as revised. I'm available to answer
questions. Thank you. Are there any questions? I
move we approve the Examiner's recommendations. Is there a second? Second.
Second by Commissioner Wright. All in favor, say aye. Aye. Motion
passes, that item's approved. Number seven, thank you. Agenda
Item No. 7 is Case No. 12849. The application
of Texas Gas Service company for Test Year 2022 Annual
Interim Rate Adjustment for the West North service area.
This case represents the 1st interim rate adjustment.
Since the company's last Statement of Intent Docket
No. OS-229896. The adjustment represents an incremental
increase of $7,258,023 of which $656,699 is allocated
to customers, subject to the order in this case. Staff
recommends approval of the interim rate adjustment as revised.
I'm available for questions. Thank you. Are there any
questions? No. I move we approve the Examiner's recommendations.
Is there a second? Second. Second by Commissioner Christian. All in favor,
say aye. Aye. Motion passes, that item's approved. Thank you.
Good morning, John.
Good morning Chairman, Commissioners. Administrative Law Judge, John Dodson with
the Hearings Division. Agenda Item 8, OS-2310813
is an unprotested request filed by INEOS Chocolate
Bayou Pipeline, LLC. For a waiver of certain remediation
requirements for a non injurious dent discovered in
a pipeline segment. The Commission's Pipeline Safety
Department administratively reviewed the application
and recommends approval, subject to certain conditions.
The applicant was given an opportunity to review these
conditions and does not oppose them. There was no hearing
in this docket, consistent with Commission Rule 8.125.
Pipeline Safety forwarded the application to hearings
to prepare a written order. The proposed order approves
the applicant's waiver request and incorporates all
of Pipeline Safety's recommended conditions. I'm available
for questions. Thank you. Are there any questions? No. I
move we approve the Examiner's recommendation. Is there
a second? Second. Second by Commissioner Wright. All in favor, say aye.
Aye. Motion passes, that item's approved. Thank you, John. Agenda
Item 9 is, is for a suspension order in OS-23-13758. A
Gas Utility Rate Case filed by Atmos Pipeline-Texas. For
this type of proceeding, the Utilities Code authorizes
the Commission to suspend operation of the proposed
rates. For up to 150 days from when they otherwise would
become effective. Consistent with this authority, the
recommendation here is to issue a 150 day suspension
order. Which will allow Hearings Division sufficient
time to evaluate (inaudible). I'm available for questions.
Thank you. Are there any questions? No. I move we approve
the Examiner's recommendations. Is there a second? Second. Second by Commissioner
Christian. All in favor, say aye. Aye. Motion passes, that
item's approved. Thank you.
Item Number 10.
Good morning, Chairman and Commissioners. For the record,
my name is Brian Rutledge, Administrative Law Judge
with the Hearings Division. Item No. 10 is an application
by San Miguel Electric Cooperative, Inc. For acceptance
of replacement blanket self-bonds with third-party
guarantees for Permit Nos. 11H, 52A, 60, and proposed
Area XYZ, San Miguel Lignite Mine located in Atascosa and
McMullen Counties. Third-Party guarantees and indemnity
agreements are by National Rural Utilities Cooperative
Finance Corporation or CFC. Currently, there are two
approved blanket bond instruments in effect for percent
San Miguel mine in the amounts of $131 million and $9 million
for a total of $140 million. Staff's most recent reclamation
cost estimate for the subject premises is
$161,842,495. Acceptance of the proffer replacement bond
will result in an increase of total bond amount from
$140 million to $166 million. Exceeding approved reclamation
costs for the subject permits by $4,157,505.
And is therefore sufficient in amount evidence
has been presented that San Miguel and CFC meet the
elements required for self bonding and for acceptance
of replacement (inaudible) bonds. San Miguel and Staff
are the only parties to the proceedings and no exceptions
are filed to the proposed order. It is recommended
the Commission accept the proffered blanket bonds. To replace
the existing bonds for San Miguel statewide mining
operations. Available for questions. Thank you. Are there
any questions? No. I move we approve the Examiner's recommendation.
Is there a second? Second. Second by Commissioner Wright. All in favor,
say aye. Aye. Motion passes, that item's approved. Thank you Brian.
Good morning. Good morning. Morning. Chairman, commissioners.
