HYDRAULIC FRACTURING AND REGULATIONS IN TEXAS

Texas has a long history of oil and gas production including through hydraulic fracturing of conventional reservoirs. Until recently, the Texas legislature did not undertake significant changes in the rules governing the practice when applied to shale plays. However, during the 84^th (2015) Texas Legislature one significant change in the existing regulatory framework in Texas related to hydraulic fracturing was adopted. House Bill (HB) 40 clarifies that the Railroad Commission of Texas (RRC) has exclusive jurisdiction to regulate oil and gas operations including the express preemption of local regulation of oil and gas operations. Therefore, cities, counties, and groundwater conservation districts (GCDs) have no policing powers over water use for oil and gas production. Although the role of GCDs in the regulation of groundwater use for hydraulic fracturing may have been maintained through statements of legislative intent recorded at the time of bill adoption, the practical matter is that GCDs from a groundwater management perspective for hydraulic fracturing has been either diminished or removed.

Several other rule changes and bills are also related to water resources issues. For example, in 2013, a RRC rule change facilitated onsite recycling of produced water by allowing it without having to request a recycling permit. In 2015, HB-30 (84^th Legislature) created a mechanism to identify additional brackish groundwater resources to support oil and gas production in lieu of the use of freshwater. The legislation charges the Texas Water Development Board with conducting studies to characterize brackish groundwater resources in areas with significant oil and gas activity, and to identify areas with significant hydrologic isolation between fresh and brackish groundwater resources. In these areas with demonstrated separation, long-term production of brackish groundwater resources may be sustained without negative impacts on fresh groundwater resources.

The 84^th legislature also funded a new program to study the potential connection between wastewater injection wells and seismic activity. The TexNet program was funded to acquire and deploy a permanent seismometer network capable of measuring and locating all seismic events >M2.