Part 1.
RAILROAD COMMISSION OF TEXAS
Chapter 3.
OIL AND GAS DIVISION
16 TAC §3.80
The Commission adopts amendments to §3.80, relating
to Commission Oil and Gas Forms, Applications, and Filing Requirements, with
changes to the version published in the December 26, 2003, issue of the
Over the past few years, the procedure for updating Oil and Gas Division
forms to meet Commission and external customer needs has been inconsistent.
There is a need for a formal forms adoption process to balance changes to
forms with the needs of staff and other stakeholders, computer programming
and other information technologies capabilities and priorities, and legal
issues concerning notice of form changes. Furthermore, the Commission's ongoing
Oil & Gas Migration (OGM) Project is bringing about increased electronic
filing capabilities and form changes, and thus makes more urgent the need
for a more structured--even formal--process.
In the past, forms were revised with input from Commission staff and external
customers through an informal process. Currently, §3.80 states that "the
Commission may revise any forms, at its discretion, without having a rulemaking
proceeding
if the revisions do not result in any
substantive changes to the forms
" (emphasis added); however, the rule
does not define "substantive changes." In addition, stakeholders have advised
the Commission that even seemingly minor changes to some forms may present
major problems for them. Further, the Commission's Office of General Counsel
(OGC) has indicated that it is preferable that any form the Commission requires
be adopted or revised through formal rulemaking, and that rulemaking is legally
required when information regarding the necessity and use of a form, and the
penalties for failure to comply, are found only on the form itself.
The Commission evaluated several possible options for addressing these
issues. The first option was to amend each rule pertaining to a form to include
a specific reference to the appropriate form or forms, and to initiate a rulemaking
to amend that rule when a form change is proposed. The form would show as
the creation or revision date the effective date of the rule amendment. A
second option was to amend §3.80 to include a list of all forms with
the creation or last revision date and to amend §3.80 whenever a new
or amended form is proposed. A third option was to provide for both informal
and formal notice of, and opportunity to comment on, proposed forms changes
through publication on the Commission's web site and in the section of the
Discussion of Oil and Gas Division forms and the need for a more structured
process also was targeted in Commissioner (then Chairman) Michael Williams'
Regulatory Vision effort by the "Process for Managing Forms Issue Group" (the
Issue Group). This group, made up of Commission staff and industry representatives,
consulting firms, and other stakeholders, developed a procedure for managing
Oil and Gas Division forms, which would be a more formalized version of the
Commission's past process. This more structured and formal procedure would
direct all requests for form changes to the Oil and Gas Division Director;
include establishment of a Form Work Group for each proposed form change;
incorporate a period of informal review and comment; and include a formal
rulemaking process to amend §3.80 to approve and adopt the new or amended
form. The process for managing forms recommended by the Issue Group is as
follows:
Process for Managing Oil and Gas Division Forms
developed by the Issue Group
1. Forms changes will be initiated through: (1) a change in a rule or law;
(2) a request from a Commissioner or agency staff; or (3) a request from an
external customer.
2. Any change requested by staff or an external customer will be required
to be accompanied by an explanation of and support for the proposed changes
and a preliminary identification of impacts to the Commission.
3. The request will be submitted to the Oil and Gas Division Director (the
Director), who either will refer it back to the originator with a request
for more information or a rejection of the proposal or will authorize an ad
hoc Form Work Team with instructions to proceed with the proposed change.
4. The Form Work Team, which will include appropriate Oil and Gas Division,
Information Technologies Division, and Office of General Counsel staff, will
perform a detailed analysis and draft the proposed new or amended form; circulate
the proposal within the Commission; and complete a final draft form.
5. The Director will request approval from the Commission to seek comments
from external stakeholders.
6. If the Commission approves the request, staff will provide notice of
the proposed form change in the
Texas Register
in
the "In Addition" section; on the Commission's Web site; and in a stripout,
subscription, or stakeholder mailing list, as appropriate.
7. The Form Work Team will receive and analyze comments and recommendations
from all stakeholders and will revise the draft form as necessary and appropriate.
8. The Form Work Team will draft the proposed amendment to §3.80 and
any necessary amendments to other rules.
9. The Form Work Team will send the final draft new or amended form and
the proposed rule amendments to the Director.
10. The Director will request Commission approval to publish for formal
comment the proposed new or amended form and rule amendments.
11. If the Commission approves, staff will submit for publication the proposed
rule amendments and a copy of the proposed new or amended form in the
12. After the comment deadline, the Form Work Team will review and analyze
the comments and make changes, if necessary and appropriate, to the form and/or
rule(s).
13. The Director will request that the Commission adopt the rule amendments
and new or amended form.
14. If the Commission adopts the rule and the form, staff will submit for
publication the final rule(s) and form in the
Texas
Register
.
The process proposed by the Issue Group includes both informal comment
and formal comment associated with rulemaking; thus, it is not expeditious.
The proposed forms management process may not be realistic over the next few
years for forms changes that result from the Commission's OGM Project because
of firm project deadlines for completing certain work and the need to finalize
internal data information needs. In addition, the need for rapid progress
in the OGM Project may mean that there will not be sufficient time to allow
informal comment prior to formal comment through rulemaking.
The OGM Project is a major business process re-engineering and information
technology initiative to move the Commission's outdated computer mainframe
technologies to an open systems environment. The purpose of the project is
to improve the Oil and Gas Division's internal business processes and provide
the public with access to accurate information in a real-time environment.