For the record, my name is Christy Reid, Administrative
Law Judge with the Hearings Division. I will be presenting
Item Nos. 11-15. Item No. 11 is the Single
Signature Form P-4 application of WTXR. To be named
the operator of record for the subject lease. The application
was protested by Renegade Operating Company, the current
operator of record. WTXR provided a reasonably satisfactory showing
of a good faith claim. Sufficient to be named the operator
of record for the lease. WTXR's form P-5 organization
report is active. Renegade did not present any evidence
to oppose WTXR's good faith
claim. Renegade argued it has a good faith claim right
to plug the well. Which is a misapplication of the
definition of a good faith claim. Renegade failed to provide
any evidence to support its contention. It is recommended
the application be approved. No exceptions were filed,
I'm available for questions. Thank you. Are there any
questions? No. All right. Jessica Mendoza, representing
WTRX is preregistered and is available for questions.
Does anybody have any questions of her? No. All right. I
move we approve the Examiner's recommendations. Is there a second?
Second. Second by Commissioner Christian. All in favor, say aye.
Aye. Motion passes, that item's approved. 12 and 13 are together,
right? Yes ma'am. And this will require one vote and
it's one order. Okay. Sinclair filed two applications
for forced pulling under the Mineral Interest Pulling
Act. The applications are to form two units in the
Spraberry (Trend Area). Each unit will consist of
more than one. Well, these applications are not substantially
different. Than the prior Sinclair applications for
the city of Big Spring. But for the inclusion of multiple
wells per unit and the method of determining the applicability
of the discovery date. Given the Spraberry (Trend Area)
fields, discovery date is prior to MPAs applicability.
The Examiners found that the multiple well issue was
resolved. Given that MPA was codified after the effective
date of the Code Construction Act. Which provides that
plural and singular within Texas statutes may be read
as either, unless specifically prohibited. This leaves
the discovery date for MPA applicability. In the prior
City of Big Spring MPA's. The portion of the Spraberry
where the wells were to be located was previously a
separate field. Later consolidated into the Spraberry.
That previous fields discovery date was after the applicability
of MPA. It was that date that was used as a discovery
date for the bench within the Sprayberry. In the present
case, Sinclair stated the prior method used for determining
the discovery date was not applicable to these wells.
Sinclair provided several methods by which MPA may be
applicable. The Examiners do not find any of the methods
provided by Sinclair appropriate. However, the Examiners
did find that given the lack of production within the
formation in the area. The fact that there were no
wells penetrating the formation in that area until
1984. And the geological evidence regarding the Wolf
Camp Formation. The designation as a UFT field applicability
to MPA is plausible. However, due to the perceived
expansion of the commission's prior approved methods
for determining the discovery date for the Spraberry
(Trend Area) field. For the purposes of MPA, the Examiners
recommend denial of the application. Exceptions were
filed, I'm available for questions. Thank you. Are
there any questions? Uh Commissioners, I have a motion
that's um different than what they're recommending
a little bit. Um, I believe the evidence in these dockets
was sufficient to show that the reservoirs the applicant
seeks to pool. In the area of the proposed MPA units
were discovered and produced after March 8, 1961
for several reasons. The first well that was drilled
deep enough to encounter any of the reservoirs is in
the area of these units and was not drilled until 1984.
The wolf camp formation was consolidated in the Spraberry
(Trend Area) field, in 1993. The reservoirs in the Spraberry
(Trend Area) field have been designated an unconventional
fractured treated or UFT field. Which is not susceptible
to mobile flow, mobile flow. I move that the applications
be granted. Is there any discussion, any questions?
All right. Is there a second? Second. Second by Commissioner Wright.
All in favor, say aye. Aye. Motion passes. Yes, ma'am. The
Hearings Division will provide a conforming order.
Thank you. Item 14. Item No. 14 is the result of a good
faith claim by Walton Ranch, LP. Alleging REO Operating
LLC does not have a good faith claim to operate the
subject lease. Walton Ranch provided sufficient evidence
to show REO is the operator of record for the lease.
And the lease has been inactive since 1995 and alleged
REO does not have a good faith claim to operate. REO
originally stated it did not have a valid lease and
then subsequently provided an assignment as proof of
its good faith claim. REO's assignment on its own is
insufficient to show it has a good faith claim to operate
the lease. It is recommended that the Commission find
REO does not have a good faith claim. Order, the plugging
extensions cancel, cancelled and order REO to plug and
abandon the well. No exceptions were filed. I'm available
for questions. Thank you. Are there any questions? I move
we approve the Examiner's recommendation. Is there
a second? Second. Second by Commissioner Christian. All in favor,
say aye. Aye. Motion passes, that item's approved. Number
15. Item No. 15 is the motion for rehearing of Vergo
Patio Gardens, Inc. Following dismissal of the matter
from the hearings division on April 27, 2023. On
May 9, 2023, Vergo filed a motion for rehearing. On
June 1, 2023, CommissionSstaff filed its reply. It
is recommended the motion be denied. The motion will
be overruled by operation of law on August 7, 2023.
