RRC's January 2022 Energy News

Energy News JANUARY 2022

From the Field Photo

Abandoned Site Cleanup - Near Kilgore Photo from Peter Pope

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Year in Review Publication Marks RRC’s 130th Year

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Natural Gas Facilities Across State Demonstrate Winter Readiness

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RRC Completes Massive Cleanup of Abandoned Oil & Gas Site Near Kilgore

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RRC Puts in Extra Work to Remediate Historic Coal Mine, Protect Endangered Toad

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National Association of Regulatory Utility Commissioners Select RRC Oversight & Safety Director for Committee Leadership Role

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Two Key Staff Hirings at the Railroad Commission

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Commissioners’ Corner

Upcoming Events RRC Open Meeting

February 8, 2022

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Year in Review Publication Marks RRC’s 130th Year The RRC celebrated a milestone anniversary last year: 130 years of proudly serving the people of the great state of Texas and protecting their interests, A special 2021 Year in Review publication not only looks at where the commission has been, it also dives into the accomplishments and changes that occurred over the course of the agency’s 130th year, including what has happened since Winter Storm Uri and looks at how the agency is preparing for the future.

The Year in Review is split up into five sections and includes videos from the agency’s three commissioners.

The first section of the publication, “Historical Perspective,” looks back at the 130-year history of the agency and interviews with some staff who have been with the agency for decades. The second section, “A Historic Storm,” dives deep into what occurred during and since Winter Storm Uri. The third section, “Today’s Agency: Achieving Higher Standards,” covers how the RRC is meeting legislative goals and other significant information from all the agency’s divisions. The fourth section, “The Core Mission: Protecting Public Safety and the Environment,” explores a host of success stories the agency has made in service to the state.

The final section, “Getting Better for the Future,” looks at ways the agency is improving to keep up with changing times.

READ THE 2021 YEAR IN REVIEW

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ENERGY NEWS

Natural Gas Facilities Across State Demonstrate Winter Readiness Texas’ natural gas facilities have demonstrated significant progress winterizing equipment and an ability to supply the necessary fuel in emergency conditions, ongoing Railroad Commission site visits show.

As the recent freezing weather events in January demonstrated, much needed quantities of natural gas did flow to electric generating power plants and into people’s homes for heating.

Daily gas production can fluctuate from hour to hour due to a variety of reasons, such as scheduled maintenance and scheduled downtime for safety reasons. Average statewide daily production can vary as much as more than 2 billion cubic feet per day, even during late spring.

Daily production is just one piece of the puzzle when it comes to natural gas supply. Gas produced from wellheads needs to be processed and transported to end users.

The vast majority of the state’s natural supply is stored in underground storage facilities and packed in major pipelines. For this reason, RRC inspectors not only visit natural gas wells but, more importantly, natural storage and pipelines.

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As of mid-December, the state had approximately 448 billion cubic feet of working gas in underground storage, and another 30-35 billion cubic feet is typically in pipelines at any given time; as the chart shows, this far exceeds the peak demand for gas-fired power generators.

Since the end of last summer, RRC inspectors have conducted site visits at more than 4,000 natural gas facilities representing oil and gas leases with nearly 22,000 active wells, gas storage facilities that account for about 77% the state’s gas storage, and more than 350 pipelines transporting natural gas including 94 that directly serve gas-fired power generators.

During the site visits, which are continuing throughout the winter, RRC inspectors have been directly observing measures operators are undertaking to provide gas supplies under normal and emergency conditions. Inspectors have physically observed what devices natural gas facilities have put in place and processes to harden their assets against cold weather.

About 98% of the facilities visited had been winterized. The remaining 2% or so were in the process of winterizing at the time when RRC visited them in the last few months.

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Available Gas Supply / Peak Demand Gas-fired Power Genera�on (in billion cubic feet)

600 500

511

400 300 200 100 0

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Available Supply

Peak Demand

Processed Gas in Storages

Processed Gas in Pipelines

Average Daily Produc�on of Unprocessed Gas

Peak Demand for Gas-fired Power Genera�on

“We have been putting boots on the ground and eyes on the state’s critical assets,” said Ted Wooten, RRC Director of Critical Infrastructure.

“Based on what our inspectors have observed, natural gas producers and pipeline operators have taken necessary actions to ensure gas will continue to flow this winter to people’s homes and power plants.”

Information RRC inspectors have been collecting is also helping the agency to develop industry best practices and guidelines relayed to operators which they could utilize based on the geographic locations and types of facilities they have. A best practices report is included in the Texas Electricity Supply Chain Security and Mapping Committee Report.

READ THE ELECTRICITY SUPPLY CHAIN REPORT

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ENERGY NEWS

RRC Completes Massive Cleanup of Abandoned Oil & Gas Site Near Kilgore The Railroad Commission completed a $14.7 million cleanup of an abandoned oil waste recycling facility at the end of January.