Additionally, this project provides the opportunity for reassessing data reporting
requirements and for enhancing filing capabilities through an improved Electronic
Data Interchange (EDI) process and on-line filing system. The Commission's
OGM Project, into which Electronic Compliance and Approval Process (ECAP)
has been incorporated, will eventually enable the Commission to meet its ultimate
goal of implementing a totally paperless electronic workflow system for regulatory
permitting and reporting through the use of Internet-based technologies, relational
databases, document imaging, and workflow software. Therefore over the next
few years, the Commission periodically will be revising forms or adopting
new ones to reflect new screen configurations for all compliance permits and
performance reports that are filed with the Commission.
The Commission's objective is to provide as much time as possible for stakeholder
review and comment without delaying work on the OGM Project. Therefore, during
the OGM Project, the Commission will be asking stakeholders for up-front comments
on Commission forms that the Commission may consider during the OGM Project,
and will use the Commission's web site to notify stakeholders of upcoming
proposed form changes and to obtain stakeholder input in a more expeditious
manner than would be possible through an extended informal comment period.
The amendments to §3.80 will establish the process to be used in the
future and, at the very least, will assure that stakeholders will have an
opportunity to submit formal comments on any form change proposed by the Commission.
The Commission also adopts revised language relating to electronic filing
in anticipation of changes and/or new electronic filing opportunities that
will develop in association with the expansion of the ECAP and the OGM Project.
As amended, §3.80 establishes a formal forms adoption process to balance
the needs of Commission staff and other stakeholders, computer programming
and other information technologies capabilities and priorities, and legal
issues concerning notice of form changes. The rule provides a process for
the Commission to revise existing forms or adopt new ones to reflect new screen
configurations for all compliance permits and performance reports that are
filed with the Commission. The Commission also adopts revised language relating
to electronic filing in anticipation of changes and/or new electronic filing
opportunities that will develop in association with the expansion of the ECAP
and the OGM Project. And, the adopted amendments make changes relating to
the Commission's electronic filing capabilities and forms resulting from the
Commission's ongoing (OGM) project.
The Commission amends §3.80(a) to delete language that allows the
Commission to revise any form, at its discretion, without having a rulemaking
proceeding. The amendment also adds Table 1, entitled Railroad Commission
Oil and Gas Division Forms, which lists all Oil and Gas Division forms and
the date that each was adopted or last revised. The Commission adds language
to subsection (a) to require that a complete set of all Oil and Gas Division
forms be posted on the Commission's web site. The Commission adds language
in subsection (a) to allow an organization to file any required or discretionary
filing using either the prescribed paper form or any electronic filing process
in accordance with subsections (e) or (f) of §3.80, as applicable. The
Commission also adds language in subsection (a) to allow the Commission to
accept an earlier version of a prescribed form, provided that it contains
all currently-required information. The Commission clarifies the requirement
by specifying that electronic filings must comply with subsection (e)(3) of §3.80.
The expected result is that stakeholders will have specific notice of when
the Commission proposes to adopt or change a form and will have an opportunity
to comment through the formal rulemaking process. These amendments also provide
the regulated community with a list of all Oil and Gas Division forms and
the creation or revision date of the current versions.
The Commission adopts amended §3.80(b), relating to definitions, to
alphabetize the definitions, to add a definition for "form," and to replace
the existing definition of "electronic filing" with a definition of "electronic
filing process." The Commission defines "form" as a "printed or typed document
or electronic submission, including any necessary instructions, with blank
spaces for insertion of required or requested specific information." The Commission
defines "electronic filing process" as "an electronic transmission to the
Commission in a prescribed form and/or format authorized by the Commission
and completed in accordance with Commission instructions."
The Commission adopts amended §3.80(c) to change the five years to
seven years, in accord with amendments to Texas Natural Resources Code, §91.114(a)(2),
made by Senate Bill 1484 (Acts 2003, 78th Legislature, ch. 956, §1, effective
June 20, 2003).
The Commission adds a new subsection (e), relating to authorization and
standards for electronic filing. New §3.80(e)(1) allows an organization
to file electronically any form listed on Table 1 for which the Commission
has provided an electronic version, provided that the organization pays all
required filing fees and complies with all requirements, including but not
limited to security procedures, for electronic filing.
New §3.80(e)(2) provides that an organization filing or upon whose
behalf is filed electronically any form shall be deemed to have knowledge
of and to be responsible for the information filed on a form pursuant to the
statutory requirements, restrictions, and standards found in and pertaining
to Texas Natural Resources Code, Title 3 (oil and gas well drilling, production,
and plugging); Texas Natural Resources Code, Title 5 (geothermal resources);
Texas Natural Resources Code, Title 11 (hazardous liquids storage); Texas
Utilities Code, Chapter 121, Subchapter I (sour gas pipeline facilities);
Texas Water Code, §26.131 (discharge permits); Texas Water Code, Chapter
27 (class II injection and disposal wells and class III brine mining wells);
Texas Water Code, Chapter 29 (oil and gas waste haulers); Texas Health and
Safety Code, §401.415 (oil and gas naturally occurring radioactive material
(NORM) waste); and Texas Administrative Code, Title 16, Chapter 3 and Chapter
4.
New §3.80(e)(3) requires that all electronic forms that an organization
transmits or that are transmitted on its behalf be transmitted in the manner
prescribed by the Commission that is compatible with its software, equipment,
and facilities.
New §3.80(e)(4) provides that the Commission may give electronic notice
to an organization of an electronic filing, and may provide the ability for
an organization to check whether the Commission has received electronic filings
it made or that were made on its behalf. This new paragraph also provides
that the Commission may notify an organization electronically of, and may
provide the ability for an organization to confirm, the Commission's receipt
of a form electronically submitted by or on behalf of that organization. Numerous
operators contract with third-party consultants to handle required and discretionary
filings with the Commission. Because an organization whose name appears on
a form filed with the Commission is ultimately responsible for the filing
and the information contained in the filing, the Commission plans to build
into its new open computer system a method by which to notify an organization
of an electronic filing or a way for an organization to electronically check
to determine if the Commission has received any electronic filings for that
organization.
