SECTION 3.97. Underground Storage of Gas in Salt Formations

(a) Definitions. The following terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Affected person--A person who, as a result of actions proposed in an application for a storage facility permit or amendment or modification of an existing storage facility permit, has suffered or may suffer actual injury or economic damage other than as a member of the general public.

(2) Cavern--The storage space created in a salt formation by solution mining.

(3) Commission--The Railroad Commission of Texas.

(4) Emergency shutdown valve--A valve that automatically closes to isolate a gas storage wellhead from surface piping in the event of specified conditions that, if uncontrolled, may cause an emergency.

(5) Fresh water--Water having bacteriological, physical, and chemical properties that make it suitable and feasible for beneficial use for any lawful purpose. For purposes of this section, brine associated with the creation, operation, and maintenance of an underground gas storage facility is not considered fresh water.

(6) Gas storage well or storage well--A well, including the storage wellhead, casing, tubing, borehole, and cavern used for the injection or withdrawal of natural gas or any other gaseous substance into or out of an underground gas storage facility.

(7) Leak or fire detector--A device capable of detecting by chemical or physical means the presence of stored product gas or the escape of stored product gas or the presence of flame or heat of a fire.

(8) Operator--The person recognized by the Commission as being responsible for the physical operation of an underground gas storage facility, or such person's authorized representative.

(9) Owner--The person recognized by the Commission as owning all or part of an underground gas storage facility, or such person's authorized representative.

(10) Person--A natural person, corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association, or any other legal entity.

(11) Pollution--Alteration of the physical, chemical, or biological quality of, or the contamination of, water that makes it harmful, detrimental, or injurious to humans, animal life, vegetation, or property, or to public health, safety, or welfare, or impairs the usefulness or the public enjoyment of the water for any lawful or reasonable purpose.

(12) Storage wellhead--Equipment installed at the surface of the wellbore, including the casinghead and tubing head, spools, block or wing valves, and instrument flanges. Spool pieces must have a length less than six feet to be considered a part of the storage wellhead.

(13) Surface piping--Any pipe within a storage facility that is directly connected to a storage well, outboard of the wellhead emergency shutdown valve and used to transport gas, brine, or fresh water to or from a storage well whether such pipe is above or below ground level.

(14) Underground gas storage facility or storage facility--A facility used for the storage of natural gas or any other gaseous substance in an underground salt formation, including surface and subsurface rights, appurtenances, and improvements necessary for the operation of the facility.

(b) Permit required.

(1) General. No person may create, operate, or maintain an underground gas storage facility without obtaining a permit from the Commission. A permit issued by the Commission for such activities before the effective date of this section shall continue in effect until revoked, modified, or suspended by the Commission, or until it expires according to its terms. The provisions of this section apply to permits to conduct gas storage operations issued prior to the effective date of this section, except as otherwise specifically provided.

(2) Conflict with other requirements. If a provision of this section conflicts with any provision or term of a Commission order, field rule, or permit, the provision of such order, field rule, or permit shall control.

(c) Application.

(1) Information required. An application for a permit to create, operate, or maintain an underground gas storage facility shall be filed with the Commission by the owner or operator, or the proposed owner or operator, on the prescribed form. The application shall contain the information necessary to demonstrate compliance with applicable state laws and Commission regulations.

(2) Permit amendment. An application for amendment of an existing underground gas storage facility permit shall be filed with the Commission:

(A) prior to any planned enlargement of a cavern in excess of the permitted cavern capacity by solution mining;

(B) when required in accordance with paragraph (3) of this subsection;

(C) prior to the drilling of any additional storage wells;

(D) prior to an increase in the maximum operating pressure above the permitted pressure; or

(E) any time that conditions at the storage facility deviate materially from the conditions specified in the permit or permit application.

(3) Increase in capacity. The owner or operator of a storage facility shall notify the Commission if information indicates that the capacity of a cavern exceeds the permitted cavern capacity by 20% or more. Such notification shall be made in writing to the Commission within 10 days of the date that the owner or operator of the storage facility knows or has reason to know that the cavern capacity exceeds the permitted capacity by 20% or more. The notification shall include a description of the information that indicates that the permitted cavern capacity has been exceeded, and an estimate of the current cavern capacity. Upon receipt of such information, the Commission or its designee may take any one or more of the following actions:

(A) require the permittee to comply with a compliance schedule that lists measures to be taken to ensure that conditions at the storage facility do not pose a danger to life or property, and that no waste of gas, uncontrolled escape of gas, or pollution of fresh water occurs;

(B) require the permittee to file an application to amend the underground gas storage facility permit;

(C) modify, cancel, or suspend the permit as provided in subsection (f) of this section; or

(D) take enforcement action.

