SECTION 3.9. Disposal Wells

Any person who disposes of saltwater or other oil and gas waste by injection into a porous formation not productive of oil, gas, or geothermal resources shall be responsible for complying with this section, Texas Water Code, Chapter 27, and Title 3 of the Natural Resources Code.

(1) General. Saltwater or other oil and gas waste, as that term is defined in the Texas Water Code, Chapter 27, may be disposed of, upon application to and approval by the commission, by injection into nonproducing zones of oil, gas, or geothermal resources bearing formations that contain water mineralized by processes of nature to such a degree that the water is unfit for domestic, stock, irrigation, or other general uses. Every applicant who proposes to dispose of saltwater or other oil and gas waste into a formation not productive of oil, gas, or geothermal resources must obtain a permit from the commission authorizing the disposal in accordance with this section. Permits from the commission issued before the effective date of this section shall continue in effect until revoked, modified, or suspended by the commission.

(2) Geological requirements. Before such formations are approved for disposal use, the applicant shall show that the formations are separated from freshwater formations by impervious beds which will give adequate protection to such freshwater formations. The applicant must submit a letter from the Groundwater Advisory Unit of the Oil and Gas Division stating that the use of such formation will not endanger the freshwater strata in that area and that the formations to be used for disposal are not freshwater-bearing.

(3) Application.

(A) The application to dispose of saltwater or other oil and gas waste by injection into a porous formation not productive of oil, gas, or geothermal resources shall be filed with the commission in Austin accompanied by the prescribed fee. On the same date, one copy shall be filed with the appropriate district office.

(B) The applicant for a disposal well permit under this section shall include with the permit application a printed copy or screenshot showing the results of a survey of information from the United States Geological Survey (USGS) regarding the locations of any historical seismic events within a circular area of 100 square miles (a circle with a radius of 9.08 kilometers) centered around the proposed disposal well location.

(C) The commission may require an applicant for a disposal well permit under this section to provide the commission with additional information such as logs, geologic cross-sections, pressure front boundary calculations, and/or structure maps, to demonstrate that fluids will be confined if the well is to be located in an area where conditions exist that may increase the risk that fluids will not be confined to the injection interval. Such conditions may include, but are not limited to, complex geology, proximity of the basement rock to the injection interval, transmissive faults, and/or a history of seismic events in the area as demonstrated by information available from the USGS.

(4) Commercial disposal well. An applicant for a permit to dispose of oil and gas waste in a commercial disposal well shall clearly indicate on the application and in the published notice of application that the application is for a commercial disposal well permit. For the purposes of this rule, "commercial disposal well" means a well whose owner or operator receives compensation from others for the disposal of oil field fluids or oil and gas wastes that are wholly or partially trucked or hauled to the well, and the primary business purpose for the well is to provide these services for compensation.

(5) Notice and opportunity for hearing.

(A) The applicant shall give notice by mailing or delivering a copy of the application to affected persons who include the owner of record of the surface tract on which the well is located; each commission-designated operator of any well located within one-half mile of the proposed disposal well; the county clerk of the county in which the well is located; and the city clerk or other appropriate city official of any city where the well is located within the municipal boundaries of the city, on or before the date the application is mailed to or filed with the commission. For the purposes of this section, the term "of record" means recorded in the real property or probate records of the county in which the property is located.

(B) In addition to the requirements of subsection (a)(5)(A) of this section, a commercial disposal well permit applicant shall give notice to owners of record of each surface tract that adjoins the proposed disposal tract by mailing or delivering a copy of the application to each such surface owner.

(C) If, in connection with a particular application, the commission or its delegate determines that another class of persons should receive notice of the application, the commission or its delegate may require the applicant to mail or deliver a copy of the application to members of that class. Such classes of persons could include adjacent surface owners or underground water districts.

(D) In order to give notice to other local governments, interested, or affected persons, notice of the application shall be published once by the applicant in a newspaper of general circulation for the county where the well will be located in a form approved by the commission or its delegate. The applicant shall file with the commission in Austin proof of publication prior to the hearing or administrative approval.

(E) Protested applications:

(i) If a protest from an affected person or local government is made to the commission within 15 days of receipt of the application or of publication, whichever is later, or if the commission or its delegate determines that a hearing is in the public interest, then a hearing will be held on the application after the commission provides notice of hearing to all affected persons, local governments, or other persons, who express an interest, in writing, in the application.

(ii) For purposes of this section, "affected person" means a person who has suffered or will suffer actual injury or economic damage other than as a member of the general public or as a competitor, and includes surface owners of property on which the well is located and commission-designated operators of wells located within one-half mile of the proposed disposal well.