The work to remediate Enviropave’s abandoned East Texas Reclamation Plant, which is a few miles southwest of Kilgore, had been ongoing since August 2017.

The abandoned site not only had contaminated soils and other products that had to be removed, but there was also a stream which was threatened by the unmanaged waste left behind.

The former facility previously had a stationary treatment permit for reclamation and would take wastes contaminated via oil and gas operations, such as drill cuttings and soils, and turn them into usable products, such as road base. The facility failed to uphold the requirements for its permit and had its permit revoked in 2016 by final order after a series of violations were cited during RRC inspections.

After the permit was revoked, the company filed for bankruptcy, leaving the mess in the hands of the State Managed Cleanup Program.

“The effort was so large that cleanup coordinators from around the state and technical staff from Austin had to travel to Kilgore to help oversee the cleanup,” said Art Correa, RRC State Managed Cleanup Program Team Lead.

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Correa explained that contractors cannot work unless RRC staff are onsite, approving and inspecting all jobs.

“We’re the first ones in the gate and the last ones to leave,” he said.

The first phase, which focused on the removal of waste, was completed in August 2018. The final phase of cleanup involved the removal of an additional waste, subsurface excavation, confirmation sampling and backfill so that the surface could be contoured and hydromulched with native grass seed. This final phase of waste removal and backfill was completed December 2021.

The largest challenge for the cleanup work was dealing with the rain.

“Rainwater that falls on the waste becomes contact waste water,” said Peter Pope, Manager of RRC Site Remediation. “We are protecting the environment by eliminating the accumulation of rainwater in a fairly wet part of the state by removing this waste and backfilling with clean soil. Now, we’ve permanently protected the creek from the threat of contamination.”

The RRC will maintain monitoring wells at the site and keep watch for any impacts to groundwater.

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ENERGY NEWS

RRC Puts in Extra Work to Remediate Historic Coal Mine, Protect Endangered Toad Dealing with an abandoned coal mine is more than just simply filling a hole.

In fact, a lot of work needs to be done before even starting construction to reclaim such mines, such as environmental and geotechnical surveys, applying for permits and funding and developing a plan.

In the case of RRC’s Bailey-Stevenson Project, located between Bastrop and Camp Swift, the land is in the middle of known habitat for the Houston toad, an endangered species.

Belto Mining Co., according to survey work conducted by the Colorado River Authority and published as the “Mining History of the Powell Bend Lease Area” in 1982.

“The site had to have extensive Houston toad mitigation,” said Katie Upham, Abandoned Land Mine Program Manager. “We put up an exclusion fence, and we had a biological monitor, a biologist who is permitted to pick up endangered species.”

The tunnels used to extract coal averaged about 30-35 feet under the surface and eroded over time, eventually collapsing and creating sink holes, said Joe Parks, Assistant Director of RRC’s Surface Mining and Reclamation Division.

Before construction could begin to dig out and fill in nearly two dozen sink holes, the exclusion fence – which, as the name suggests, was designed to keep toads out – was set up where the construction would take place, Upham said.

Once up, the interior of the fence had to be extensively surveyed for any toads present and remove them, if needed.

Because the sink holes were not near any buildings or other structures, the AML program was able to use sandy-clay subsoil material to fill the excavated holes rather than cement, which provides more structural support.

And construction could only occur during a narrow window to minimize any harm to the toads.

The actual construction work and other site remediation efforts, including revegetating the areas with grasses known to benefit the toads and other species, cost less than the development work beforehand: $127,000 versus $175,000.

The sink holes were the result of underground tunnels from what is believed to have been part of the Miley Spur Mine, which operated from 1919 to 1929, and was operated by the

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Because the work had to be done within a narrow window between toad breeding season and migratory bird movement, AML staff relied upon the timely help of other RRC staff, Parks said, including Patrick Shelton from General Counsel, Matt Bowman from Procurement and Theresa Lopez, the Procurement Director.

“Otherwise, we might have had to wait another year to get this project started,” Parks said.

The work removed any potential threats to public safety and the environment, providing both prime habitat for the toad and useable property for the landowners.

Adjacent landowners, who are also being impacted by the same historic mine, came forward during construction and will likely be part of a future AML project, Parks said.

If you are a landowner and think you may have an historic mine tunnel under your property, you can contact the AML program at 512-305-8830 or mining@rrc.texas.gov.

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ENERGY NEWS

National Association of Regulatory Utility Commissioners Select RRC Oversight & Safety Director for Committee Leadership Role RRC Director of Oversight and Safety Kari French was recently selected to serve as chair of the Staff Subcommittee on Pipeline Safety for the National Association of Regulatory Utility Commissioners.

NARUC, which was founded in 1889, is a nonprofit representing state organizations that regulate essential utilities, such as energy, telecommunications, power, water and transportation. NARUC is, in part, a meeting ground where public regulatory professionals from all parts of the county, including membership in all 50 states, can exchange ideas that help improve the regulation of utilities.

