Episode Transcript
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Speaker 1 (00:01):
Welcome to the nationally syndicated Energy Mix Radio Show produced
by the Energy Network Media Group. The Energy Mix Radio
Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
and government officials on the Energy Mix Radio Show.
Speaker 2 (00:16):
And welcome back to the Energy Mix Radio Show, where
we dive deep into the latest developments shaping the energy industry. Today,
I have a special guest, Commissioner Jim Wright of the
Texas Railroad Commission. A Commissioner, Wright has been at the
forefront of Texas energy policy, overseeing critical regulation and advancements
in the oil and gas sector. Yesterday, he was at
(00:39):
the Porter Corpus Christie's celebration of the completion of the
Ship Channel Improvement Project, a major milestone that deepens and
widens the harbor to enhance energy exports and efficiencies. We'll
discuss the significance of this project, its impact on Texas energy,
and what it means for the future of the energy industry. Additionally,
(01:01):
with the eighty ninth Texas Session closing are coming to
a close, we'll explore policy changes affecting energy and the
Texas Railroad Commission and what businesses and consumers can look
forward to. Welcome back, Commissioner Right.
Speaker 3 (01:15):
Thank you again for letting me be on the show.
It's always an honor, and I want to thank you
for all the efforts you put into educating people on
what energy means for not only the state of Texans,
but for our nation and for our allies across the globe.
Really appreciate all your efforts. I'm excited to be on
today's show and talk about the issues that you brought
(01:36):
up earlier.
Speaker 2 (01:38):
Well, you know, Commissioner Right, it is so important that
you know first of all, that Texans understand how important
your regulatory agency is. You don't regulate railroads, you regulate
the oil and gas industry and more anything that's going
on with energy, you guys are a part of it,
and they need to understand that. And then also, I
(01:58):
believe that the Texas Railroad Commission is a model for
other states to look at and see how do we
produce energy efficiently, think about the environment as well as
continue to support the residents of Texas. So I love
having you come on the show and explore that with me,
help the consumers understand the importance of what you guys do.
(02:22):
So let's get started with a little bit about yesterday.
Yesterday you and I were attending a celebration from the
Port of Corpus Christy their expansion, and as I stated earlier,
they completed an improvement project that actually deepened and widened
their ability to move ships in and out of their harbor.
(02:44):
Tell me a little bit about how important this was
to not just the residents of South Texas, but how
it's going to benefit all of Texas, especially when we
talk about Middland Odessa, where the main energy hub is
right now and it's moving product actor to the Port
Corpus Christie. How important was this and tell us a
little bit about your thoughts.
Speaker 3 (03:06):
Oh, yeah, and that's a great question too. It's it's
incredibly important to us continuing our ability to move our product,
to try to have people receive our product, that that
utilize it in such a way that that we continue
with investor confidence we we have the marketability to get
(03:27):
to get those products to everyone throughout the state, the nation,
and the world. You know, yesterday's project at the City
of Corpus Christie's port, or the Port of Corpus Christie
was a was a huge huge impact for what's going
to happen, not not just locally, but but as you said,
all the way across the state when it comes to
(03:48):
getting products moved around where it needs to be. You know,
if you look at the widening and the deepening of
the ship channel and the installation of the new harbor
bridge that we put in, it will bigger ships to
load more cargo, which is estimated to save I think
annually over two hundred million dollars in transportation costs, which
(04:09):
means we stay more competitive here in the local areas
Carpus Christie when delivering those products. So Corpus Christie, not
a lot of people know the port is the number
one exporter of crude oil in our nation. I think
it's number four in the world. So it's really it's
it's it's infrastructure is set up to deliver products, to
(04:33):
ship products out, you know, I think, I think we
have more work to do and in furthering our infrastructure, infrastructure,
growth growth to continue the magnitude of what we're able
to produce out of Texas. And it's an exciting time.
I mean it said yesterday's was a was a really
a great honor to be at and be a part
(04:55):
of and to see what those impacts are again not
just for our community, but for the on gas industry
throughout Texas.
Speaker 2 (05:03):
Can you give me an idea? So you mentioned two
hundred million annually in transportation costs that we're expected to save.
I think some of the businesses and maybe even consumers
are questioning or you know, trying to figure out what
does that mean for them? And especially since our show
does air in Midland and Odessa and we're happy that,
you know, we're airing in that area, how do you
(05:24):
see this really benefiting that specific area with it being
so remote, they have a lot of they have some challenges.
How will this also benefit those great people in the
Middle and Odessa area?
Speaker 4 (05:37):
You know?
Speaker 3 (05:37):
Unfortunately, Corbus Christia has been one of the easier ports
to get ships in and out of. In the expansion
of this product or the expansion of the canal itself
allows us to bring bigger capacity type ships in to
where those ships can actually double the amount of product
that goes into them and be able to flow that
(06:00):
weight out to see and to receive those ships and
turn them around and load them. And we're fortunate that
Midland West Texas. Those areas have really seen what the
ease is of moving that product through Corpus Christian. A
lot of the infrastructure, the pipelines have been built to
service the products that gets put into those ships. So
(06:24):
when you talk about the two hundred million that it's
estimated in savings, it's pretty simple math. If you put
double the amount of product on the same transport vehicle,
then the cost is cut in half. So that's that's
what we're looking at when you say that we're going
to look at saving two hundred million, which will be
good in opening up other markets for us. In that
(06:48):
I think that's a really important key for our success
here in Texas, just to make sure that we're always
searching for newer markets so that we can have some
steadiness when it comes to our pricing in the marketplace.
We can eliminate this historical peaks in valleys that our
markets has experienced, because we all know during the peaks,
we hire a lot of people and we you know,
(07:09):
we gear up to try to meet the market demand,
and then all of a sudden we fall into a valley,
which means that we have to lay off people. We
have less jobs, we have less less comp investor confidence.
It's just not a good thing. We need to make
sure that we're looking at the market as Corpus Christie's
poor to Port Corpus Christie has done in trying to
(07:31):
create that a steady graph, not a peaked in valley graph.
When it comes to servicing the market.
Speaker 2 (07:38):
How important do you think now with Opec plus announcing
they're going to continue to put their product on the market.
It's driving down prices and we already were in a
place where it was so tough for profitability on the
industry as it was now with this new widening and
deeping of Porter Corpus Christie, do you see any easing
(08:01):
there for them? Do you see that this will have
a positive impact on them considering the climate that they're
already in in a difficult market to just make a profit.
How welcoming is this news for them? Do you think for.
Speaker 3 (08:14):
Opeck it shouldn't be a very good welcoming news if
that's your question. But I will say this that it
should be very welcoming for us because it allows us
to increase our product and our ability for those savings
of getting more on these ships, which means that we
(08:35):
should be able to compete better in the market, not
only in our marketplace and with our allies, but we
should be able to manage and maneuver lower pricing, which
is good for everybody in the nation at the pomp
and our profits should continue to escalate if we can
just continue to do things like or Coropus Christi just completed.
(08:58):
By deepening and widening channel, you start creating efficiencies where
again that moves more toward a steady line instead of
a peaked in valley line as we've seen in the
history of all on gas business.
Speaker 2 (09:12):
I think in an industry that has very very little normalcy,
it's constantly up and down and all around as you mentioned,
they welcome this type of activity. So now they know
that they have the port they're able to do. This
gives them at least a little bit of some reassurance
that they'll have some normalcy on some basic ability to
(09:35):
know what can be moved through there on a regular
basis as opposed to its always flopping around.
