Oil and Gas Oil and Gas

Development: Development:

What Landowners What Landowners

Should KnowShould KnowShould KnowShould Know

The University of Texas Environmental The University of Texas Environmental

Law ClinicLaw Clinic

andand

The Caddo Lake InstituteThe Caddo Lake Institute

Areas of FocusAreas of Focus

�� Potential Impacts of Oil and Gas DrillingPotential Impacts of Oil and Gas Drilling

�� Important Government Agencies and Important Government Agencies and

Rights of LandownersRights of LandownersRights of LandownersRights of Landowners

��What You Can DoWhat You Can Do

Potential ImpactsPotential Impacts

�� EconomicEconomic

��Health, Safety and EnvironmentalHealth, Safety and Environmental

Economic ImpactsEconomic Impacts

��Royalties and Other Direct CompensationRoyalties and Other Direct Compensation

�� Property Values Property Values

Gas WellGas Well

Economic ImpactsEconomic Impacts

��Royalties and Other Direct CompensationRoyalties and Other Direct Compensation

�� Property Values Property Values

��RoadsRoads

Economic ImpactsEconomic Impacts

��Royalties and Other Direct CompensationRoyalties and Other Direct Compensation

�� Property Values Property Values

��RoadsRoads

��Recreation and TourismRecreation and Tourism

Health, Safety and Environmental Health, Safety and Environmental

ImpactsImpacts

��NoiseNoise

�� Air QualityAir Quality

Water Quality Water Quality ��Water Quality Water Quality

�� Spills of oil or chemicals and leaks from Spills of oil or chemicals and leaks from

poorly cased or abandoned wellspoorly cased or abandoned wells

Health, Safety and Environmental Health, Safety and Environmental

ImpactsImpacts

��NoiseNoise

�� Air QualityAir Quality

Water Quality Water Quality ��Water Quality Water Quality

�� Spills of oil or chemicals and leaks from Spills of oil or chemicals and leaks from

poorly cased or abandoned wellspoorly cased or abandoned wells

�� Produced water and other waste disposal Produced water and other waste disposal

Injection Wells?Injection Wells?

�� Oil and gas production creates a lot Oil and gas production creates a lot

of waste, primarily saltwater.of waste, primarily saltwater.

�� This water is often disposed of in This water is often disposed of in

wells.wells.

�� These wells must be properly built These wells must be properly built �� These wells must be properly built These wells must be properly built

and maintained, otherwise the waste and maintained, otherwise the waste

can contaminate ground and surface can contaminate ground and surface

water.water.

Injection WellInjection Well

Reserve PitReserve Pit

Texas Railroad Commission (RRC)Texas Railroad Commission (RRC)

�� Authority to regulate the Oil and Authority to regulate the Oil and Gas industry in TexasGas industry in Texas

�� FunctionsFunctions�� Maximize development of public Maximize development of public resourcesresources

Protecting the environmentProtecting the environment�� Protecting the environmentProtecting the environment

�� Public safetyPublic safety

�� Protecting rights of mineral ownersProtecting rights of mineral owners

�� Preventing waste of natural Preventing waste of natural resourcesresources

picture from RRC strategic report

Statutes Affecting RRCStatutes Affecting RRC

�� Texas ConstitutionTexas Constitution

�� Texas Water CodeTexas Water Code

�� Texas Natural Resources CodeTexas Natural Resources Code

Safe Drinking Water ActSafe Drinking Water Act�� Safe Drinking Water ActSafe Drinking Water Act

��Resource Conservation ActResource Conservation Act

��Clean Water ActClean Water Act

Texas RRC ResponsibilitiesTexas RRC Responsibilities

�� Regulatory jurisdiction over Oil and Gas and Regulatory jurisdiction over Oil and Gas and pipeline transporters pipeline transporters

�� Granting permits and licensesGranting permits and licenses

�� Inspection of facilitiesInspection of facilities

�� Investigating complaintsInvestigating complaints�� Investigating complaintsInvestigating complaints

�� Plugging abandoned wellsPlugging abandoned wells

�� To report a spill contact field operations To report a spill contact field operations 512512--463463--73287328

�� Does not Does not •• Give advice on enforcing or making oil and gas leasesGive advice on enforcing or making oil and gas leases

