Texas regulators overhaul oilfield waste rule for the first time in four decades

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Texas regulators have completed the first overhaul of oilfield waste rules in over 40 years.

The Railroad Commission of Texas last month adopted revisions for Chapters 3 and 4 of its rules that govern commercial oilfield waste landfills and on-site disposal at drilling rigs. The new rule — a compendium of numerous new requirements — goes into effect on July 1 and covers waste streams that include drill cuttings, mud that oozes out of wells and the saline wastewater that comes to the surface during drilling.

The rule-making generated widespread interest. The commission, which regulates oil and gas drilling and waste, received over 650 public comments on the draft rule from individuals, companies and associations.

The final rule includes new provisions that watchdogs say will better protect property owners and the environment. For the first time companies will have to register the location of earthen waste pits that contain toxic drilling waste, known as reserve pits. But companies holding leases to drill on private property will still be able to bury this waste near the surface without notifying the landowner or, in most cases, lining the pit to prevent groundwater contamination. These pits were the subject of more than 400 public comments.

Some oil and gas companies had submitted comments in favor of easing provisions in the draft rule. Other companies had urged the commissioners to go further in requiring new reserve pit protections to bring Texas regulations in line with other states. In response to public comments on reserve pits, the Railroad Commission technical staff wrote that they attempted to “strike a balance between these interests.”

Commissioner Jim Wright, who spearheaded the rulemaking, reflected on the multi-year process during the December meeting.

“Today I believe the Railroad Commission and the state of Texas have taken a significant step forward to update our practices and procedures to better align with the considerable changes that have occurred in those 40 years,” he said.

Waste pit requirements 

The waste rule, last updated in 1984 and previously housed in Chapter 8 of the RRC rules, covers a wide range of disposal sites for drilling wastes. Texas is now drilling record amounts of oil and gas. Waste streams have also changed as hydraulic fracturing, or fracking, overtook conventional drilling. Horizontal wells used for fracking can extend laterally up to four miles, which generates more waste.

“The volume of waste for every well that's drilled is dramatically higher,” explained Gabriel Rio, the CEO of Milestone Environmental Services, an oilfield waste management company based in Houston.

Operators must dispose of the mud and cuttings that return to the surface when a well is drilled.

One horizontal well generates between 8,000 and 16,000 barrels of waste, equivalent to 336,000 to 672,000 gallons, according to Milestone’s comments on the draft.

While drillers used water-based fluids for conventional wells, they now use oil-based and synthetic fluids to drill unconventional wells for fracking. These drilling fluids enter the waste stream when they resurface in the fracking process and can contain benzene, toluene, ethylbenzene and xylene and other harmful constituents. However, under the federal Resource Conservation and Recovery Act, this waste is deemed non-hazardous — a decision made after heavy industry lobbying.

“It doesn’t necessarily mean it’s not toxic,” Rio said, noting that the wrong concentrations of oilfield waste stored improperly can be toxic to humans and wildlife.

This waste can be disposed of at commercial landfills that accept waste from multiple drilling sites and companies. The new rule will strengthen liner and construction standards for these commercial facilities. The updates also increase their bonding and financial security requirements. These bonds ensure that the Railroad Commission has funds when it is necessary to intervene and close operations at a facility if, for example, a company goes bankrupt.

Another section of the rule covers reserve pits. These are earthen disposal pits dug next to drilling rigs, referred to as Schedule A pits in the rule. Once the well is complete, the waste is permanently buried underground. These pits used to be smaller, but a single pit can now cover several acres. Most of these pits are authorized automatically under RRC procedures and do not require a permit from the Railroad Commission.

The new rule allows drillers to keep the pit open for up to a year while the well is drilled. The rule does not require companies to notify landowners when a reserve pit is dug on their property. Liners are only required when pits contain fluid with a high concentration of total dissolved solids or if groundwater is present within 50 feet of the bottom of the pit. The final rule states that drillers are expected to know the depth of groundwater but does not require any specific methods of determining the depth.

Schedule A pits were one of the most contentious pieces of the rule, judging from more than 400 comments submitted asking for notification requirements, clearer construction standards and the liner requirement. Zane Kiehne of Z&T Cattle Co., a cattle ranch of more than 400,000 acres in the Permian Basin with extensive oil and gas drilling on its property, was among them.

Kiehne wrote in support of notification and liner requirements for reserve pits. “The above amendments will actually benefit oil and gas companies by lessening the number of future environmental damage claims from landowners,” he wrote.

Oilfield waste pits have been linked to at least two dozen cases of groundwater contamination reported by the Railroad Commission to the Joint Groundwater Monitoring and Contamination Report. Milestone Environmental Service’s comments also referenced numerous examples of pollution at these pits.

However, some in the oil and gas industry commented that the proposed registration requirements for these pits were “too stringent.”

One such company was Crownquest Operating. “The uncertainty and complexity of these rules alone could cause massive backlogs in activity,” wrote Luke Dunn, the company’s vice president and son of founder and billionaire Tim Dunn.