New §3.80(e)(5) states that the Commission deems the signature of
an organization's authorized representative to appear on each form submitted
electronically by or on behalf of the organization, as if this signature actually
appears, as of the time the form is submitted electronically to the Commission.
New §3.80(e)(6) reiterates each organization's responsibility, under
the penalties prescribed in Texas Natural Resources Code, §91.143, for
all forms, information, or data that an organization files or that are filed
on its behalf. The Commission charges each organization with the obligation
to review and correct, if necessary, all forms or data that an organization
files or that are filed on its behalf. The wording in subsection (e)(6) has
been amended to correct a grammatical error; in that subsection, the word
"is" in the phrase "is filed on its behalf" has been replaced with the word
"are."
The Commission deletes existing §3.80(e), which referred to requirements
for electronic filing under ECAP. The Commission also deletes the language
in existing §3.80(f), which relates to requirements for electronic filing
under the EDI program. The language in both these subsections is replaced
with the broader language in new §3.80(e) to accommodate possible changes
in the requirements for electronic filing associated with the Commission's
new automated systems. There will be no immediate changes for any operator
that has met the ECAP and EDI filing requirements. The Commission will provide
advance notice of any future changes in electronic filing requirements.
The Commission re-designates current §3.80(g), relating to other electronic
transmission, to subsection (f), to allow the Commission, at its discretion,
to accept any other documents or data electronically transmitted.
In conjunction with the adopted amendments to §3.80, the Commission
also adopts revised forms related to Class II Underground Injection Control
(UIC) well applications (Forms W- 14, H-1, and H-1A), adopts a new production
reporting form (Form PR), and adopts a revised Form W-1 (Application for Permit
to Drill, Recomplete, or Re-Enter), as well as new Forms W-1D and W-1H (Supplemental
Directional Well Information and Supplemental Horizontal Well Information,
respectively).
The Commission revises Form W-14, Application to Dispose of Oil and Gas
Waste by Injection into a Formation Not Productive of Oil and Gas; Form H-1,
Application to Inject Fluid into a Reservoir Productive of Oil or Gas; and
Form H-1A, Injection Well Data (an attachment to Form H-1). The Commission
adds a few new data elements to these forms that the Commission requires to
enable competent review of the application but for which there is currently
no space on the forms. The Commission also deletes certain information currently
requested on the forms, but not required by the rules. These form revisions
have been in development for several years--the latest discussions occurred
in conjunction with Commissioner Williams' Regulatory Vision efforts--with
much opportunity for review and comment by stakeholders. Copies of the proposed
revised forms were published for review and comment in the same issue of the
As a part of the ongoing OGM Project, the Commission adopts revisions to
Form W-1, Application to Drill, Deepen, Plug Back, or Reenter, as well as
two new forms, Form W-1D, Supplemental Directional Well Information, and Form
W-1H, Supplemental Horizontal Well Information. These new forms contain no
new data requirements. The adopted revision to Form W-1 and the new Forms
W-1H and W-1D generally reflect the current flow of the ECAP screens for electronically
applying for a drilling permit and will facilitate the Commission's conversion
of the filing, review and approval of a well's drilling permit application
to a completely electronic process. The effective date of the revised Form
W-1 and new Forms W-1D and W-1H is July 1, 2004. The new revision date for
these forms is indicated in Table 1 of §3.80. The Commission will not
accept the old forms after the new revision date because the format of the
old forms is not compatible with the Commission's new electronic workflow
procedures.
In addition, the Commission revises Form P-1, Producer's Monthly Report
of Oil Wells, and Form P-2, Producer's Monthly Report of Gas Wells, to consolidate
production reporting on one monthly form, new Form PR, Monthly Production
Report. Commission staff originally presented the new Form PR to potentially
affected external stakeholders, including representatives of industry, consultants,
and forms software providers, at an October 10, 2003, meeting as a part of
the Oil and Gas Migration project. The comments received by the Commission
on the proposed revised production reporting form as a result of that meeting
and the comments received by the Commission through this rulemaking were generally
positive. The Commission has deleted some data elements, such as the gas lift
volumes and disposition Code 9 for well separation extraction loss on gas
wells, and has clarified other data elements, such as including a break-down
for more specificity on disposition Code 7 (other dispositions).
The Commission contracted with a third party for help in the final design
of the Form PR so that these forms can be scanned. The Commission also made
some changes in response to comments. Therefore, the specific format design
of the form changed very slightly, but the overall format and required information
did not change substantially from the version published in the December 26,
2003, issue of the
Texas Register
(28 TexReg
11455). The new Form PR revision becomes effective for production reports
filed for January, 2005, production or any production report, including corrected
reports and late reports, filed after close of business (5:00 p.m. Central
Time) on February 11, 2005. The Commission will be "migrating" the data on
its mainframe system to the new open system the weekend starting Friday, February
11, 2005, after 5:00 p.m. Central Time. The Commission expects the migration
to be completed some time before 8:00 am on Monday, February 14, 2005. Because
the Commission will be switching to the new data system, the Commission will
not be able to accept old Forms P-1 and P-2 after close of business on Friday,
February 11, 2005. Therefore, any production reported to the Commission after
February 11, 2005, including corrected reports for production reports filed
before that date, must be reported on the new Form PR. Any production reports
NOT filed on the new Form PR that are received by the Commission after the
close of business on February 11, 2005, will be returned to the operator.
