RRC Energy News - May 2022

Energy News MAY 2022

From the Field Photo

Old Oilfield Equipment - Eastland County

Photo from Jarod Riffe

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RRC Hires New Director of Critical Infrastructure

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RRC Moves Toward Oversight of Injection and Storage of CO2 with Proposed Rules

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RRC Earns Award for Seismic Monitoring, Response

Commissioners Approve FY 2023-27 Strategic Plan

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Wave of the Future: RRC Begins Use of Artificial Intelligence to Help with Seismicity Reviews

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RRC Expertise

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Commissioners Give 2022 Texas Coal Mining Reclamation Award to Marshall Mine

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RRC to Require Online Submission of Disposal/ Injection Well Monitoring Report

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Public Can Comment on Proposed Revisions to Form P-16, Acreage Designation

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RRC Accepting Comments on Revisions to Form T-1, Monthly Transportation and Storage Report

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Commissioners’ Corner

Upcoming Events RRC Open Meeting

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ENERGY NEWS

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June 7, 2022

COMMISSIONERS APPROVE FY 2023-27 STRATEGIC PLAN Commissioners on May 18 approved the Railroad Commission’s Strategic Plan for the Fiscal Years 2023 to 2027.

The primary section of the strategic plan is “Agency Goals and Action Plans,” which shows the planned direction of the agency in our ongoing mission to protect public safety and the environment across Texas.

Among the key changes to this strategic plan is the inclusion of critical infrastructure.

Following Winter Storm Uri in 2021, the Texas Legislature approved Senate Bill 3, which, among other requirements, mandated rules for the designation of critical gas infrastructure, creation of the Electricity Supply Chain Map of Critical Infrastructure followed by weatherization rules for critical gas infrastructure.

Objective 3.4 in the plan calls for establishing critical infrastructure compliance standards, regulating natural gas supply chain entities for power generation requirements and mitigating system outage risks during extreme weather events.

Strategy 3.4.1 has the RRC ensuring designated facilities incorporate weatherization and reliability standards and practices through communication, inspections, processing applications and monitoring reports.

The plan includes various measures for RRC to track, including:

• Number of weatherization inspections conducted • Number of facilities out of weatherization compliance • Percent of facilities that are required to weatherize that are non-compliant with weatherization standards

• Total number of designated critical infrastructure facilities SB 3 and a future influx of federal funding for well plugging are having an impact on staffing levels at the agency, which is addressed in the Future Workforce Profile. Creation of RRC’s Critical Infrastructure Division will result in 130 new positions, and federal well plugging funding will likely mean the addition of 35 new inspectors to help oversee plugging efforts.

VIEW THE STRATEGIC PLAN

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ENERGY NEWS

RRC Hires New Director of Critical Infrastructure Jared Ware has been hired as the RRC’s new director of the Critical Infrastructure Division.

He earned a Bachelor of Science degree in Geography from the United States Military Academy and a Master of Science degree in Engineering Management from Missouri University of Science and Technology. He later earned a Master of Science degree in Geographic Information Science from Cranfield University in the United Kingdom.

Prior to joining the Railroad Commission, Ware was the deputy director of the Program Support and Environmental Assistance Division at the Texas Commission on Environmental Quality.

He also worked as the senior engineer (infrastructure, energy, and the environment) at the Army Futures Command G4/9 Directorate headquartered in Austin. He previously worked at the RRC in the Oil and Gas Division managing the Well Mapping Department.

Ware served as a Corps of Engineers officer in the United States Army with operational assignments as a deputy district engineer, battalion commander and division engineer.

His academic assignments were at the National Geospatial-Intelligence Agency and the United States Military Academy West Point.

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ENERGY NEWS

RRC Moves Toward Oversight of Injection and Storage of CO2 with Proposed Rules On May 18, RRC’s commissioners approved the publishing of proposed amendments to the agency’s carbon dioxide rules for public comment. The rules concern Class VI injection wells, which are used for the storage of carbon dioxide from energy production, power generation or industrial sources.

The proposed amendments were a first step needed to be able to apply for primacy from the EPA for Class VI injection wells.