(d) Standards for underground storage zone.

(1) Geologic, construction, and operating performance. An underground gas storage facility may be created, operated, or maintained only in an impermeable salt formation in a manner that will prevent waste of the stored gases, uncontrolled escape of gases, pollution of fresh water, and danger to life or property. This section does not authorize storage of liquid or liquefied hydrocarbons in an underground salt formation. A permit under §3.95 of this title (relating to Underground Storage of Liquid or Liquefied Hydrocarbons in Salt Formations) is required to convert from storage of natural gas to storage of liquid or liquefied hydrocarbons in an underground salt formation.

(2) Fresh water strata. The applicant must submit with the application a letter from the Groundwater Advisory Unit of the Oil and Gas Division stating the depth to which fresh water strata occur at each storage facility.

(e) Notice and hearing.

(1) Notice requirements. The applicant shall, no later than the date the application is mailed to or filed with the Commission, give notice of an application for a permit to create, operate, or maintain an underground hydrocarbon storage facility, or to amend an existing storage facility permit, by mailing or delivering a copy of the application form to:

(A) the surface owner of the tract where the storage facility is located or is proposed to be located;

(B) the surface owner of each tract adjoining the tract where the storage facility is located or is proposed to be located;

(C) each oil, gas, or salt leaseholder, other than the applicant, of the tract on which the storage facility is located or is proposed to be located;

(D) each oil, gas, or salt leaseholder of any tract adjoining the tract on which the storage facility is located or is proposed to be located;

(E) the county clerk of the county or counties where the storage facility is located or is proposed to be located; and

(F) if the storage facility is located or is proposed to be located within city limits, the city clerk or other appropriate city official.

(2) Publication of notice. Notice of the application, in a form approved by the Commission or its designee, shall be published by the applicant once a week for three consecutive weeks in a newspaper of general circulation in the county where the storage facility is or is proposed to be located. The applicant shall file proof of publication prior to any hearing on the application or administrative approval of the application.

(3) Notice by publication. The applicant shall make diligent efforts to ascertain the name and address of each person identified under paragraph (1)(A) - (D) of this subsection. The exercise of diligent efforts to ascertain names and addresses of such persons shall require an examination of the county records where the facility is located and an investigation of any other information of which the applicant has actual knowledge. If, after diligent efforts, the applicant has been unable to ascertain the name and address of one or more persons required to be notified under paragraph (1)(A) - (D) of this subsection, the notice requirements for those persons are satisfied by the publication of the notice of application as required in paragraph (2) of this subsection. The applicant must submit an affidavit to the Commission specifying the efforts that were taken to identify each person whose name and/or address could not be ascertained.

(4) Hearing required for new permits. A permit application for a new underground gas storage facility will be considered for approval only after notice and hearing. The Commission will give notice of the hearing to all affected persons, local governments, and other persons who express, in writing, an interest in the application. After hearing, the examiner shall recommend a final action by the Commission.

(5) Hearing on permit amendments.

(A) An application for an amendment to an existing storage facility permit may be approved administratively if the Commission receives no protest from a person notified pursuant to paragraph (1) of this subsection or from any other affected person.

(B) If the Commission receives a protest from a person notified pursuant to paragraph (1) of this subsection or from any other affected person within 15 days of the date of receipt of the application by the Commission, or of the date of the third publication, whichever is later, or if the Commission determines that a hearing is in the public interest, then the applicant will be notified that the application cannot be approved administratively. The Commission will schedule a hearing on the application upon written request of the applicant. The Commission will give notice of the hearing to all affected persons, local governments, and other persons who express, in writing, an interest in the application. After hearing, the examiner shall recommend a final action by the Commission.

(C) If the application is administratively denied, a hearing will be scheduled upon written request of the applicant. After hearing, the examiner shall recommend a final action by the Commission.

(f) Modification, cancellation, or suspension of a permit.

