Upstream Texas - Spring/Summer 2017 - 16
each month for a consecutive 12 month
period (SWR 15).
❍ Revise the "active gas well" definition
from 100 thousand cubic feet (Mcf)
a month to 50 Mcf/month or any
reported production in each month for a
consecutive 12 month period (SWR 15).
Implement a revised internal inspection
priority system so commission inspectors
can prioritize drilling rig inspections and
hydraulic fracture treatments in sensitive
areas such as cities or wetlands without
affecting other inspections.
Review existing washout factors to
determine whether different washout
factors should be used in certain areas of
the state for calculation of cement tops. In
doing so, this would expedite the process of
verifying compliance with agency rules for
both operators and the commission without
compromising well integrity.
Direct the Groundwater Advisory Unit to
identify counties or portions of counties in
which the usable quality water protection
depth is constant. Those areas will be eligible
for area-wide recommendations for meeting
surface casing requirements, streamlining
industry regulatory requirements.
Issue guidance for implementation of the
Texas Environmental, Health & Safety Audit
Privilege Act, permitting operators of new
property to identify and remedy violations
which occurred prior to their ownership.
This ensures compliance without punishing
an operator not responsible for the violation.
Conduct an extensive review of all
Railroad Commission forms required for
application and reporting purposes to
determine whether data collected are
used currently or no longer necessary.
Staff also was instructed to consider
eliminating forms no longer useful to
the commission's regulatory functions to
reduce regulatory administrative burden
on staff and industry.
Simplify the complete duplication of a
drilling permit application with a sworn
statement of no changes to the original
application. The operator then would
pay the fee for reissuance of the permit,
speeding the review process and reducing
regulatory administrative burden for both
the agency and industry.
As an association serving a majority of the
state's oil and gas producers, including many
"We saw that, first
and foremost, getting
rid of unnecessary
cost less money. We
also looked at things
we could do in our
are easy to fix,
small family-operated businesses, TIPRO
says that it was especially appreciative
of Chairman Craddick's leadership in
spearheading an initiative that offers
necessary and timely improvements to
Railroad Commission procedures and
regulatory practices. "These reforms help
to provide much needed relief to operators
across the state as we continue to confront
depressed commodity prices," said Ed
Longanecker, president of TIPRO.
Despite the need to act quickly to help both
the agency and the industry weather the
tough times, Craddick indicates the need for
speed did not override the need to get it right.
"In a downturn, we want to save money for
both the agency and the industry, as quickly
as possible, but even if knee-jerk reactions
sound good, they are not always the best
way to regulate," she says. "We wanted
to get good feedback from all stakeholders
and see if those ideas also worked for us as
an agency. There were challenges with our
information technology systems. We also
knew it was important to talk with some of
the experts in our agency that understood
the history of why the commission does or
does not do certain things. It was important
to put sufficient thought into this initiative
before going forward."
And even after the specifics were
announced, she notes, not all of them could
be fully implemented immediately. A few
did not take effect until around the turn of
UPSTREAM TEXAS S P R I N G | S U M M E R 2 0 17
Even so, Craddick emphasizes that the Texas
Oilfield Relief Initiative is not inherently tied
to tough times. As the glut in world crude
inventories shrinks and commodity prices
recover, the brighter industry outlook is
not going to squelch the impetus for smart
oversight, she promises.
"Commonsense regulation is always
important, no matter the oil price," she says.
"If our agency costs the industry unnecessary
dollars that can be spent on things other
than complying with excessive regulations,
we are not doing our jobs. We are always
looking for common-sense approaches. We
are always looking for good rules and how
to adjust those rules. At the end of the day,
oil and gas industry margins always are
going to be slim. My goal for the Railroad
Commission is not to be an impediment to
someone having a job."
Only Phase I
It's worth noting that some elements of the
initiative seem to be especially well-suited
to an upturn. For instance, since December
2016, the Railroad Commission has allowed
operators to reapply for new drilling permits
for wells that were not spudded before an
original drilling permit's expiration. As long
as the conditions on the lease/unit have not
changed, the commission says an operator
can use documents provided with the original
application, which should help as drilling
activity picks up.
Craddick also points out that the first nine
provisions are merely the initiative's first
phase. She indicates that further regulatory
improvements under the Texas Oilfield Relief
Initiative will be considered moving forward
in the future.
Moreover, she says, input from the Texas
Independent Producers & Royalty Owners
Association has helped provide significant
food for thought as the initiative evolves.
"TIPRO has been particularly helpful with
a couple rules and processes dealing with
washout factors, groundwater advisory units
and figuring out our areawide requirements
for surface casing," she says. "We appreciate
TIPRO's feedback. Small operators have been
the long-term lifeblood of this industry and
they are, across the board, a very reliable
source of good information."