The proposed changes and other information will be sent to EPA as part of a pre-application for primacy and allow EPA a chance to start its review. If ultimately approved by the EPA, primacy would mean that operators would only need to apply with the RRC for Class VI permits rather than both agencies.

“Clearly, there is concern today about levels of carbon dioxide in the atmosphere and its impact on the environment,” said Leslie Savage, RRC’s Chief Geologist. “Class VI injection wells have the potential to be part of the solution by trapping the CO2 in appropriate geologic formations. We hope our program will be able to streamline the process and allow for the timely issuing of Class VI permits.”

Primacy allows the EPA to delegate its authority to states, provided they meet the federal government’s minimum standards.

To see the proposed changes to RRC’s Chapter 5 rules on carbon dioxide injection and to comment, visit the following webpage.

The proposed amendments would modify various sections of RRC rules, including those describing the applicability of the rules, application requirements, notice and hearing requirements, permit standards and reporting, recordkeeping and more.

ENERGY NEWS

VIEW THE PROPOSED RULES WEBPAGE

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ENERGY NEWS

RRC Earns Award for Seismic Monitoring, Response The RRC has been working with stakeholders, including operators, to develop response plans for the SRAs to reduce the frequency and intensity of injection-induced earthquakes.

The Railroad Commission and the University of Texas at Austin’s Bureau of Economic Geology were both recognized in May with the Bruno Hanson/Midland College Environmental Excellence Award for collaborative efforts with the TexNet Seismic Monitoring Program.

“We are honored to receive this award,” said Paul Dubois, Assistant Director of RRC Technical Permitting. “We’ve put a lot of work into the response plans and developing best practices for disposal well permitting in seismic areas to better protect the residents of the Permian Basin and the environment. And we will continue to do this important work.”

The annual award, which was presented at the Permian Basin Environmental Regulatory Seminar, recognizes exceptional achievements in environmental stewardship and is named for the geologist Bruno Hanson, who was a pioneer in developing environmentally friendly procedures for the energy industry.

The Midland College Petroleum Professional Development Center works closely with community leaders to identify superior environmental practices in the oil and gas industry.

The first response plan, which was effective at the end of December, was for Gardendale SRA, which is north of Odessa and northwest of Midland, prohibited deep injection below the top of the Strawn Formation, which occurs at around 10,000 feet in depth but can vary.

The RRC has been helping BEG expand its TexNet Seismic Monitoring Program, which has been a critical tool used by the RRC to monitor seismic activity near injection/ disposal wells throughout the state and which was instrumental in the creation of RRC’s Seismic Response Areas (SRA) in West Texas.

ENERGY NEWS

For the Northern Culberson-Reeves SRA – which is adjacent to Guadalupe Mountain National Park and is near the border of New Mexico to the north – the RRC began

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RRC Assistant Director of Technical Permitting Paul Dubois (left) poses with BEG’s Mark Blount and Gretchen Bakke, daughter of Bruno Hanson.

implementation of the first-ever operatorled response plan, which provides variable reductions in disposal volumes of produced water (water that comes out of the ground with oil and gas during production) across all disposal wells and allows for the seismic monitoring stations in the area to provide better data on the precise location of earthquakes.

A response plan is in development for the Stanton SRA, which is north of the Midland area in Martin County.

VIEW THE SEISMICITY RESPONSE WEBPAGE

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ENERGY NEWS

Wave of the Future: RRC BEGINS USE OF ARTIFICIAL INTELLIGENCE TO HELP WITH SEISMICITY REVIEWS

The RRC continues to innovate and draw on hightech solutions in order to improve its processes.

The agency recently began using artificial intelligence to help technical analysts in its Underground Injection Control (UIC) Department conduct seismicity reviews that ensure residents and the environment are protected.

ENERGY NEWS

Seismicity reviews are done for injection/ disposal well permits in areas susceptible to earthquakes and in certain geologic zones. UIC staff programed a machine learning algorithm to help with the large amount of information that needs to be processed and digested.

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Along with some other changes, tasks performed by the machine learning algorithm have enabled UIC to wipe out a backlog of seismic reviews to zero today.

As this illustration shows, Python scripts automatically collect GIS mapping of historic seismic events within a permit application’s area of interest, data which is used by the machine learning algorithm.