(1) General. Any permit may be modified, suspended, or canceled after notice and opportunity for hearing if:

(A) a material change in conditions has occurred in the operation, maintenance, or construction of the storage facility, or there are material deviations from the information originally furnished to the Commission. A change in conditions at a facility that does not affect the safe operation of the facility or the ability of the facility to operate without causing waste of hydrocarbons or pollution is not considered to be material;

(B) pollution of fresh water is likely as a result of continued operation of the storage facility;

(C) there are material violations of the terms and provisions of the permit or Commission regulations;

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

(E) injected fluids are escaping or are likely to escape from the storage facility.

(2) Imminent danger. Notwithstanding the provisions of paragraph (1) of this subsection, in the event of an emergency that presents an imminent danger to life or property, or where waste of hydrocarbons, uncontrolled escape of hydrocarbons, or pollution of fresh water is imminent, the Commission or its designee may immediately suspend a storage facility permit until a final order is issued pursuant to a hearing, if any, conducted in accordance with the provisions of paragraph (1) of this subsection. All operations at the facility shall cease upon suspension of a permit under this paragraph.

(g) Transfer of permit. A storage facility permit may not be transferred without the prior approval of the Commission, or its designee. Until such transfer is approved by the Commission or its designee, the proposed transferee may not conduct any activities authorized by the permit. The following procedure shall be followed when requesting approval for transfer of a permit.

(1) Request. Prior to transferring either ownership or operation of a storage facility, the permittee shall file with the Commission a request for transfer of the permit. Such a request may not be filed unless a completed Form P-4, signed by both the permittee and the proposed transferee, has been filed with the Commission.

(2) Approval. The Commission, or its designee, shall approve the transfer of a storage facility permit, provided:

(A) the proposed transferee is not the subject of any unsatisfied Commission enforcement order at the time of the request for permit transfer; and

(B) there are no existing violations of any Commission regulation, order, or permit at the storage facility at the time of the request for permit transfer that have been documented by the Commission, or its employees, unless the proposed transferee agrees to correct the violations according to a compliance schedule approved by the Commission, or its designee.

(3) Good cause. Notwithstanding paragraph (2) of this subsection, for good cause shown the Commission, or its designee, may require public notice and opportunity for hearing prior to taking action on a request for transfer of a permit. Such request may be denied after notice and opportunity for hearing if the Commission or its designee finds that transfer of the permit would not be in the public interest.

(h) Safety. The following safety requirements shall apply to all underground gas storage facilities, provided, however, that the provisions of this subsection shall not apply to any natural gas storage well that is out of service and disconnected from surface piping. Notwithstanding the compliance time periods specified in this subsection, a new underground gas storage facility permitted under this section must have all required safety measures and equipment in place before commencement of storage operations at the facility. All existing storage facilities must have such safety measures and equipment in place within the period of time specified. Notwithstanding the compliance time periods specified in paragraph (2)(B) of this subsection, no storage well in active service may be operated without a fully functional emergency shutdown valve unless in compliance with specified conditions of paragraph (2)(C) of this subsection.

(1) Monitoring of injection and withdrawal operations. All gas injection and withdrawal activities shall be continuously monitored by an individual who is experienced and trained in such activities. Any facility that is unattended during injection and withdrawal activities shall have company personnel on call at all times. On-call personnel must be able to reach the facility within 30 minutes from the time a potential problem is noted by the individual monitoring the injection or withdrawal activities.

(2) Storage wellhead.

(A) The storage wellhead must be designed, operated, and maintained to contain the contents of the storage well and protect against loss of stored product.

(B) Within five years of the effective date of this section, the operator shall have installed emergency shutdown valves between the wellhead and the gas injection/withdrawal surface piping of each storage well and between the wellhead and any brine or fresh water surface piping. Within one year of the effective date of this section, the operator may request an exception to the storage wellhead configuration or compliance date of this subparagraph and propose an alternative configuration or workover schedule for approval by the Commission or its designee. A storage well that is out of service and is disconnected from surface piping shall be exempt from this requirement until reactivated for active gas storage. Emergency shutdown valves shall meet the following requirements:

(i) Each emergency shutdown valve shall be capable of activation at each storage well, at the on-site control center if one exists, at the remote control center if one exists, and at a location that is reasonably anticipated to be accessible to emergency response personnel at any facility that does not have an on-site control center that is attended 24 hours per day.

(ii) Each emergency shutdown valve shall be an automatic fail-closed valve that automatically closes when there is a loss of pneumatic or hydraulic pressure on, or power to, the valve or when the maximum operating pressure under subsection (k) of this section is exceeded.