(F) If no protest from an affected person is received by the commission, the commission's delegate may administratively approve the application. If the commission's delegate denies administrative approval, the applicant shall have a right to a hearing upon request. After hearing, the examiner shall recommend a final action by the commission.

(6) Subsequent commission action.

(A) A permit for saltwater or other oil and gas waste disposal may be modified, suspended, or terminated by the commission for just cause after notice and opportunity for hearing, if:

(i) a material change of conditions occurs in the operation or completion of the disposal well, or there are material changes in the information originally furnished;

(ii) freshwater is likely to be polluted as a result of continued operation of the well;

(iii) there are substantial violations of the terms and provisions of the permit or of commission rules;

(iv) the applicant has misrepresented any material facts during the permit issuance process;

(v) injected fluids are escaping from the permitted disposal zone;

(vi) injection is likely to be or determined to be contributing to seismic activity; or

(vii) waste of oil, gas, or geothermal resources is occurring or is likely to occur as a result of the permitted operations.

(B) A disposal well permit may be transferred from one operator to another operator provided that the commission's delegate does not notify the present permit holder of an objection to the transfer prior to the date the lease is transferred on Commission records.

(C) Voluntary permit suspension.

(i) An operator may apply to temporarily suspend its injection authority by filing a written request for permit suspension with the commission in Austin, and attaching to the written request the results of an MIT test performed during the previous three-month period in accordance with the provisions of paragraph (12)(D) of this section. The provisions of this subparagraph shall not apply to any well that is permitted as a commercial disposal well.

(ii) The commission or its delegate may grant the permit suspension upon determining that the results of the MIT test submitted under clause (i) of this subparagraph indicate that the well meets the performance standards of paragraph (12)(D) of this section.

(iii) During the period of permit suspension, the operator shall not use the well for injection or disposal purposes.

(iv) During the period of permit suspension, the operator shall comply with all applicable well testing requirements of §3.14 of this title (relating to plugging, and commonly referred to as Statewide Rule 14) but need not perform the MIT test that would otherwise be required under the provisions of paragraph (12)(D) of this section or the permit. Further, during the period of permit suspension, the provisions of paragraph (11)(A) - (C) of this section shall not apply.

(v) The operator may reinstate injection authority under a suspended permit by filing a written notification with the commission in Austin. The written notification shall be accompanied by an MIT test performed during the three-month period prior to the date notice of reinstatement is filed. The MIT test shall have been performed in accordance with the provisions and standards of paragraph (12)(D) of this section.

(7) Area of Review.

(A) Except as otherwise provided in this paragraph, the applicant shall review the date of public record for wells that penetrate the proposed disposal zone within a 1/4 mile radius of the proposed disposal well to determine if all abandoned wells have been plugged in a manner that will prevent the movement of fluids from the disposal zone into freshwater strata. The applicant shall identify in the application any wells which appear from such review of public records to be unplugged or improperly plugged and any other unplugged or improperly plugged wells of which the applicant has actual knowledge.

(B) The commission or its delegate may grant a variance from the area-of-review requirements of subparagraph (A) of this paragraph upon proof that the variance will not result in a material increase in the risk of fluid movement into freshwater strata or to the surface. Such a variance may be granted for an area defined both vertically and laterally (such as a field) or for an individual well. An application for an areal variance need not be filed in conjunction with an individual permit application or application for permit amendment. Factors that may be considered by the commission or its delegate in granting a variance include:

(i) the area affected by pressure increases resulting from injection operations;

(ii) the presence of local geological conditions that preclude movement of fluid that could endanger freshwater strata or the surface; or

(iii) other compelling evidence that the variance will not result in a material increase in the risk of fluid movement into freshwater strata or to the surface.

(C) Persons applying for a variance from the area-of-review requirements of subparagraph (A) of this paragraph on the basis of factors set out in subparagraph (B)(ii) or (iii) of this paragraph for an individual well shall provide notice of the application to those persons given notice under the provisions of paragraph (5)(A) of this subsection. The provisions of paragraph (5)(D) and (E) shall apply in the case of an application for a variance from the area-of-review requirements for an individual well.