Like the technical analyst, the AI program weighs many factors related to the number, severity and proximity of earthquakes and uses a decision tree to assign a grade to the review. The higher the grade, the more the permit would be allowed to inject.

If AI grades the seismic review with low grades, the technical analyst will consult with the agency’s seismologist on whether the permit request should be denied or be allowed a minimal amount of disposal (10,000 barrels per day). The AI process, which has a high accuracy rate, assists the technical analyst, who reviews the data and ultimately makes the final judgment.

“Over time, since we are accruing more data every day, we will be able to produce more accurate models by feeding the machine learning algorithm more data,” said Sean Avitt, Manager of the UIC Department. “It’s not a replacement for our technical analysts. It’s a tool that not only allows them to do their jobs more quickly, but it helps them make the best possible decision on each seismic review.”

VIEW THE SEISMICITY REVIEW WEBPAGE

By embracing technology, including the automation of certain tasks, the time it takes for injection/ disposal well permits went from more than 100 days in November 2018 to about 20 days presently.

More importantly, AI also ensures consistency in permitting decisions and how seismic and other factors are considered.

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ENERGY NEWS

RRC EXPERTISE The U.S. Department of the Interior’s Office of Surface Mining Reclamation and Enforcement requested that RRC’s Surface Mine Reclamation Division train its counterparts from Arkansas, which had a rash of staff turnover because of retirements. The federal body sought RRC’s help because of the success of its SMRD program.

RRC inspectors demonstrate mine inspection methods during a tour of reclamation projects with their Arkansas counterparts. The inspectors are discussing active pit operations and reviewing dragline advancement of the pit, pit sizes and the type of equipment used to uncover the coal seams.

ENERGY NEWS

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RRC SMRD inspector Cade Harris explains reclamation progress and techniques with Ashlon Wasko of the Arkansas Department of Energy and Environment. The area in front of them had just been leveled and graded.

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ENERGY NEWS

COMMISSIONERS GIVE 2022 TEXAS COAL MINING RECLAMATION AWARD TO MARSHALL MINE Caddo Creek Resources’ Marshall Mine is the latest recipient of the Texas Coal Mining Reclamation Award, which was recognized by RRC’s commissioners on May 3.

Commissioners noted the company’s efforts to return the area back to its natural state.

Caddo Creek Resources transformed the East Texas mine from full operation to complete reclamation in less than 18 months. To do this, they moved about 4.5 million cubic yards of material, including 2.5 million cubic yards of spoil and 2 million cubic yards of soil suitable for plant growth and replanted the area.

Most of the mine (77%) was converted to fish and wildlife habitat, and the rest of the area includes pasture, industrial space and reclamation ponds that provide water to wildlife and future cattle or livestock and sedimentation control for any surface runoff before vegetation is fully establishment.

“Caddo Creek Resources exemplified responsible ownership and deserved to be commended for what they accomplished,” said RRC Director of Surface Mining and Reclamation Division Brent Elliott. “The mine, while shortlived, served a useful purpose, but now it has been returned to a state as good as or better than before mining started.”

The mine received its permit in March 2012 and ceased mining in March 2021. Lignite from the 2,400-acre mine was converted to activated carbon and used in a wide variety of filtration and purification products manufactured by the mine’s owner, Cabot Norit Americas.

Over the life of the mine, 1.12 million tons of lignite were produced with a yearly average of 207,055 tons.

The mine will continue to be monitored for at least five years to ensure water quality standards are met and vegetation quality and quantity has been demonstrated.

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A reclaimed area at the Marshall Mine with furrows of planted trees.

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ENERGY NEWS

RRC TO REQUIRE ONLINE SUBMISSION OF DISPOSAL/INJECTION WELL MONITORING REPORT The RRC will no longer accept hard copy filings of Form H-10, Annual Disposal/Injection Well Monitoring Report effective Sept. 1. Oil and gas operators should file the form online using the RRC Online System.

For more information on filing the Form H-10 online, reference the Injection Well Annual Report on the RRC website.

To access the Form H-10 in the RRC Online System, the organization’s designated security administrator must assign the “H-10 Filing System” filing rights to each user’s RRC Online System account. If your company needs to set up security administrator rights to file online, view the instructions on RRC website.

