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The House Committee on Environmental Regulation met on March 8, 2021 to discuss matters related to methane flaring, climate change, regulation, technological advances, and radioactive waste disposal. A video of the hearing can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

Jay McKenna, CEO of Nacero Inc.

  • High growth job-creating business for American drivers
  • Builds, owns, and operates manufacturing facilities with a low carbon footprint
  • Gasoline has 50% lower footprint, 100% Sulphur content production, and will integrate carbon-capturing technology
  • To be sold using existing retail outlets; looking to go nationwide
  • Company also co-produces hydrogen, bi-product of making gasoline
  • 3 facilities across US, with one $8 billion project being planned in west Texas, enough gasoline to serve 10 million drivers
  • Footprint will reduce carbon emission across the whole US by 5%
  • Will focus on cities where pollution is the biggest problem
  • Methane from flared gas will be captured and used
  • Morales Shaw – Where is the technology being used already?
    • The technology comes from a Danish company, will use the same system as a Turkmenistan project
  • Morales Shaw – Could you talk more about the methane flaring?
    • As natural gas is produced, there is no sink for it, we want to capture this
  • Morales Shaw – So you are reusing it?
    • Yes
  • Morales Shaw – What about transportation?
    • We will work that out along the way; are working with existing infrastructure and planning to see what is needed
  • Dean – Is this a startup or an existing business?
    • We are a privately held small independent business based out of Texas
  • Dean – Are you waiting on anything from the state to proceed with the project?
    • The project will be project-financed through larger investment banks and we will run through local tax evaluation processes and discuss with TCEQ
  • Dean – When will you start?
    • Objective is to break ground by the end of the year
  • Goodwin – Concerning the flaring aspect, are you capturing after the gas is produced?
    • We would connect it to pipelines and bring to facilities before it is flared
  • Hal Bouknight, COO of Nacero Inc. – Will be happy to work the legislature

Dr. Cyrus Reed, Sierra Club

  • Believes climate change is happening as illustrated by extreme weather events like the winter storm a couple weeks ago which disproportionally affects vulnerable and minority populations
  • Texas is number one in carbon dioxide emissions, 700 million metric tons, 1/3 industrial, 1/3 electric, and 1/3 transportation
  • Texas is number two behind California with issues relating to smog
  • Looking to prioritize community protections in legislation and above ground storage
  • Seeking enforcement for bills proposed
  • Would like to have more monitoring for ozone-related pollution in hot spots
  • Kuempel – Would you base that on population?
    • There are guidelines on EPA, will consult
    • Would like to see environmental justice emphasized in permitting
    • Ozone impacts people on a daily basis, cities in the summer tend to violate the ozone requirements
    • Going to take revenues from TERP and give to TCEQ, a total of $250 million in HB 1
    • Oil and gas air pollution, very concerned about methane, 84 – 87 times more potent
  • Reynolds – Could you elaborate on the impact of climate change on the winter storms?
    • People said these are 500-year events, but these have been happening intensely for the past several years
  • Reynolds – Are you familiar with President Biden’s executive order on climate change?
    • Yes, I’ve seen it
  • Reynolds – Are you familiar with who regulates the study of clean air and water?
    • The EPA
  • Reynolds – Are you familiar with the statement from the head of the EPA?
    • Yes
  • Reynolds – Are you aware the current administration is studying climate change?
    • Yes, the state legislature can work in a bipartisan fashion to take care of this
  • Reynolds – Do you believe the TCEQ should be studying climate change?
    • Yes, there are bills that have been filed to get these studies going
  • Reynolds – Have you seen TCEQ do any of this regarding best practices?
    • No, they stopped looking into it years ago when it began to be politicized
  • Goodwin – You touched on pollution that comes from startups and shutdowns, is this avoidable?
    • We should institute a plan to not have all companies act in unison, which exaggerates the effects, there are preparations that can be enacted