(iii) Each emergency shutdown valve shall be closed and opened at least monthly.

(iv) Each emergency shutdown valve system shall be tested at least twice each calendar year at intervals not to exceed 7 1/2 months. The test shall consist of activating the actuation devices, checking the warning system, and observing the valve closure.

(C) If an emergency shutdown valve system fails to operate as required, the well shall be immediately shut in until repairs are completed, unless:

(i) a backup emergency shutdown valve is in operation on the same piping; or

(ii) an attendant is posted at the well site to provide immediate manual shut-in.

(3) Gas, brine, and fresh water surface piping.

(A) Gas surface piping shall be designed for the permitted maximum allowable operating pressure on the hydrocarbon side of the well. For facilities with hazardous materials surface piping under the administrative authority of the Safety Division of the Railroad Commission of Texas, for the purposes of this section, gas surface piping extends from the wellhead emergency shutdown valve to the first pressure regulation device, including a manual, motor-operated, or emergency shutdown valve.

(B) Brine piping, if any, shall be designed for the maximum brine wellhead pressure and to transport, under emergency conditions, gas to a gas control system if the operator is solution mining while the gas storage well is in active storage service, unless:

(i) a secondary emergency shutdown valve is in operation on the brine surface piping; and

(ii) the brine surface piping between the wellhead emergency shutdown valve and the secondary emergency shutdown valve is designed for the permitted maximum allowable operating pressure on the hydrocarbon side of the well.

(C) Fresh water surface piping, if any, must be equipped with an emergency shutdown valve unless it is:

(i) disconnected from the wellhead; or

(ii) connected to the brine surface piping outboard of the wellhead emergency shutdown valve; or

(iii) designed for the maximum allowable operating pressure on the hydrocarbon side of the well; and has an internal diameter of less than or equal to two inches; and an attendant is posted at the well site to provide immediate manual shut-in when in use.

(D) Fresh water piping designed for the permitted maximum allowable operating pressure on the hydrocarbon side of the well and with an internal diameter of less than or equal to two inches, is exempt from the requirement that an emergency shutdown valve be separated from the wellhead by a spool no longer than six feet.

(4) Cavern debrining and solution mining operations.

(A) Within one year of the effective date of this section, each storage well shall have two or more of the following redundant devices or methods in operation during cavern debrining operations or during solution mining operations that are conducted with gas in storage in the same cavern. These devices are designed to prevent the release of gas into the brine and fresh water systems connected to the well during cavern debrining operations or during solution mining operations that are conducted with gas in storage in the same cavern. Gas release prevention shall consist of at least two of the following redundant devices or methods:

(i) emergency shutdown valves equipped with pressure sensor switches or transducers set to automatically close emergency shutdown valves on the brine side of the wellhead and on the fresh water piping, if any, in response to preset pressures on the brine and fresh water piping of the well;

(ii) weep hole(s) on the brine return string in conjunction with a preset pressure sensor switch or transducer on the brine piping that is set to automatically close emergency shutdown valves on the brine side of the wellhead and on the fresh water piping, if any, in response to a preset pressure;

(iii) a device on the brine return string or brine piping that detects hydrocarbon in the brine by physical or chemical characteristics and that is set to automatically close emergency shutdown valves on the brine side of the wellhead and on the fresh water piping, if any, in response to hydrocarbon detection;

(iv) an instrument that detects a rapid increase in the brine flow rate indicative of hydrocarbon in the brine and that is set to automatically close emergency shutdown valves on the brine side of the wellhead and on the fresh water piping, if any, in response to a preset flow rate or differential flow rate; or

(v) an alternative device or method approved by the Commission.

(B) Solution mining of a cavern may occur while gas is in storage, provided that the injection of fresh water and the injection of gas do not occur simultaneously within the same cavern.

(5) Leak or fire detectors.

(A) Within two years of the effective date of this section, a leak or fire detector shall be installed and in operation at each gas storage well and each structurally enclosed compressor site.

(B) Leak or fire detectors shall be tested twice each calendar year at intervals not to exceed 7 1/2 months, and, when defective, repaired or replaced within 10 days. Leak or fire detectors shall be integrated with warning systems required in paragraph (6)(A) of this subsection.

(6) Warning systems and alarms.

(A) Within two years of the effective date of this section, all leak or fire detectors and sensors or methods that actuate the emergency shutdown valve shall be integrated with warning systems that are audible and visible in the control room and at any remote control center. The circuitry shall be designed so that failure of a leak or fire detector to function will activate the warning.

