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Energy News January 2020

From the Field Photo ‘Storm Edge’ Districts 1 & 2 Photo by Joseph Baird

RRC Sets Historic Record for Processing Drilling Permits

RRC Opens New Lubbock Oil & Gas District Office

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Reminder to Pipeline Operators: 2020 Pipeline Mileage Fees Due April 1, 2020

Upcoming RRC Workshops Learn How to File Drilling Permits, Well Completions, Pipeline Permits & Other RRC Regulatory Forms

Hello 2020! Check Out the RRC’s 2019 Year In Review

RRC Testifies at Senate Hearing on Future Water Supplies

Staff Moves

RRC Around Texas

Commissioners’ Corner

Resources

Upcoming Events Feb. 11, 2020

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Open Meeting

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Austin, TX

RRC Sets Historic Record for Processing Drilling Permits For the second year in a row, Railroad Commission staff set a record for approving standard drilling permits in two days. This is one day below the Legislative requirement. Hard work like this by Commission employees helps foster energy production growth statewide. Standard drilling permits are permits that do not require exceptions to Commission rules such spacing or density rules. During Calendar Year 2019 the RRC processed a total of 11,654 new drilling permits. “The Railroad Commission’s technological solutions enables operators to quickly apply for and receive drilling permits,” said RRC Executive Director Wei Wang. “Nearly 99 percent of operators apply for drilling permits online. This allows our staff to thoroughly and quickly review each application to ensure operators meet all drilling permit requirements.”

LEARN MORE4 The Oil & Gas Journal also highlighted the Commission’s work with drilling permits at:

VIEW THE OIL & GAS JOURNAL4

As one of the state’s and nation’s top oil and gas-producing regions, it’s no surprise that Permian Basin also is one of the Commission’s busiest regulatory regions. To serve energy industry activity in the northern section of the Permian Basin, the RRC opened a new Lubbock oil and gas district office this month. “The new Lubbock office will enhance our regulatory capability in the region. It is a key strategic decision to address both operational and recruiting challenges we have experienced in our Western regional offices in recent years,” said RRC’s Executive Director Wei Wang. “The opening of our Lubbock office enables RRC staff to keep pace with the energy industry’s growth in West Texas and the Permian Basin, and ultimately to ensure Texas oil and gas is produced safely and in compliance with our rules.” The Lubbock office makes up District 8A of the RRC’s existing statewide oil and gas districts and will serve the following counties: Bailey, Borden, Cochran, Cottle, Crosby, Dawson, Dickens, Floyd, Gaines, Garza, Hale, Hockley, Kent, King, Lamb, Lubbock, Lynn, Motley, Scurry, Terry and Yoakum. This area was previously served by the Abilene Oil & Gas District office.

LEARN MORE ABOUT THE LUBBOCK OFFICE4

Reminder to Pipeline Operators: 2020 Pipeline Mileage Fees Due April 1 Pipeline operators are reminded their 2020 pipeline mileage fees are due April 1, 2020. Operators will use the number of miles they have permitted as of Dec. 31, 2019 to calculate their 2020 pipeline mileage fee. The deadline for payment without incurring late penalties is April 1, 2020. This year’s mileage charts recorded by the Commission and other information on the fees can be found at:

PIPELINE MILEAGE FEES4 The rule amendments are in accordance with House Bill 1818 (85th Legislature, Regular Session, 2017) which mandated the creation of provisions to fund the RRC’s Pipeline Safety Program. All mileage fees are required to be paid through the Pipeline Online Permitting System (POPS) in the RRC Online System.

VIEW POPS INSTRUCTIONS4 For additional information, contact the RRC’s Pipeline Safety department at POPS@rrc.texas.gov or 512-463-6802.

Upcoming RRC Workshops

Learn How to File Drilling Permits, Well Completions, Pipeline Permits & Other RRC Regulatory Forms

The Railroad Commission of Texas is hosting one-day Regulatory Forums throughout the state through April: • February 4, 2020 HOUSTON • March 5, 2020 FORT WORTH • April 1, 2020 MIDLAND • April 2, 2020 MIDLAND The RRC is hosting these forums to educate and train energy industry representatives on a variety of topics, including: • Drilling permitting; • Completions; • Form P-16, Acreage Designation; • Injection well permitting; and • Pipeline permitting.

VIEW ADDITIONAL INFORMATION4

HELLO 2020! As the Commission ushers in 2020, we want to invite you to take a look at our agencyâ€™s many accomplishments from 2019 in our Year In Review. The 2019 Year in Review outlines the Commissionâ€™s successes in achieving the highest standard of service by modernizing processes, enhancing transparency and exceeding performance expectations. Throughout 2019, the Commission boosted its protection of public safety and our natural resources while maintaining strong regulatory oversight. The Commission plugged orphan wells at an historic rate, launched the RRC Online Inspection Lookup tool and began transitioning data from an antiquated mainframe system to a modern, cloud-based platform.

VIEW THE YEAR IN REVIEW4

PICTURED: Paul Dubois speaking before the Texas Senate.