The Commission received two comments, one from an association and one from
an individual. The comment from the association was generally in support of
the Commission's proposed amendments, but offered suggestions for changes,
particularly on the forms.
The individual, a third party consultant for various oil and gas entities,
commented not on the proposed rule amendments or form changes, but on the
Commission's proposed deadline for accepting expedited applications for drilling
permits. The Commission advised consultants at a meeting at the Commission
headquarters in Austin on January 15, 2004, that the Commission was considering
a deadline of 12:00 noon for receipt of any expedited drilling permit applications
that are received by the Commission in paper form. The commenter noted several
problems such a deadline could cause both consultants and Commission staff.
The commenter stated that most overnight delivery services do not deliver
until 10:30 a.m. If the consultant received an overnight delivery at 10:30
a.m. from a client asking that a drilling permit application be expedited,
the consultant would not have enough time to prepare the Forms W-1 and attachments
and correct any problems. If the consultants were able to adequately prepare
the paperwork, there would be a number of consultants arriving at the Commission
between 11:30 a.m. and 12:00 noon in order to meet the deadline and these
consultants would be standing in line waiting to get the drilling permit applications
entered before the deadline.
The Commission is adopting a revised Form W-1 and new Forms W- 1D and W-1H
in preparation for implementation of a new automated Drilling Permit System
scheduled for release July 1, 2004. Through this system, the Commission will
image scan and process electronically all drilling permit applications filed
in paper format. All drilling permit information filed after the new drilling
permit system is deployed will be available for public viewing through the
ECAP query System on the Commission's website at www.rrc.state.tx.us. This
will include images of permit applications, drilling permits, plats, and attachments.
In preparation for this change, effective on March 1, 2004, the Commission's
deadline for receipt of expedited Form W-1 Drilling Permit Applications requesting
same-day processing changed from 3:00 p.m. to 12:00 noon to allow Commission
staff to enter the information from the paper filing into the ECAP system
to enable the request to be forwarded electronically to the necessary sections
for processing to meet the "same day processing" deadline for expedited permits.
The processing goal for Form W-1 applications that include the $150 expedite
fee will be the same day they are received if the filing arrives at the Commission's
Austin Office, Drilling Permit Section, before noon. Although Commission staff
will continue to process all expedited Form W-1 applications as quickly as
possible, those arriving at the Commission after 12:00 p.m. may not be processed
the same day they are received. Commission staff will strive for a turn- around
time of eight working hours for expedited applications received after the
noon deadline.
The commenter also stated that consultants would not be able to use the
ECAP process because the majority of their clients pay by check or pre-pay.
The commenter also noted that his clients usually send only one check to cover
the charge for multiple Forms W-1 and expressed concern with how he would
pay if all of the applications were not entered by the noon deadline. The
Commission is working with the designer of the Commission's new OGM system
to accommodate this concern within the constraints of the Commission's resources
and technical capabilities.
This commenter also wanted to know how the Commission plans to scan oversized
plats, such as those that must be filed with a drilling permit application
for the first well on the lease, for horizontal wells, and for wells for which
an exception to §3.37 and/or §3.38 (relating to Statewide Spacing
Rule and Well Densities, respectively) is required. The Commission has the
capability to scan oversized documents, such as plats.
The Texas Oil and Gas Association (TxOGA) stated that it generally supports
the Commission's proposed adoption of a formal process by which Oil and Gas
Division forms used by the industry in permitting and submission of data can
be adopted and revised and a list of forms that provides a clear notice of
the latest version of any form currently being used by the Commission. TxOGA
also expressed its full support for the Commission's OGM Project and the hope
that the Commission's efforts will update and streamline many of its current
processes and that this will result in reduction and/or elimination of redundant
reporting and elimination of reporting of information that is no longer necessary.
TxOGA further expressed appreciation for the opportunity to have participated
in the Issue Group to produce a workable process by which forms can be proposed
for change by either the Commission staff or industry representatives for
mutual benefit. The Commission appreciates this comment.
TxOGA stated that, although it supports the adoption of the formal process
in the proposed §3.80 changes, it is disappointed in the Commission's
statements that the process may be unrealistic while the OGM Project is ongoing.
TxOGA stressed that it is at this time specifically, as the Commission undertakes
its most ambitious revision of forms and processes, that this process would
be most beneficial. TxOGA acknowledged that time constraints may be unavoidable
but reiterated that industry must have ample opportunity to review, process,
and comment on the changes that will be proposed. TxOGA committed to providing
comments as rapidly as possible.
The Commission agrees with this comment that stakeholder input is essential
and reiterates that the Commission's objective is to provide as much time
as possible for stakeholder review and comment without delaying work on the
OGM Project. As it did in the preamble to the proposed amendments to §3.80,
the Commission will be asking stakeholders for advance comments on forms that
the Commission may consider during the OGM Project, and will use the Commission's
web site to notify stakeholders of upcoming proposed form changes and to obtain
stakeholder input in a more expeditious manner than would be possible through
an extended comment period, whether formal or informal. Although the adopted
amendments to §3.80 establish the
formal
process
to be used in the future and, at the very least, assures that stakeholders
will have an opportunity to submit formal comments on any form change proposed
by the Commission,
whenever possible
the Commission
plans to follow the procedure outlined in the preamble to the proposed amendments
to §3.80 in the December 26, 2003, issue of the
Texas Register
(28 TexReg 11455), including the creation of ad hoc
form work teams and the opportunity for informal comment in proposed forms.