•• Enforce royalties of leasesEnforce royalties of leases

Texas RRC officesTexas RRC offices

�� 24 hour emergency number 51224 hour emergency number 512--463463--67886788

�� Public Relations office 877Public Relations office 877--228228--57405740

�� General information line 512General information line 512--463463--72887288

�� Marion and Harrison Counties are in District 6Marion and Harrison Counties are in District 6�� Director Michael O’Quinn 903Director Michael O’Quinn 903--984984--3026 3026 �� Director Michael O’Quinn 903Director Michael O’Quinn 903--984984--3026 3026

�� 619 Henderson Blvd619 Henderson Blvd

�� Kilgore TX 75662Kilgore TX 75662--59985998

�� Office of General CounselOffice of General Counsel�� Enforcement section charged with prosecuting individuals and Enforcement section charged with prosecuting individuals and companies charged with violating RRC rules and regulationscompanies charged with violating RRC rules and regulations

�� Posts Decisions and Orders Posts Decisions and Orders ––http://www.rrc.state.tx.us/divisions/supporthttp://www.rrc.state.tx.us/divisions/support--divisions/gc/pfdord/ogpoindx.htmldivisions/gc/pfdord/ogpoindx.html

Environmental Protection Agency Environmental Protection Agency

(EPA)(EPA)

��MissionMission

�� To protect human health and the environmentTo protect human health and the environment

�� Develops and enforces regulations and Develops and enforces regulations and implements federal environmental lawimplements federal environmental law

�� Can issue sanctions and provide support to Can issue sanctions and provide support to states to help maintain environmental quality. states to help maintain environmental quality.

�� Provides grants and financial assistance to Provides grants and financial assistance to states, nonstates, non--profits, and educational institutesprofits, and educational institutes

Picture from EPA strategic report

Statutes Affecting EPAStatutes Affecting EPA

��Clean Air Act Clean Air Act

��Clean Water Act Clean Water Act

��Oil Pollution ActOil Pollution Act

Safe Drinking Water ActSafe Drinking Water Act�� Safe Drinking Water ActSafe Drinking Water Act

��Oil and Gas may be exempted from parts Oil and Gas may be exempted from parts

or all of the above statutes.or all of the above statutes.

�� Information on laws and full text Information on laws and full text

http://www.epa.gov/laws/index.htmlhttp://www.epa.gov/laws/index.html

EPA Emergency ResponseEPA Emergency Response

�� Maintains phone number through Maintains phone number through the National Response Center for the National Response Center for reporting chemical spills 1reporting chemical spills 1--800800--424424--8802 8802

�� Provides information to public Provides information to public regarding spills or releases of regarding spills or releases of regarding spills or releases of regarding spills or releases of hazardous substances and oil hazardous substances and oil spillsspills

�� In some instances helps In some instances helps coordinate spill responsecoordinate spill response

Picture from EPA strategic report

Texas Commission on Texas Commission on

Environmental Quality (TCEQ)Environmental Quality (TCEQ)

�� Environmental agency of the StateEnvironmental agency of the State

��MissionMission-- To protect Texas’ human and To protect Texas’ human and natural resources consistent with natural resources consistent with sustainable economic development.sustainable economic development.sustainable economic development.sustainable economic development.

��Clean Air, clean water, and the safe Clean Air, clean water, and the safe management of wastemanagement of waste

�� Administers Clean Air Act and Clean Administers Clean Air Act and Clean Water ActWater Act

��Will defer to RRC for Oil and Gas issuesWill defer to RRC for Oil and Gas issues

TCEQ OfficesTCEQ Offices

�� Enforcement Division Enforcement Division

�� Responsible for investigation of violations of state environmental Responsible for investigation of violations of state environmental

laws laws

�� Responsible for ensuring that corrective action is takenResponsible for ensuring that corrective action is taken

�� Drafts proposed enforcement orders and penaltiesDrafts proposed enforcement orders and penalties

�� Has mobile laboratories to analyze air, water, and waste Has mobile laboratories to analyze air, water, and waste

samplessamples

�� Environmental complaints hotline 888Environmental complaints hotline 888--777777--31863186

TCEQ Reporting a SpillTCEQ Reporting a Spill

�� To report a spill contact 800To report a spill contact 800--832832--8224 (State Emergency Response 8224 (State Emergency Response Commission)Commission)

�� Have as much of the following information available as possible:Have as much of the following information available as possible:

�� Date and time of spill or releaseDate and time of spill or release

�� Identity of material Identity of material

�� Estimate of quantityEstimate of quantityEstimate of quantityEstimate of quantity

