American Oil and Gas Reporter - December 2015 - 14

page 14-21_Layout 1 12/1/2015 9:44 AM Page 14

IndustryDigest
RRC Proposes Change
To Its UFT Field Rules

AUSTIN, TX.-The Texas Railroad
Commission is proposing to establish
procedures for designating certain oil
fields as unconventional fracture treated
(UFT) fields, where horizontal drilling
and hydraulic fracturing must be used to
recover the resources.
According to the proposal, the
designation would include shale
formations such as the Eagle Ford and
Barnett, in which wellbore drainage is
based on the area reached by fracturing
treatments rather than conventional
flow patterns.
The RRC says its staff members
project that for each year of the first
five years the amendments are in effect,
state revenues will increase $77.4
million annually. It notes industry data
indicate the changes could enable
drilling of 125 additional wells a year
in affected fields, with estimated initial
oil production of 800 barrels a day for
each well. The commission staff
estimates an additional 36.5 million
barrels would be brought to market
annually.
Alex Mills, president and chief
executive officer of the Texas Alliance
of Energy Producers, says the changes
have been needed for several years.
"There are five rules that the RRC had
to revamp because of the new
technology companies are using in
drilling and production techniques," he
says, adding that the RRC and an
industry task force that included the
Alliance's RRC Committee Chairman
Brian Miller worked on the
amendments for 18 months.
According to the RRC, the
amendments also affect drilling of
horizontal drain-hole wells, including
revisions to provisions covering firstand last-take point language, off-site
tract penetration points, stacked
lateral provision, and a "box rule"
with a suggested 50-foot distance
limitation.
It says the revisions will incorporate
common special field rule provisions
that apply on a field-by-field basis into
rules with statewide application. The
proposed amendments will reduce and
simplify field rule hearings, it says, and
also:
* Eliminate the certificate of pooling authority (Form P-12) with the ini14 THE AMERICAN OIL & GAS REPORTER

tial completion filing (Form G-1/W-2),
if no changes have been made since the
drilling permit application (Form W-1)
was filed;
* Add an administrative procedure
to balance overproduction on a specific
oil lease; and
* Revise qualification requirements,
procedures for designation, and allowable assignments. ❒

EPA Plans Regulations
For Toxic Gas Reports
From Processing Plants

WASHINGTON-In response to
legal actions by environmental groups,
the U.S. Environmental Protection
Agency says it is preparing regulations
that will require natural gas processing
plants to report chemicals they release
to the federal Toxics Release Inventory
(TRI) online public database.
According to the agency, it is
proposing that plants start reporting
chemical emissions, including xylene,
hexane, formaldehyde and benzene. The
federal government estimates more than
550 U.S. plants processed more than 19
trillion cubic feet of natural gas in 2014,
with half of those facilities meeting the
proposal's size threshold.
Importantly for producers, the
Independent Petroleum Association of
America points out, well sites,
compressor stations, pipelines and
facilities that employ fewer than 10
people are not included in the new
requirement.
The EPA proposal is in response to a
lawsuit filed in January by the
Environmental Integrity Project and
nine partner organizations. The suit
alleged the federal government had
failed to require the refining sector to
reveal emissions for more than a
decade. The lawsuit comes after an
October 2012 petition filed by 17 antidevelopment groups asking that EPA
add the industry to the TRI.
"The addition of natural gas
processing facilities to TRI would
increase meaningfully the information
available to the public and further the
purposes of (the TRI law), assesses
EPA Administrator Gina McCarthy.
"EPA estimates that natural gas
processing facilities in the United
States manufacture, process or

otherwise use more than 25 TRI-listed
chemicals."
She notes that Congress established
the TRI in 1986, two years after the
Bhopal disaster in India killed more
than 5,000 in neighborhoods around the
Union Carbide India chemical
processing plant.
Mark Sutton, president and chief
executive officer of the Gas Processors
Association, says GPA looks forward to
working with EPA through the rulemaking process.
"It is important to note that most,
if not all, of the information EPA is
seeking already is available
publically in one form or another,
which may explain why it took EPA
so long to act on the 2012 petition
and the validity afforded to it,"
Sutton poses. "This is a classic
example of activists using the 'sue
and do' concept, where they petition
the agency to do something they want
and then sue the agency to ensure it
complies with their wishes." ❒

EPA Unveils Updated
Cross-State Air Rule

WASHINGTON-After a federal
court sent the Environmental
Protection Agency back to the
figurative drawing board in July, EPA
in mid-November proposed updates to
its Cross-State Air Pollution Rule
(CSAPR) ozone season program that
the agency says complies with the
decision.
Starting in 2017, the proposal would
reduce summertime emissions of oxides
of nitrogen from power plants in 23
states in the eastern half of the United
States, EPA says, adding that the
proposal also responds to the July 2015
remand of CSAPR budgets by the U.S.
Court of Appeals for the District of
Columbia Circuit.
That decision ordered EPA to
recalculate how much pollutant control
it was requiring states to impose. An
example of the agency's miscalculation
cited in the decision noted that EPA
ordered Texas and six other states to
impose emission-reduction measures
that cost $500 a ton, despite the fact
that EPA's own technical
documentation showed a downwind
nonattainment site in Madison, Il.,
could reach attainment if the relevant
American Oil and Gas Reporter - December 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2015
