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Energy News February 2020

From the Field Photo ‘First Light’ Districts 1 & 2 Photo by Joseph Baird

Railroad Commissioners Amend Rules to Help Boost Energy Production in Texas

Safeguarding the Public, Commission Adopts Enhanced Pipeline Safety Measures

Interactive Spud & Drilling Permit Data Now Available

Commission Appoints New Surface Mining & Reclamation Director

RRC Sends Good News to City of Gorman

New Communications Director

Still Time to Brush Up on RRC Regulatory Forums at Upcoming RRC Workshops

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Railroad Commissioners Amend Rules to Help Boost Energy Production in Texas Keeping up with industry’s advances in horizontal drilling and hydraulic fracturing, the three Commissioners unanimously voted this month to amend rules to help boost energy production in the state. Their action amended RRC Rule 3.40 Assignment of Acreage to Pooled Development and Proration Units. The rule restricted exploration in unconventional fracture treated fields when oil and gas mineral ownership is divided at different depths below the surface. A UFT field is a field in which horizontal drilling and hydraulic fracturing must be used to recover oil and gas. To take advantage of technological advances that can tap into once inaccessible hydrocarbon resources in UFT fields, Commissioners voted to allow assignment of acreage to multiple wells in these fields. This rule revision will further protect mineral owner interest and allow access to additional resources. “This rule change is a win-win for industry and regulators, saving both agency staff and energy producers time and resources,” said Chairman Wayne Christian. “I am thankful for the hard work that went into modernizing these rules.” “I appreciate the tremendous effort that Commission staff put into revising this rule,” said Commissioner Christi Craddick. “Working together with industry and stakeholders, these changes help to streamline our processes and increase production.” “Our job as Commissioners is to ensure that the state’s rules keep up with advancing technology,” said Commissioner Ryan Sitton. “Amending Rule 40 will enable energy producers to responsibly extract more energy resources by recognizing that the way energy is produced has evolved over time. All Texans win in the form of lower energy prices with this change.” The rule amendments adopted by Commissioners go into effect March 3, 2020.

Safeguarding th Enhan

Public safety is the Railroad Commissionâ€™s highest priority as demonstrated by new pipeline safety rules adopted by the Commission. The new rules prohibit natural gas distribution pipeline operators from installing underground cast iron, wrought iron or bare steel pipelines. Other new pipeline safety requirements require operators to more thoroughly assess the potential public safety risk of gathering lines. The amendments are effective Jan. 6.

The Commission adopted these amendments on Dec. 17, 2019â€”weeks before a Dec. 31, 2019 statutory deadline for House Bills 864 and 866 passed by the 86th Legislature last year. Local distribution gas pipeline operators transport natural gas to households and businesses through thousands of miles of small-diameter distribution pipes. RRCâ€™s new pipeline rules also require these natural gas distribution pipeline operators to replace any known existing cast iron pipelines by Dec. 31, 2021.

he Public, Commission Adopts nced Pipeline Safety Measures

“The Railroad Commission’s highest priority is public safety,” said RRC’s Executive Director Wei Wang. “These new amendments enhance our existing rules requiring pipeline operators to construct, operate and maintain their pipelines in compliance with Texas laws and regulations.” “With more than 469,000 miles of pipelines, Texas’ pipeline infrastructure is key to delivering energy to Texans, the nation and world,” Wang said. “By taking truck traffic off the highways, pipelines

continue to be one of the safest ways to transport crude oil and natural gas.” According to the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration, it would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week, to move the volume of even a modest pipeline.

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Interactive Spud & Drilling P

Permit Data Now Available Building on its commitment to provide more data and transparency about Texas’ dynamic energy industry, the Commission recently released two interactive statewide data maps. The new maps provide drilling permit and spud data, which is when operators begin drilling a well. Information is displayed by counts, operators, county locations and on a statewide level. The data is available 24-hours a day, seven days a week beginning with Calendar Year 2018. “With this latest interactive data on the Commission’s drilling permit approvals and wells spudded, our agency is providing more detailed insight into Texas’ energy industry,” said Wei Wang, RRC’s Executive Director. “This helps enhance our regulatory transparency and continues educating the public about one of the state’s top economic drivers.” The Commission’s first series of interactive data on oil and gas production and plugged abandoned wells is very popular with nearly 8,000 unique page views for oil and gas production data and nearly 1,400 unique page views for the abandoned well plugging data since the information’s release in October 2019. The RRC Approved Drilling Permits Data Visualization Map is available at:

VIEW APPROVED DRILLING PERMITS4 Once approved, RRC drilling permits are valid for two years. RRC wells spudded data shows the number of wells that have begun drilling operations. The Wells Spudded Data Visualization is available at:

VIEW WELLS SPUDDED4 See more about these dynamic maps in our latest news release.