Speaker 3 (09:40):
In addition to pricing carem everybody knows that consumers also
rely or are they demand reliability, So us having that
ability that por Corpus Christie has with making sure that
we get that volume a supply that are needed in markets.
By deep and widening the channel, I think opens us
(10:03):
up to newer markets that we've never been able to
penetrate before that our competition people that are involved with
OPEC have been successful in doing so. We just were
getting closer to be able to compete better in our
world market in that and I think we will continue
to see that as we move forward in time. And
the widening of the ship channel and all the things
(10:25):
that the Port Corpus Christie has done with putting in
a new bridge on Tallar Bridge to allow bigger ships,
those are all the vast improvements that it will take
for us to continue those success.
Speaker 2 (10:36):
Well, I want to switch gears, and there's two things
I really want to highlight in this show as well.
One is we are completing the eighty ninth Texas Legislator
and I want for you to tell us some of
the bills that you were following and why. But before
we get to that, the Texas Railroad Commission recently issued
some new guidelines for permitting when we talk about salt
(10:58):
water disposal, well, and so that went into effect June first,
twenty twenty five. We're going to talk about that too,
but I am going to have to take a quick break.
When we return, I want to cover again the closing
of the eighty ninth legislative session. What bills came out
of there, What do we need to watch and look
out for, what are you all following as the Railroad Commission?
(11:20):
And then also in great detail, what was the design
behind how you all needed to look at the guidelines
on these disposal wells, the rationale and everything that was
behind that, and how you guys came up with that.
I'd also like to ask how it is the feedback
of was this something that the industry itself was looking
(11:43):
for reform or was it not looked upon because of
the nature of what you guys were trying to do.
How the industry as well as the citizens viewed the
permitting and the new guidelines of the well. But let's
take a quick break. You're listening to the Energy Mix
radio show, and we'll be right back.
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Speaker 2 (13:02):
And we're back. You're listening to the Energy Mix radio show.
My guest today is the Honorable gim Right. Commissioner GYM
Right of the Texas Railroad Commission. Commissioner Right, you all
with the Texas Railroad Commission recently issued some new guidelines
for permitting salt water disposable wells in the Permium basin
and that it took place January first. These changes include
(13:25):
an expanded area of review, limited injection pressure, and restrictions
on daily injection volumes to address the seismicity concerns and
reservoir integrity. Can you walk us through the reasoning behind
these updates and how they're going to impact operators here
in Texas.
Speaker 3 (13:45):
You know, that's a complicated answer to your question, and
I think it's important that people listeners understand kind of
some of the history of US drilling and producing all
gas here in the state of Texas, back before we
discovered the shell, and by the shell, the definition of
that is gas and oil that was found in really
(14:06):
tight formations that we had to fracture to get access
for that stuff to float a surface. Before in the
old days, we would drill simply like most people do
with their water wells. We drill down straight. We'd hope
that we hit a pool and we would extract that
oil and water and natural gas and return the water
(14:30):
back to the place in which it came from. Today,
it's totally different. Today we go into a tighter formation,
a very tight formation. We run those vertical wells into
horizontal wells. Well they'll go down sometimes deep to eight
to ten thousand feet and turn and go a mile
mile and a half in a vertical or a horizontal position. Anyway,
(14:54):
they will turn and run along that formation, and then
they'll fracture and break that mass conglomerate of rock so
that oil, water and natural gas start to flow to
the surface. Those formations are so tight, and the difference
that we deal in today since the discoveries of the
shell in twenty eleven, doesn't allow us to return that
(15:16):
water to those same for producing formations. So we've got
to look at different formations to put that produced water
alongside the on gas that's being generated. And just so
people know today that average a very conservative average on
a well that's producing. At its peak, we're producing about
four barrels of water for every barrel of crue. Today
(15:39):
we're almost every day generating about six million barrels of crude.
So the math is just in our generation twenty four
million barrels of water that we have to deal with,
which again is going back into formations that it did
not derive from. So when you look at some of
the issues that can be created from that, two things
(16:00):
can happen, which we've seen seismicity can occur when you
try to shove something into two areas that put additional
weight on fault lines, and if you go into other formations,
you get what's called over pressurization. And overpressurization is simply
a higher pressure that will seek a path of least resistance.
(16:23):
And when we talked about drilling in the old days,
the vertical wells that went straight down, those those started
being drilled in the twenties, thirties, forties, fifties, and those
are still still a lot of them existing today. Those
are those, to me, are pathways of least resistance. Those
are over pressurization that could force some of that brind
(16:46):
that produced water up into fresh water sources. So knowing that,
you know, I started myself as one of the three
commissioners almost two years ago holding informal talks with mid
midstream water handlers and producers about the issues in seismicity
(17:08):
and over pressurization. And I think we had meetings almost
on a monthly basis there for a year or a
little better than the year, talking about how we were
going to mitigate that. In addition to looking at treatment
and reuse of that water, we also talked about what
could we do to continue to mitigate seismicity and over pressurization.
(17:31):
And that's why just as of May fifteenth, twenty twenty five,
through those meetings and through some of the talks that
we've had with all of the constituents involved, we came
up with a notice to operators and it created new
guidelines for permitting order disposal wells in the Permianium basin.
Those new guidelines became effective June first of this year,
(17:54):
and these guidelines strengthen the Commission's current disposal well permitting
requirements by focusing permitting efforts on ensuring that injected fluids
remain confined to the disposal formations. That's by demonstrating the
mechanical characteristics the confining strata, and by closest scrutiny of
(18:15):
well bor penetrations. Within an expanded area of review, we're
looking at at a lot of things that's going to
impact that, mainly concentrating on how do we mitigate seismicity
and over pressurization. And I'm going to a lot of
detail on that if we have time to, I'll be
(18:35):
happy to do that. But the gist of what we're
trying to accomplish here is making sure that we have
the data and the technology to ensure that injection moving
forward as of June first, is doing everything we can
to stop seismicity and to stop any overpressurization concerns that
(18:56):
could impede our fresh groundwater sources.
Speaker 2 (19:00):
Well, I think we will. We're going to go to
break here, but I want to come back and give
you an opportunity to drill down a little bit more.
I think it's important because not all of our listeners.
We do have a lot of energy listeners that are
understanding where this is coming from, but some not so
that are listeners. And the one thing that I would
hear regularly this was back in the height of Eagle
Ford Shell days, is how the Railroad Commission was just
(19:23):
an auto pin of just signing they were for big
oil and gas and they didn't care about the environment
and this and that and things like this. Actually commission
right show the Railroad Commission is not just a rubber stamper.
They are looking at the community. They are looking at
what is for the best of Texas and taking into
consideration we have to keep energy flowing and the oil
(19:45):
and gas. That's a huge part of resources that we
get here for economic development, but we have to look
at it at the same time, what is in the
safety of the energy industry, the community and the environment.
And so you come when we come back from break,
drilling down a little bit more to help the listeners understand.
That's exactly what's happening here. The Texas Railroad Commission is
(20:05):
looking at everything and evaluating and making change changes for
the greater good. Let's take a quick break. You're listening
to the Energy Mix radio show. We'll be right back.
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Speaker 2 (21:22):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Jim Wright of the Texas
Railroad Commission.
Speaker 3 (21:28):
Commissioner.
