Texas Supreme Court Clarifies RRC Jurisdiction

By: Michael K. Reer

On April 28, 2017, the Texas Supreme Court delivered an opinion in Forest Oil Corp. v. El Rucio Land and Cattle Co., Inc., No. 14-0979 (Tex. 2017). One of the principal questions in the case concerned whether the Railroad Commission has exclusive or primary jurisdiction over claims of environmental contamination related to oil and natural gas development, thus precluding suits for damages and other judicial relief. The Texas Supreme Court found that the Railroad Commission does not have exclusive jurisdiction over common-law actions related to contamination, particularly where the plaintiff brings a breach of contract cause of action related to a surface use agreement. The Court cautioned, however, that “an operator can reduce or eliminate the landowner’s damages” “by seeking an RRC determination of contamination allegations and complying with RRC cleanup orders.”
Tuesday, May 02, 2017

Railroad Commission Amends Rule 15

By: Michael K. Reer


On November 15, 2016, the Railroad Commission of Texas announced final amendments to Rule 15 (“Surface Equipment Removal Requirements and Inactive Wells”), which will take effect January 1, 2017.  Generally, Rule 15 requires that operators who assume responsibility for an inactive oil or natural gas well either plug the well or return it to active operation within six months after the Commission approves an operation designation form. 

The final rulemaking modifies the regulatory requirements for returning oil and natural gas wells to active operation.  Currently, operators must produce at least 10 barrels of oil or 100 Mcf of natural gas for at least three consecutive months for an inactive well to become active.  Under the finalized rules, operators must produce just five barrels of oil or 50 Mcf of natural gas for an inactive well to become active.  Alternatively, operators may produce at least one barrel of oil or one Mcf of natural gas for 12 consecutive months. 

The Commission stated in the preamble to the final rulemaking that “the amendments discourage the premature plugging of wells that have the potential to produce and, thus, align with the Commission’s responsibility to prevent waste.”   

Friday, November 18, 2016

Commissioner Sitton Joins CISR

By: Michael K. Reer


On November 15, 2016, Texas Railroad Commissioner Ryan Sitton announced that he will join the Bureau of Economic Geology Center for Integrated Seismicity Research ("CISR").  According to the press announcement, CISR conducts "fundamental and applied research to better understand both naturally occurring and potentially induced seismicity and the associated risks." 

Commissioner Sitton states that "the science is clear that it is physically possible for injection wells that dispose of fluids deep underground to cause earthquakes" but cautioned that hydraulic fracturing itself may only cause "micro earthquakes that are almost never felt."  The press release also states that the Commission will use industry data and the Texas Seismometer Network to enhance CISR's and the Commission's understanding of induced seismicity.  In particular, the Commission will examine the potential for induced seismicity in Johnson County, Texas.

Thursday, November 17, 2016

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