There have been some recent developments at the RRC in Austin regarding commercial disposal operations in Harrison, Panola & Shelby Counties.  This three county area has been under additional scrutiny due to charged disposal zones for quite some time now.  The Commission ceased issuing commercial disposal permits in this area beginning in 2008.

More recently, the RRC has seen increased pressure from the EPA due to complications at a Class I disposal facility located north of Marshall.  This situation along with the known charged disposal zones have prompted the RRC to take action.

In August, the RRC issued letters to the operators of all 74 commercial disposal facilities in the three county area featuring reduced maximum operating pressures for some operators and additional bottom hole pressure and fall off testing requirements 12 months after the disposal permit modifications go into effect.  The new bottom hole pressure requirements and pressure fall of tests are very restrictive and will cause a majority of the commercial facilities in the three county area to become non-compliant.  Much of the eastern counties’ commercial disposal capacity will potentially be shut in with much of the disposal burden pushed west and/or alternatives such as reuse will have to be implemented where feasible.

Currently, disposal demand in the three county area is approximately 120 million barrels annually.  Of this approximately half of this is handled by commercial facilities and half is handled by producer facilities.  At this point in time, the RRC has not imposed the new permit requirements on the private (producer operated) facilities, however this is potentially on the horizon per the RRC.  

Essentially, the RRC along with the EPA are giving the industry 14 months to develop and implement alternative solutions to disposal in the three county area.  Although this seems very aggressive, few people in the industry see the RRC letting up on this issue until it is convinced that development and production will be impacted.  The AESC (Association of Energy Service Contractors) has led a recent effort of dialogue and meetings with the RRC to explore potential solutions.  They are working on a meeting in the coming weeks in Austin to potentially inform the producers of what is happening and explore remedies to this situation.  

If anyone is interested in participating or would like additional information please feel free to contact me thru this forum.

Best Regards,

Derek St. Amant

President - LATX Operations

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All, 

Please keep in mind that this has a potential to increase disposal costs for Louisiana operations and/or result in new injection being built further west, south, or north.  I encourage you to follow this issue.

This really is a BIG deal and a potentially industry changing event for this region.

 

I suspect the follow on regulatory effects will extend well outside the region and the oil and gas industry.

the old arabic saying goes that 'if the camel gets his nose under the tent, the rest of the camel is soon to follow'. imo, in this instance the rrc and epa are the front and rear halves of that camel.

i believe we can all only wish god speed to those outfits trying to perfect frack water remediation processes that would allow for water to be discharged into surface waters or used for ag irrigation purposes.

VERY IMPORTANT MEETING NOTICE:

TXOGA & AESC (Association of Energy Service Contractors) have a meeting organized for Thursday, 10/16/14 in Austin for continued discussions of this topic.  The target audience for this round of discussions are the producers and operators along with service companies. 

Please pass this on to any other companies or parties of interest:

Pre-meeting at the offices of Dan Hinkle:

 Date:           Thursday, October 16

 Time:           10:00 a.m.

 Place:         1220 Colorado Street.  Suite 430.  Austin

 

Meeting With Operators @ TXOGA Office

Date:           Thursday, October 16

Time:           11:00 a.m.

Place:         Texas Oil and Gas Offices.  304 West 13th.  Austin.

We may have a post meeting as well back at Dan Hinkle's office.

If you plan to attend, please RSVP to Kenny Jordan at kjordan@aesc.net

 

Best Regards,

Derek St. Amant

 

All,

We have our follow up meeting set with the RRC on the Rodessa disposal well issues set for Nov. 6th. Meeting schedule as follows:

12:00 NOON Meeting Dan Hinkle’s office, 1220 Colorado, Ste 430, Austin, TX for lunch and discussions (lunch will be provided)

1:30 PM Meeting at RRC offices with Gil and RRC staff on the issues brought to the table for solutions in East Texas

2:30 PM Back to Dan’s office for follow up conversations and discussion of next course of action

3:30 PM Convene

For those not able to attend, I can do a conference call for Dan’s office but not sure we can do anything at the RRC conference room. If you would like to call in, please let me know when you RSVP.

Call in: 1-866-861-7917

Code: 401186#

To All:

Attached is a summary of the events regarding this subject with notes current thru 11/12/14.  In summary:

  1. The proposed commercial dipsosal permit modifications to operators in Harrison, Panola and Shelby Counties, as written in their current state, would render the majority of the commercial disposal capacity in Harrison, Panola and Shelby Counties out of compliance.
  2. It does not appear that the RRC will relax the 10% reduction to the operating surface pressure to the disposal wells as this has been already been requested by at least two different operators and denied by the RRC.
  3. Alternatives that have been presented to the RRC to extend the areas of review and provide documentation that area wellbores are sufficiently plugged and cemented appear to have been rejected by the RRC.
  4. It appears that the new bottom hole pressure and testing requirements will be applicable to permits in the Pettit and Travis Peak formations which may render them unviable for future disposal.
  5. The final state of the pending permit modifications is not yet known.  The RRC expects to distribute the next revision of the permit modifications in early December.

Best Regards,

 

Derek St. Amant

President

LATX Operations

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Thank you! Folks really need to be paying attention to this

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