Speaker 2 (21:29):
Right, let's get back on a decision that the three
of you guys, there's three commissioners Christi, Kredit, Commissioner Wayne Christian,
and yourself making policies at the Railroad Commission. You guys
implemented big change when we talk about disposable wells. It
goes into effect June one, which they're in effect as
of right now. And it was looking at seismicity and
(21:49):
how they were injecting water back into the wells that
you informed us of why we were having these problems. Now,
I want you to drill down a little bit more
if you don't mind and tell the listeners you know
why this was important to look at all things and
that the Railroad Commission does care about the community and
making sure that when we are drilling, we're doing it
(22:11):
in the most not just efficient way, but the safest way,
and taking of course our climate into consideration and the environment.
Speaker 3 (22:19):
But going onto mitigating seismicity and over pressurization, I'd like
to talk a little bit more about, you know, where
where are these new rules being being impactful, and those
are within our districts at seven C, eight A, and
eight which is pretty much all of West Texas to Permium,
(22:40):
and they they're gonna they're going to ask for information
that requires what what the use or installation of the
injection well is and is it in public interest to
put that well in? Secondly, the use or installation of
the injection well will not endanger or injure any oil,
(23:01):
gas or other mineral formations. And thirdly, uh, it must
provide proper safeguards both ground and to our ground and
surface of fresh water sources that will always be protected
from pollution that could come from mixing it with produced water.
(23:21):
You know, the these are these are considered areas of review,
and and that area of review has gone from a
half mile radius now to a two mile radius. It must,
it must be implemented. You know, where conditions exist that
may increase the risk that fluids will not be confined
to the injection interval. Such conditions might might include, but
(23:46):
they're certainly not limited to complex geology, proximity of the
basement rock to the injection interval, transmissive faults and our
history of seismic events and the areas demonstrated UH the
USGS and also UH, you know when it comes to
appl applicability injection wells that are not for all and
(24:08):
gas waste disposal on. I just want to make sure
that I clarify this. For example, injection wells for water
flood or other enhance recovery, pressure, maintenance or storage are
not part of these new new guidelines that we've set out.
I need to make sure that people know that you
know that this thing essentially will focus on the applicants
(24:30):
thorough characterization of the of the insituous stretches of a
confining zones upper and lower and the permitted injection interval,
as well as the average reservoir pressure and the permitted
injection intervals. I mean, it's it's it's it's complex document.
It's going to require a lot of a lot of study,
(24:52):
a lot of experts to come in and give us
this data in order for us to consider issuing injection permits. Again,
all of this is to mitigate seismicity and or over pressurization.
You know, you talked about it a little bit earlier,
you know, and people may be scratching their head going,
Man's that's a lot that you've added to getting a
(25:14):
permit to inject produced water. It is a lot, and
it's also an effort to encourage people to recycle and
reuse water.
Speaker 7 (25:25):
You know.
Speaker 3 (25:25):
I don't think there's anybody listening to your program that
will not agree that Texas is in one of the
worst drought conditions we've seen in our history, especially everywhere
in that west of the ninety eighth. And I think
everybody would agree that technology has come a long way.
It continues to improving vastly, especially as we're looking at
(25:49):
AI and all the new things that we're seeing in
the ability to economically safely treat that produced water.
Speaker 2 (25:58):
Absolutely too. Jim, let me take a quick break because
I want to return on this a little bit deeper
into this. So you're listening to the Energy Mix radio show,
we'll be right back.
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Speaker 2 (27:22):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Gym Ride at the Texas
Railroad Commission. Sorry, Commissioner Ride, I had to take a
hard break, but I want to get back on so
all you mentioned. There's a lot of complexity into what
now operators are going to have to do to reinject
this water that's being produced back into injection rolls, and
(27:45):
it seems like it's going to be pretty complicated and
probably very pricey as well for them. But there's other
solutions that I think you and the Texas the other
commissioners are trying to get the operators to move towards.
And that's more of rec Can you drill down on
that for us too?
Speaker 3 (28:03):
Yeah, And certainly, as I was saying before we went
to break, I think most people will agree that over
half of Texas today is in a pretty severe drought conditions.
We're searching for new water sources, and those new water
sources come with some things that you really have got
to consider. You've got to consider what are the economic
(28:24):
impacts of using new water sources, things like produced water.
This new program that we're putting into effect, that has
gone into effects since June first, is not only a
way to mitigate the seismicity and over pressurization, but I
hope it also encourages people to move faster, quicker, and
(28:45):
stronger into recycling that water. As I said, the technology
is there, the economics work for this, and it's something
that I feel like the oil and gas industry is
going to have to address in recite in order for
us to continue our great success and production of our
own gas. I think that this when you look at
(29:09):
what can we identify for future water sources in the
water needs that we have today, this goes to the
top of the list because you can treat this water safely,
you can do it in a way that will not
harm our environment. We have natural waterways to carry it
where places is needed. And it's also the most economical
(29:32):
that most of our communities can find. Because this is
something that producers are are addressing and are going to
have to address in mitigating seismicity and overpressurization, which could
be a huge problem if it continues to occur. Can
you only imagine, Kim, if we did have a seismic
(29:54):
event and where the roof came down and actually harmed somebody,
what the mark, what the industry would look like? I mean,
I would hate to even it makes me shutter to
even think about that happening. I'm going to fight night
and day to make sure that it doesn't. So that's
that's the reason we've we've introduced these new rules and
(30:16):
regulations when it comes to that injection in the permium,
and hopefully this adds even more strength to encouraging that
water that's being produced to be reused as a much
needed source of water for everybody, especially west of the
ninety eighth meridian. Are in Texas absolutely well. If Texas
(30:38):
does not consider looking at the economics of determining what
water sources can be reused, you're going to see that
Texas is going to start losing a lot of its
industrial strength. Industry has to have water in order to
create their products. They're going to move to places that
provide that water safely and economically. And if we can't
(31:02):
do that, we're going to we're going to find ourselves
in really bad shape.
Speaker 2 (31:08):
Right And I know that, you know, the Railroad Commission
only has so many things that you all can do
to try to push this forward. But I do think,
you know what you mentioned earlier, you know, we could
be one bad seismicity meaning earthquake, tremor away from something
really bad happening here in Texas. And then now it's
(31:29):
you know, for legislators to have to start really forcing
and maybe even the federal government potentially requirements. When you
said earlier, they have the ability, It does the economics
work for them to convert some of this water into
reusable water, and it just makes sense, It just makes sense.
(31:51):
It's a license to operate.
Speaker 3 (31:53):
You know, that leads that leads into a very good
way of going to the next segment of what you
want discuss. And I will say that, you know, for
the last two legislative sessions, I've had the opportunity to
work with Senator Charles Perry has been a leader in
this in this side of things. He has he has
(32:13):
introduced Senate Bill seven UH. It is going to the
Governor's desk to be signed into law, and it expands
the Texas Water Fund to include new infrastructure development projects
to transport and integrate new water supplies, including produced water,
(32:33):
and I think the funding on that today is in
the magnitude of a billion dollars per year to try
to not not just for produce water, but for for
you know, other sources, so that people have a way
to afford to build the infrastructure to treat and to
transport it to places where we need it. I couldn't
(32:56):
be more proud of Senator Charles Perry and the air
for said he's put into this and all the work
he put in to get in it past the finish line.
Speaker 2 (33:05):
Well, we're going to have to take another quick break.
This will be the last session that we have before
we have to wrap it up. But what I do
want to do with you, if you don't mind we
come back from break, is really do a legislative wrap
up from the eighty ninth Texas Legislative Session. And I
know you have quite a few bills that you want
to cover on well plugging. Then we also were talking
(33:25):
about water, so let's get into that. Let's take a
quick break. You're listening to the Energy Mixed radio show.