(B) A manually operated audible alarm shall be installed at each attended storage facility. The alarm shall be audible in areas of the facility where personnel are normally located.

(7) Emergency response plan. Each storage facility shall submit to the Commission a written emergency response plan. The plan shall address gas releases, fires, fire suppression capability, explosions, loss of electricity, and loss of telecommunication services. The plan shall describe the facility's emergency response communication system, procedures for coordination of emergency communication and response activities with local authorities, use of warning systems, procedures for citizen and employee emergency notification and evacuation, and employee training. The plan shall also include a plat of the facility showing the locations of wells, processing areas, and other significant features at the facility. The initial plan must be designed based upon the existing safety measures at the facility. The plan shall be updated as changes in safety features at the facility occur, or as the Commission or its designee requires. A copy of the plan shall be provided to the local emergency response committee and to any other local governmental entity that submits a written request for a copy of the plan to the operator. Copies of the plan shall also be available at the storage facility and at the company headquarters.

(8) Notification of emergency or uncontrolled release.

(A) Emergency response personnel. Each operator shall notify the county sheriff's office, the county emergency management coordinator, and any other appropriate public officials which are identified in the emergency response plan of any emergency that could endanger nearby residents or property. Such emergencies include, but are not limited to, an uncontrolled release of hydrocarbons from a storage well or a leak or fire at any area of the storage facility. The operator shall give notice as soon as practicable following the discovery of the emergency. At the time of the notice, the operator shall also report an assessment of the potential threat to the public.

(B) Commission. The operator shall report to the appropriate Commission district office as soon as practicable any emergency, significant loss of gas or fluids, significant mechanical failure, or other problem that increases the potential for an uncontrolled release. The operator shall file with the Commission within 30 days of the incident a written report on the root cause of the incident. Within 90 days of the incident, the operator shall file with the Commission a written report that describes the operational changes, if any, that have been or will be implemented to reduce the likelihood of a recurrence of a similar incident. An operator may request that the Commission grant, for good cause, a reasonable amount of additional time to file a written report on the root cause of the incident.

(9) Annual emergency drill. Annually, each operator shall conduct a drill that tests response to a simulated emergency. Written notice of the drill shall be provided to the appropriate Commission district office, the county emergency management coordinator, and the county sheriff's office at least seven days prior to the drill. Local emergency response authorities shall be invited to participate in all such drills. The operator shall file a written evaluation of the drill and plans for improvements with the appropriate district office and the county emergency management coordinator within 30 days after the date of the drill.

(10) Employee safety training.

(A) Each operator shall prepare and implement a plan to train and test each employee at each underground gas storage facility on operational safety to the extent applicable to the employee's duties and responsibilities. The facility's emergency response plan shall be included in the training program.

(B) Each operator shall hold a safety meeting with each contractor prior to the commencement of any new contract work at an underground gas storage facility. Emergency measures, including safety and evacuation measures specific to the contractor's work, shall be explained in the contractor safety meeting.

(11) Fire suppression capability.

(A) Within three years of the effective date of this section, each operator shall have fire suppression capability designed to aid in personnel rescue and equipment protection and cooling.

(B) Within one year of the effective date of this section, the operator may request an exception to the schedule or fire suppression requirement of this paragraph and propose an alternative schedule or means of protection from wellhead fire for approval of the Commission or its designee.

(12) Wellhead, piping, and associated valves. All wellhead surface piping and associated valves shall be designed, installed, and operated in accordance with engineering standards to the expected service conditions to which the piping and equipment will be subjected.

(13) Barriers. Within one year of the effective date of this section, barriers designed to prevent unintended impact by vehicles and equipment shall be placed around above grade hydrocarbon piping, hydrocarbon process equipment where vehicles may normally be expected to travel, or within 100 feet of a public road.

(i) Cavern capacity and configuration.

(1) Before storage operations begin. The capacity and configuration of each gas storage cavern (both salt domes and bedded salt) shall be determined by sonar survey before storage operations begin in a newly completed cavern.

(2) Salt domes. The capacity and configuration of each salt dome gas storage cavern shall be determined by sonar survey before a cavern that has been out of service is returned to service, provided, however, that a sonar survey shall not be required on a cavern that is being returned to service if a sonar survey of that cavern has been run at any time during the previous 10 years.