�� Location of spill and any waters involved Location of spill and any waters involved

�� SourceSource

�� Information on identity of ownerInformation on identity of owner

�� Steps takenSteps taken

�� Extent of injuriesExtent of injuries

�� HazardsHazards

Mineral and Surface owners rightsMineral and Surface owners rights

�� Severance of RightsSeverance of Rights

�� Mineral Estate as dominant estateMineral Estate as dominant estate

�� Surface Estate as servient estateSurface Estate as servient estate

Mineral and Surface Owner RightsMineral and Surface Owner Rights

�� Dominant Estate may use premises as is “reasonably Dominant Estate may use premises as is “reasonably

necessary” to produce and remove mineralsnecessary” to produce and remove minerals

�� Enter and Exit propertyEnter and Exit property

�� Locate wellsLocate wells

�� Construct roadsConstruct roads

�� Install pipesInstall pipes

�� House employeesHouse employees

�� Install storage tanks, slush pitsInstall storage tanks, slush pits

�� Use any waterUse any water

Mineral and Surface Owner RightsMineral and Surface Owner Rights

�� Surface estate entitled to Surface estate entitled to

“accommodation”“accommodation”

�� Mineral owner must not substantially impair Mineral owner must not substantially impair

an existing use when reasonable alternativean existing use when reasonable alternativean existing use when reasonable alternativean existing use when reasonable alternative

•• Interference with irrigationInterference with irrigation

•• Close proximity to homesClose proximity to homes

•• Damages outside the surface area reasonably Damages outside the surface area reasonably

necessarynecessary

•• NegligenceNegligence

Surface Owners Actions to Protect Surface Owners Actions to Protect

InterestsInterests

�� Attempt to purchase mineral rightsAttempt to purchase mineral rights

�� Attempt land use or surface use Attempt land use or surface use

agreementagreement

��Work with mineral right holderWork with mineral right holder��Work with mineral right holderWork with mineral right holder

PermitsPermits

�� Permit is required through RRC to drill for oil or Permit is required through RRC to drill for oil or gasgas�� Drill permit Application query Drill permit Application query http://webapps.rrc.state.tx.us/DP/initializePublicQueryhttp://webapps.rrc.state.tx.us/DP/initializePublicQueryAction.doAction.doAction.doAction.do

�� Army corps of Engineers 404 permit for the Army corps of Engineers 404 permit for the discharge of dredged or fill material into discharge of dredged or fill material into navigable waters at specified disposal sitesnavigable waters at specified disposal sites

�� Withdrawing water from underground reservoirs Withdrawing water from underground reservoirs below base of usable quality water ( saline or below base of usable quality water ( saline or brackish water) requires permit through RRCbrackish water) requires permit through RRC

What Can I Do?What Can I Do?

A lot.A lot.A lot.A lot.

There are many things that you can There are many things that you can

do to guide and impact the do to guide and impact the

development of oil and gas in the development of oil and gas in the

Caddo area.Caddo area.

This includes:This includes:

�� getting involved in the permitting process getting involved in the permitting process

for drillers;for drillers;

�� drafting the best leases for you and your drafting the best leases for you and your

community;community;community;community;

�� being aware of State laws that affect you;being aware of State laws that affect you;

�� learning the lessons of other communities learning the lessons of other communities

who have dealt with oil and gas.who have dealt with oil and gas.

PermitsPermits

��Drillers are required to obtain a permit Drillers are required to obtain a permit

from the RRC for drilling related to oil and from the RRC for drilling related to oil and

gas production and disposal.gas production and disposal.

��Under the RRC Rules, the public has an Under the RRC Rules, the public has an ��Under the RRC Rules, the public has an Under the RRC Rules, the public has an

opportunity to participate when:opportunity to participate when:

�� the operator intends to deviate from the the operator intends to deviate from the

Statewide rules; orStatewide rules; or

�� there is an application for a disposal or there is an application for a disposal or

injection well for oil & gas waste.injection well for oil & gas waste.

New WellsNew Wells

�� If an operator is planning to drill a new well If an operator is planning to drill a new well

according to the RRC’s standard statewide according to the RRC’s standard statewide

rules, there is NO public input.rules, there is NO public input.

�� The statewide rules primarily deal with how The statewide rules primarily deal with how �� The statewide rules primarily deal with how The statewide rules primarily deal with how

close the proposed new well is to another close the proposed new well is to another

existing well or neighboring property line.existing well or neighboring property line.