Todd Staples, President of the Texas Oil and Gas Association

  • The methane coalition was formalized in December of 2019
  • Methane, emissions, flaring, and infrastructure are the four categories of interest
  • Texas decreased gas flared by 67% from June 2019 to November 2020; operating at a gas capture of 99%
  • Texas oil production and flaring plummeted as a result of economic havoc from the pandemic; declined 29% and 60% respectively from January 2020 to November 2020
  • Carbon capture and technology is being used to repair leaks
  • Last year, the coalition produced recommendations to address flaring in Texas as asked by RRC
  • The coalition has a goal to end routine flaring by 2030; some companies will exceed that date, but some need that time
  • US Energy carbon dioxide emissions are at 30-year lows; US has reduced aggregate emission by 73% since 1970
  • 99% of gas in Texas is being captured for reuse
  • Emerging technologies is the solution
  • Dean – Does it seem like free enterprise works better than government overreach?
    • Regulation prevents the further study of innovation, most already are committing to lowering emissions
  • Dean – Could you elaborate on the technologies being used?
    • Companies are replacing valves, using satellite imagery, drones, and a variety of leak detection and repair equipment
  • Dean – A standard valve uses packing to keep water in, so it’s good to hear this technology is being used
    • We will make this information more accessible
  • Morales Shaw – How does the work of the coalition transfer to smaller or medium-sized industry players?
    • We have a broad outreach, we represent all sizes and different types of productions
  • Goodwin – Black Rock and JP Morgan said they would end flaring by 2025, how are they doing this earlier?
    • They are finance companies with the funding to do so, not operational companies, but that is meaningful progress nonetheless
  • Reynolds – Do you support regulations on fugitive methane or NOx emissions such as requiring optical cameras and quarterly inspections?
    • NOx emissions are regulated by TCEQ
    • We want to reduce those emissions, but will leave that to TCEQ, companies are already making a lot of investments to reduce emissions
  • Dean – Paris Climate Accord, US reduced more carbon dioxide emissions more than those a part of the accord?
    • Yes, either in 2019 or 2020 the US reduced emissions more than those in the accord
  • Morales Shaw – Does the coalition exerts any energy or funding to renewable energies?
    • The coalition itself does not, but many of our member companies have invested quite heavily in wind and solar; does not want to pick “winners” and “losers”

Stephen Raines, Executive Director of the Texas Low Level Radioactive Waste Compact Commission

  • Regulates the transport of radioactive waste out of the state and into the state, join venture with Vermont, created in 1988
  • Duties consist of rulemaking, deny petitions, coordinate timing with operators, and tasked with adopting contingency plans
  • Low-level radioactive waste consists of class a, class b, and class c waste
  • A lot of medical waste is stored
  • DSHS plays a major role in what can come in and out of the state, TCEQ is tasked with oversight and licensing
  • Kuempel – Why Texas, Vermont, and Maine?
    • The federal government wanted the states to come up with solutions to dispose of waste, but these states aligned with their solutions
  • Landgraf – Could you go into detail on the frequency of contingency planning?
    • Ongoing discussion at the commission, we have a draft plan and are waiting for review
  • Goodwin – Do you oversee the waste control specialist?
    • Yes
  • Goodwin – What is your role exactly?
    • You apply for a permit to have an agreement to ship waste to the state or from the state and we regulate and make sure they comply with statutes
    • Will not accept waste from foreign countries
  • Goodwin – So this can come from any other state?
    • Yes
  • Goodwin – So the paperwork will say what they are sending?
    • Yes, what type of waste, how much, and the source
  • Goodwin – What percentage of each class is there?
    • It is not that specific, more of a WCS question
  • Morales Shaw – Each permit application goes online for public comment and the decision takes 35-100 days?
    • Correct

Ashley Forbes, Deputy Director of Radioactive Waste at TCEQ

  • TCEQ is tasked with licensing at the low-level compact waste sites
  • We review criteria for approval of applications to safeguard public safety

Edward Selig, General Manager for the Advocates for Responsible Disposal in Texas

  • Represents generators for radioactive waste; work with UT and A&M
  • Supports state efforts to establish and provide a safe way to dispose of radioactive waste
  • Support disposal rates that are fair and reasonable
  • Low-level classification has a lot of medical waste
  • Resins, filter materials, contaminated hand tools, piping, lab coats, fluids, etc. can all be low-level waste
  • Class A has the highest level of radioactive waste, least potent
  • First choice for Texas generators are waste support specialists
  • In 2020, Comanche Peak disposed over 4,174 cubic feet of low level radioactive waste to the WCS Facility; was majority dry active waste
  • In 2020, the South Texas Project shipped 16,700 cubic feet of Class A dry active waste and 190 cubic feet of dry active Class B waste
  • Types of waste when we talk about low level dry active waste is not spent fuel or generated from nuclear weapons; just needs to be disposed of in a safe and economic way

David Carlson, President of Waste Control Specialist at the Texas Compact Waste Facility