(3) Bedded salt. The configuration of the roof of each gas storage cavern in bedded salt shall be determined by downhole log or an alternate method approved by the Commission, or its designee, at least once every five years.

(4) Filing of results. Sonar and roof monitoring survey results shall be filed with the Commission within 30 days after the survey.

(5) Out-of-service caverns. A sonar or roof monitoring survey is not required for a cavern that is out of service. A sonar or roof monitoring survey shall be performed before any such cavern that has been out of service is returned to service, unless the provisions of paragraph (2) of this subsection apply.

(6) Verification. Sonar surveys performed before debrining shall be verified by metering the volume of the displaced brine.

(j) Well completion, casing, and cementing. Gas storage wells shall be cased and the casing strings cemented to prevent gases from escaping to the surface or into fresh water strata, or otherwise escaping and causing waste or endangering public safety or the environment.

(1) New wells.

(A) All gas storage wells drilled in salt domes after the effective date of this section shall have at least two casing strings cemented into the salt formation. Sufficient cement shall be used to fill the annular space outside the casing from the casing shoe to the ground surface, or from the casing shoe to a point at least 200 feet above the shoe of the previous casing string.

(B) All gas storage wells drilled in bedded salt after the effective date of this section shall have all casing strings cemented with sufficient cement to fill the annular space outside each casing string from the casing shoe to the ground surface.

(2) Well completion report. A well completion report shall be filed in accordance with the instructions on the form prescribed by the Commission within 30 days after a storage well is completed and before solution mining to create the cavern begins.

(k) Operating pressure.

(1) Not to exceed maximum. The operating pressure of each gas storage well shall not exceed the permitted maximum allowable operating pressure for that well. The permitted maximum allowable operating pressure is that pressure specified in the Commission permit or order, or, if not specified in the permit or order, that pressure stated in the application or the application for amendment to a permit or order.

(2) At casing seat. The maximum operating pressure at the casing seat shall not exceed 0.85 pounds per square inch per foot of depth.

(l) Monitoring requirements.

(1) Gas pressure. Gas pressure on the injection/withdrawal casing or tubing or piping connected thereto shall be equipped with a pressure sensor to continuously monitor the wellhead pressure. Pressure sensors shall be integrated electronically with the warning systems, alarms, and emergency shutdown valve actuation system as required in subsection (h)(2)(B) and (h)(6)(A) of this section.

(2) Pressure observation valves. The injection/withdrawal casing or tubing shall be equipped with a pressure observation valve and gauge. The wellhead shall be equipped with a pressure observation valve on each casing annulus so that a gauge may be installed for pressure monitoring.

(3) Volumes injected and withdrawn. The volume of gas injected into and withdrawn from each storage well shall be measured by:

(A) flow meter for each well; or

(B) an alternate method approved by the Commission.

(4) Meter calibration. Meters that measure the volume of gas into storage and out of storage shall be recalibrated at least once each year.

(5) Data recording. Within three years of the effective date of this section, operators shall have installed and have functioning equipment to electronically record all liquid and gas pressures and injection volumes and rates at a frequency of at least once per minute, and all actuations of the emergency shutdown valve.

(m) Reporting.

(1) Monthly reports. On or before the last day of each month, the operator of each facility that stores gas to supply a public utility shall file with the Commission a report showing the volume of gas placed into storage and the volume of gas removed from storage at the storage facility, during the preceding month. The report shall also state the total volume of gas in storage on the first and last days of the preceding month. This report shall be filed in a format acceptable to the Commission or its designee.

(2) Annual reports. The operator shall file annually a status report for each storage well in accordance with the instructions on the form prescribed by the Commission.

(n) Operations, construction, and maintenance records retention.

(1) Operations data.

(A) The operator shall retain for at least three months all electronic records of storage well pressures, volumes of gases injected and withdrawn, and the inventory of gas in storage. These electronic data shall be recorded at a frequency of at least once per minute.

(B) The operator shall retain for at least five years the records reported to the Commission under subsection (m). These electronic data shall be recorded at a frequency of at least once per day.

(2) Records retention. The operator shall retain for at least five years the records of measurement performance under subsection (l)(4) of this section; and testing of safety devices under subsection (h) of this section. Records of any test of a safety device required under subsection (h) of this section shall be available for on-site inspection within 10 days of the date of the test.