We'll be right back.
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Speaker 2 (36:12):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Jim Wright of the Texas
Railroad Commission. Commissioner. Right, we have had our eighty ninth
Texas Legislative Session wrap up. There were a lot of
bills that came out of there that you all have
been watching, some pertaining to well plugging, some pertaining to
wildfire risk and mitigation, and some pertaining to water. Let's
(36:35):
go back to water and then we'll touch on the
fire risk and plug welling. Tell us a little bit
about what the final session was pertaining to water recycling.
Speaker 3 (36:45):
I'll put a little context around each one of these
builds we're going to be talking about in water. About
three years ago, noticing that we had seismicity and over
pressurization issues, I insisted that we start a pilot program
to invite people to come in and treat water and
use it for irrigation, and proud to say today we
have three of those pilot programs going. Legislation thinks that
(37:09):
the permitting for that needs to be moved over to TCQ.
So Senate Bill eleven forty five, introduced by Birdwell was passed.
It's gone to the Governor's desk for now for the
TCQ to take that over and to issue those permits
where people wanting to treat produced water and use it
for irrigation, not only for natural vegetation, but for agricultural needs.
(37:32):
I just wanted to make sure you got a context
how that was developed and how that was done. That
was actually set the Railroad Commission that started that initiative,
and I'm proud to say today that it's taking serious
enough to where it's been moved over to TCQ for
an actual outline of how that's going to be permitted,
which I think will help people with certainty and what
(37:54):
regulatory is going to look like around that. The other one,
Senate Bill twenty one twenty two, allows the Railroad Commission
to impose application fees for certain permits relating to a
on gas waste. So it's going to allow us to
really take a hard look at things like empowerments water
(38:15):
empowerments that carry water prior to being treated, about imposing
bonding requirements that protect our environment and protect people for
the health, so that in the case that those those
companies may get to where they cannot operate, there'll be
enough funding so that taxpayers don't have to foot the
(38:37):
bill for cleaning some of those projects up if that
ever occurs, which I don't think it will given the
like of rainfall we seem to experiencing here in Texas.
And then again, you know, I talked about Senate Bill seven.
Senate Bill seven was the one that Charles Perry led
and provides a billion dollars a year to help encourage,
(38:57):
you know, opening up infrastructionructure and creating other ways and
other uses for the water. And I think the one
that's most important was House Bill forty nine, which was
co authored with Perry, Senator Charles Perry and a Representative Derby.
And what it does is it addresses liability and it
(39:21):
has a It reverts the definitions that are in there now.
It reverts them to its exists transferred for treatment and
subsequent benefit possession, treatment, beneficial reuse and UH as far
(39:41):
as producers and surface owners of fluid all and gas
generated waste will not be liable for tort components unless
as provided in a subsection, And the sub one of
the subsections is that if you go out and you
do not meet the conditions under your granted permit authority,
(40:02):
then you would be liable as long as those conditions
are met and that water is used somewhere else, the
liability for the person that generated that water will be
removed and it will be placed on the person that's
going to be treating the water. So I think that's
a great bill. It provides certainty and how this mechanism
(40:24):
will unfold, and I think it was part of what
was holding us back of actually getting this thing on
a commercial scale so that we get the benefit of
that water absolutely.
Speaker 2 (40:36):
I mean, I could see Khaniko wanting to sell or
get rid of their waste water, but are they going
to be sued if something happens to that water? And
I can see that Bill forty nine. Hospital forty nine
is definitely a great bill. Let's move on to plugging wells.
You had a lot of bills come out on plugging
wells we've been talking about wells, but injection. Let's switch
(40:58):
and tell us a little bit about what you've been
following in these Senate bills.
Speaker 3 (41:02):
You know, there was a lot of talk any verted
for the past few years about abandoned in the orphan wells,
and in the state of Texas, there were actually three
bills that mitigated some of that. Birdwell had one that
allows for people just to volunteer to plug orph and wells.
And the reason people would volunteer to do that is
(41:22):
if they wanted to reproduce a field, or if they
wanted to use that field for some sort of injection
or storage or for carbon capture, those kind of things.
And then I sentate Bill seventeen fifty nine, which was
also introduced by Birdwell, allows for industry to help the
Railroad Commission with respect to emergency situation and limits liability
(41:43):
for providing assistance to the Railroad Commission with respect to
these emergency declarations. And by that what I mean is
a lot of these wells, and I talked about this
early on that were vertical wells, and the over pressurization
issues has essentially some of them to become sprinkler systems,
and those are not part of what we've contemplated within
(42:06):
our budget. As an example, last year, just one of
those wells cost US over eight million dollars to go
mitigate and plug once it started looking like it was
a sprinkler system. So in the Bill seventeen fifty nine
there was a physical note that was put on it
for one hundred million dollars, which we were given in
(42:28):
order to have enough money to continue our orpher and
well plugging program and also have money in reserve to
fight those conditions that we did not know would occur,
like the emergency I call them sprinkler systems. And then
lastly was Senate Bill eleven fifty which now tells producers
(42:49):
that wells that you have out there that are fifteen
years or older, you must come up with a plugging
plugging program and start plugging those wells. There's a lot
of detailed to that one, and I don't know we
have enough time to go through that, but I think
that is a great step in the right direction.
Speaker 2 (43:06):
Well, they should be responsible for the end of life
of that well and show how they're going to instead
of just leaving it for the State of Texas to
deal with it.
Speaker 3 (43:14):
Yeah, I think it's showing too that legislatures are really
taking and putting attention to this, and I think that
that those as we go through the next couple of
legislative sessions, I think we'll see all those things improve
even better. Absolutely, I'm really proud of what kind of
happened this year.
Speaker 2 (43:28):
It sounds like a great year for a lot of these.
We've got about thirty seconds left. Did you want to
cover one lass?
Speaker 3 (43:36):
There are some other bills around all field theft that
were good. It's going to create an organization of all
Field Theft Prevention Unit with the Department of Public Safety
and charges the Railroad Commission to create a task force
to study it. So I think I think all those
things are good. We're seeing a lot of theft out
in all field today, and so we want to make
(43:56):
sure that we have the authority not just from this agency,
but other agencies to go try to combat what's going on.
Speaker 2 (44:05):
Absolutely, well, Commissioner right, thank you for coming on the
show today and talking to us about a bunch of
different things you all are working on. I'm glad to
have you stop in, and please feel free to let
us know if you have something you want to update.
Us on like when you start your new I can't
even believe that there is stuft in the oil field.
What what are they stealing? But oh well, that's probably
(44:26):
sounds like another show.
Speaker 3 (44:28):
But when you get they're stealing oil, kim oil, oh well.
Speaker 2 (44:31):
Okay, well that kind of knew that, but wow, that
can't be that easy. Okay, well, definitely when you get
your task force going, let us know, we'll be happy
to see.
Speaker 3 (44:39):
As always, it's an honor and a pleasure to come
on your show, and I want to again tell you
thank you for all you've done in educating people and
what energy really means and what it really means for
us here in the state of Texas.
Speaker 2 (44:51):
Absolutely, thank you, Commissioner, right.
Speaker 3 (44:54):
Thank you.
Speaker 1 (44:55):
The Energy Mixed Radio Show is where we explore topics
that affect us all in the oil and gas industry.
Every week, our host will interview the movers and shakers
in this fast paced industry. You'll hear from industry experts,
elected officials, and many more on the Energy Mix Radio Show.
