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House Energy Resources met on May 17 to take up a number of bills. This report focuses on SB 387, SB 1258, SB 1582, and SB 1668. The full notice can be found here. A link to the video archive of this hearing may be found here.

 

Vote Outs (all going to general calendars)

SB 387 (Schwertner) (10-0)

SB 1258 (Birdwell) (9-1)

SB 1668 (Hughes) (10-0)

SB 1582 (Hughes) (10-0)

 

SB 387 (Schwertner) – Relating to the appeal of rates for water or sewer service charged to certain customers of a municipality

  • Reynolds – Requires an oil and gas well permit applicant to notify the railroad commission of a previous blowout at an adjacent well sight when the applicant is drilling in a county with more than 750,000 people and if two wells are in the same geographical location

 

Adrian Shelley, Public Citizen – For

  • Currently no provision that allows or requires notification of blowouts to the commission, this bill would fix that

 

Jason Clark, Railroad Commission – On

  • Geren – There is no current reporting requirement for blowouts?
  • Not at the present time, there are blowouts that have to be reported to field operations when a well has a problem
  • This bill would require us to change the ability for the operator to notify us on the W-1(drilling permit application) that they have had a blowout before they apply for a new permit
  • Darby – So the bill envision the commission will adopt rules? Walk us through the meaning of the language, “criteria for determining whether a side is adjacent to another side.”
  • Currently we do not have the term “adjacent” as a definition on our current rules
  • Would have to go through rule making process and define what adjacent would actually mean
  • Craddick – Why don’t we just amend it and make it statewide?
  • We would go through the same rule making process, no difference we would just have a greater scope

SB 387 left pending

 

SB 1258 (Birdwell) – Relating to the duty of a lessee or other agent in control of certain state land to drill an offset well, pay compensatory royalty, or otherwise protect the land from drainage of oil or gas by a horizontal drain hole well located on certain land

  • Goldman – Companion of HB 3409
  • Statute requires state land operator drilling a well, if a well is drilled, on an adjacent track within a certain distance
  • Will not apply to state lands managed by university lands, will only apply to state lands managed by the GLO
  • Craddick – Why are we making it different for the GLO than everyone else?
  • We spoke to the GLO and they are agreeable to this
  • Craddick – The GLO always wants something different than everyone else; do we have anyone here to speak on their behalf?
  • Ok and yes, we do

 

Robert Hatter, General Land Office (GLO) – On 

  • Question was “Why does the GLO wish to be considered differently, hoe does it apply to these provisions?”
  • Can’t speak for university lands, but GLO has reviewed this and we feel comfortable with it
  • We also have an offset obligation in our existing leases, bill allows us to amend those
  • Craddick – Tell me what makes y’all different than anyone else out there?
  • I do not think we are any different

 

Todd Staples, Texas Oil & Gas Association – For

  • This change needs to occur to modernize the statute
  • Craddick – I do not think that GLO should exempt themselves from everything around this state, they should do it like everyone else
  • Well actually, I think this does bring them to them like everyone else, moves them into modern horizonal well drilling statutes; they agree with us on the setbacks
  • This brings the GLO in compliance to modern standards
  • Geren – So you are telling me university lands is out and GLO is in to the 330 setbacks, correct?
  • Yes, that is correct
  • Geren – Currently they are under a 1000 ft setback because of vertical wells, but this brings them to the 330 setbacks because of the horizontals? But it leaves university out?
  • Correct
  • Geren – I think that is a mistake, but thank you

SB 1258 left pending

 

SB 1582 (Hughes) – Relating to examinations for applicants for or holders of licenses or registrations to perform certain activities pertaining to compressed natural gas or liquefied natural gas

  • White – Provides commission with the flexibility to use third party testing services including online proctoring services for the administration of propane, natural gas, and compressed certification examinations
  • Testing service company usually must collect an examination fee from an LPG certification applicant, instead must have the applicant pay the fee directly to the railroad commission

SB 1582 left pending 

 

SB 1668 (Hughes) – Relating to licensing and examination requirements for persons engaged in liquefied petroleum gas activities

  • Chair Goldman offers CS
  • Raney – Senate companion to HB 3885, CS adds examination provision at the request of the railroad commission
  • Removes unnecessary barriers to propane dispensing, will enhance the supplier’s ability to meet propane demand
  • Exam must be administered by the railroad commission or proof of completion must be submitted
  • Craddick – Is this different than the house companion?
  • Yes, it has a railroad commission examination that the other one did not have

SB 1668 left pending