(3) Construction and maintenance data. The operator shall retain for the life of the facility documents and records pertaining to the drilling, mining, completion, repair and workover of storage wells and the testing of storage well integrity, and shall transfer all such documents and records to any new owner and/or new operator of the facility.

(4) Extension during investigation. The operator shall retain beyond the prescribed retention period any documents or records that contain operational data pertaining to the resolution of any pending regulatory enforcement proceedings until the resolution of such proceedings.

(o) Testing and maintenance.

(1) Integrity tests. Each gas storage well shall be tested for integrity prior to being placed into service, at least once every five years, and after each workover that involves physical changes to any cemented casing string. The following requirements apply to such integrity tests.

(A) A test procedure shall be filed with the Commission for approval at least 10 days before the test date.

(B) The initial test conducted on a well prior to placing it into service shall be performed using the nitrogen-interface test method or an alternative method approved by the Commission or its designee.

(C) The integrity test required to be conducted at least once every five years on a well that has gas in storage may be performed using pressure monitoring, provided:

(i) the wellhead pressure is stabilized such that the effects of ambient temperature on pressure have overtaken the effects of the last injection or withdrawal on pressure;

(ii) a downhole temperature log is run at the beginning and at the end of the test period;

(iii) the test period is a minimum of 72 hours; and

(iv) the net gas volume change for the test period is calculated.

(D) The operator shall notify the district office at least five days prior to conducting any integrity test.

(E) A complete record of each integrity test shall be filed in duplicate with the district office within 30 days after testing is completed. The record shall include a chronology of the test, copies of all downhole logs, storage well completion information, pressure readings, volume measurements, temperature logs and readings, and an explanation of the test results that addresses the precision of the test in terms of a calculated leak rate.

(2) Alternative monitoring. An operator may request the Commission or its designee to approve well pressure monitoring as an alternative to integrity testing for storage wells that are out of gas storage service. An out-of-service well shall be tested for integrity by the nitrogen-interface method before it may be returned to storage service.

(3) Storage wellhead and casing. Storage wellhead components and casing shall be inspected at least once every 15 years for corrosion, cracks, deformations, or other conditions that may compromise integrity and that may not be detected by the five-year test. The operator may request an extension of up to five years from the Commission for good cause. Factors the Commission may consider in determining good cause pursuant to this paragraph include by are not limited to the age, location, and configuration of the well; well and facility history; operator compliance record; operator efforts to comply with this subsection; and accuracy of inventory control.

(4) Fresh water, brine, and gas surface piping. Within one year of the effective date of this section, the operator shall submit a piping integrity management plan for approval by the Commission or its designee. Within three years of the effective date of this section, or in conjunction with the storage well integrity testing, all gas, freshwater, and brine surface piping shall be maintained according to the facility's piping integrity management plan.

(p) Plugging.

(1) Plug on abandonment. A gas storage well shall be plugged upon permanent abandonment in a manner approved by the Commission or its designee. A proposal for plugging shall be submitted to the Commission in Austin for approval or modification prior to plugging. Following approval of a plugging plan, the operator shall file notification of intent to plug at least five days prior to commencement of plugging operations. A plugging report shall be filed with the Commission within 30 days after plugging.

(2) Alternative monitoring. As an alternative to plugging a gas storage well that has been permanently deactivated, an operator may request approval by the Commission or its designee of a plan to convert the well to a monitor well. A pressure monitoring plan must be submitted to the Commission along with the request to convert the well to a monitoring well.

(q) Penalties.

(1) Penalties. Violations of this section may subject the operator to penalties and remedies specified in Texas Natural Resources Code, Title 3; Texas Utilities Code, Chapter 121; and other statutes administered by the Commission.

(2) Certificate of compliance. The certificate of compliance for any underground gas storage facility may be revoked in the manner provided in §3.73 of this title (relating to Pipeline Connection; Cancellation of Certificate of Compliance; Severance) for violation of this section.

(r) Applicability of other Commission rules and orders. The owner or operator of an underground gas storage facility is not relieved by this section of compliance with any other requirement of Chapters 3, 4, 7, or 8 of this title (relating to Oil and Gas Division; Environmental Protection; Gas Services Division; or Pipeline Safety Regulations).

Source Note: The provisions of this §3.97 adopted to be effective January 1, 1994, 18 TexReg 8871; amended to be effective November 24, 2004, 29 TexReg 10728; amended to be effective January 30, 2007, 32 TexReg 289; amended to be effective July 2, 2012, 37 TexReg 4892