TxOGA also provided comments on proposed Forms H-1, H-1A, W- 14, W-1, W-1D
and W-1H. In general, TxOGA agreed that revision of these forms is timely
and should be done, but recommended that the Commission require on the forms
only information required or needed for the Commission to approve or deny
the filing to avoid unnecessary burdens on the applicant. The Commission agrees
with this comment and reiterates that a large part of the Commission's OGM
Project is a major re-engineering of the Commission's business processes.
This effort is providing the Commission with an opportunity to completely
reassess data reporting requirements and application requirements and eliminate
those that are not necessary.
TxOGA urged the Commission to allow adequate time for implementation for
the proposed form changes to allow vendors to perform any necessary work to
upgrade forms programs for their customers. TxOGA estimated that six months
from rollout of the final program requirements by the Commission would be
required for operator implementation if the only changes are to the format
in which the data will be presented on the form(s) and if no new data are
required. TxOGA advised that if the Commission imposed new data submittal
requirements, the time necessary for industry to comply could be from 12 to
18 months. TxOGA further recommended that all changes be made at one time,
as it will cost each company many thousands of dollars to make programming
changes each and every time the RRC changes the reporting requirements.
The Commission is keenly aware of the need to provide adequate notice to
operators concerning effective dates of revised or new Commission forms and
will provide as much time as possible within the constraints of the Natural
Resources Code, the Administrative Procedure Act, and the OGM Project. The
Commission understands that the time between adoption of a form and its implementation
is especially critical for high volume forms that operators currently file
electronically through EDI, such as the production reports. The Commission
therefore adopts an effective date for Form PR for production reports filed
for January, 2005, production or any production report filed after close of
business (5:00 p.m. Central Time) on February 11, 2005. Because Form PR has
been designed as a fillable PDF file, very little programming should be required
because the form will not have to be recreated. The Commission will make the
form available as a .PDF file on its website. As part of the change to the
new combined Form PR for production reporting, the Commission will make available
on its web page and by mail request, the electronic format required to file
the new Form PR through the new EDI system. The Commission will include in
this material instructions related to testing procedures for the new format.
Testing of the new format and the approval process will begin in the fall
of 2004. The instructions will also include contact information for questions
and additional information.
The time between adoption of a form and the implementation date may not
be as critical for forms that are filed much less frequently or that are not
currently filed electronically, such as the UIC Forms W-14, H-1, and H-1A,
for which the Commission adopts an effective date of May 1, 2004. As noted
previously, the revised drilling permit applications generally reflect the
flow of the ECAP screens for electronic application. The effective date for
Forms W-1, W-1D, and W-1H are tied to the Commission's rollout of the new
ECAP system scheduled for July 1, 2004. The Commission is also attempting
to make all proposed changes to forms at one time, because any subsequent
changes to the forms and the Commission's data systems would consume more
of the Commission's scarce resources.
TxOGA also provided specific comments on the proposed new and revised forms
proposed in the December 26, 2003, issue of the
Texas Register
(28 TexReg 11455). TxOGA suggested that the Commission
change Blocks 6 and 8 on Form H-1 to delete the word "project"; change Block
10, "Types of fluids," to "Add or Change Fluid Type" with a check box to be
consistent with the rest of Block 10; change Block 12, "Composition," to "Lithology,"
based on the examples listed; rename Block 16, "Acreage," to "Acreage in lease
or unit" to be consistent and to avoid confusion with the aerial extent of
the reservoir or the lease/unit; and reword Block 27 to say "If water other
than produced salt water will be injected, identify the source of each type
of injection water by formation, or by aquifer and depths, or by name of surface
water source." TxOGA's reason for this last suggested change is that the question
presumes that "fluids other than produced salt water" consist of water from
another source. This is confusing when dealing with CO2 as an injectant because
CO2 is an "injection fluid(s) other than salt water" but it is not injection
water whose source is a named formation, aquifer, etc. The Commission finds
that these suggested changes clarify the form and has made the changes to
Form H-1.
TxOGA also recommended that the Commission delete the requirement in Block
21 on Form H-1 for the injection pattern and spacing information because such
information is not necessary for the Commission to make a decision to review
an application. The Commission agrees that this information is not necessary,
and has deleted Block 21 and renumbered subsequent blocks accordingly.
TxOGA requested that the Commission clarify Instruction 1 on the back of
Form H-1, the request for an additional $150 fee for exceptions, to insure
that it applies only to exceptions contemplated in §3.46 (relating to
Fluid Injection into Productive Reservoirs) such as those described in §3.46(g)(3)
and (j)(5)(B). The Commission agrees that this change would clarify the instructions,
and has added the specific rule references. The Commission also made a similar
change in the instructions for the Form W-14.
TxOGA recommended that the Commission revise Instruction 2 on Form H-1,
which asks for a log of one of the proposed injection wells. TxOGA requested
that the instruction be clarified to provide, consistent with current Commission
practice, that if such a log is not available, the applicant may substitute
a log from a nearby well instead. The Commission agrees with this comment
and has made this change to the instructions on Form H-1.
TxOGA also recommended deleting the second sentence in Instruction 2 requiring
operators to attach any other logging and testing information available for
the well, because this request is an expansion of existing requirements and
is unduly burdensome--operators can choose to submit additional data they
wish to provide in support of an application, but should not be required to
submit all logs and data available for the well. The Commission did not propose
to change this wording, which is on the previous Form H-1 instructions; however,
the Commission agrees that all logs and data for the well would not be necessary
for staff to perform an adequate review of the application. The Commission
has therefore modified the language of Instruction 2 to require only the logging
and testing information available for the well that would support the application.
