The regular session of the 2013 Texas Legislature has adjourned, and a great deal of the session's activity involved the state's oil and gas industry. In general, several pieces of legislation passed by the Legislature aid the industry, and none of the legislation passed does any great harm. However, the Legislature also failed to take action on common carrier status, an important topic where the industry needs relief and clarification in light of the demands for more energy infrastructure.
Major energy-related legislation passed in 2013 includes:
Water Infrastructure. A primary concern in Texas is ensuring a water supply sufficient to meet the long-term needs of a growing Texas. Through a trio of bills (SJR 1, HB 4 and HB 1025), the Legislature provided initial funding to begin implementing the state's long-neglected State Water Plan. Subject to voter approval in November 2013, $2 billion from the Rainy Day Fund will begin to finance new water infrastructure projects.
Water Recycling & Reuse. Industry worked with the Legislature to encourage water recycling and reuse in exploration. HB 2767 enhances predictability and fairness by transferring ownership of waste material from the producer to the recycler, and by limiting liability for the recycler with regard to future uses of the waste material.
Transportation. HB 2300 and SB 1747 create a $225 million grant program through which counties can access state funds to build and repair roads impacted by energy production. The bills also authorize counties to establish County Energy Transportation Reinvestment Zones in order to direct local property tax revenues toward these road needs. HB 2741 significantly increases penalties for non-compliance of vehicle weight limits.
Environmental Permitting. HB 788 streamlines permitting and reduces federal involvement by authorizing the Texas Commission on Environmental Quality (TCEQ) to adopt a greenhouse gas emissions permitting program that includes and reflects federal regulations.
Well Logs. HB 878 allows for electronic filing of well logs with the Railroad Commission.
Railroad Commission Modernization. HB 1025 appropriated $24.7 million toward much-needed information technology modernization at the Railroad Commission.
Several major pieces of energy legislation did not pass in 2013:
Common Carrier. HB 2748 was sorely needed legislation to address the uncertainty and vulnerability created by the recent Denbury decision on establishing "common carrier" status. Unfortunately, a coalition of landowner rights activists, agricultural interests and trial lawyers succeeded in blocking this bill, so the threat of county by county litigation remains.
Water Well Permitting. HB 873 on water well permitting was opposed by the industry because it would have totally removed the long-standing exemption for water used in production. This bill was defeated, but all observers expect this issue to return next session.
Hydraulic Fracturing. HB 448 would have imposed an unworkable requirement that oil and gas operators provide advance disclosure and notification to landowners adjacent to a production site of the chemicals used in hydraulic fracturing. This and other similar bills restricting fracing were defeated.
Foreclosure Sale of Property. HB 2590 would have provided that a lease for the production of minerals survives foreclosure of a property. However, this bill was vetoed by the Governor.