Regulation of Oil and Gas Activities in Texas, Louisiana

Oil and gas E&P operations are regulated by a variety of agencies in varying degrees and forms. Jurisdictional lines overlap and are sometimes blurred to a point where it is increasingly difficult for operators to understand which agency is regulating which activity. Adding to the confusion, operators from one state may conduct regulated activities in another but not fully understand the applicable regulatory regime. The information in this article, although certainly not definitive, may shed some light on the regulation of waste and air emissions.

In Texas, jurisdiction over oil and gas operations is split between the Railroad Commission of Texas (RRC) and the Texas Commission on Environmental Quality (TCEQ). In Louisiana, it is split between the Louisiana Department of Natural Resources (LDNR) and the Louisiana Department of Environmental Quality (LDEQ).

Wastes from oil and gas drilling or exploration operations are called E&P wastes. Drilling fluids, produced water and other wastes associated with the exploration, development or production of crude oil or natural gas are E&P wastes. Generally, any material that comes from downhole, or was otherwise generated by contact with the oil and gas production stream, is E&P waste. Some wastes generated during oil and gas operations, such as paint wastes or waste solvents, are not E&P wastes and must be handled like any other industrial or hazardous waste stream.

In Texas and Louisiana, the RRC and LDNR have jurisdiction over E&P wastes. The main types of disposal facilities are injection wells, commercial surface facilities and landfills. The RRC and LDNR regulate injection wells and commercial surface facilities. Injection wells receive liquid wastes such as produced water. In Louisiana, there are land-based treatment facilities regulated by LDNR that receive E&P waste for placement into five-acre treatment cells designed to reclaim solids and oil. The solids are supposed to be beneficially reused, the oil is collected and sold, and the water from the cell is injected into a disposal well.

Solid waste landfills are regulated by the TCEQ and LDEQ. These agencies allow the disposal of non-hazardous E&P waste at solid waste landfills. Non-E&P wastes generated by oil and gas operations must be properly handled and are usually disposed of at solid waste or hazardous waste landfills, depending on whether they exhibit any hazardous characteristics.

Air emissions from oil and gas operations require a permit. In Texas and Louisiana, the basic framework is the same for most production facilities and is administered by the TCEQ and LDEQ. There are exclusions for facilities with low emissions, permit by rule (PBR), a standard permit and an individual permit.

Texas has a robust PBR, formerly known as the standard exemption. The PBR may be applicable depending on the level of emissions from the facility. Further, the PBR applies different rules to facilities operating in the Barnett Shale and those that are not. Louisiana has a regulatory permit for oil and gas well testing. Texas and Louisiana have standard permits that apply. If none of these options apply, an individual permit must be obtained.

Many Texas operators work in Louisiana but fail to transfer permits when they acquire a production facility. The LDEQ will fine an operator for failing to transfer a permit from the old operator. The LDEQ views the new operator as operating without a permit, which it regards as a major violation.

In short, be aware your wastes require proper handling and your facilities proper permitting. Knowing the entity administering the regulatory regime may help you maintain compliance and operate without unnecessary expense.

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