He wrote that large pits take months to build and that delays resulting from implementing new rules could cost operators millions of dollars.

Ultimately the Railroad Commission did not change the rule to require landowner notification or liners at all reserve pits. The commission concluded that it does not have the statutory authority to require companies to notify landowners or obtain consent before digging pits and burying waste on their land.

“Landowner permission and/or notification is a matter of land use authorization between the surface owner and the operator,” said commission spokesperson R.J. DeSilva.

This issue could be taken up by the Texas Legislature.

“Commissioner Wright thinks it is important for all Texas landowners to know how their land might be used,” his director of public affairs, Aaron Krejci, wrote in an emailed statement. “Whether that knowledge is expressed through consent, notification, or neither, is up to the Texas Legislature.”

Most changes in the new rule pertain to the disposal of muds and cuttings, not the disposal issues presented by billions of gallons of contaminated water that come back up to the surface during oil and gas drilling every year in Texas. The rule does include new provisions for recycling that “produced water.”

Most of that water, which often contains toxic substances, is disposed of underground in injection wells, which have been linked to earthquakes. The commission is conducting pilot projects for the treatment and reuse of produced water in agriculture. The Texas Commission on Environmental Quality, the state’s environmental regulator, is issuing permits to discharge treated produced water into rivers and seasonal streams.

A four-year process

Updating the oilfield waste management rules in the biggest oil-producing state in the country was a rocky road. Wright, who owns several oilfield waste management companies, campaigned on the promise of updating the rule when he ran for a seat on the Railroad Commission in 2020. Once he took office, his staff formed a regulatory task force to make recommendations for a revised rule.

The task force met privately for two years before an informal draft rule was released to the public in October 2023. After accepting public comments, the commission released the formal draft in August 2024. Members of the public had until Oct. 15 to submit comments on the more than 300-page draft. The commission also hosted an in-person comment session in Austin and a virtual comment session.

Over 650 comments poured in. Individual landowners impacted by drilling operations, oil and gas industry groups, and associations representing farmers, ranchers and mineral rights owners all weighed in. Two months later, the three commissioners voted to adopt the final rule.

Virginia Palacios, executive director of Commission Shift, a Laredo-based environmental nonprofit that monitors the commission’s activities, was skeptical that RRC staff had enough time to review and respond to hundreds of public comments in such a short time.

“It seems like they rushed approval at the end of the day,” she said. “I just don’t know if they’ve really taken everything into account that they needed to.”

DeSilva, the Railroad Commission spokesperson, said that staffers addressed all comments they received. He said only “about 50” comments were unique and the rest were form letters. Inside Climate News reviewed dozens of the comments and found well more than 50 to include unique language.

Rio, the Milestone CEO, said the rule changes for commercial landfill facilities are a “step in the right direction” and codify industry best practices that many companies already follow.

“The good thing is almost the vast majority of operators are not working at the bottom rung of Railroad Commission standards,” he said.

But Rio is concerned that the rule largely leaves the old rules for reserve pits intact. He said this creates disparities between “high-standard, highly regulated” commercial facilities and “very lightly or almost completely unregulated” waste pits. Drillers can face long-term environmental liabilities when they bury waste in pits, so many send the waste to commercial landfills instead.

Rio commended the requirement for companies to register the locations of their reserve pits for the first time. “Knowing where those pits are is really important so that people can avoid contamination in the future and avoid problems going forward,” he said.

“It is surprising when you realize the latitude the operators have to manage this waste without very much regulation,” Rio said. “So it is something that needs to continue to be addressed.”

Gary Joiner, spokesperson for the Texas Farm Bureau, noted the group’s comments were specific to reserve pits.

“Overall, the adopted changes leave us in a better position than we were,” he said.

Commission Shift submitted hundreds of pages of technical comments. Palacios was gratified that the RRC adopted some of their suggestions, including striking a provision that would have allowed treated drill cuttings to be used to construct county roads.

Commission Shift noted there is insufficient scientific study to ensure this practice is safe. The RRC removed the language about county roads but did leave the possibility of using treated drill cuttings to build oil and gas drill pads and lease roads and as a “legitimate commercial product.”

DeSilva, the agency spokesperson, said this includes materials such as road base or flex base suitable for roadways. He said counties would have to approve its use on county roads.

Palacios said her group does not want this provision to become a loophole for harmful material to enter the environment.

“There is radioactive material in this waste, there are a lot of other substances that affect human hormones and are carcinogenic,” Palacios said.

The Railroad Commission will now turn its focus to implementing the new rule and providing compliance guidance to companies. Wright, the commissioner, emphasized that the rule should face periodic review.

“We are better served when we make targeted surgical changes,” he said during the December meeting. “Rather than deferring maintenance until a full rebuild is required.”

Asked how often the commission should review the rule, Wright’s staff simply said, “More than once every 40 years is a good place to start.”

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