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Railroad Commission Preparing Rule Changes for Oil and Gas Drilling

A major overhaul to oil and gas drilling rules is under way at the Texas Railroad Commission. The initiative has received a cautious welcome from both environmentalists and some industry groups.

A worker waits to load a piece of pipe, or casing, that will be lowered into the well at a Chesapeake Energy drill site in Dimmit County on the Eagle Ford Shale.

Hydraulic fracturing, or fracking, the controversial process of shooting water, sand and chemicals underground to access oil or natural gas trapped in shale rock, has made plenty of headlines in recent years. But the drilling process involves many other steps beyond breaking up rock, and several opportunities for things to go wrong.

Recognizing this, the Railroad Commission, Texas’ oil and gas regulatory agency, is updating its rules to address the broad process of drilling, from the drilling itself to cementing and completing an oil or gas well. The latest version of the proposed rule changes is expected this week. So far, the commission’s work is winning qualified praise from environmentalists and some in the oil industry.

“This is the biggest overhaul of Texas well construction regulations since the 1970s,” said Scott Anderson, an Austin-based senior policy adviser for the Environmental Defense Fund.

Debbra Hastings, the executive vice president of the Texas Oil and Gas Association, said she expected that the new rules would probably be adopted by the Railroad Commission toward the beginning of the state legislative session, which starts in January.

“We’re supportive of them moving forward right now, as long as they’re feasible and they can implement them,” Hastings said.

Careful construction of oil and gas wells is vital to preventing oil, gas or fracking-related fluids from leaking into aquifers. A study last year for the Groundwater Protection Council found that from 1993 to 2008, faulty drilling or well completion was responsible for 10 documented instances of groundwater contamination in Texas.

The proposed rules span a range of topics related to what the industry calls “well integrity.” They cover the quality of the protective cement placed between layers of pipe in an oil or gas well and a pressure test for the pipes themselves (which are often called casing) in wells being prepared for fracking. They could create new requirements for the components of blowout preventer systems on certain wells, including those onshore in populated areas.

Among the most-discussed provisions is a proposal that bans fracking operations at non-cemented wells when the shale being fracked comes within 1,000 vertical feet of a usable aquifer.

Public comments ended last month, and some drillers said that the proposed rules were too restrictive. Keith Valentine, a lawyer with Clayton Williams Energy, wrote in a filing that the changes would have a “negative impact” with significant costs.

Environmentalists, while welcoming the proposals, wish they would do more. In a public filing, the Lone Star Chapter of the Sierra Club and other green groups urged the commission to improve oversight of cement work and ban “toxic additives during the well drilling process."

Barry Smitherman, the Railroad Commission chairman, declined to comment on the proposal ahead of the new version expected this week. The commission is also in the early stages of looking at rule changes that would impact wells built to dispose of waste fluids from fracking operations.

State Rep. Jim Keffer, R-Eastland, the chairman of the House Energy Resources Committee, is “closely monitoring” the Railroad Commission’s work, according to Evan Autry, his legislative aide. Keffer championed legislation last year requiring disclosure of some chemicals in hydraulic fracturing. For now, Keffer is not planning to introduce a bill on well integrity, leaving it to the Railroad Commission, Autry said in an email.

Anderson of the Environmental Defense Fund said that the Railroad Commission has long been seen as a leader on drilling rules, but that it has not kept up on well integrity.

“Several of the other states have stolen a march on Texas,” he said, noting that Colorado, Wyoming, Pennsylvania and Ohio have updated well-integrity rules in recent years.

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