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The Texas Commission on Environmental Quality met on July 28th, 2021 to consider hearing requests, special matters, and agreed orders. A recording of the meeting can be found here and the agenda can be found here.

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions 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.

 

Opening Remarks

  • Jon Niermann, Chairman – Today’s meeting is in a hybrid format

 

Hearing Requests/Request for Reconsideration

Agenda Item 1

  • Mary Smith, General Counsel – Application #13488 by Aethon Energy Operating LLC for a temporary water use permit.
  • Niermann – Required to determine if requester has shown a personal interest in the application. None hold water right authorization or are on the water course subject to this application. All fall short of demonstration required. Recommends denying request.
  • Emily Lindley, Commissioner– Agrees
  • Bobby Janecka, Commissioner – Agrees
  • Motion to deny all hearing requests and issue application #13488 prevails unanimously.

 

Agenda Item 2

  • Smith – Application #13487 by Aethon Energy Operating LLC for a temporary water use permit.
  • Niermann – Application is basically the same as Item 1, just different diversion point. Same analysis. Recommend denying request and issuing the application.
  • Motion to deny all hearing requests and issue application #13487 prevails unanimously.

 

Agenda Item 3

  • Smith – Application by Equistar Chemicals LP for a major amendment and renewal of permit number WQ0020750000.
  • Niermann – Single request by Mr. Fred Burkhart, Jr. raises concerns on flooding and erosion. Flooding and erosion are property related issues, but they’re outside of our jurisdiction. Deny request and issue.
  • Lindley – Agrees
  • Janecka – Agrees
  • Motion to deny all hearing requests and grant the renewal and amendment prevails unanimously.

 

 

 

Superfund Matter

Agenda Item 4

  • Smith – Consideration of an administrative order for the McBay Oil and Gas Superfund site. ED is the moving party, followed by interested persons, and finally OPIC.
  • Marc Sebo, on Behalf of Executive Director – Soil and groundwater at the site are contaminated.
    • Executive Director’s remedy has long-term data analysis to monitor plume and ensure stability
    • There are no agreeing respondents
    • Executive Director requests that the commission issues the administrative order
  • Niermann – Crude oil is excluded from the definition of hazardous waste, but it does not refer to any contaminants that may be in crude oil. Is that correct?
  • Sebo – Yes, that is correct.
  • Niermann – So does the sale of skim oil by itself create any superfund liability?
  • Sebo – We would have to take the totality of circumstances into account before looking at that.
  • Niermann – Can you think of any examples where the sale of uncontaminated skim oil created liability?
  • Sebo – The sale of completely uncontaminated skim oil would not create liability.
  • Janecka – Could you comment on the review of potentially responsible parties?
  • Sebo – Several responsible parties were removed prior to bringing this site to agenda. TCEQ determined that we didn’t have evidence to list them as responsible parties on this agenda.
  • Janecka – Can you speak to what decisions we made in terms of new entities that had not been implicated in the past?
  • Sebo – There haven’t been any significant additions to the list in the last decade or so.
    • There has been extensive review of site records, relevant documents, and applicable law in listing the parties before you today.
  • Rod Johnson, Attorney Representing Goldston Oil Corporation – Respectfully disagree with the ED’s recommendation
    • There are no waste disposal connections with this site
    • Met definition of marketable crude oil given by the Railroad Commission
    • Proof of fair market value check paid to Goldston for that oil is the only evidence of connection between Goldston and Valco
    • Goldston did engage with TNRCC
  • Niermann – I don’t imagine that your client had engaged in a sham. I don’t have any reason to think that y’all were engaged in a sham operation, even though it is an accurate statement of the law.
  • Johnson – Me and my client appreciate that. Request that we are fine with the order without Goldston on it.
  • Niermann – ED had identified numerous barrels that included some sediment, which sounds different than skimmed oil. Can you speak to that?
  • Johnson – BS&W accounts for both water and sediment in produced crude oil. It is generally mostly water. When you sell and market a barrel of crude, there is a centrifuge sample done. The definition of marketable crude oil is no more than 2% BS&W, and this amounts to 1%.
  • Robin Morse, Crain Caton & James – The remedy selected seems to be appropriate. The Continental Can Company did not participate because they did not have the opportunity to be involved in early administrative orders.
    • Concerned about the timing for the company
    • Would like to see 10 days changed to 30-45 days
    • Client would like to have the opportunity to be the performing party
    • Not sure why releases were given before remediation was completed in this case
    • Ask that order be revised to allow more than just 10 days from the time it is effective
  • Steve Wells, Mission Petroleum Carriers – We are listed as one of the responsible parties.
    • Mission Petroleum Carriers was not responsible for solid waste or hazardous materials at the site
    • This is associated with only 8 shipments of crude oil petroleum, which is not a solid waste or hazardous material
    • We ask that Mission Petroleum Carriers be removed from the list of responsible parties
  • Office of Public Interest Council – OPIC has no objection to the order
  • Niermann – Does Mr. Morse’s request present any problems?
    • Sebo – Order allows for time extensions to be granted.
  • Niermann – I am alright if the order the way it is, but 10 days does seem pretty tight. Mr. Morse’s request was entirely reasonable, and the ED should exercise discretion.
  • Lindley – The request is reasonable. We could either strongly encourage ED or we could make a motion that they need to allow more time.
  • Janecka – I’m encouraged to hear Mr. Sebo’s description of the ED’s flexibility. This is an understandable matter for people to be caught off guard by.
  • Niermann – TIPRO had filed a letter with concerns on how we’re approaching this. The ED has tried to follow existing law. We’re trying to have a consistent approach. Gives Sebo a chance to offer rebuttal.
  • Sebo – Evidence shows that Goldston has liability under arranger theory of superfund liability.
    • Staff determined that Goldston and Mission Petroleum Carrier waste does not fall under the petroleum exclusion
  • Niermann – If we move forward with this order and it’s in district court, what is our argument and evidence?
    • Sebo – There were shipments that contained contaminants beyond the boundary of the petroleum exclusion.
  • Niermann – Can you go any deeper into that?
    • Sebo – Specifically with regard to BS&W, there is also litigation potential on this site, which is guiding responses.
  • Niermann – There is almost always litigation in these cases, and PRPs will have a chance to review these issues. I just want to make sure we have a record that supports our action.
  • Lindley – Comfortable adopting ED’s administrative order
  • Janecka – Ready to move forward
  • Motion to adopt ED’s proposed order concerning the oil and gas McBay superfund site prevails unanimously.

