On Tuesday, October 28, 2014, the Texas Railroad Commission unanimously adopted amendments to rules concerning disposal wells in areas that have experienced or are likely to experience seismic activity. As covered by the North America Shale Blog in August, the amendments were proposed in response to questions from residents in towns sitting atop the Barnett Shale Formation in North Texas of whether a connection exists between disposal wells, which are used to dispose of saltwater and fluids used in hydraulic fracturing operations, and increased seismic activity in the area.
The amendments adopted on Tuesday take effect on November 17, 2014. The highlights of the amended rules are as follows:
- Applicants for new disposal wells are required to conduct a search of the U.S. Geological Survey seismic database for historic seismic activity in a 100-square mile area from the proposed disposal well site;
- The Railroad Commission now has authority to modify or suspend or terminate a disposal well permit if it is determined that a disposal well is likely to be or determined to be contributing to seismic activity;
- Operators may be required to disclose current annually reported volumes and pressures for disposal wells on a more frequent basis if the Railroad Commission has a need for this information;
- Disposal well permit applicants may be required to provide information related to pressure front boundary calculations and demonstrate that disposal fluids will remain confined if the disposal well is determined to be located in a high-risk seismic area; and
- The Railroad Commission has estimated that the probable cost for disposal well applicants to comply with the adopted amendments is an additional $300 per permit application.
The most notable change between the proposed rule and the final rule relates to Railroad Commission’s authority to potentially require a disposal well permit applicant to provide pressure front boundary calculations. The proposed rule would have required each applicant to provide information from the U.S. Geological Survey regarding the locations of any historical seismic events 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 provides that pressure front boundary information may be required in areas that exhibit complex geology or have a history of seismic activity.
Railroad Commission Chairman Christi Craddick believes the amended rules “follow science in protecting our natural resources while at the same time providing a stable regulatory environment for our oil and gas operators.” Commissioner David Porter stated that the “rule amendments will allow us to further examine seismic activity in Texas and gain an understanding of how human activity may impact seismic activity, while continuing to allow for the important development of our energy resources in Texas.”