Welcome to the nationally syndicated Energy Mix Radio Show produced
by the Energy Network Media Group. The Energy Mix Radio
Show will give you an inside look at the energy
industry and how it affects you by talking with industry leaders, experts,
and government officials on the Energy Mix Radio Show.
Speaker 2 (00:16):
And welcome back to the Energy Mix Radio Show, where
we dive deep into the latest developments shaping the energy industry. Today,
I have a special guest, Commissioner Jim Wright of the
Texas Railroad Commission. A Commissioner, Wright has been at the
forefront of Texas energy policy, overseeing critical regulation and advancements
in the oil and gas sector. Yesterday, he was at
(00:39):
the Porter Corpus Christie's celebration of the completion of the
Ship Channel Improvement Project, a major milestone that deepens and
widens the harbor to enhance energy exports and efficiencies. We'll
discuss the significance of this project, its impact on Texas energy,
and what it means for the future of the energy industry. Additionally,
(01:01):
with the eighty ninth Texas Session closing are coming to
a close, we'll explore policy changes affecting energy and the
Texas Railroad Commission and what businesses and consumers can look
forward to. Welcome back, Commissioner Right.
Speaker 3 (01:15):
Thank you again for letting me be on the show.
It's always an honor, and I want to thank you
for all the efforts you put into educating people on
what energy means for not only the state of Texans,
but for our nation and for our allies across the globe.
Really appreciate all your efforts. I'm excited to be on
today's show and talk about the issues that you brought
(01:36):
up earlier.
Speaker 2 (01:38):
Well, you know, Commissioner Right, it is so important that
you know first of all, that Texans understand how important
your regulatory agency is. You don't regulate railroads, you regulate
the oil and gas industry and more anything that's going
on with energy, you guys are a part of it,
and they need to understand that. And then also, I
(01:58):
believe that the Texas Railroad Commission is a model for
other states to look at and see how do we
produce energy efficiently, think about the environment as well as
continue to support the residents of Texas. So I love
having you come on the show and explore that with me,
help the consumers understand the importance of what you guys do.
(02:22):
So let's get started with a little bit about yesterday.
Yesterday you and I were attending a celebration from the
Port of Corpus Christy their expansion, and as I stated earlier,
they completed an improvement project that actually deepened and widened
their ability to move ships in and out of their harbor.
(02:44):
Tell me a little bit about how important this was
to not just the residents of South Texas, but how
it's going to benefit all of Texas, especially when we
talk about Middland Odessa, where the main energy hub is
right now and it's moving product actor to the Port
Corpus Christie. How important was this and tell us a
little bit about your thoughts.
Speaker 3 (03:06):
Oh, yeah, and that's a great question too. It's it's
incredibly important to us continuing our ability to move our product,
to try to have people receive our product, that that
utilize it in such a way that that we continue
with investor confidence we we have the marketability to get
(03:27):
to get those products to everyone throughout the state, the nation,
and the world. You know, yesterday's project at the City
of Corpus Christie's port, or the Port of Corpus Christie
was a was a huge huge impact for what's going
to happen, not not just locally, but but as you said,
all the way across the state when it comes to
(03:48):
getting products moved around where it needs to be. You know,
if you look at the widening and the deepening of
the ship channel and the installation of the new harbor
bridge that we put in, it will bigger ships to
load more cargo, which is estimated to save I think
annually over two hundred million dollars in transportation costs, which
(04:09):
means we stay more competitive here in the local areas
Carpus Christie when delivering those products. So Corpus Christie, not
a lot of people know the port is the number
one exporter of crude oil in our nation. I think
it's number four in the world. So it's really it's
it's it's infrastructure is set up to deliver products, to
(04:33):
ship products out, you know, I think, I think we
have more work to do and in furthering our infrastructure, infrastructure,
growth growth to continue the magnitude of what we're able
to produce out of Texas. And it's an exciting time.
I mean it said yesterday's was a was a really
a great honor to be at and be a part
(04:55):
of and to see what those impacts are again not
just for our community, but for the on gas industry
throughout Texas.
Speaker 2 (05:03):
Can you give me an idea? So you mentioned two
hundred million annually in transportation costs that we're expected to save.
I think some of the businesses and maybe even consumers
are questioning or you know, trying to figure out what
does that mean for them? And especially since our show
does air in Midland and Odessa and we're happy that,
you know, we're airing in that area, how do you
(05:24):
see this really benefiting that specific area with it being
so remote, they have a lot of they have some challenges.
How will this also benefit those great people in the
Middle and Odessa area?
Speaker 4 (05:37):
You know?
Speaker 3 (05:37):
Unfortunately, Corbus Christia has been one of the easier ports
to get ships in and out of. In the expansion
of this product or the expansion of the canal itself
allows us to bring bigger capacity type ships in to
where those ships can actually double the amount of product
that goes into them and be able to flow that
(06:00):
weight out to see and to receive those ships and
turn them around and load them. And we're fortunate that
Midland West Texas. Those areas have really seen what the
ease is of moving that product through Corpus Christian. A
lot of the infrastructure, the pipelines have been built to
service the products that gets put into those ships. So
(06:24):
when you talk about the two hundred million that it's
estimated in savings, it's pretty simple math. If you put
double the amount of product on the same transport vehicle,
then the cost is cut in half. So that's that's
what we're looking at when you say that we're going
to look at saving two hundred million, which will be
good in opening up other markets for us. In that
(06:48):
I think that's a really important key for our success
here in Texas, just to make sure that we're always
searching for newer markets so that we can have some
steadiness when it comes to our pricing in the marketplace.
We can eliminate this historical peaks in valleys that our
markets has experienced, because we all know during the peaks,
we hire a lot of people and we you know,
(07:09):
we gear up to try to meet the market demand,
and then all of a sudden we fall into a valley,
which means that we have to lay off people. We
have less jobs, we have less less comp investor confidence.
It's just not a good thing. We need to make
sure that we're looking at the market as Corpus Christie's
poor to Port Corpus Christie has done in trying to
(07:31):
create that a steady graph, not a peaked in valley graph.
When it comes to servicing the market.
Speaker 2 (07:38):
How important do you think now with Opec plus announcing
they're going to continue to put their product on the market.
It's driving down prices and we already were in a
place where it was so tough for profitability on the
industry as it was now with this new widening and
deeping of Porter Corpus Christie, do you see any easing
(08:01):
there for them? Do you see that this will have
a positive impact on them considering the climate that they're
already in in a difficult market to just make a profit.
How welcoming is this news for them? Do you think for.
Speaker 3 (08:14):
Opeck it shouldn't be a very good welcoming news if
that's your question. But I will say this that it
should be very welcoming for us because it allows us
to increase our product and our ability for those savings
of getting more on these ships, which means that we
(08:35):
should be able to compete better in the market, not
only in our marketplace and with our allies, but we
should be able to manage and maneuver lower pricing, which
is good for everybody in the nation at the pomp
and our profits should continue to escalate if we can
just continue to do things like or Coropus Christi just completed.
(08:58):
By deepening and widening channel, you start creating efficiencies where
again that moves more toward a steady line instead of
a peaked in valley line as we've seen in the
history of all on gas business.
Speaker 2 (09:12):
I think in an industry that has very very little normalcy,
it's constantly up and down and all around as you mentioned,
they welcome this type of activity. So now they know
that they have the port they're able to do. This
gives them at least a little bit of some reassurance
that they'll have some normalcy on some basic ability to
(09:35):
know what can be moved through there on a regular
basis as opposed to its always flopping around.
