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.
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.
16 Tex. Admin. Code § 3.9.
16 Tex. Admin. Code § 3.46(a).
Of note, the RRC may still require that applicants submit pressure-front data; however, this data would likely be requested only if the well is an area “where conditions exist that may increase the risk that fluids will not be confined to the injection interval.” See infra text accompanying note 6. A “pressure front” is defined as the zone of elevated pressure that is created by the injection of fluids into the subsurface. A “10-year, five psi pressure front boundary” is defined as the boundary of increased pressure of five psi after 10 years of injection at the maximum requested permit injection volume.
The RRC identifies the following conditions as several factors that may increase the risk that fluids will not be confined to the injection interval: complex geology, proximity of the basement rock to the injection interval, transmissive faults, and/or a history of seismic events in the area shown by information from the USGS.