 

Total Maximum Daily Load Matter

Agenda Item 5

  • Smith – Consideration for adoption of two total maximum daily loads of indicator bacteria in Corpus Christi.
  • Cary Niemann – ED requests the adoption of the total maximum daily loads.
  • McWhirter – OPIC recommends the adoption as recommended by the ED.
  • Janecka – Thanks stakeholder groups and excited to see the implementation of this project.
  • Motion to adopt the two total maximum daily loads for indicator bacteria as recommended by the executive director prevails unanimously.

 

Enforcement

Agenda Items 6-18

  • Melissa Cordell, Enforcement Division of the Executive Director –
    • Total administrative penalties are $508,224
    • $34,413 deferred
    • $172,500 provide for supplemental environmental projects
    • $301,311 to the general revenue
    • Request approval of items
  • McWhirter – Recommend approval of the orders as recommended by the ED
  • Motion to adopt items 6-18 as recommended by the ED prevails unanimously.

 

Monthly Enforcement Report

Agenda Item 19

  • Smith – Consideration of the monthly enforcement report
  • Cordell – 697 effective administrative orders issued and 96 contained supplemental environmental projects
    • Assessed to total of $7,811,600
    • 12 judgements have been issued
    • OCE investigative activity review has been included
  • McWhirter – No questions
  • No action is necessary on this item.

 

Monthly Public Water System Report

Agenda Item 20

  • Smith – Consideration of agency post-incident response actions related to the February 2021 severe winter storm.
  • Jaime Garza, Regional Director of the Office of Compliance and Enforcement – Conducting roundtable discussions
    • Having open dialogue with water system operators, administrators, and stakeholders
    • Gathered information from participants and partner state agencies
    • What is needed for systems to respond better to future weather-related events?
    • Project team is evaluating information on other state’s regulations
  • Niermann – Thanking water system operators for participation in discussion. This is an enormous problem that deserves this kind of attention.
  • Lindley – Can you tell me how many people are participating in resiliency training? How are we getting the word out about that?
    • Garza – We have an email group and training on our website. Doesn’t have the numbers of attendees. Have had positive feedback on the email notification.
  • Janecka – It is always valuable to hear from regional offices. Could you speak to wearing two hats? Can you speak to the differences in conversation with public water systems and how it compares to the typical dynamics?
    • Garza – The makeup of this group within the agency includes staff and directors, investigators, etc. It’s a good mix of staff.
  • Niermann – Impressed with agency’s ad hoc response to boil water notice
  • McWhirter – Really impressed with outreach and training efforts by staff
  • No action is necessary on this item.

 

Executive Meeting

Agenda Items 21-24

  • For closed session. Commission did not meet in closed session on 7/28.