TxOGA requested that the Commission revise Instruction 3(a) on Form H-1,
concerning the map of wells, to show only wells of public record that lie
within a 1/4 mile radius of the
proposed injection
wells
, not the "project area." The Commission agrees that this change
clarifies the requirement and has made this change.
Also with respect to Instruction 3(a), TxOGA requested that the Commission
change the language from "expansion of previous authority" to "amendment of
previous authority" to avoid confusion, because an expansion of a previous
authority is not a stated reason for filing an H-1. The Commission agrees
with this comment and changed the language to read "amendment to add wells
to a previous authority."
TxOGA requested that the Commission revise Instruction 7(a) and (b) of
Form H-1 to require identification of certain parties and notice of the application
to such parties to reflect the requirements in §3.46, (relating to Fluid
Injection into Productive Reservoirs). The Commission agrees with this comment
and has modified the language to more closely track the language in the rule.
TxOGA requested that the Commission modify Block 10 on Form H- 1A and stated
that the "UIC number" should be assigned when the permit is issued, and it
should be identified on any new or amended permit rather than being first
revealed when pre-printed H-10's are sent out. Unfortunately, the Commission's
current mainframe computer system is set up to assign the UIC number after
the permit is issued. The system was established this way because the Commission
issues injection and disposal well permits for wells that are not drilled,
and/or have no drilling permit number, API number, lease name or number. Commission
staff will keep this request in mind when the Commission begins work to reassess
and re-engineer its business processes associated with the UIC programs under
the OGM Project.
TxOGA requested that the Commission increase the available space in Block
14(a) of the Form H-1A to allow for adequate information. The Commission agrees
that this would be helpful and has increased the allowable space within the
restrictions of the form.
In commenting on Block 19 on Form H-1A, TxOGA stated that if a liner is
not run all the way to surface, there is no place on the proposed form to
record this information even though it would seem to be important to a proper
technical review of the well's construction. TxOGA suggested that the language
be modified to ask "If a liner was installed in the well, what is the top
of liner?" The Commission agrees that this would be important information.
Because of limited space on the form, however, the Commission has taken an
alternative action. The space in Block 19 has been slightly expanded, and
a comment has been added to the instructions for Form H-1A to include both
the top and bottom setting depth of any liner that is not run to the surface.
TxOGA also requested that the Commission add two more "free form" lines
in Block 24 on Form H-1A to allow for inclusion of several squeeze jobs or
that the applicant be requested to attach additional information as necessary.
TxOGA also requested that the Commission delete the required information concerning
the "top of cement" on a squeeze job because this information is almost never
known. The Commission partially agrees and has added free-form lines. However,
the Commission does not agree that the top of cement is never known. The top
of cement can be calculated with reasonable certainty or tagged and the applicant
should know the top of cement.
TxOGA recommended that the Commission accept the Form H-1A construction
data as an update to previously filed Form W-2 completion reports, and not
require the applicant to revise the Form W-2 to make it agree with the Form
H-1A filing. At this time, the Commission's programs are not set up to automatically
update the information on the last Form W-2. In addition, §3.46(h), concerning
well record, currently requires that the operator submit Form W-2 within 30
days after completion or conversion of an injection well and the Commission
did not propose to change this requirement. The Commission will keep this
comment in mind when designing the new data management systems for UIC and
any conforming amendments to Commission rules.
TxOGA stated that the word "current" appears twice in instruction Item
2 on Form H-1A. TxOGA also requested that the Commission reword as "Complete
the field name and number (Items 3 and 4) as designated by current Commission
records." TxOGA had a similar comment for Item 3 on Form H-1A. The Commission
agrees and has made these corrections.
TxOGA requested that the Commission revise Form W-14 to allow more room
in Blocks 12, 32, and 40 for describing information. The Commission agrees
and has allowed more space in these blocks, within the limits of the form.
TxOGA also recommended that the Commission modify Form W-14 to delete the
requirement in Blocks 37 and 39 for average daily injection volumes and pressures
in addition to maximum daily injection volumes and pressures. TxOGA states
that the information is unnecessary because the permit is for a maximum condition
not an average condition. The Commission disagrees with this comment, and
has not changed the form. This information is important. Although any disposal
well permit issued by the Commission contains a limit based on the estimated
maximum conditions of pressure and volume, any permit issued by the Commission
is also based on information contained in the permit application, including
the average conditions under which the well will be operated. Although not
generally noted in the permit, the average daily injection volume and pressure
are necessary to evaluate potential impacts from operation of the well under
average or normal conditions, as well as maximum conditions.
TxOGA requested that the Commission delete Block 24 on Form W- 1, which
would require the unitization order number, because it is currently not required
in the manual Form W-1 or when using ECAP and is not necessary for the Commission
to regulate this activity. The Commission declines to make this change. By
providing the unitization number, the operator avoids filing a Form P-12 unnecessarily.
If a lease has been pooled and unitized through the hearing process, a Form
P-12 filing is not required. The current ECAP system has this functionality
and, for the current paper Form W-1 process, Commission staff gathers this
information manually and writes it on the form. Uniformity is gained by adding
this functionality. Although the Commission declines to make the recommended
change, it has added an explanation to the instructions on Form W-1 to clarify
why the Commission is requesting the information.
TxOGA commented that the information required in Blocks 33, 34, and 35
on Form W-1 is redundant when an applicant is also filing the Form W-1H or
Form W-1D, and thus should be required on Form W-1 only when a Form W-1H or
Form W-1D is not being filed. The Commission originally provided Blocks 33,
34, and 35 for directional or horizontal wells with a single bottomhole location
and anticipated that Form W-1H and Form W-1D would be used as supplemental
forms only for directional or horizontal wells with multiple bottomhole locations.