RRC Testifies at Senate Hearing on Future Water Supplies The Railroad Commission was among several agencies testifying about how new water resources, including produced water, could be developed as future water supplies at a Jan. 22 joint hearing by the Senate committees on Natural Resources and Economic Development and on Water and Rural Affairs. This hearing was the first of several the committees will hold this year on developing new water supplies for a growing state. Paul Dubois, Assistant Director for Technical Permitting in RRC’s Oil and Gas Division, testified about energy industry uses and the RRC’s regulation of produced water. Produced water is briny water produced along with oil and gas. Dubois highlighted how estimated volumes of produced water in Texas track with statewide oil and gas production trends. Dubois also discussed RRC’s role in enforcing rules for pollution prevention and permitting injection wells used to dispose of produced water. Dubois discussed how produced water could be used as a future water supply for Texas. Currently, approximately 46 percent of produced water is reused for enhanced oil recovery or other beneficial purposes. The remaining 54 percent is injected for disposal, Dubois said. Dubois remarks centered on how produced water could be used for energy production and agricultural use, and the technical and infrastructure challenges associated with expanded produced water use. Other agencies participating in this hearing included the Texas Commission on Environmental Quality, General Land Office and the Texas Water Development Board.

Staff Moves Commission appoints new Commission Secretary Callie Farrar was appointed Commission Secretary at the Commission’s Dec. 17, 2019 conference bringing more than 18 years of executive assistant and office manager experience to the position. Farrar began her career with the Commission April 2018 as an executive assistant to the Oil & Gas Division Director. Prior to joining the RRC, Farrar was an office manager for Argas Inc. in Tulsa, Okla. Farrer, a native Austinite, graduated from Texas State University with a Bachelor of Science in Sociology/Psychology.

Assistant Director for RRC’s New Lubbock Field Office Koby Kendrick is the Assistant Director for the RRC’s New Oil and Gas Field office, Lubbock District 8A. The Lubbock office is serving as a satellite to the Abilene Oil and Gas District office under the direction of Abilene’s Director Doug Allmand. Kendrick is taking on an active role in developing a team in preparation for a spring grand opening (date to be determined) of the Lubbock District Office. Kendrick began his career with the Commission in July 2014 as a field inspector in the Abilene District. Prior to joining the RRC Kendrick was the facilities manager at Hardin-Simmons University in Abilene where he completed a master’s degree in Earth and Environmental Resource Management.

RRC AROUND TEXAS JAN. 06 The RRC kicked off its JAN. 06 San Antonio Boots on the Ground

second round of Boots on the Ground training for Commission oil and gas inspectors with less than 2 years’ experience Jan. 6-10 in San Antonio.

JAN. 14 RRC’s Oversight and Safety Division welcomed 2020 with its “All Hands” meeting in Austin, bringing together staff from its Alternative Fuels, Gas Services and Pipeline Safety departments.

JAN. 14 Doug Allmand, Director

JAN. 14 O&S All Hands

JAN. 14 Desk & Derrick Club

for RRC’s Oil and Gas Division’s West Region and Abilene office, gave the Desks and Derricks Club of Graham an overview of the Commission’s resources available online.

Chairman Christian

Commission

As tensions rise in the Middle East, Chairman Christian pointed out in a recent op-ed one positive effect of Texas’ robust energy production. Unlike years past, our nation is no longer reliant on other nations for our energy, which enhances the United States’ national security, Chairman Christian said. In fact, Chairman Christian notes that one estimate projects the Permian Basin holds more than 230 billion barrels oil equivalent and within this estimate more than 600 trillion cubic feet of natural gas exists. “The United States is now the largest producer of oil and natural gas in the world, producing a record 12.4 million barrels in August,” Chairman Christian said. “Meanwhile, environmentally, the six major pollutants in America monitored by the EPA have plunged by 73 percent since 1970, while the U.S. economy grew 262 percent and its population by 60 percent.

VIEW CHAIRMAN'S OP-ED4

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Commissioners’ Corner

ner Craddick

Commissioner Craddick met Jan. 23 with Abilene Chamber of Commerce representatives visiting Austin and informed them about the Railroad Commission and . The business and professiony are participating in the anam. The group’s visit included and learning more about ner Craddick often speaks to ol about the important work agency works to keep the

Commissioner Sitton Commissioner Sitton has been busy busting a few common energy myths this month. “Myths dominate our political discourse today, and it’s not just energy,” he said, speaking recently in Midland. He cited the myth that the U.S. is running out of oil and needed to find other energy sources, as then-president Jimmy Carter told the nation in 1979 when the Iranian revolution sent oil prices near $40 a barrel amid public panic about shortages. “We are so much more independent in energy, that what happens overseas won’t have much impact here,” he said. Another myth Sitton is refuting is “the myth that oil and gas is bad. The truth is, oil and gas has lifted people out of poverty, it’s feeding people, it’s enabling other industries, it’s boosting the economy over all,” he said.