I'm available for questions. Thank you. Are there any
questions? I move we approve the Examiner's
recommendations. Is there a second? Second. Second by Commissioner Wright.
All in favor, say aye. Aye. Motion passes, that item's approved.
Thank you. Thank you. Item No. 16.
Good morning, Chairman and Commissioners. Good morning.
For the record, I am John Merculief, Administrative
Law Judge with the Hearings Division. I will be presenting
Item Nos. 16-21. Item No. 16 is a motion
for rehearing. On April 26, 2023, the Commission issued
an order denying the application of Maverick Energy
Group, LLC for renewal of its P-5 organization report.
A timely motion for rehearing was filed. Staff filed
a timely reply to the motion. None of the issues it
raised in the motion are new. All issues raised in
the motion were previously raised by Maverick and considered
by the Commission, prior to the Commission issuing the
order, in this case. It is recommended the motion
be denied. The motion will be overruled by operation
of law on August 4. I'm available for questions.
Thank you. Are there any questions? I move we approve
the Examiner's recommendations. Is there a second? Second. Second by Commissioner
Christian. All in favor, say aye. Aye. Motion passes, that
item's approved. Item 17-21. Item No.
17-21 are also a motion for rehearing. These
items will be presented together, there is one order
requiring one vote. On March 31, 2023, the Hearings Division
signed a final order dismissing the protests of the
City of Midland. To the applications of Pilot Water
Gathering Delaware LLC to amend its permits for salt
water disposal wells from commercial to non commercial.
A timely motion for rehearing was filed. A timely reply
opposing the motion was filed as well. None of the
issues raised in the motion are new. All issues raised
in the motion were previously raised by the City of
Midland and considered by the Hearings Division, prior
to the hearings division issuing the order. In this
case. It is recommended that the motion be denied.
The motion will be overruled by operation of law on
July 10, 2023. I'm available for questions. Thank
you. Are there any questions? Madam Chairman? I've got
some people who want to testify, can I do that first. Okay, sure. Okay. Um I have, we
have Kelly Kenney who's here representing the City
of Midland and Rob Hartgrove representing Pilot Water.
Which if you have any questions for the lawyers? And
then I have uh, preregistered the Mayor of Midland,
Lori Blong is preregistered. And normally out of courtesy,
we let any elected official come testify. So if that's
ok, I'm gonna bring up the Mayor.
Good morning. Good morning, thank you. Um, good morning
Chairman and Commissioners. For the record, my name
is Lori Blong, Mayor of the City of Midland. I'm
here today, to ask you to reconsider the Hearing Division's
decision. To deny the City of Midland's as standing and
for the opportunity to protest Pilot's application for
5 disposal wells. Um Pilot seeks to construct in
the city T Bar Ranch Municipal Water Well Field.
As you are undoubtedly aware, Midland is an independent
and friendly relationship with the oil and gas industry.
Uh personally I own and operate an independent oil
and gas company myself, with my husband. And Midland
recognizes how essential SWD's are to the oil and gas
industry. However, I also understand that all SWD
well construction procedures and applications um, are
not created equal. And, and across Texas, they must
demonstrate that groundwater is protected. It is particularly
important that Midland have standing, to be able to
carefully evaluate any disposal well on T Bar Water Well
Field before they are permitted, many of pilots proposed
disposal wells are less than 1000 ft from a Midland
water. I'm here today asking the Commission to
recognize Midland's right to standing and a seat at
the table. To make certain our undisputed vested property
interest. That is the source of fresh water for Midland
residents is protected. Midland's purchased um, the T
Bar Well Field, um in 1965. And it holds significant
importance as a reliable fresh water resource for the
community. The T Bar Water Well Field currently supplies
30 to 35% of Midland's fresh water for municipal purposes.
The development and distribution systems in the field
were designed and constructed at a cost to Midland
of approximately $200 million. And Midland has completed
42 water wells in the T Bar Well field. Eight of which
are located in the same two sections where Pilot proposes
to locate at least 14 disposal wells. The T Bar Water
Well field has been in continuous operation since May
of 2013 and is rated as a 50 year water supply for
Midland's residents. It's also designated as Midland's
emergency water supply as required by the Senate Bill
3. The placement, construction and operation of
14 disposal wells, so close to Midland's municipal water
wells and their associated operations. Facilities create
unnecessary potential disruption for Midland residents.