(D) Notice of an application for an areal variance from the area-of-review requirements under subparagraph (A) of this paragraph shall be given on or before the date the application is filed with the commission:

(i) by publication once in a newspaper having general circulation in each county, or portion thereof, where the variance would apply. Such notice shall be in a form approved by the commission or its delegate prior to publication and must be at least three inches by five inches in size. The notice shall state that protests to the application may be filed with the commission during the 15-day period following the date of publication. The notice shall appear in a section of the newspaper containing state or local news items;

(ii) by mailing or delivering a copy of the application, along with a statement that any protest to the application should be filed with the commission within 15 days of the date of the application is filed with the commission, to the following:

(I) the manager of each underground water conservation district(s) in which the variance would apply, if any;

(II) the city clerk or other appropriate official of each incorporated city in which the variance would apply, if any;

(III) the county clerk of each county in which the variance would apply; and

(IV) any other person or persons that the commission or its delegate determine should receive notice of the application.

(E) If a protest to an application for an areal variance is made to the commission by an affected person, local government, underground water conservation district, or other state agency within 15 days of receipt of the application or of publication, whichever is later, or if the commission's delegate determines that a hearing on the application is in the public interest, then a hearing will be held on the application after the commission provides notice of the hearing to all local governments, underground water conservation districts, state agencies, or other persons, who express an interest, in writing, in the application. If no protest from an affected person is received by the commission, the commission's delegate may administratively approve the application. If the application is denied administratively, the person(s) filing the application shall have a right to hearing upon request. After hearing, the examiner shall recommend a final action by the commission.

(F) An areal variance granted under the provisions of this paragraph may be modified, terminated, or suspended by the commission after notice and opportunity for hearing is provided to each person shown on commission records to operate an oil or gas lease in the area in which the proposed modification, termination, or suspension would apply. If a hearing on a proposal to modify, terminate, or suspend an areal variance is held, any applications filed subsequent to the date notice of hearing is given must include the area-of-review information required under subparagraph (A) of this paragraph pending issuance of a final order.

(8) Casing. Disposal wells shall be cased and the casing cemented in compliance with §3.13 of this title (relating to Casing, Cementing, Drilling, and Completion Requirements) in such a manner that the injected fluids will not endanger oil, gas, geothermal resources, or freshwater resources.

(9) Special equipment.

(A) Tubing and packer. Wells drilled or converted for disposal shall be equipped with tubing set on a mechanical packer. Packers shall be set no higher than 100 feet above the top of the permitted interval. For purposes of this section, the term "tubing" refers to a string of pipe through which injection may occur and which is neither wholly nor partially cemented in place. A string of pipe that is wholly or partially cemented in place is considered casing for purposes of this section.

(B) Pressure valve. The wellhead shall be equipped with a pressure observation valve on the tubing and for each annulus of the well.

(C) Exceptions. The director may grant an exception to any provision of this paragraph upon proof of good cause. If the director denies an exception, the operator shall have a right to a hearing upon request. After hearing, the examiner shall recommend a final action by the commission.

(10) Well record. Within 30 days after the completion or conversion of a disposal well, the operator shall file in duplicate in the district office a complete record of the well on the appropriate form which shows the current completion.

(11) Monitoring and reporting.

(A) The operator shall monitor the injection pressure and injection rate of each disposal well on at least a monthly basis, or on a more frequent basis as required by the commission under conditions described in paragraph (3)(C) of this section.

(B) The results of the monitoring shall be reported annually to the commission on the prescribed form, or on a more frequent basis as required by the commission under conditions described in paragraph (3)(C) of this section.

(C) All monitoring records shall be retained by the operator for at least five years.

(D) The operator shall report to the appropriate District Office within 24 hours any significant pressure changes or other monitoring data indicating the presence of leaks in the well.

(12) Testing.

(A) Purpose. The mechanical integrity of a disposal well shall be evaluated by conducting pressure tests to determine whether the well tubing, packer, or casing have sufficient mechanical integrity to meet the performance standards of this rule, or by alternative testing methods under subparagraph (E) of this paragraph.

(B) Applicability. Mechanical integrity of each disposal well shall be demonstrated in accordance with provisions of subparagraph (D) and subparagraph (E) of this paragraph prior to initial use. In addition, mechanical integrity shall be tested periodically thereafter as described in subparagraph (C) of this paragraph.

(C) Frequency.

(i) Each disposal well completed with surface casing set and cemented through the entire interval of protected usable-quality water shall be tested for mechanical integrity at least once every five years.

(ii) In addition to testing required under clause (i), each disposal well shall be tested for mechanical integrity after every workover of the well.

(iii) A disposal well that is completed without surface casing set and cemented through the entire interval of protected usable-quality ground water shall be tested at the frequency prescribed in the disposal well permit.