The Commission now agrees that including this language on Form W-1 is confusing
and has deleted this section. Now Form W-1 may be filed alone for a vertical
well. Form W-1D must be filed with a Form W-1 for a directional well or an
unintentionally deviated well for which an amended (Form W-1) application
is being filed. Form W-1H must be filed with a Form W-1 for a horizontal well.
The Commission has added clarifying language under Block 34 on Form W-1, and
has changed the name of Forms W-1D and W-1H to indicate that they are supplemental
to Form W-1. The Commission further included additional clarifying language
in the instructions to Form W-1 concerning when these supplemental forms must
be filed.
For Form W-1D, TxOGA recommended that the Commission delete the word "Associated"
in Blocks 5, 13, and 21 because the term is confusing due to very different
meaning in allowable context. The Commission agrees with this comment and
has deleted the word "Associated;" however, the Commission has added language
after "Field" to clarify that the field should be the one shown on Form W-1
for which the supplemental Form W-1D or W-1H is being filed to link the information
in these items with the information shown in Block 27 on Form W-1.
For Form W-1H, TxOGA recommended that the Commission delete the word "Associated"
in Blocks 5, 14, and 23 on Form W-1H, because the term is confusing due to
very different meaning in allowable context. The Commission agrees with this
comment and has deleted the word "Associated;" however, the Commission also
has added language after "Field" to clarify that the field should be the one
shown on Form W-1 for which the supplemental Form W-1D or W-1H is being filed
to link the information in these items with the information shown in Block
27 on Form W-1.
For new Form PR, TxOGA recommended that the Commission change the wording
to use consistent nomenclature for gas. The Commission agrees with this comment
and has modified the form to use the term "casinghead gas/gas well gas" consistently
to avoid confusion.
TxOGA also commented that the drilling permit numbers should be used exclusively
in place of the well or lease identification numbers for the initial months
of production. Once the permit is validated upon filing of the completion
paperwork, it is no longer used whereas the API number remains an active number
with the well bore. The production reporting systems of many operators must
be able to accept the same permit number for wells that have multiple completions.
The system must be able to accept a Form PR showing the same well under different
Commission designated fields with the same drilling permit number. An API
number is associated with the well bore, which may be completed in multiple
reservoirs and thus is not unique to the productive reservoir. API numbers
should be used only when a drilling permit number is not available, such as
when a well is reclassified from oil to gas. The Commission made no change
in response to this comment.
TxOGA recommended that the Commission further explain the column "OGP"
so operators will know exactly what they need to fill this in correctly. The
Commission agrees with this comment and has modified the form.
TxOGA expressed support for the elimination in new §3.80(e) of the
Master Electronic Filing Agreement (MEFA) for ECAP and the Master Electronic
Filing Certification for EDI, and the granting of that authority by rule rather
than agreement. However, TxOGA is unclear how Security Administrator Designation(s)
will be made. TxOGA takes the position that a company should be able to designate
multiple security administrators for each P-5 company and that security administrator
designations should be allowed for multiple P-5s. TxOGA supports the concept
of having the security for reporting and permitting rest with the operator
and not the Commission, and states that it should be the responsibility of
the designated security administrator(s) to delegate authority within a company
to submit reports and make permit applications. The Commission agrees with
these comments. The distributed security design ensures that the control will
rest within the operator's organization through each operator's designated
security administrator(s). Security administrator designations will continue
to be made by the operator on the Security Administrator Designation (SAD)
that is filed with the Commission. An operator may designate multiple security
administrators. After receiving an operator's SAD, the Commission will issue
the designated security administrator(s) a User ID that will allow the security
administrator(s) to access and update the Commission's electronic filing security
system. The security administrator(s) will then be responsible for assigning
additional User IDs to individuals within the company and maintaining that
security.
TxOGA expressed support for the proposed e-filing of all other documents
or data that may help support any filing made with the Commission. TxOGA further
proposes that electronic notices to operators, gatherers, etc., which pertain
to any electronic filing be transmitted to the individual which submitted
the application or electronic form; electronic reply and confirmation to the
filer is fundamental to assuring timely and accurate information submittal.
The Commission appreciates TxOGA's support and agrees that electronic reply
and confirmation of receipt of filing should be elements of the Commission's
electronic filing systems within the restraints of its technical capabilities
and resources.
The Commission specifically solicited comments on Form T-1, Monthly Transportation
and Storage Report, Form P-4, Producer's Transportation Authority and Certificate
of Compliance, and Form P-5, Organization Report, in the December 26, 2003,
proposal, even though these forms were not part of the proposal itself. The
Commission will be focusing on these forms and the associated business processes
over the next few years' work on the OGM Project. TxOGA also provided comments
on Forms T-1, P-4, and P- 5. The Commission appreciates this information and
will consider it as the Commission begins work on these programs.
The Commission adopts the amendments to §3.80 pursuant to Texas Natural
Resources Code, §§81.051 and 81.052, which give the Commission jurisdiction
over all persons owning or engaged in drilling or operating oil or gas wells
and persons owning or operating pipelines in Texas and the authority to adopt
all necessary rules for governing and regulating persons and their operations
under Commission jurisdiction; and §91.142, which requires the Commission
to obtain specified information from a person, firm, partnership, joint stock
association, corporation, or other domestic or foreign organization operating
wholly or partially in this state and acting as principal or agent for another
for the purpose of performing operations which are within the jurisdiction
of the Commission.
Statutory authority: Texas Natural Resources Code, §§81.051,
81.052, and 91.142.
Cross-reference to statute: Texas Natural Resources Code, §§81.051,
81.052, and 91.142.
Issued in Austin, Texas, on March 23, 2004.