For health care systems, agricultural activities and
other essential needs. A balanced approach that protects
successful production and valuable water rights and
considers the quality of life for Midland residents.
is necessary for a prosperous future that benefits
both the community and the oil industry. To achieve
this balance. It is crucial that the City of Midland
be able to assess and evaluate any salt water disposal
wells proposed in the T Bar Well field. Once risks are
assessed Midland and the oil industry can establish
a coordinated effort to manage industry related activity
around the T Bar Water Well field. By working together,
the City of Midland and the industry can ensure that
any activities near the T Bar Well field are conducted
sustainably and responsibly. Minimizing the potential
risk to Midland's water supply and to the community.
In conclusion, a collaborative effort between the city
and the industry. Centered around responsible industry
related activity near the T Bar Water Well field will
be essential for maintaining a sustainable balance
between economic development and preservation of fresh
water resources in Midland. However, Midland must have
a seat at the table during the permitting process to
achieve this goal. For these reasons, I asked the Commission
to grant the City of Midland standing to protest Pilot's
water wells. Thank you, Mayor. Are there any questions?
Thank you for coming. Thank you very much. Thank you. Thanks
for being here. Are there any questions of the
other two that were registered? Or any questions (inaudible)
You know, III I would just like to say uh, Mayor.
That I appreciate you coming here today. And I think
that uh, our water issues out in the Permian Basin are
something that we continue to look at here at the Commission
of getting alternative uses for. And uh it's something
that's very important for, for I know myself and my
fellow Commissioners. So thank you for being here.
Thank you for coming. And Madam Chairman, I have a
motion for consideration. Yes sir. I move that we grant the
motion for rehearing. Grant the City of Midland standing
as to these applications. And consolidate these dockets
with Oil and Gas Docket No. OG-23-00012401
for the purposes of the hearing. You've heard the
motion. Is there any questions? All right, is there a second?
Second. Second by Commissioner Wright. All in favor, say aye. Aye. Motion
passes, that item is, those items are approved. As, as
we've, as we've done the motion. So if you will, please
get us a new, a new um, or get, get. I
guess, do we need a different order based on? We will provide. You'll
get us a new order? Ok, great. We will provide. Thank you very much.
All right. We're going to the Oil and Gas Consent Agenda.
There are 18 items on the Oil and Gas Consent Agenda.
Items 22-39. Are there any questions? All right.
I move that we approve items 22-39. Is there
a second? Second. Second by Commissioner Christian. All in favor,
say aye. Aye. Motion passes, those items are approved. Master
Default Orders. There are 16 Master Default Orders.
I move that we approve items 40-55. Is there
a second? Second. Second by Commissioner Wright. All in favor, say
aye. Aye. Motion passes, those items are approved. Agreed
Enforcement Orders. Um, there are 156 Agreed
Enforcement Orders. I move that we approve Items 56
through 211. Is there a second? Second. Second by Commissioner Christian.
All in favor, say aye. Aye. Motion passes, those items are
approved. That includes the hear, that concludes the
Hearings Division. We will now take up the Administrative
Agenda. Wei, good morning. Good morning Commissioners. Um
for the record, Wei Wang, Executive Director. Um, as
you know the, the Regular Session ended
on May 29. So I thought I could provide you an update
on the changes and the additional responsibilities
the Legislature has given us. They like us a lot don't they. Yes. Yes,
ma'am. Um, so the Legislature passed a Bill that authorized
Railroad Commission jurisdiction over LDC, statewide
jurisdiction. Over LDC's Energy Conservation Program,
so we'll be looking at rulemaking for that. And also
several Bills uh, dealing with orphan wells, um purpose
for geothermal production. And uh, uh also uh had transferred
closed loop, closed loop geothermal injection well
jurisdiction from TCEQ to our agency. And also a Bill
clarify the ownership of geothermal energy. So geothermal
seems to be a uh, new area that will be uh, ventured
into. In addition to our existing resources over geothermal
wells. Uh in addition to that, uh the Legislature also
passed a Bill that give us authority for brine mining
wells. This is to produce brine water and extract mineral
and metal from that water. And reinject uh, that brine
water back down below from where it came from. Does
that include (inaudible) Wei? Uh no, it's lithium, you make sure you
may be thinking lit.
And uh, also there is a bill that instruct the agency to
put together a Texas Hydrogen Policy Council. Uh, aimed
at providing recommendations to the Legislature, Legislature
regarding hydrogen policy and statutory changes for
the state. So, uh on that front, we'll be hiring some
people as a result. Currently, um our head count as
of last week, it was 987. That put our vacancy rate
at less than 3%. So we've been fortunate in the last
couple of years to maintain a very healthy, uh staffing
rate. So we, you know, be busy hiring and training
our new employees. And we'll be coming back with probably
some rule proposals to implement these wells. Now,
the uh the deadline for Governor to sign is June 18.