(iv) The commission or its delegate may prescribe a schedule and mail notification to operators to allow for orderly and timely compliance with the requirements in clauses (i) and (ii) of this subparagraph. Such testing schedule shall not apply to a disposal well for which a disposal well permit has been issued but the well has not been drilled or converted to disposal.

(D) Pressure tests.

(i) Test pressure.

(I) The test pressure for wells equipped to dispose through tubing and packer shall equal the maximum authorized injection pressure or 500 psig, whichever is less, but shall be at least 200 psig.

(II) The test pressure for wells that are permitted for disposal through casing shall equal the maximum permitted injection pressure or 200 psig, whichever is greater.

(ii) Pressure stabilization. The test pressure shall stabilize within 10% of the test pressure required in clause (i) of this subparagraph prior to commencement of the test.

(iii) Pressure differential. A pressure differential of at least 200 psig shall be maintained between the test pressure on the tubing-casing annulus and the tubing pressure.

(iv) Test duration. A pressure test shall be conducted for a duration of 30 minutes when the test medium is liquid or for 60 minutes when the test medium is air or gas.

(v) Pressure recorder. Except for tests witnessed by a commission representative or wells permitted for disposal through casing, a pressure recorder shall be used to monitor and record the tubing-casing annulus pressure during the test. The recorder clock shall not exceed 24 hours. The recorder scale shall be set so that the test pressure is 30 to 70% of full scale, unless otherwise authorized by the commission or its delegate.

(vi) Test fluid.

(I) The tubing-casing annulus fluid used in a pressure test shall be liquid for wells that inject liquid unless the commission or its delegate authorizes the use of a different test fluid for good cause.

(II) The tubing-casing annulus fluid used in a pressure test shall contain no additives that may affect the sensitivity or otherwise reduce the effectiveness of the test.

(vii) Pressure test results. The commission or its delegate will consider, in evaluating the results of a test, the level of pollution risk that loss of well integrity would cause. Factors that may be taken into account in assessing pollution risk include injection pressure, frequency of testing and monitoring, and whether there is sufficient surface casing to cover all zones containing usable-quality water. A pressure test may be rejected by the commission or its delegate after consideration of the following factors:

(I) the degree of pressure change during the test, if any;

(II) the level of risk to usable-quality water if mechanical integrity of the well is lost; and

(III) whether circumstances surrounding the administration of the test make the test inconclusive.

(E) Alternative testing methods.

(i) As an alternative to the testing required in subparagraph (B) of this paragraph, the tubing-casing annulus pressure may be monitored and included on the annual monitoring report required by paragraph (11) of this section, with the authorization of the commission or its delegate and provided that there is no indication of problems with the well. Wells that are approved for tubing-casing annulus monitoring under this paragraph shall be tested in the manner provided under subparagraph (B) of this paragraph at least once every ten years after January 1, 1990.

(ii) The commission or its delegate may grant an exception for viable alternative tests or surveys or may require alternative tests or surveys as a permit condition.

(F) The operator shall notify the appropriate district office at least 48 hours prior to the testing. Testing shall not commence before the end of the 48-hour period unless authorized by the district office.

(G) A complete record of all tests shall be filed in duplicate in the district office on the appropriate form within 30 days after the testing.

(H) In the case of permits issued under this section prior to the effective date of this amendment which require pressure testing more frequently than once every five years, the commission's delegate may, by letter of authorization, reduce the required frequency of pressure tests, provided that such tests are required at least once every three years. The commission shall consider the permit to have been amended to require pressure tests at the frequency specified in the letter of authorization.

(13) Plugging. Disposal wells shall be plugged upon abandonment in accordance with §3.14 of this title (relating to Plugging).

(14) Penalties.

(A) Violations of this section may subject the operator to penalties and remedies specified in the Texas Water Code, Chapter 27, and the Natural Resources Code, Title 3.

(B) The certificate of compliance for any oil, gas, or geothermal resource well may be revoked in the manner provided in §3.73 of this title (relating to Pipeline Connection; Cancellation of Certification of Compliance; Severance) for violation of this section.

Source Note: The provisions of this §3.9 adopted to be effective January 1, 1976; amended to be effective February 23, 1979, 4 TexReg 436; amended to be effective April 1, 1982, 7 TexReg 651; amended to be effective December 4, 1996, 21 TexReg 11361; amended to be effective August 4, 1998, 23 TexReg 7768; amended to be effective December 28, 1999, 24 TexReg 11711; amended to be effective November 24, 2004, 29 TexReg 10728; amended to be effective July 2, 2012, 37 TexReg 4892; amended to be effective November 17, 2014, 39 TexReg 8988