Railroad Commission Proposes Overhaul of Waste Management Rules

In its statement on the Proposed Rule, the Commission noted that the protection of groundwater was a key consideration in crafting the Proposed Rule. The Proposed Rule introduces a number of changes intended to reflect modern waste management practices and recent advancements in oil and natural gas production methods, such as hydraulic fracturing. Many of these changes were already reflected in the Commission’s guidance documents, which have been used for years in connection with the issuance of permits for waste pits and landfarming. Under the Proposed Rule, standards for design, construction, operation, monitoring, and closure of authorized, permitted, and commercial waste pits and landfarming would be codified, reorganized, and moved to new Chapter 4, Subchapter A. The proposal would also include codification of guidance and revisions to the rules relating to the transportation of oil and gas waste, including characterization, documentation, and recordkeeping in new Chapter 4, Subchapter B.

In addition to providing a much-needed codification of existing guidance that will provide clarity to the regulated community, the Proposed rule also implements recently passed state legislation regarding the location of disposal pits (H.B. 2201, 87th Leg.), beneficial recycling of fluid oil and gas waste (H.B. 3516, 87th Leg.), and the treatment, recycling for beneficial use, and disposal of drill cuttings (S.B. 502, 88th Leg.; S.B. 1531, 85th Leg.).

The Commission is accepting public comments on the Proposed Rule until Friday, November 3, 2023.

Key substantive changes in the Proposed Rule include:

1. Pit Liner Standards: Current regulations allow clay or natural liners for pits as long as the liner meets certain thickness and permeability standards. The Proposed Rule would change these standards and allow natural liners only for pits with an active life of less than one year; any pit with an active life of more than one year or that is used for waste disposal must have a synthetic liner with an impermeable geomembrane. See Proposed 16 T.A.C. § 4.114(c).
2. Pit Location Restrictions: Under the Proposed Rule, pits may not be located on a barrier island or a beach or within 300 feet of surface water, 500 feet of any public water system well or intake, 300 feet of domestic or irrigation water wells, or within a 100-year floodplain. Proposed 16 T.A.C. § 4.114(b); 4.150(g). Commercial disposal pits are further restricted and must be sufficiently isolated to prevent surface or subsurface water pollution and the applicant must conduct a flooding history investigation of the proposed site to ensure that the facility is not located in a flood-prone area. Proposed 16 T.A.C. § 4.153(a). These updated location restrictions implement the Texas Legislature’s H.B. 2201.
3. Reclamation Plant Permits: In addition to significant substantive revisions to Statewide Rule 8, the Proposed Rule would also modify certain permit requirements for reclamation plants under Statewide Rule 57. Currently, reclamation plant permits do not expire and cannot be transferred to another operator after issuance. Under the Proposed Rule, reclamation plant permits would have set terms of five years, after which they must be renewed. The Proposed Rule would also allow reclamation plant permits to be transferred to another operator, so long as certain timing, financial security, and real estate requirements are met. See Proposed 16 T.A.C. § 4.122.
4. Pilot Program for Recycling Activities: The Proposed Rule encourages recycling of oil and gas waste by adding provisions whereby an operator may propose a pilot program to assess the safe use, efficiency, and effectiveness of using a recycled product in certain activities. If the Commission finds that the pilot program does not present a threat of pollution and encourages the recycling of oil and gas waste, then the pilot program may be authorized for one year and, if successful, may be continued via permitting under the Commission’s regulations. Proposed 16 T.A.C. § 4.185. For example, recycling of treated produced water could be subject to a pilot program under these provisions. These provisions implement the Texas Legislature’s instruction to encourage fluid oil and gas waste recycling in H.B. 3516.
5. Encouragement of Commercial Fluid Recycling: To further effectuate H.B. 3516, the Proposed Rule includes provisions to expedite permitting of off-lease and stationary commercial fluid recycling. These provisions include a 90-day deadline for the Commission to act on a complete permit application. If the Commission fails to act on a permit before the 90-day deadline passes, then the application is presumed approved and the applicant may operate under it for one year. See 16 T.A.C. §§ 4.262, 4.278.
6. Beneficial Use of Drill Cuttings: The Proposed Rule implements S.B. 1541’s requirements that the Commission adopt criteria for permitting and beneficial reuse of drill cuttings that that is as protective of public health as requirements for disposal of drill cuttings. It also implements H.B. 502’s requirements by clarifying that the tort liability shield for treatment, recycling, and disposal of waste drill cuttings extends to associated waste streams like sands, drilling fluids, and other materials cleaned out of the wellbore that compose the same waste stream as the cuttings. See 16 T.A.C. § 4.301.

If the Proposed Rule is promulgated, any existing pits that are compliant with current Statewide Rule 8, but not the Proposed Rule, must be brought into compliance or closed. While the Proposed Rule does not include a timeline for permitted or commercial pits, existing authorized pits must be registered or closed within one year.