Some of the Bill has been signed and effective immediately.
So we're also monitoring that on the effective date
and I'll bring back more updates as things progress.
What, what's the timeline on the rules once that's done? Some of the Bills
are effective immediately. So uh, there's no statutory
deadline for implementing rules. So and some of the
bills are effective September 1. So based on that,
you know, we're putting the team together for implementation.
Okay, great. Thank you. We had a good Session overall.
See they like us, they keep giving us more to do. I
think that speaks volume to uh, their trust and confidence
in our ability, you know, and our efficiency. So uh
we, we're seeing more and more programs being transferred
from other agency to this agency. Great, thank you. We had
a great Session. Thank y'all for the help. Thank
you. Thank you for the work you did, you and the Chairman. And our team,
we had a good team. We did. So, so thank you. All right. Uh,
Randall. Oh, good you're back. See, you didn't lose
your job. You just thought you got rid of me.
You could only be so lucky.
Good morning Chairman, Commissioners. For the record,
I'm Randall Collins. Staff, staff seeks approval on
Agenda Item 213. Item 213 on the Agenda pertains to
the Commissioner approval of contracts. Pursuant to
the Commission's delegation of authority, under Section
2261.254 of the Texas Government Code. The Commission's
internal delegation of authority and the government
code requires Commissioner approval of contracts or
associated amendments, greater than or equal to $1 million.
At issue today, are several contract amendments for
site remediation, surface mining and reclamation and
emergency well plugging and related services. Approval
of these Agenda Items will ensure that the agency has
the necessary approvals in place. Pursuant to the Commission's
delegation of authority and state law. A summary of
the amendments, amendment terms including the contract
numbers and amounts are included in your notebooks.
Staff asked the Commission to approve the contract
amendments pursuant to the Commission's delegation
of authority. And I am available if you have any questions.
Thank you. Are there any questions? I move we approve
the Staff's recommendations. Is there a second? Second. Second by Commissioner
Wright. All in favor, say aye. Aye. Motion passes, that item's
approved. Thank you. Uh, General Counsel. Thank you.
Good morning. Good morning Chairman, Commissioners. I'm Betsy Peticolas
with the Office of General Counsel. Here to present
a few updates to the Commission. First at the last
conference, I informed the Commission of a proposed
EPA rulemaking. That would apply greenhouse gas emission
standards to fossil fuel fired electric generating
units. We've determined that portions of the rule would
affect oil and gas and could also have pipeline permitting
implications. And therefore, we will be working with
TCEQ to submit, uh joint comments on that proposed rule.
I also have some updates, um in the litigation challenging
EPA's disapproval of Texas' state implementation
plan for the transport of ozone emissions. And their
attempt to implement or to impose a federal implementation
plan. Um as you may recall, the 5th Circuit issued
a stay of the rule disapproving Texas's state implementation
plan, pending appeal. Which also necessarily stays the
application of a federal implementation plan. On June
1, EPA released a memo entitled, Notice of Forthcoming
EPA Action to address judicial state orders. That memo
indicated that EPA would be taking action in the near
future. To ensure that the requirements of the federal
implementation plan would not take effect in the states
of Arkansas, Kentucky, Louisiana, Missouri and Texas.
While the stays of the state implementation plan, state
implementation plan disapprove actions with respects
to those states remained in place. However, since EPA
published its final federal implementation plan on
June 5. Um, the Railroad Commission joined the state
of Texas, TCEQ and the PUC. To file a petition for review
to preserve error on that federal implementation plan.
Finally, I also have an update on Waters of the U.S.
On May 25, the United States Supreme Court issued
its decision in Sackett versus EPA. Which clarified and
narrowed the reach of federal jurisdiction under the
Clean Water Act. The Sackett Case was pending before the
Court. While EPA published and finalized its latest
rule redefining Waters of the United States. Um, the
Court unanimously rejected the significant nexus text.
That EPA and the core relied heavily upon to justify
that latest rulemaking. And thus, substantially undercut
the justification for that rule. Um, we'll be watching
both EPA and the core for any updates on how they plan
to implement that ruling. And we'll be working with
the Office of the Attorney General. To um, address that
in the pending litigation. Um, that's all I have for
you today. But I'm happy to take any questions. Any
questions or comments? A lot going on. Thank you for
continuing that, to give us updates and be very engaged.
Thank you. Thank you.