French has been a member on NARUC’s pipeline safety subcommittee since 2015.

“I am honored and very willing to now lead this subcommittee,” she said.

French brings a wealth of experience to the role, including seven years in her current position at the RRC overseeing such areas as Pipeline Safety, Alternative Fuels and Gas Services. She also has more than 25 years of related experience in the private sector.

At the Railroad Commission, French has overseen the development of the RRC PIPES database, which streamlines agency processes and provides a valuable tool for RRC’s Pipeline Safety staff and operators to upload documents, including inspection and incident reports, and complaints, while automatically making more documents available to the public.

French has also participated in the successful adoption of statewide rules allowing the agency to take over oversight of underground natural gas storage facilities from the federal government. She also led the division to help the agency implement bills passed in response to Winter Storm Uri. “The legislation passed here in Texas has been of value to NARUC as it has received much national attention,” French said. “The group had many questions about our experience and our plans going forward.”

French attends other NARUC staff subcommittees as an observer.

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Two Key Staff Hirings at the Railroad Commission The Railroad Commission recently hired its first Chief Data Officer and also a new director of Government Relations.

Chief Data Officer Alkesh Amodwala and Government Relations Director Krista Duke have hit the ground running as the agency implements new legislation, including bills on data governance and natural gas infrastructure.

Amodwala brings more than 15 years of experience in supply chain development, business intelligence, analytics and data governance/strategy to the RRC. Among his roles, he has worked for General Motors IT Branch – Global Purchasing and Supply Chain, Hewlett Packard and Home Depot.

Amodwala leads a new team in the RRC’s Information Technology Services Division focusing on data projects. The 10-member team consolidates experts in the agency and is working on data initiatives as well as supporting the work of the agency’s ongoing development of a map of the electric grid supply chain.

Duke, who is playing a critical role with the implementation of all the RRC’s state legislation and any federal legislation, has wide-ranging experience at the state Capitol. She most recently served in the Texas Senate as General Counsel and as Legislative Director for two senators, respectively. In addition, she held leadership positions in the offices of members of the Texas House of Representatives and House Committees.

She has a bachelor’s degree from St. Edward’s University and a law degree from St. Mary’s University.

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Chairman Christian CO M M I S S I O N E R S’ CO R N E R

Chairman Christian recently spend several days in West Texas. During his trip, he visited with Matt Coday, the president of the Oil & Gas Workers Association, about protecting jobs in the Permian Basin from Biden Administration threats. He also had the opportunity to visit with Gabriel Rio the CEO of Milestone Environmental Services and check out one of their facilities in Stanton.

Chairman Christian also released a press release touting the RRC’s flaring report numbers which feature a historic flaring rate (0.19%). Texas has one of the lowest flaring rates of large oil and gas producing states in the country, with an average rate of flaring that has remained significantly less than 2% for more than two years.

READ THE FLARING PRESS RELEASE

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Chairman Christian visiting with Matt Coday, the president of the Oil & Gas Workers Association.

Chairman Christian visiting with Gabriel Rio, the CEO of Milestone Environmental Services.

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ENERGY NEWS

Commissioner Craddick CO M M I S S I O N E R S’ CO R N E R

In January, Commissioner Craddick spent time speaking with business groups across the state about the importance of a welltrained workforce and the statewide impact of the oil and gas industry. These groups included the North Texas Commission and the Fort Worth Chamber of Commerce.

Additionally, Commissioner Craddick commends agency staff on their continued efforts to implement Senate Bill 3 and House Bill 1520. These bills address problems that faced Texas in the aftermath of Winter Storm Uri. Agency inspectors continue to visit critical oil and gas facilities to ensure their preparedness for winter weather events, and efforts to protect natural gas customers from unreasonably high gas bills is well underway.

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Commissioner Wright CO M M I S S I O N E R S’ CO R N E R

In January, Commissioner Wright traveled to Midland-Odessa to meet with local elected officials, community leaders and industry representatives to provide an update on seismic activity in the region and discuss recent actions taken by both the Railroad Commission and local oil and gas operators in response.

As a regulatory agency, it is important that the Railroad “Commission communicates not only with operators, but also the community leaders and local officials who represent all those who live and work in the area. I think all those who attended the meeting left with a better understanding of the facts surrounding these seismic events and the recent actions taken by both the Railroad Commission and industry to protect the health and safety of the local population.

I look forward to continuing our outreach and updating local leaders on efforts to reduce the potential for future seismic events by finding alternative, productive uses for the water generated during oil and gas extraction.

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ENERGY NEWS

Oil & Gas Production Statistics

View monthly production totals of crude oil, condensate and total oil; and of gas well gas, casinghead gas, and total natural gas.

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Enforcement Actions

The Commission has primary oversight and enforcement of the state’s oil and gas industry and intrastate pipeline safety. View RRC’s Latest Enforcement Actions here.

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Public GIS Viewer

The Public GIS Viewer allows users to view oil, gas and pipeline data in a map view.

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