§3.80.Commission Oil and Gas Forms, Applications, and Filing Requirements.
(a)
Forms. Forms required to be filed at the Commission shall
be those prescribed by the Commission as listed in Table 1 of this subsection.
A complete set of all Commission forms listed on Table 1 required to be filed
at the Commission shall be kept by the Commission secretary and posted on
the Commission's web site. Notice of any new or amended forms shall be issued
by the Commission. For any required or discretionary filing, an organization
may either file the prescribed form on paper or use any electronic filing
process in accordance with subsections (e) or (f) of this section, as applicable.
The Commission may at its discretion accept an earlier version of a prescribed
form, provided that it contains all required information and meets the requirements
of subsection (e)(3) of this section.
(b)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Commission--The Railroad Commission of Texas.
(2)
Electronic filing process--An electronic transmission to
the Commission in a prescribed form and/or format authorized by the Commission
and completed in accordance with Commission instructions.
(3)
Form--A printed or typed paper document or electronic submission,
including any necessary instructions, with blank spaces for insertion of required
or requested specific information.
(4)
Organization--Any person, firm, partnership, joint stock
association, corporation, or other organization, domestic or foreign, operating
wholly or partially within this state, acting as principal or agent for another,
for the purpose of performing operations within the jurisdiction of the Commission.
(5)
Position of ownership or control--A person holds a position
of ownership or control in an organization if the person is:
(A)
an officer or director of the organization;
(B)
a general partner of the organization;
(C)
the owner of an organization which is a sole proprietorship;
(D)
the owner of more than a 25 percent ownership interest
in the organization; or
(E)
the designated trustee of the organization.
(6)
Violation--Non-compliance with a statute, Commission rule,
order, license, permit, or certificate relating to safety or the prevention
or control of pollution.
(c)
Organization eligibility. The Commission may not accept
an organization report or an application for a permit, or approve a certificate
of compliance if:
(1)
the organization that submitted the report, application,
or certificate violated a statute or Commission rule, order, license, certificate,
or permit that relates to safety or the prevention or control of pollution;
or
(2)
any person who holds a position of ownership or control
in the organization has, within the seven years preceding the date on which
the report, application, or certificate is filed, held a position of ownership
or control in another organization, and during that period of ownership or
control the other organization violated a statute or Commission rule, order,
license, permit, or certificate that relates to safety or the prevention or
control of pollution.
(d)
Violations. An organization has committed a violation if
there is either a Commission order against an organization finding that the
organization has committed a violation and all appeals have been exhausted
or an agreed order entered into by the Commission and an organization relating
to an alleged violation, and:
(1)
the conditions that constituted the violation or alleged
violation have not been corrected;
(2)
all administrative, civil and criminal penalties, if any,
relating to the violation or agreed settlement relating to an alleged violation
have not been paid; or
(3)
all reimbursements of costs and expenses, if any, assessed
by the Commission relating to the violation or to the alleged violation have
not been collected.
(e)
Authorization and standards for electronic filing.
(1)
An organization may file electronically any form listed
on Table 1 for which the Commission has provided an electronic version, provided
that the organization pays all required filing fees and complies with all
requirements, including but not limited to security procedures, for electronic
filing.
(2)
The Commission deems an organization that files electronically
or on whose behalf is filed electronically any form, as of the time of filing,
to have knowledge of and to be responsible for the information filed on the
form, pursuant to the statutory requirements, restrictions, and standards
found in and pertaining to:
(A)
Texas Natural Resources Code, Title 3 (oil and gas well
drilling, production, and plugging);
(B)
Texas Natural Resources Code, Title 5 (geothermal resources);
(C)
Texas Natural Resources Code, Title 11 (hazardous liquids
storage);
(D)
Texas Utilities Code, Chapter 121, Subchapter I (sour gas
pipeline facilities);
(E)
Texas Water Code, §26.131 (discharge permits);
(F)
Texas Water Code, Chapter 27 (class II injection and disposal
wells and class III brine mining wells);
(G)
Texas Water Code, Chapter 29 (oil and gas waste haulers);
(H)
Texas Health and Safety Code, §401.415 (oil and gas
naturally occurring radioactive material (NORM) waste); and
(I)
Texas Administrative Code, Title 16, Chapter 3 (Oil and
Gas Division) and Chapter 4 (Environmental Protection).
(3)
All forms that an organization submits or that are submitted
on behalf of an organization shall be transmitted in the manner prescribed
by the Commission that is compatible with its software, equipment, and facilities.
(4)
The Commission may provide notice electronically to an
organization of, and may provide an organization the ability to confirm electronically,
the Commission's receipt of a form submitted electronically by or on behalf
of that organization.
(5)
The Commission deems that the signature of an organization's
authorized representative appears on each form submitted electronically by
or on behalf of the organization, as if this signature actually appears, as
of the time the form is submitted electronically to the Commission.
(6)
The Commission holds each organization responsible, under
the penalties prescribed in Texas Natural Resources Code, §91.143, for
all forms, information, or data that an organization files or that are filed
on its behalf. The Commission charges each organization with the obligation
to review and correct, if necessary, all forms or data that an organization
files or that are filed on its behalf.
(f)
Other electronic transmissions. The Commission may at its
discretion accept other documents or data electronically transmitted.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on March 23, 2004.
TRD-200402082
Mary Ross McDonald
Managing Director
Railroad Commission of Texas
Effective date: April 12, 2004
Proposal publication date: December 26, 2003
For further information, please call: (512) 475-1295
Subchapter G. EMPLOYEE TRAINING AND EDUCATION PROGRAM
Chapter 20.
ADMINISTRATION