Good morning, how are you? Good morning, well thank
you. How are you? Good, thanks. Good morning, Chairman
Commissioners. Haley Cochran with the Office of General
Counsel. Item No. 215 is Staff's recommendation
to publish proposed amendments to Chapter 5, relating
to carbon dioxide. Staff proposes these amendments
to ensure the rules are as stringent as the EPA's requirements.
And thus, support the Commission's application for enforcement
primacy. For the federal Class 6 Underground Injection
Control Program. The Commission submitted its official
application for primacy to the EPA on December 19, 2022.
Included in the application was a crosswalk comparison
of the state and federal requirements. In March of this
year, EPA provided comments on the crosswalk and recommended
rule amendments in a few areas. These proposed amendments
are intended to respond to EPA's recommendations. We
request the Commission's approval to publish the proposed
amendments in the Texas Register for a public comment
period. If approved today, the proposal should appear
in the June 30 issue of the Register. The proposal
would also be made available on the Commission's website
giving interested persons more than two additional
weeks to submit comments. Leslie Savage is here as
well and we're available to answer any questions. Thank
you. Are there any questions specifically? I want to
thank you both for moving this pretty quickly, along
so we don't get lost. So, um I appreciate it and I
appreciate the time that you've spent on it. And we've
come a long way and I think I think we're in good
shape, Leslie. So thank you, Hayley. I appreciate it.
Um, I move that we approve the Staff's recommendations.
Is there a second? Second. Second by Commissioner Christian.
All in favor, say aye. Aye. Motion passes, that item's approved.
Thank you. All right. Good morning Chairman, Commissioners. Good morning. Uh, for
the record, I'm Joseph Parks, the Assistant Director
of the Surface Mining and Reclamation Division. I'll
be presenting Item uh, 216 and we will take pictures
afterwards. Great. Uh, every year this uh, Surface Mining Reclamation
Division of the Texas Railroad Commission receives
submissions uh, for a Reclamation Award. These submissions
exemplify environmental stewardship and the efforts
of Texas coal mining operations. Take to achieve the
standard set forth by the Commission. The standard
is to return the land, mine lands to a state that is
as good or or better uh than the pre-mine state. The
2023 Reclamation Award recipient is the Texas Municipal
Power Agency. For the outstanding reclamation of the
Givens Creek Lignite Mine, specifically the Pond SP
50 area. They have demonstrated how energy resources
can be successfully recovered. The land returned to
natural pre-mine state. And enhanced to provide an area
that is now flourishing and productive land resource.
Mr. uh, Jan Horbaczewski and Bob Kahn of the Texas Municipal
Power Agency have been instrumental in leading the
reclamation efforts. And will accept the award on their
behalf.
And with congratulations for a job well done.
Thanks.
Thank you. Congratulations. Good work. Thank you.
Thank you. Thank you. Thank you for the good work.
All right. Okay. Who's taking the picture?
We're here and nobody's here. Come on up.
(inaudible)
Perfect. Thank you. Thank you, gentlemen. Thank you for your work.
Thank you.
Yes.
It's always impressive when you go out and look at
see what people are doing in these mines. Looks better
than when they got it probably. Amazing.
Hi, good morning. How are you? I'm doing well. Uh, good
morning Chairman, Commissioners. For the record, my
name is Keith May with the Oil and Gas Division. And
I will be presenting Items 217 and 218. Item
217 for your approval is the Commission's Oil and Gas
Monitoring Enforcement Plan for fiscal year 2024. Uh,
draft of this plan was before you on April 25, and
was made available for public comment until May 26.
During that period, the Commission received a total
of 13 comments from the public, environmental and industry
groups. The final version of the plan includes items
that support the goals of demonstrating the Commission's
oil and gas monitoring and enforcement activities and
the strategic use of Commission resources. To ensure
public safety and to protect the environment. Uh, this
plan must be posted to the Commission's website no
later than July 1 and that deadline will be met with
your approval today. May I answer any questions? Are
there any questions? No. Thank you all for the work. I
move we approve the Staff's recommendations. Is there a second? Second.
Second by Commissioner Wright. All in favor, say aye. Aye.
Motion passes, that item's approved. Uh Item 218 is
the Oilfield Cleanup program's 3rd quarter status
report for fiscal year 2023. During the 3rd quarter
of 2023, plugging operations were completed. And files
were closed on 546 wells at a cost of $17,915,373.
Of those three, of those wells, uh 197 were plugged
using OGRC funds or uh, oil state funds. And 349
were plugged using funds from the Infrastructure Investment
and Jobs Act or IIJA funds.
