On October 28th, the Railroad
Commission of Texas (“RRC”) amended its existing oil and gas disposal well
regulations to require seismic activity data in permit applicants, provide for
more frequent monitoring and reporting for certain wells, and allow modification,
suspension, or termination of permits on grounds that a disposal well is
contributing to seismic activity.
Specifically:
- Applicants for a disposal permit must provide
U.S. Geologic Survey (“USGS”) data regarding seismic events within a circular
100 square mile area centered on the well (a radius of approximately 5.64
miles).
- The RRC may require additional information,
including logs, geologic cross-sections, pressure front boundary calculations,
and structure maps.
- The RRC may require more frequent monitoring and
reporting for disposal wells for which conditions may exist that would prevent
fluids from being confined to the injection interval.
- The RRC may modify, suspend, or terminate a
permit if disposal is contributing to seismic activity, after notice and an
opportunity for a hearing.
The amendments will be published
in the Texas Register on November 14, 2014, and will go into effect on November
17, 2014. The new rules are unlikely to
pose a significant additional burden for most new wells and the estimated
50,000 existing oil and gas disposal wells in Texas. However, if seismicity increases in the area
of a well, the RRC will now have explicit regulatory provisions allowing it to
impose injection pressure and rate limits, a temporary injection ban, or even
outright cancellation of a disposal well permit.
Background
The amendments are the result of
growing public scrutiny of hydraulic fracking and concerns over the past
several years of a connection between earthquakes and the disposal of frack
flowback and produced water. Although
disposal by underground injection is not new—the first federal Underground
Injection Control regulations were promulgated in 1980—opposition to fracking,
new wells, and certain seismic events have spurred many recent studies and
debates.
In March 2014, the RRC hired a
seismologist to assist the agency in understanding the potential impact of oil
and gas extraction activities and to clarify the root causes of earthquakes
that some contend are connected to fracking.
RRC Commissioner David Porter commented that bringing
a seismologist on board would allow the 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.”
In its introduction of the text of
the now-final amendments, the RRC states 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 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.
Amendments to Section 3.9 and Section 3.46
The new amendments modify Title
16, Sections 3.9 and 3.46 of the Texas Administrative Code, relating respectively
to Disposal Wells and to Fluid Injection into Productive Reservoirs. Although these sections regulate disposal
into different types of formations, the language in both sections adopts the
same new requirements and provides the RRC with the same level of authority.
Section
3.9 governs disposal of saltwater or other oil and gas waste by injection
into formations not productive of oil, gas, or geothermal resources.
Section
3.46 governs fluid injection operations, including disposal, involving
reservoirs productive of oil, gas, or geothermal resources.
Of note, although Section 3.46 regulates
injection into productive formations for both enhanced recovery and disposal, the
new language relating to seismic activity applies
only to wells permitted for disposal.
The new requirements for applicants
are found in Sections 3.9(3)(B) and 3.46(b)(1)(C). The amendments to these two subsections
require applicants for disposal permits to include with the application a
printed copy or screenshot showing the results of a survey of information from
the USGS regarding the locations of any historical seismic events within a
circular area of 100 square miles centered around the proposed disposal well
location.
The above provisions are the primary
difference between the amendments proposed by the RRC in August 2014 and the
final amendments that are now adopted.
The
proposal would have required that applicants include USGS historical seismic
event information for within the estimated radius of the 10-year, five pounds
per square inch (“psi”) pressure front boundary of the proposed disposal well
location.
Ultimately, the RRC agreed
with several comments that this requirement was too complex and had the
potential for error and, instead, adopted the 100 square mile area language
discussed above.
The other amendments 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,
the amendments 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)).
For certain wells, the
RRC might impose additional monitoring as a condition of the issued
permit.
One would also expect that,
after identifying an increase in seismic events, the agency would impose
increased monitoring on existing wells in the area.
Additions to Sections 3.9(6)(A)(vi)
and 3.46(d)(1)(F) amend the RRC’s existing authority to modify, suspend, or
terminate a disposal permit to allow such an action based on grounds that the
injection is likely to be or has been determined to be contributing to seismic
activity.
These actions would require
notice to the well operator and a hearing.
This amendment could allow the RRC to terminate permits, but could also
be used to impose limits on injection rates and pressures, or other conditions
intended to mitigate any contribution to seismic activity.
Read the final rule.
