Texas proposes rule to evaluate seismic activity related to fracking

On August 12, 2014, the Railroad Commission of Texas (“RRC”) approved several proposed amendments to fracking regulations in the Texas Administrative Code for publication in the Texas Register. These proposed amendments relate generally to additional permitting requirements for disposal wells. Additionally, the proposed amendments would codify the RRC’s authority to request increased monitoring and reporting related to seismic events near disposal wells and to modify, suspend, or terminate a permit if fluids are not confined to the injection interval.

Over the past several years, suspicions of a connection between hydraulic fracking and earthquakes have spurred many studies and debates. In effort to better understand the impact of oil and gas extraction activities, the RRC hired a seismologist several months ago to clarify the root causes of earthquakes that some insist are connected to fracking. In relation to bringing a seismologist on board, Commissioner David Porter commented that “[t]his will allow our agency to further examine any possible correlation between seismic events and oil and gas activity and gain a more thorough understanding of the science and data available.”

To introduce the proposed amendments, the RRC states in the proposal that “[w]hile few earthquakes have been documented over the past several decades relative to the large number of disposal wells in operation, seismic events have infrequently occurred in areas where there is coincident oil and gas activity.” Therefore, the proposed amendments incorporate several provisions that require additional collection and evaluation of seismic activities near proposed disposal wells, and the potential to impose additional monitoring and reporting of seismic data for areas surrounding existing disposal wells.

Proposed Amendments to Section 3.9 and Section 3.46

The RRC proposes amendments to Title 16, Sections 3.9 and 3.46 of the Texas Administrative Code, relating to Disposal Wells and to Fluid Injection into Productive Reservoirs, respectively. Although these sections regulate two different types of disposal well permits, the proposed language in both sections would adopt the same new requirements and rules.

Section 3.9 currently requires anyone “who disposes of saltwater or other oil and gas waste by injection into a porous formation not productive of oil, gas, or geothermal resources” to obtain a well disposal permit. 16 Tex. Admin. Code § 3.9. Section 3.46 currently requires anyone “who engages in fluid injection operations in reservoirs productive of oil, as, or geothermal resources” to obtain an injection permit from the RRC. 16 Tex. Admin. Code § 3.46(a). Section 3.46 regulates injection into productive formations for either enhanced recovery or for disposal. However, the proposed new language relating to seismic activity would apply only to those wells permitted under Section 3.46 for disposal purposes.

The only proposed amendments that would automatically require all applicants to perform additional duties are those proposed in Sections 3.9(3)(B) and 3.46(b)(1)(C). The proposed amendment to these two subsections would require applicants for disposal permits under Sections 3.9 or 3.46 to include with the application for the permit the results of a review of information from the United States Geological Survey (“USGS”)1 regarding the locations of any historical seismic events within the estimated radius of the 10-year, five pounds per square inch (“psi”) pressure front boundary of the proposed disposal well location. A “pressure front” is defined as the zone of elevated pressure that is created by the injection of fluids into the subsurface. A “10-year, five psi pressure front boundary” is defined as the boundary of increased pressure of five psi after 10 years of injection at the maximum requested permit injection volume.

The other proposed amendments would serve to formally recognize the RRC’s authority to regulate seismic activity related to the disposal wells. For example, if the well is to be located in certain areas seen as having an increased risk that fluids will not be confined to the injection interval,2 the proposed amendments would authorize the RRC to request additional information during the permitting process (Sections 3.9(3)(C) and 3.46(b)(1)(D)) and more frequent monitoring and reporting of injection pressure and injection rates (Sections 3.9(11)(A)–(B) and 3.46(i)(1)–(2)). Additionally, the proposed additions of Sections 3.9(6)(A)(vi) and 3.46(d)(1)(F) would authorize the RRC to modify, suspend, or terminate a disposal permit (after notice and opportunity for a hearing) if the injection is suspected of or shown to be causing seismic activity.

How to Comment

The proposal will appear in the August 29, 2014, issue of the Texas Register for a 30-day comment period ending September 29, 2014, at 12:00 p.m. However, comments concerning these proposed amendments can currently be submitted online.

This post was written by Eva Fromm O'Brien (eva.obrien@nortonrosefulbright.com or +1 713.651.5321) and Jennifer Caplan (jenn.caplan@nortonrosefulbright.com or +1 713.651.5372) from Norton Rose Fulbright's Environmental Practice Group.

1According to the RRC’s memorandum describing the proposed amendments, the USGS has the ability to detect and locate all seismic events larger than magnitude 2.0 throughout the continental United States. The RRC states that this ability makes the USGS the de facto source of seismic event location in the United States.
2The RRC identifies the following conditions as several factors that may increase the risk that fluids will not be confined to the injection interval: complex geology, proximity of the baserock to the injection interval, transmissive faults, and/or a history of seismic events in the area shown by information from the USGS.