And this includes only those walls that are plugged,
invoiced by the plugging contractor and approved for
payment by Field Operations. During that same period,
431 new wells were approved for plugging and a total
of 1327 wells were physically plugged through the end
of the 3rd quarter. Um of which 1231 have been invoiced
and paid.
Uh, the state managed cleanup program completed and
closed 73 cleanup activities at a cost of
$1,657,952 using OGRC funds. And during that same period
50 new cleanup were authorized for clean up with state
funds. A total of 170 cleanup activities were
completed and closed through the end of the quarter,
third quarter using OGRC funds. May I answer any questions?
Are there any questions? Thank you. Thank you. Thank
you. All right, Item 219. It's my understanding that
Staff wants to pass that. Is that correct? All right.
Let's move to Item 220. Item 220 is a public
participation item. We have one person who's registered
to speak Ashley Watt. If you'll come on up and state
your name and who you're here for.
Good morning. My name is Ashley Watt. I'm here on behalf
of myself and my ranch. The last time I was here, it
was over a year ago. I came asking for your help. We
had three or four wells that had bubbled to the surface,
old plugged Chevron wells. And we wanted help to know
what's going on. You rejected us and wouldn't do a
thing. You told us nothing was wrong. So we went out
and we dug up over 100 PNA wells on that ranch.
They looked generally benign at surface and we got
down there and every single one of them has failed
and is leaking brine. We have begun to, we asked you
to make the operator Chevron go in and log those wells.
Figure out why are they leaking, PNA wells shouldn't
leak according to you. If they do, that completely changes
the paradigm of oil and gas. This is a big problem.
If we have to consistently replug wells every 50
years, that changes everything in regards to this industry.
You wouldn't order the operator to log the wells. So
we had to get a court order from the Crane County District
Judge to allow us to go in there and log those wells
on our dollar. Literally today, I have a logging crew
as a cattle rancher. Logging Chevron wells in West
Texas and there's holes in the casing. The casing is
gone, the cement is gone. They've fallen apart.
We've had to buy fresh water for the ranch, so we can
continue to live there and have livestock. I've asked
for your help. And again, the Railroad Commission has
done nothing.
The one thing the Railroad Commission has done is we asked
for water monitoring wells. Particularly into our Rustler
and Santa Rosa aquifers. The Rustler and Santa Rosa
there's a, a rustler well, on our southern end. That
started flowing brine on its own. Uh, you may remember
the Crane County Geyser from January of 2022. That
was a Rustler Well as well. That turned into a 200ft
tall Brine Geyser in the middle of pasture. That's
our neighbors just across the road. The benefit that
we did get there is um, Field Operations Director, Clay
Whittle. Promised us that we would get Rustler and Santa
Rosa monitoring wells. That was a year and a half ago.
Clay, if you tell me that well will get drilled, I'll
thank you your work. And we'll, okay.
And I said in the very beginning, I have questions about
holes in the casing and 158, 189 and 565
572. How am I going to get answers to those holes in
the casing? And what happened if those aquifers drill down (inaudible).
I stand by what I said. Somebody is going to drill a monitor well for the Rustler. And Santa Rosa, the deeper. Yes, I mean
Yeah, that was over a year ago. We had nothing since
then. The Railroad Commission has again refused to help
us. And so I asked myself why? Why is this publicly
elected body that's supposed to look out for all Texans,
not just the oil and gas companies refusing. My attorney
ran against Commissioner Christian and took him to
a runoff, maybe it's political. Christi, your father
owns working interest in many of these wells. He's
gonna have to pay to replug them. He's gonna have to play,
pay to remediate the environment around them. Maybe
it's personal. I, I don't know how this works. I'm
not an oil and gas person. I'm a cattle rancher. I
I, I've read that I give you overrides and you do what
I want, but I'm not really sure how that works. So
I'm here pleading like, what will it take? How many
wells do I have to dig up that are flowing brine to
the surface? How many water well tests do we have
to do? I have spent millions of dollars on this. It's
not my wells, Chevron's wells. It's the Railroad Commission's
responsibility.
So I come to, I come to you today asking for help.
Uh and I await anything you can provide me. Madam Chairman,
may I ask some questions? Sure. Uh, to make sure I'm correct
on what I'm understanding of this? And I, I have a
different understanding. So let's, you know, I like
to get corrected if I have a misunderstanding. Uh,
you say we haven't been there. We haven't done anything.
I, I understand that within usually 97% of the time.