  • Provides an overview of the Texas Compact Waste Facility; waste is generated by everyday activities
  • Facility was 100% privately financed and is a 14,000-acre site, 10% is used for facilities
  • 9,000 cubic feet of disposal space, used 2% past nine years
  • Local community has approved of the facility and voted for a $75 million bond to construct the facility which was paid back in 2018
  • 4 years without any lost time accidents; workers receive less radiation on the job than they do in the natural environment
  • 343 ground monitor wells, does constant sampling
  • 294 required submittals, and 26 notifications provided to Texas
  • 2 on-site oversight officials and we bury waste 90-100 feet below surface
  • No faults in the location and the Andrews facility is 3,400 feet above sea level
  • 90% of facility operations funded from out-of-state
  • Waste is safely stored for thousands of years to come
  • Not connected to any aquifers
  • Goodwin – What is an example of a near-miss?
    • If someone is backing up a truck, they could not honk to let people know they are backing up
  • Goodwin – You mentioned not having high-level at your site, so you do not have plutonium?
    • We do not take any type of reprocessed high-level waste
  • Goodwin – Is it correct that if you do not take in more waste, then your operation will not be economically viable?
    • Three things that keep us from being economically viable long term, limits on the amount to bring in, limited storage space, and rates are set by rulemaking
    • Issues arise because we cannot respond to market waste because we were set up like a public utility
    • We are taxed by 31%, while states like Utah pay 5-10% in taxes
  • Goodwin – Is there a concern about the potential for accidents?
    • I am sure there are, but we have very safe transportation, regulated by DSHS
    • Have a variety of emergency protocols
  • Goodwin – Is all of the waste stored the same way?
    • We dump all waste at our disposal cells in the ground
  • Kuempel – Could you discuss these cells?
    • We have four cells for varying levels of waste; one of which is for federal use only and other will eventually be the property of the federal government
    • Overviews the make-up of the disposal cells
  • Landgraf – Could you tell us more about the tax surcharges?
    • 5% goes to the host community, 1.25% goes to activities of the compact commission, 20% to the environmental radiation fund (abandoned uranium sites), and 5% to general revenue
  • Landgraf – The surcharge is paid to the state and covers TCEQ operations?
    • Cost to the site is over and above the surcharge and $10 per cubic foot funds emergency responsiveness activities
  • Landgraf – Who is more in line with the mainstream between Texas and Utah?
    • Utah charges 5-10% to pay for regulators while we are paying 3 times as much
    • We are the most expensive because we have the most robust process
  • Dean – How often do you sign contracts?
    • We tend to sign 3-4-year contracts that go through TCEQ
  • Dean – Are the fees passed back to the customer?
    • If you take price plus tax, it goes to cover the cost of the site
  • Dean – What committee reviews the financial sustainability?
    • The fees can only be changed legislatively
  • Dean – Sounds like this needs to be looked at
  • Morales Shaw – How long will the facility last?
    • Approximately 500 years at the current rate
  • Where is the beginning of habitability from your site?
    • About 5 miles, but it is safe on-site
  • Goodwin – Do you have any plans to take in high-level waste?
    • Without the consent of the state of Texas, we cannot have our application accepted, the Governor has been clear on this
  • Landgraf – If any member wanted to see the facility, could that be accommodated?
    • Yes, we have COVID-19 protocols
  • Reynolds – Could we listen to Mr. Garcia as a resource witness
  • Landgraf – Yes

Ramiro Garcia, Deputy Executive Commissioner at TCEQ

  • Reynolds – Did you hear the speakers today?
    • Yes
  • Reynolds – Were you aware of Biden’s executive order on climate change?
    • No
  • Reynolds – What is TCEQ’s relationship with the EPA?
    • Our working relationship during disasters is close to address the issues
  • Reynolds – You said TCEQ has not studied climate change, but in light of recent climate change topics, do you not think it is prudent to look into this?
    • We enforce statutory requirements at the direction of the legislature
  • Reynolds – So without lawmaking, the TCEQ will not do it?
    • We do after-action reviews, but have not looked at specific climate change issues
  • Reynolds – In looking how to prepare for future events, we are not even looking at Biden’s agenda, how are we not considering this?
    • We will follow the direction of the legislature
  • Reynolds – Do you use best practices without the legislature?
    • Yes, we have processes to take into consideration, such as the optimal gas imaging cameras
  • Reynolds – Legislators are not necessarily experts, has TCEQ given us any guidance related to the study of climate change?
    • Not to my knowledge