Texas Railroad Commission Finalizes New Rule Addressing Seismic Events for Disposal Wells
V&E Shale Insights - Tracking Fracking E-communication, November 14, 2014
Today, the Texas Railroad Commission (RRC) published a new rule aimed at reducing seismic activity linked to oil and gas disposal wells. Disposal wells are permitted by the RRC to safely dispose of nonhazardous produced water (saltwater) and hydraulic fracture flowback fluid from oil and gas wells.
On October 28, the RRC voted unanimously to amend its existing disposal well regulations, located at Title 16, Sections 3.9 and 3.46 of the Texas Administrative Code, to require companies seeking permits for disposal wells to provide seismic activity data in permit applications, 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 likely to be, or determined to be, causing seismic activity. In particular,
- Applicants for new disposal wells must provide U.S. Geologic Survey (USGS) data regarding historical earthquakes within a circular 100 square-mile area centered on the proposed disposal well location;
- The RRC may require applicants to provide additional information, including logs, geologic cross-sections, pressure front boundary calculations, and structure maps, to demonstrate that disposal fluids will remain confined if the well is to be located in an area where conditions exist that may increase the risk of fluid migration;
- The RRC requires monthly monitoring and annual reporting of injection rates and pressure, but may require more frequent monitoring and reporting for injection wells located in areas where conditions exist that may increase the risk of fluid migration; and
- The RRC may modify, suspend, or terminate a permit, including modifying disposal volumes and pressures or shutting in a well, if scientific data indicates a disposal well is likely to be or determined to be contributing to seismic activity, after notice and an opportunity for a hearing.
The primary difference between the amendments proposed by the RRC in August 2014 and the final rule relates to requirements for permit applicants. Specifically, the proposed rule would have required applicants to include USGS historical seismic event information within the estimated radius of the 10-year, five pounds per square inch (psi) pressure front boundary of the proposed disposal well location. The final rule, however, takes a simpler approach, adopting the 100 square-mile area language discussed above. The requirement to calculate a pressure front boundary around a proposed disposal well location was moved to Sections 3.9(3)(C) and 3.46(b)(1)(D) and will be required only in certain limited circumstances where additional information is necessary to demonstrate that fluids will be confined if the well is to be located in an area where conditions exist that may increase the risk that fluids will migrate from the injection interval.
The only other difference between the proposed and final rules relates to the RRC's authority to modify, suspend, or terminate a permit. The adopted rule replaces the phrase "if injection is suspected of or shown to be causing seismic activity" with the phrase "if injection is likely to be or determined to be causing seismic activity."
The final rule, available here (see page 8988), was published in the Texas Register on November 14, 2014, and the rule will become effective November 17, 2014.
For further information, please contact Vinson & Elkins lawyers Larry Nettles, Jay Rothrock, or one of the members of V&E's Shale and Fracking practice group: John B. Connally, Casey Hopkins, Jim Prince, or Jim Thompson. Visit our website to learn more about V&E's Environmental and Natural Resources practice.