RRC Works to Improve Regulation of Oil, Gas Industry

The Railroad Commission of Texas (RRC), in its role regulating energy production and ensuring natural resources are extracted responsibly, has been taking advantage of operational and technological efficiencies to achieve its goals.

In early August, RRC commissioners took actions to further address flaring with proposed revisions to the Application for Exception to Statewide Rule 32, while the Commission creates better reporting requirements to record for how much each flare releases and an integrated online system connecting the work of permit writers, operators, and agency field staff.

The proposed changes to the application are within parameters of existing rules and are currently in a 30-day public comment period. The proposed revisions can be found at https://rrc.texas.gov/about-us/resource-center/forms/proposed-form-changes/.

As the commission moves forward with these important steps, there have been some recent positive trends. While the amount of natural gas produced from oil and gas wells dropped by 13% from June 2019 to May 2020, the rate of produced gas that was flared went down by an even greater 79% over the 12-month period. More importantly, the flaring rate of casinghead gas, which is the gas produced from oil wells, decreased by 85%, and the ratio of casinghead gas flared to the amount of crude oil produced decreased by 82%.

“The sharp decline in the flaring rate suggests that decreased flare volume was caused by more than simply a decrease in production,” said Paul Dubois, RRC assistant director for technical permitting. “We will continue analyzing the monthly data that comes in. That information, along with the proposed modifications to the Statewide Rule 32 applications will help us continue a comprehensive approach to regulating flaring.”

Growth of the energy industry and protection of environment are not mutually exclusive. According to the Association of Air Pollution Control Agencies’ 2019 report, the six major pollutants regulated by the EPA decreased by 73% from 1970 to 2017, while the U.S. economic growth increased by 262%.

In order for the U.S. to be independent of oil and gas from troubled parts of the world and to protect itself from being held hostage to the politics of such places, it needs Texas, with its abundance of oil and gas resources. According to a U.S. Geological Survey (USGS) assessment in 2018, portions of the Delaware Basin in Texas and New Mexico’s Permian Basin area contain an estimated 46.3 Bbbl of oil, 281 Tcf of natural gas, and 20 Bbbl of natural gas liquids. In 2016, USGS estimated that the Midland portion of the Permian Basin contains 20 Bbbl of oil, 16 Tcf of associated natural gas, and 1.6 Bbbl of natural gas liquids.

In the Energy Information Administration’s Texas State Energy Profile, which was last updated in July, the state is still the largest energy producer in the U.S., accounting for more than 40% of crude oil production and 25% of natural gas production.

Natural gas accounts for more than half of Texas’ electric production and 38.5% of the nation’s, according to the EIA. Because of Texas’ rich resources, the cost of electricity in the state is much less than other parts of the country—in fact, it costs 49% less than California and 43% less than New York.

SOURCE: The Weekly Propane Newsletter, August 20, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.