The Chairman’s Blog 11/7/2020
The oil and natural gas industry is a vital part of the economy. It is especially essential in rural communities and small towns...
Texas has long been a top producer of oil and natural gas, a legacy which dates back to the early 20th century and has provided vast economic and societal benefits.
Oil and natural gas play a fundamental role in our lives, contributing to important, everyday products like transportation and heating fuel, plastics and synthetic materials, lifesaving pharmaceuticals and electric generation — in addition to providing more than $14 billion to the Texas economy in the form of taxes and royalty payments and hundreds of thousands of jobs last year alone.
The historic gusher at Spindletop in 1901 ushered in the beginning of Texas’ oil era; and nearly a century later, Texas was the birthplace for a new combination of techniques which would revolutionize the industry. Hydraulic fracturing combined with horizontal drilling allows for the increased production of oil and gas trapped within shale rock, once thought unattainable. However, this process also requires an increase in water used to produce
those hydrocarbons. The water used to produce a well which flows back to the surface post-production, flowback water, and the water naturally occurring within a geologic formation, or produced water, are now significant byproducts of oil and gas production. The proper management of such water is not an option — it is a necessity.
The most popular form of produced water management is to dispose of the fluid through injection into disposal wells. These wells are governed by strict federal and state regulations. The Railroad Commission of Texas is the state authority with regulatory oversight of disposal and injection wells in Texas, with Statewide Rules 9 and 46 being the principal rules governing these wells. Although these rules were recently updated in 2014 in light of a series of seismic events, this paper puts forth even greater recommendations on potential amendments to SWR 9 and 46.
The proposed recommendations specifically revolve around the concept of bifurcating rules to create two different levels of well categorization — high-volume/high-pressure wells, and low-volume/low-pressure wells. In order to greater account for risk profiles of each well, all high-volume disposal wells (HVDWs) should be subject to heightened standards from a permitting and regulatory perspective.
For HVDWs, recommendations include expanding the area of review from 1/4 mile radius to 1/2 mile radius; increasing the permitting fees; and prohibiting the conversion of a producing well to a HVDW.
Additionally, the paper suggests increased beneficial reuse of produced water in lieu of disposing the fluid and removing it from the hydraulic cycle. Beneficial reuses of produced water include, but are not limited to: use in hydraulic fracturing fluid and other wellbore uses; mining; power generation, such as cooling ponds; irrigation of nonedible crops and large-scale watering operations; irrigation of consumable crops; and potentially even drinking water.
The specific quantities suggested in the recommendations are largely conceptual, intended begin a dialogue around implementing such thresholds. As with all regulations, much input should be received from industry and other stakeholders, and consultation with academia should occur to ensure a solid basis in science and fact before solidifying a new numerical standard in rule.