Supposedly we're supposed to have inspectors that come
out. Did we not have inspectors come out to your ranch
at any time? It's very rare. You inspector. Now rare isn't the word
the answer. I heard you said never, never is different from
rare. Uh, usually within 97% of time is our understanding
is our inspectors arrive at because there's a request
of some emergency. So you're telling us that we have
not sent people out. And yet you have, that you presented
us with testimony of one of our people commenting that
they have been there. So have they been there? Have
they not been there? Very rare. Very rare. Your inspector out
there covers 10 counties. Like we're, we're one little
county out there. There's millions of wells. Right,
lots of people we're responsible for. I understand,
I understand. Uh, the other part is. I understand we
have negotiated or you know maybe not to what you
want. But we have negotiated with Chevron as the Railroad
Commission, uh multiple times. Are you aware that
we have been doing that? You negotiated an operator
cleanup program with them? Now the, the ironic part
about the operator clean up program is there's no clean
up. We've got multiple operator clean up program sites
on us. There's never been an ounce of clean up from
them and they're from the 90s. Like that is a farce
of a program. And you sit up here trotting how many
wells you've plugged and how much you've cleaned out.
Like I've seen the Railroad Commission plug orphan wells.
And the Railroad Commission will not go the full depth of
the well, and make sure and plug it the right way. To
stretch those dollars and they are limited public dollars,
as far as they go. The Railroad Commission will generally
only go in the top 200ft of the well and put
cement. So that way cosmetically at the surface, it
looks good. Now the problem with that is. If there's
holes in the casing. You've now just plugged up the
surface and all that pressure from below is now going
straight in the aquifers. So you make the problem worse.
It, it's not a particularly good program. There
needs to be more oversight on it. And I'm, I'm sitting
here. And your, your coal mining and surface reclamation
people. You're saying it takes it back to better than
it was before the coal companies got there. Like, why
do coal mines get that? But if you live in an oil
field, I now live in a super fund site. Question again,
you know. So, um I understand you say we, we have been
there. We did not agree with what you feel like should
have been done. As you present the statements, we have
been there. Uh, we haven't and we have negotiated with
Chevron on behalf of your property. Not coming with
the right. Let me negotiate on behalf of my property.
That's exactly the next point. We were, we send inspectors
out later, later time. We were advised if I'm not mistaken
by you. That we could not enter your property because
it was under suit from the, you had a suit and a
Chevron. And may I say that once we were told that
there is a lawsuit there. And they're told by the owner
which is you, that we can't enter your property because
there is a lawsuit. Then we, we have to stay away.
That was an even better story. Chevron wanted to come
plug the wells. Uh, but they were afraid I was gonna
shoot them. So they sent your inspectors to go plug
them. And so we said no, these are not orphan wells.
These are Chevron wells, why are we wasting public dollars? You stopped our people from coming
to your property. No. Under legitimate reason of a lawsuit.
Well, you just said you did. Look, if you were gonna
spend public dollars cleaning up Chevron's liabilities.
I would love you to spend public dollars on any of
my liabilities too. I didn't realize you were so free spending.
No, I'm sorry. We, we did not make an agreement with
Chevron. We were negotiating with Chevron, but our inspectors
came to your property and you told them to go away,
because of a legitimate reason. I'm not arguing a reason.
What I ask is. I'm saying that is a legal reason for us not to go.
Order. But that was at your order request and a legitimate
reason. you had a lawsuit pending. Order every operator
out there to log every failed PNA, top to bottom. The
whole way up and down. They'll tell you holes in the
casing. They'll tell you where things are wrong. We
have crude oil and our Rustler Aquifer. We have radioactivity
in our Rustler Aquifer that didn't come there. Your, your statement
was, we have not helped. We have not been there. We
have not shown up. We have shown up, we did negotiate
with Chevron on behalf of your property. And then, we
were told we couldn't come, because you had a lawsuit.
Legitimate reason, may I say? But it is, it is not
correct to say. We aren't willing to come when you tell
us to go. Not, not come on your property for a legitimate
reason. The Houston Chronicle called on you to resign
and I think they made a pretty good point. I'm sure you do. Thank you
for being here. We appreciate it. We're not gonna take,
do a direct attacks on each other. That's not the way,
we appreciate it. We appreciate you've got some challenges.
Again, we'll be glad to send inspectors out there if
you'll let us on your property. I want logging, logging. If you have
a well that fails. The first thing you should do is
log it, see what's happened. Why is that so difficult?
I want monitoring wells. Clay Whittle promised them.
Why is that so difficult? Why am I spending millions
of dollars to do your job regulating the oil and gas
industry? Thank you for being here.
All right. Item 221 is our Executive Session which we
won't be going into. And are there any other duly
posted matters to be brought before the Commission
at this time? Hearing none. This meeting of the Railroad
Commission is adjourned. Thank you all.