Speaker 3 (09:40):
In addition to pricing carem everybody knows that consumers also
rely or are they demand reliability, So us having that
ability that por Corpus Christie has with making sure that
we get that volume a supply that are needed in markets.
By deep and widening the channel, I think opens us
(10:03):
up to newer markets that we've never been able to
penetrate before that our competition people that are involved with
OPEC have been successful in doing so. We just were
getting closer to be able to compete better in our
world market in that and I think we will continue
to see that as we move forward in time. And
the widening of the ship channel and all the things
(10:25):
that the Port Corpus Christie has done with putting in
a new bridge on Tallar Bridge to allow bigger ships,
those are all the vast improvements that it will take
for us to continue those success.
Speaker 2 (10:36):
Well, I want to switch gears, and there's two things
I really want to highlight in this show as well.
One is we are completing the eighty ninth Texas Legislator
and I want for you to tell us some of
the bills that you were following and why. But before
we get to that, the Texas Railroad Commission recently issued
some new guidelines for permitting when we talk about salt
(10:58):
water disposal, well, and so that went into effect June first,
twenty twenty five. We're going to talk about that too,
but I am going to have to take a quick break.
When we return, I want to cover again the closing
of the eighty ninth legislative session. What bills came out
of there, What do we need to watch and look
out for, what are you all following as the Railroad Commission?
(11:20):
And then also in great detail, what was the design
behind how you all needed to look at the guidelines
on these disposal wells, the rationale and everything that was
behind that, and how you guys came up with that.
I'd also like to ask how it is the feedback
of was this something that the industry itself was looking
(11:43):
for reform or was it not looked upon because of
the nature of what you guys were trying to do.
How the industry as well as the citizens viewed the
permitting and the new guidelines of the well. But let's
take a quick break. You're listening to the Energy Mix
radio show, and we'll be right back.
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Speaker 2 (13:02):
And we're back. You're listening to the Energy Mix radio show.
My guest today is the Honorable gim Right. Commissioner GYM
Right of the Texas Railroad Commission. Commissioner Right, you all
with the Texas Railroad Commission recently issued some new guidelines
for permitting salt water disposable wells in the Permium basin
and that it took place January first. These changes include
(13:25):
an expanded area of review, limited injection pressure, and restrictions
on daily injection volumes to address the seismicity concerns and
reservoir integrity. Can you walk us through the reasoning behind
these updates and how they're going to impact operators here
in Texas.
Speaker 3 (13:45):
You know, that's a complicated answer to your question, and
I think it's important that people listeners understand kind of
some of the history of US drilling and producing all
gas here in the state of Texas, back before we
discovered the shell, and by the shell, the definition of
that is gas and oil that was found in really
(14:06):
tight formations that we had to fracture to get access
for that stuff to float a surface. Before in the
old days, we would drill simply like most people do
with their water wells. We drill down straight. We'd hope
that we hit a pool and we would extract that
oil and water and natural gas and return the water
(14:30):
back to the place in which it came from. Today,
it's totally different. Today we go into a tighter formation,
a very tight formation. We run those vertical wells into
horizontal wells. Well they'll go down sometimes deep to eight
to ten thousand feet and turn and go a mile
mile and a half in a vertical or a horizontal position. Anyway,
(14:54):
they will turn and run along that formation, and then
they'll fracture and break that mass conglomerate of rock so
that oil, water and natural gas start to flow to
the surface. Those formations are so tight, and the difference
that we deal in today since the discoveries of the
shell in twenty eleven, doesn't allow us to return that
(15:16):
water to those same for producing formations. So we've got
to look at different formations to put that produced water
alongside the on gas that's being generated. And just so
people know today that average a very conservative average on
a well that's producing. At its peak, we're producing about
four barrels of water for every barrel of crue. Today
(15:39):
we're almost every day generating about six million barrels of crude.
So the math is just in our generation twenty four
million barrels of water that we have to deal with,
which again is going back into formations that it did
not derive from. So when you look at some of
the issues that can be created from that, two things
(16:00):
can happen, which we've seen seismicity can occur when you
try to shove something into two areas that put additional
weight on fault lines, and if you go into other formations,
you get what's called over pressurization. And overpressurization is simply
a higher pressure that will seek a path of least resistance.
(16:23):
And when we talked about drilling in the old days,
the vertical wells that went straight down, those those started
being drilled in the twenties, thirties, forties, fifties, and those
are still still a lot of them existing today. Those
are those, to me, are pathways of least resistance. Those
are over pressurization that could force some of that brind
(16:46):
that produced water up into fresh water sources. So knowing that,
you know, I started myself as one of the three
commissioners almost two years ago holding informal talks with mid
midstream water handlers and producers about the issues in seismicity
(17:08):
and over pressurization. And I think we had meetings almost
on a monthly basis there for a year or a
little better than the year, talking about how we were
going to mitigate that. In addition to looking at treatment
and reuse of that water, we also talked about what
could we do to continue to mitigate seismicity and over pressurization.
(17:31):
And that's why just as of May fifteenth, twenty twenty five,
through those meetings and through some of the talks that
we've had with all of the constituents involved, we came
up with a notice to operators and it created new
guidelines for permitting order disposal wells in the Permianium basin.
Those new guidelines became effective June first of this year,
(17:54):
and these guidelines strengthen the Commission's current disposal well permitting
requirements by focusing permitting efforts on ensuring that injected fluids
remain confined to the disposal formations. That's by demonstrating the
mechanical characteristics the confining strata, and by closest scrutiny of
(18:15):
well bor penetrations. Within an expanded area of review, we're
looking at at a lot of things that's going to
impact that, mainly concentrating on how do we mitigate seismicity
and over pressurization. And I'm going to a lot of
detail on that if we have time to, I'll be
(18:35):
happy to do that. But the gist of what we're
trying to accomplish here is making sure that we have
the data and the technology to ensure that injection moving
forward as of June first, is doing everything we can
to stop seismicity and to stop any overpressurization concerns that
(18:56):
could impede our fresh groundwater sources.
Speaker 2 (19:00):
Well, I think we will. We're going to go to
break here, but I want to come back and give
you an opportunity to drill down a little bit more.
I think it's important because not all of our listeners.
We do have a lot of energy listeners that are
understanding where this is coming from, but some not so
that are listeners. And the one thing that I would
hear regularly this was back in the height of Eagle
Ford Shell days, is how the Railroad Commission was just
(19:23):
an auto pin of just signing they were for big
oil and gas and they didn't care about the environment
and this and that and things like this. Actually commission
right show the Railroad Commission is not just a rubber stamper.
They are looking at the community. They are looking at
what is for the best of Texas and taking into
consideration we have to keep energy flowing and the oil
(19:45):
and gas. That's a huge part of resources that we
get here for economic development, but we have to look
at it at the same time, what is in the
safety of the energy industry, the community and the environment.
And so you come when we come back from break,
drilling down a little bit more to help the listeners understand.
That's exactly what's happening here. The Texas Railroad Commission is
(20:05):
looking at everything and evaluating and making change changes for
the greater good. Let's take a quick break. You're listening
to the Energy Mix radio show. We'll be right back.
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Speaker 2 (21:22):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Jim Wright of the Texas
Railroad Commission.
Speaker 3 (21:28):
Commissioner.