VIEW THE NEWS RELEASE4

Commission Appoints New Surface Mining & Reclamation Director

Brent A. Elliott is the new director for the agency’s Surface Mining and Reclamation Division. During his first week on the job, Elliott met Feb. 5 with RRC’s federal oversight agency - the Office of Surface Mining and Reclamation Enforcement to discuss state reporting guidelines and recent federal revisions to enforcement mechanisms. Texas’ program oversees coal exploration, mining and reclamation activities ensuring operators follow Commission rules and regulations established to protect public health and safety, the environment and natural resources. “It is an honor to lead the Commission’s Surface Mining and Reclamation Division,” Elliott said.” The staff’s commitment to environmental and public safety is well known. I look forward to working with them to continue their dedication toward safety-focused stewardship of mined resources, effective reclamation and constructive communication with the public and industry.” Elliott brings more than 25 years of mining and exploration-related research to the RRC. He joins the Commission from the University of Texas Bureau of Economic Geology, where he served as an economic geologist for seven years and supervised research staff and guided graduate students. Elliott also has taught a wide variety of geoscience and science education courses over the past 20 years.

RRC Sends Good News to City of Gorman The water is fine for recreation declares the Railroad Commission about a lake in the Eastland County community of Gorman. Now local city leaders can move forward with any potential plans to revitalize Bass Lake in the Frank Gray Memorial Park that was the site of a 1990s crude oil spill. Cleanup occurred immediately following the incident. In 2018 the city entered the Railroad Commission’s Brownfields Response Program to assess the lake for any potential lingering hazards related to the oil spill. RRC staff worked with an environmental engineering firm to conduct a site assessment and analyze samples of surface water and sediments from the lake, soils along the bank and groundwater from an onsite water well. Test results for compounds related to the oil spill were all within protective concentration levels. “Our project in Gorman is another example of how we strive to help communities across Texas safeguard the environment,” said Wei Wang, Executive Director of the Railroad Commission. “Our work at Bass Lake was done in several phases, and we recently completed our work and now this lake can be enjoyed by all Texans for recreational purposes.” The RRC issued a Certificate of Completion to the city noting that any risks associated with consumption of fish at the lake is within protective concentration thresholds.

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New Communications Director Austin news and state agency communications veteran R.J. DeSilva joined the RRC this month to head up the RRC’s Communications Division. “I’m excited to be joining the RRC’s Communication team,” DeSilva said. “This group has excelled at educating the public about the agency’s important regulatory role in protecting public safety and the environment while ensuring energy is safely produced in compliance with Commission rules.” DeSilva brings more than 20 years of experience in news coverage, media relations and state government to the RRC. DeSilva joins the Commission from the Texas Legislative Budget Board, where he served as Communications Officer since 2014. Before joining the LBB, DeSilva was spokesperson for the Texas Comptroller’s Office. DeSilva also was an anchor and reporter for Austin’s NBC affiliate, KXAN-TV for 10 years.

Still T Brush RRC R Forum Upcom RRC W

Time to h Up on Regulatory ms at ming Workshops

CAPTION: Cory 2/4/2020 Houston Regulatory Forum

The Railroad Commission of Texas is hosting one-day Regulatory Forums throughout the state through April: • March 5, 2020 — Fort Worth • April 1, 2020 — Midland • April 2, 2020 — Midland The RRC is hosting these forums to educate and train energy industry representatives on a variety of topics, including: • drilling permitting; • Form P-16, Acreage Designation;

• completions; • injection well permitting; and • pipeline permitting.

The registration fee is $100 per person.

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RRC AROUND TEXAS FEB. 06 Australian energy officials learning about the RRCâ€™s role in energy regulation, rules and processes in a meeting with RRC staff at the Commissionâ€™s Austin headquarters.

Photo Caption: Wei Wang and Danny Sorrells with Alister Trier, Chief Executive, Department of Primary Industry and Resources, Northern Territory Government and Louis Gomatos, Senior Director Petroleum Operations, Department of Primary Industry and Resources, Northern Territory Government.

Chairman Christian COMMISSIONERS’ CORNER

Chairman Wayne Christian noted this month there are many misconceptions about what flaring is and how much flaring occurs in Texas. “This uncertainty has led to confusion and concern among the general public and on Wall Street, limiting the funding opportunities for independent energy producers across the state,” Christian said. Flaring is a process used primarily in the production of crude oil in which excess natural gas produced with the oil is burned off at the well head. An operator who wants to flare gas must receive authorization from the Railroad Commission of Texas. “As I previously stated in an opinion piece for USA Today, flaring is an important part of America’s rise to global energy dominance and is a safer alternative to venting,” contin-

ued Christian. “However, I am very concerned about the rate of flaring in Texas and have expressed this as the first commissioner in recent memory to vote against a flaring permit.”

READ USA TODAY4 Last fall, Chairman Christian instructed staff to analyze flaring in Texas. Their analysis shows that the average monthly statewide flaring rate since January 2014 has been about 1.24 percent, fluctuating between 0.8 percent to 2.2 percent. The data is taken from flaring amounts and gas production reported on operators’ monthly production reports to the Commission.