The Form H-10 filing cycle is staggered by testing county for the field in which the well is completed. Operators are notified via mail three and a half months prior to the form’s due date.

The due date of the Form H-10 filing cycle is available via the RRC Online System.

To view a RRC webinar how to locate the due date and Form H-10 cycle in the RRC Online System, visit the AdminMonitor website.

If you have questions regarding this notice, contact the Injection-Storage Permits Unit (UIC) of the RRC’s Oil and Gas Division at H10info@rrc.texas.gov or 512-463-6792.

When a Form H-10 is submitted online using the RRC Online System, the system will generate a print-friendly PDF. All reports are available to view in the RRC Online System after the Form H-10 is processed.

ENERGY NEWS

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PUBLIC CAN COMMENT ON PROPOSED REVISIONS TO FORM P-16, ACREAGE DESIGNATION The public is invited to comment on proposed revisions to RRC’s Form P-16, Acreage Designation and its instructions.

The proposed revisions include three changes to the Form P-16 and applicable changes to the instructions.

1. Addition of ownership intervals in Section II. 2. Removal of acreage assignments from Section V. 3. Addition of ownership interval information in Section V. The proposed revisions to the Form P-16 instructions provide clarity related to the inclusion of depth severances when needed for reporting purposes.

Public comments will be accepted through June 3. To view the proposed revisions and submit a comment, visit the RRC website at https://www.rrc.texas.gov/forms/proposed-form-amendments/.

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ENERGY NEWS

RRC ACCEPTING COMMENTS ON REVISIONS TO FORM T-1, MONTHLY TRANSPORTATION AND STORAGE REPORT The RRC is accepting public comment on proposed revisions to the Form T-1, Monthly Transportation and Storage Report and its instructions.

The proposed revisions are purely cosmetic. There are no new data items, and no existing date requirements been removed.

The updated Form T-1 is now in a fillable PDF format along with reported totals auto-calculated within the form.

The instructions have been expanded to clarify filing procedures along with examples of how to properly assign receipts and deliveries. The proposed revisions make the necessary changes to align with the form.

Public comments will be accepted through June 3. To view the proposed revisions and submit a comment, visit the RRC website at https://www.rrc.texas.gov/forms/proposed-form-amendments/.

ENERGY NEWS

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

In May, Chairman Christian traveled to Denton, Borne, Galveston and more cities across the state, meeting with constituents and discussing the importance oil and gas plays in our economy. He talked with Texans about how the U.S. should be divesting from hostile countries and harnessing American oil and gas, especially right here in Texas, to alleviate rising energy costs and growing inflation. He boasted that Lone Star State is ready to meet U.S. energy needs to lower costs for hardworking Texas, should the Biden Administration get out of the way and let Texas lead.

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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

This month, Commissioner Christi Craddick and the Railroad Commission of Texas unveiled the Texas Electricity Supply Chain Map to legislative staff and TERC members. This release comes after months of hard work and collaboration with our partners at the Public Utility Commission, Electric Reliability Council of Texas, Texas Department of Emergency Management, and industry leaders.

By overlaying the data provided by each agency, Texans will be better served during weather-related emergencies.

Additionally, Commissioner Craddick was pleased to provide updates to several Chambers of Commerce Leadership classes at the Texas Capitol. Members of Leadership Abilene and Leadership Sweetwater were very engaged with the state government process, and Craddick appreciated the opportunity to share regulatory updates on the oil and gas industry in Texas.

ENERGY NEWS

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

In May, Commissioner Wright met with his counterparts from across the nation at the Interstate Oil and Gas Compact Commission’s (IOGCC) Annual Business Meeting in Oklahoma City. Commissioner Wright provided an update of recent RRC actions to IOGCC’s members and discussed the importance of clear, consistent, rules and regulations at both the state and federal level to further promote and develop our nation’s domestic oil and gas resources.

Commissioner Wright also spent time with a congressional delegation in Houston where he provided an update on the Railroad Commission’s Class VI injection well permit application for underground storage of carbon dioxide and discussed the significant interest and financial investments being made throughout the Texas Gulf Coast to advance carbon capture and storage (CCS) projects.

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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.

LA U N C H T H E P U B L I C G I S V I E W E R4