Speaker 2 (21:29):
Right, let's get back on a decision that the three
of you guys, there's three commissioners Christi, Kredit, Commissioner Wayne Christian,
and yourself making policies at the Railroad Commission. You guys
implemented big change when we talk about disposable wells. It
goes into effect June one, which they're in effect as
of right now. And it was looking at seismicity and
(21:49):
how they were injecting water back into the wells that
you informed us of why we were having these problems. Now,
I want you to drill down a little bit more
if you don't mind and tell the listeners you know
why this was important to look at all things and
that the Railroad Commission does care about the community and
making sure that when we are drilling, we're doing it
(22:11):
in the most not just efficient way, but the safest way,
and taking of course our climate into consideration and the environment.
Speaker 3 (22:19):
But going onto mitigating seismicity and over pressurization, I'd like
to talk a little bit more about, you know, where
where are these new rules being being impactful, and those
are within our districts at seven C, eight A, and
eight which is pretty much all of West Texas to Permium,
(22:40):
and they they're gonna they're going to ask for information
that requires what what the use or installation of the
injection well is and is it in public interest to
put that well in? Secondly, the use or installation of
the injection well will not endanger or injure any oil,
(23:01):
gas or other mineral formations. And thirdly, uh, it must
provide proper safeguards both ground and to our ground and
surface of fresh water sources that will always be protected
from pollution that could come from mixing it with produced water.
(23:21):
You know, the these are these are considered areas of review,
and and that area of review has gone from a
half mile radius now to a two mile radius. It must,
it must be implemented. You know, where conditions exist that
may increase the risk that fluids will not be confined
to the injection interval. Such conditions might might include, but
(23:46):
they're certainly not limited to complex geology, proximity of the
basement rock to the injection interval, transmissive faults and our
history of seismic events and the areas demonstrated UH the
USGS and also UH, you know when it comes to
appl applicability injection wells that are not for all and
(24:08):
gas waste disposal on. I just want to make sure
that I clarify this. For example, injection wells for water
flood or other enhance recovery, pressure, maintenance or storage are
not part of these new new guidelines that we've set out.
I need to make sure that people know that you
know that this thing essentially will focus on the applicants
(24:30):
thorough characterization of the of the insituous stretches of a
confining zones upper and lower and the permitted injection interval,
as well as the average reservoir pressure and the permitted
injection intervals. I mean, it's it's it's it's complex document.
It's going to require a lot of a lot of study,
(24:52):
a lot of experts to come in and give us
this data in order for us to consider issuing injection permits. Again,
all of this is to mitigate seismicity and or over pressurization.
You know, you talked about it a little bit earlier,
you know, and people may be scratching their head going,
Man's that's a lot that you've added to getting a
(25:14):
permit to inject produced water. It is a lot, and
it's also an effort to encourage people to recycle and
reuse water.
Speaker 7 (25:25):
You know.
Speaker 3 (25:25):
I don't think there's anybody listening to your program that
will not agree that Texas is in one of the
worst drought conditions we've seen in our history, especially everywhere
in that west of the ninety eighth. And I think
everybody would agree that technology has come a long way.
It continues to improving vastly, especially as we're looking at
(25:49):
AI and all the new things that we're seeing in
the ability to economically safely treat that produced water.
Speaker 2 (25:58):
Absolutely too. Jim, let me take a quick break because
I want to return on this a little bit deeper
into this. So you're listening to the Energy Mix radio show,
we'll be right back.
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Speaker 2 (27:22):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Gym Ride at the Texas
Railroad Commission. Sorry, Commissioner Ride, I had to take a
hard break, but I want to get back on so
all you mentioned. There's a lot of complexity into what
now operators are going to have to do to reinject
this water that's being produced back into injection rolls, and
(27:45):
it seems like it's going to be pretty complicated and
probably very pricey as well for them. But there's other
solutions that I think you and the Texas the other
commissioners are trying to get the operators to move towards.
And that's more of rec Can you drill down on
that for us too?
Speaker 3 (28:03):
Yeah, And certainly, as I was saying before we went
to break, I think most people will agree that over
half of Texas today is in a pretty severe drought conditions.
We're searching for new water sources, and those new water
sources come with some things that you really have got
to consider. You've got to consider what are the economic
(28:24):
impacts of using new water sources, things like produced water.
This new program that we're putting into effect, that has
gone into effects since June first, is not only a
way to mitigate the seismicity and over pressurization, but I
hope it also encourages people to move faster, quicker, and
(28:45):
stronger into recycling that water. As I said, the technology
is there, the economics work for this, and it's something
that I feel like the oil and gas industry is
going to have to address in recite in order for
us to continue our great success and production of our
own gas. I think that this when you look at
(29:09):
what can we identify for future water sources in the
water needs that we have today, this goes to the
top of the list because you can treat this water safely,
you can do it in a way that will not
harm our environment. We have natural waterways to carry it
where places is needed. And it's also the most economical
(29:32):
that most of our communities can find. Because this is
something that producers are are addressing and are going to
have to address in mitigating seismicity and overpressurization, which could
be a huge problem if it continues to occur. Can
you only imagine, Kim, if we did have a seismic
(29:54):
event and where the roof came down and actually harmed somebody,
what the mark, what the industry would look like? I mean,
I would hate to even it makes me shutter to
even think about that happening. I'm going to fight night
and day to make sure that it doesn't. So that's
that's the reason we've we've introduced these new rules and
(30:16):
regulations when it comes to that injection in the permium,
and hopefully this adds even more strength to encouraging that
water that's being produced to be reused as a much
needed source of water for everybody, especially west of the
ninety eighth meridian. Are in Texas absolutely well. If Texas
(30:38):
does not consider looking at the economics of determining what
water sources can be reused, you're going to see that
Texas is going to start losing a lot of its
industrial strength. Industry has to have water in order to
create their products. They're going to move to places that
provide that water safely and economically. And if we can't
(31:02):
do that, we're going to we're going to find ourselves
in really bad shape.
Speaker 2 (31:08):
Right And I know that, you know, the Railroad Commission
only has so many things that you all can do
to try to push this forward. But I do think,
you know what you mentioned earlier, you know, we could
be one bad seismicity meaning earthquake, tremor away from something
really bad happening here in Texas. And then now it's
(31:29):
you know, for legislators to have to start really forcing
and maybe even the federal government potentially requirements. When you
said earlier, they have the ability, It does the economics
work for them to convert some of this water into
reusable water, and it just makes sense, It just makes sense.
(31:51):
It's a license to operate.
Speaker 3 (31:53):
You know, that leads that leads into a very good
way of going to the next segment of what you
want discuss. And I will say that, you know, for
the last two legislative sessions, I've had the opportunity to
work with Senator Charles Perry has been a leader in
this in this side of things. He has he has
(32:13):
introduced Senate Bill seven UH. It is going to the
Governor's desk to be signed into law, and it expands
the Texas Water Fund to include new infrastructure development projects
to transport and integrate new water supplies, including produced water,
(32:33):
and I think the funding on that today is in
the magnitude of a billion dollars per year to try
to not not just for produce water, but for for
you know, other sources, so that people have a way
to afford to build the infrastructure to treat and to
transport it to places where we need it. I couldn't
(32:56):
be more proud of Senator Charles Perry and the air
for said he's put into this and all the work
he put in to get in it past the finish line.
Speaker 2 (33:05):
Well, we're going to have to take another quick break.
This will be the last session that we have before
we have to wrap it up. But what I do
want to do with you, if you don't mind we
come back from break, is really do a legislative wrap
up from the eighty ninth Texas Legislative Session. And I
know you have quite a few bills that you want
to cover on well plugging. Then we also were talking
(33:25):
about water, so let's get into that. Let's take a
quick break. You're listening to the Energy Mixed radio show.
