Flaring and Railroad Commission
Developments
ROSS SUTHERLAND
What is Rule 32?
• Rule 32 governs gas
“releases”
• Venting and flaring
• At the well or lease level
• At off‐lease facilities that
handle gas
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What is Rule 32?
• General rule:
• All gas must be utilized for legal purposes
• i.e., marketed or used for a beneficial purpose
• Don’t flare or vent for lack of a “legal purpose”
• If you release gas, flare it instead of venting it
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What is Rule 32?
• Rule 32’s text is
complex
• Provides for “legal” gas
•
releases
“Legal” means RRC only
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What is Rule 32?
• When is flaring or venting legal?
•
•
•
Exempt releases
Authorized releases
Exceptions (permits)
•
Never vent H2S
• Administrative or
• Hearing required?
• Generally oil wells
• Prefer flaring to venting
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Flaring Permits in Texas
Year
RRC Permits Granted
2013
3,092
2014
5,285
2015
5,689
2016
4,870
2017
3,708
2018
5,488
2019
6,972
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Exempt Releases
• Gas releases not readily measured by oilfield devices:
• Routine, low‐volume releases
• Not metered or reported
• May be vented
• Unless a flare is required for safety reasons
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Exempt Releases
• Common Examples:
• tank vapors
• fugitive emissions
• that cannot readily be captured and sold or routed to a vent or
flare
amine treaters and glycol dehydrator flash tank emissions
•
• blowdown from gas lines, compressors or other equipment
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Exempt Releases
• Common Examples:
• gas purged from compressor cylinders or other equipment at
•
startup
gas released during drilling operations
• before completion of a well
• during initial completion
• during re‐completion or workover operations
• May be others – not “readily measured”
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Authorized Releases
• Releases that the Commission has deemed necessary
for efficient drilling and operations
• Must measure
• Report on Form PR
• Generally, must flare
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Authorized Releases
• Most common on‐lease authorized releases:
• for 10 days after initial completion of a well
• or recompletion or workover
• venting a well that must be unloaded or cleaned up to
atmospheric pressure
• limited to 24 hours at a time and less than 72 hours in a month
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Authorized Releases
• Most common on‐lease authorized releases:
• because of a shutdown at a gas gathering system, compression
facility or gas plant
• for less than 24 hours at a lease
• Notify the district office ASARP*
• low pressure separator gas, up to 15 mcfd per gas well or 50
mcfd for an oil lease
• Oil well/lease: 50 mcfd = ~1500 mcf/month
*As Soon As Reasonably Possible
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Authorized Releases
• Gas handling facilities
• Gathering system
• Gas plant
• Gas compressor
• Other gas handling equipment not directly associated with
•
lease production
Central production facility
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Authorized Releases
• Gas handling facility authorized release:
• Upset condition
• e.g., downed compressor, unexpected pipeline issues
• Not more than 24 hours
• Notify the district office ASARP
• Must be measured and reported
• Must be flared
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Exempt v. Authorized Releases
Exempt Releases
Generally…
• may vent
• need not report
• need not measure (not readily
measurable)
• indefinite
• no permit required
Authorized Releases
Generally…
• must flare
• must report
• must measure or estimate
• some have limited time periods
• no permit required
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Exceptions
• Exceptions
• If a release is not authorized or exempt
• Requires an application
• Permits granted administratively or after a hearing
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Exceptions
• Key permitting questions:
• What grounds justify an exception?
• How are exceptions obtained?
• How long does an exception last?
• When is a hearing required?
• Exceptions are governed at each flare point
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Exceptions
• Grounds for exceptions at the well or on the lease:
• Generally, if operator shows “necessity”
• Examples of potential necessity in the Rule:
• Flaring more than 10 days after completion
• Unloading or cleaning up a well for longer than authorized
• Low pressure gas that can be measured, but is impractical to
•
market
For oil wells, unavailable pipeline or other legal use
• Flaring longer than 24 hours for system upsets
• High line pressure
• Compressor issues/downtime
• Avoiding waste that might be caused by curtailment
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Exceptions
• Grounds for exceptions at gas handling facilities:
• Generally, “necessity”
• Examples of potential necessity in the Rule:
• Flaring longer than 24 hours for system upsets
• Gas‐gathering system or plant construction
• Gas plant turnaround
• Emergency situations
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Exceptions
• How to get an
administrative permit:
• Application for Exception to
•
•
Statewide Rule 32
New form requires more
granularity
$375 fee
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Exceptions
• Rule 32 Data Sheet tips:
• Identify the flare point and sources
•
• Single point on lease? At each well? Central facility?
• Think of Rule 32 exceptions as applying to each flare point.
More granularity required
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Exceptions
• New Rule 32 Data Sheet is tedious but beneficial
• Sometimes additional information is required
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Exceptions
Timing Issues
• When should the operator apply?
• Generally, before flaring begins
• Except: unanticipated system upsets
• Authorized for 24 hours
• Notify the district office, apply by end of the next business day
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Exception
Timing Issues
• COVID 19 Policy is still in place and extends notification
deadlines
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Exceptions
Timing Issues
• How long does an administrative permit last?
•
Generally, maximum administrative period: 180 days total
• Four permits of 45 days = 180 days total
• Most upset flaring events last less than 180 days
• New permit for each unique event
•
•
Except, 50 mcfd or less at the flare point
Most common long term permit: no economic pipeline
connection
• Evidence:
• distance to nearest line
• economics of value of gas v. cost of building pipeline
• Disfavored by RRC
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Exceptions
Timing Issues
• Can administrative permits be extended/renewed?
• To ensure no gap:
• Apply and submit fee at least 21 days before expiration
• Include prior permit number on the application
• If the first permit is still being processed…
• Apply to “renew” 21 days before first would expire if granted
• What is a renewal?
• Same flare point same need
• Not at a new well on the same lease
• Need a new permit and fee if it has a separate flare point
• Exceptions apply to flare points
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Exceptions
Timing Issues
• New operator
• Permits do not transfer
• 90‐day review period for new operator
• Must apply for new permits, as necessary
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Exceptions
Hearings
• When is a hearing required?
• Exhausted 180‐day cap
• Administrative permit denied
• To vent instead of flare
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Exceptions
Hearings
• How to apply?
• Submit a letter requesting the exception and a hearing
• Reference prior permit number
• Submit 21 days before prior permit expires
• How long will permit last?
• Depends on the necessity
• Maximum at hearing is NOW 18 months
• Prior permit by hearing: up to 2 years
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Enforcement
• Protection:
• Comply
• Keep records
• Reason for authorized flares
• Communications with district office
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Decision Tree
• When is a gas release legal?
•
•
Exempt?
Authorized?
•
Permit
• Flare or vent?
• How long?
• Administrative or hearing required?
• How long?
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New Form PR
(effective September 2021)
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New Disposition Codes Required for New Form PR
• Venting and flaring are now separate and require sub‐codes
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New Disposition Codes Required for New Form PR
• Based on new disposition codes and sub‐codes, greater
communications between regulatory and operations
departments is needed
• More granular information is now needed when reporting
to RRC
•
E.g., hour by hour flaring volumes
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Flaring and Railroad Commission
Developments
ROSS SUTHERLAND