�� If an operator wants to deviate from these If an operator wants to deviate from these

rules, the neighboring mineral owners will rules, the neighboring mineral owners will

be notified.be notified.

Injection Well Permits Injection Well Permits

�� If an injection well is proposed for the If an injection well is proposed for the area, all “affected parties” will be notified, area, all “affected parties” will be notified, and notification must be published in the and notification must be published in the newspaper.newspaper.

�� You can contest the injection well and You can contest the injection well and bring information to a hearing on whether bring information to a hearing on whether the RRC should grant or deny the permit.the RRC should grant or deny the permit.

��Other communities have been successful Other communities have been successful contesting injection wells in their towns.contesting injection wells in their towns.

Surface Use Agreements (SUA) & Surface Use Agreements (SUA) &

LeasesLeases

��The best way to protect your land The best way to protect your land

and economic interests is through and economic interests is through and economic interests is through and economic interests is through

a wella well--drafted SUA or lease.drafted SUA or lease.

SUAs definedSUAs defined

�� These are agreements between the These are agreements between the

surface owner and company. They cover surface owner and company. They cover

how the company will use the surface and how the company will use the surface and

how damages to the surface will be how damages to the surface will be how damages to the surface will be how damages to the surface will be

handled. They can be negotiated whether handled. They can be negotiated whether

or not the surface owner also owns the or not the surface owner also owns the

mineral rights. Mineral owners often mineral rights. Mineral owners often

negotiate a SUA at the same time as a negotiate a SUA at the same time as a

lease.lease.

Things to consider in your SUAThings to consider in your SUA

��Make sure you are compensated for ALL Make sure you are compensated for ALL surface damages.surface damages.

�� This can include:This can include:

•• injuries to crops and pastures; erosion injuries to crops and pastures; erosion •• injuries to crops and pastures; erosion injuries to crops and pastures; erosion and stagnation of soil; growing timber; and stagnation of soil; growing timber; livestock; fences; ditches; canals; livestock; fences; ditches; canals; buildings and other structures; and buildings and other structures; and pollution of any surface or subsurface pollution of any surface or subsurface waters.waters.

Surface DamagesSurface Damages

Texas Cooperative Extension photo by Brian Hill Texas Cooperative Extension photo by Brian Hill

SUA (cont.’d)SUA (cont.’d)

��Water Water

�� Land UseLand Use

��ReclamationReclamation��ReclamationReclamation

��Quality of life, Quality of life, health, and health, and safetysafety

http://www.fossiloilandgas.com/photo-galleries/earp/012earp.htm

Leases definedLeases defined

�� A contract between a landowner (lessor) A contract between a landowner (lessor)

and a company or individual (lessee) that and a company or individual (lessee) that

grants exploration and development rights grants exploration and development rights

to subsurface oil and gas deposits.to subsurface oil and gas deposits.to subsurface oil and gas deposits.to subsurface oil and gas deposits.

LeasesLeases

�� A preprinted lease will tend to favor the A preprinted lease will tend to favor the

interests of the drilling company.interests of the drilling company.

��When entering into a lease, take care to When entering into a lease, take care to

define all terms carefully.define all terms carefully.define all terms carefully.define all terms carefully.

Before Signing a Lease or SUABefore Signing a Lease or SUA

��Do not sign anything right away. If Do not sign anything right away. If

someone makes you an offer, ask for it in someone makes you an offer, ask for it in

writing.writing.

��Consult an attorney or landowners Consult an attorney or landowners ��Consult an attorney or landowners Consult an attorney or landowners

organization.organization.

�� Find out as much as you can about the Find out as much as you can about the

company.company.

�� Talk to your neighbors.Talk to your neighbors.

House Bill 630House Bill 630

��Requires gas or oil well operators to notify Requires gas or oil well operators to notify

surface owners before they enter property surface owners before they enter property

to drill.to drill.

�� The operator must give notice within 15 The operator must give notice within 15 �� The operator must give notice within 15 The operator must give notice within 15

days of receiving a permit from RCC.days of receiving a permit from RCC.

�� If you have a SUA, operators are NOT If you have a SUA, operators are NOT

required to give you notice under this law.required to give you notice under this law.

Lessons from other CommunitiesLessons from other Communities

BEFORE BEFORE

AFTERAFTER

Road DamageRoad Damage

Poorly Maintained Poorly Maintained

InjectionInjection

WellsWells

Panola CountyPanola County