We'll be right back.
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Speaker 2 (36:12):
And we're back. You're listening to the Energy Mix radio show.
My guest today is Commissioner Jim Wright of the Texas
Railroad Commission. Commissioner. Right, we have had our eighty ninth
Texas Legislative Session wrap up. There were a lot of
bills that came out of there that you all have
been watching, some pertaining to well plugging, some pertaining to
wildfire risk and mitigation, and some pertaining to water. Let's
(36:35):
go back to water and then we'll touch on the
fire risk and plug welling. Tell us a little bit
about what the final session was pertaining to water recycling.
Speaker 3 (36:45):
I'll put a little context around each one of these
builds we're going to be talking about in water. About
three years ago, noticing that we had seismicity and over
pressurization issues, I insisted that we start a pilot program
to invite people to come in and treat water and
use it for irrigation, and proud to say today we
have three of those pilot programs going. Legislation thinks that
(37:09):
the permitting for that needs to be moved over to TCQ.
So Senate Bill eleven forty five, introduced by Birdwell was passed.
It's gone to the Governor's desk for now for the
TCQ to take that over and to issue those permits
where people wanting to treat produced water and use it
for irrigation, not only for natural vegetation, but for agricultural needs.
(37:32):
I just wanted to make sure you got a context
how that was developed and how that was done. That
was actually set the Railroad Commission that started that initiative,
and I'm proud to say today that it's taking serious
enough to where it's been moved over to TCQ for
an actual outline of how that's going to be permitted,
which I think will help people with certainty and what
(37:54):
regulatory is going to look like around that. The other one,
Senate Bill twenty one twenty two, allows the Railroad Commission
to impose application fees for certain permits relating to a
on gas waste. So it's going to allow us to
really take a hard look at things like empowerments water
(38:15):
empowerments that carry water prior to being treated, about imposing
bonding requirements that protect our environment and protect people for
the health, so that in the case that those those
companies may get to where they cannot operate, there'll be
enough funding so that taxpayers don't have to foot the
(38:37):
bill for cleaning some of those projects up if that
ever occurs, which I don't think it will given the
like of rainfall we seem to experiencing here in Texas.
And then again, you know, I talked about Senate Bill seven.
Senate Bill seven was the one that Charles Perry led
and provides a billion dollars a year to help encourage,
(38:57):
you know, opening up infrastructionructure and creating other ways and
other uses for the water. And I think the one
that's most important was House Bill forty nine, which was
co authored with Perry, Senator Charles Perry and a Representative Derby.
And what it does is it addresses liability and it
(39:21):
has a It reverts the definitions that are in there now.
It reverts them to its exists transferred for treatment and
subsequent benefit possession, treatment, beneficial reuse and UH as far
(39:41):
as producers and surface owners of fluid all and gas
generated waste will not be liable for tort components unless
as provided in a subsection, And the sub one of
the subsections is that if you go out and you
do not meet the conditions under your granted permit authority,
(40:02):
then you would be liable as long as those conditions
are met and that water is used somewhere else, the
liability for the person that generated that water will be
removed and it will be placed on the person that's
going to be treating the water. So I think that's
a great bill. It provides certainty and how this mechanism
(40:24):
will unfold, and I think it was part of what
was holding us back of actually getting this thing on
a commercial scale so that we get the benefit of
that water absolutely.
Speaker 2 (40:36):
I mean, I could see Khaniko wanting to sell or
get rid of their waste water, but are they going
to be sued if something happens to that water? And
I can see that Bill forty nine. Hospital forty nine
is definitely a great bill. Let's move on to plugging wells.
You had a lot of bills come out on plugging
wells we've been talking about wells, but injection. Let's switch
(40:58):
and tell us a little bit about what you've been
following in these Senate bills.
Speaker 3 (41:02):
You know, there was a lot of talk any verted
for the past few years about abandoned in the orphan wells,
and in the state of Texas, there were actually three
bills that mitigated some of that. Birdwell had one that
allows for people just to volunteer to plug orph and wells.
And the reason people would volunteer to do that is
(41:22):
if they wanted to reproduce a field, or if they
wanted to use that field for some sort of injection
or storage or for carbon capture, those kind of things.
And then I sentate Bill seventeen fifty nine, which was
also introduced by Birdwell, allows for industry to help the
Railroad Commission with respect to emergency situation and limits liability
(41:43):
for providing assistance to the Railroad Commission with respect to
these emergency declarations. And by that what I mean is
a lot of these wells, and I talked about this
early on that were vertical wells, and the over pressurization
issues has essentially some of them to become sprinkler systems,
and those are not part of what we've contemplated within
(42:06):
our budget. As an example, last year, just one of
those wells cost US over eight million dollars to go
mitigate and plug once it started looking like it was
a sprinkler system. So in the Bill seventeen fifty nine
there was a physical note that was put on it
for one hundred million dollars, which we were given in
(42:28):
order to have enough money to continue our orpher and
well plugging program and also have money in reserve to
fight those conditions that we did not know would occur,
like the emergency I call them sprinkler systems. And then
lastly was Senate Bill eleven fifty which now tells producers
(42:49):
that wells that you have out there that are fifteen
years or older, you must come up with a plugging
plugging program and start plugging those wells. There's a lot
of detailed to that one, and I don't know we
have enough time to go through that, but I think
that is a great step in the right direction.
Speaker 2 (43:06):
Well, they should be responsible for the end of life
of that well and show how they're going to instead
of just leaving it for the State of Texas to
deal with it.
Speaker 3 (43:14):
Yeah, I think it's showing too that legislatures are really
taking and putting attention to this, and I think that
that those as we go through the next couple of
legislative sessions, I think we'll see all those things improve
even better. Absolutely, I'm really proud of what kind of
happened this year.
Speaker 2 (43:28):
It sounds like a great year for a lot of these.
We've got about thirty seconds left. Did you want to
cover one lass?
Speaker 3 (43:36):
There are some other bills around all field theft that
were good. It's going to create an organization of all
Field Theft Prevention Unit with the Department of Public Safety
and charges the Railroad Commission to create a task force
to study it. So I think I think all those
things are good. We're seeing a lot of theft out
in all field today, and so we want to make
(43:56):
sure that we have the authority not just from this agency,
but other agencies to go try to combat what's going on.
Speaker 2 (44:05):
Absolutely, well, Commissioner right, thank you for coming on the
show today and talking to us about a bunch of
different things you all are working on. I'm glad to
have you stop in, and please feel free to let
us know if you have something you want to update.
Us on like when you start your new I can't
even believe that there is stuft in the oil field.
What what are they stealing? But oh well, that's probably
(44:26):
sounds like another show.
Speaker 3 (44:28):
But when you get they're stealing oil, kim oil, oh well.
Speaker 2 (44:31):
Okay, well that kind of knew that, but wow, that
can't be that easy. Okay, well, definitely when you get
your task force going, let us know, we'll be happy
to see.
Speaker 3 (44:39):
As always, it's an honor and a pleasure to come
on your show, and I want to again tell you
thank you for all you've done in educating people and
what energy really means and what it really means for
us here in the state of Texas.
Speaker 2 (44:51):
Absolutely, thank you, Commissioner, right.
Speaker 3 (44:54):
Thank you.
Speaker 1 (44:55):
The Energy Mixed Radio Show is where we explore topics
that affect us all in the oil and gas industry.
Every week, our host will interview the movers and shakers
in this fast paced industry. You'll hear from industry experts,
elected officials, and many more on the Energy Mix Radio Show.
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