Sign up for The Brief, The Texas Tribune’s daily newsletter that keeps readers up to speed on the most essential Texas news.
On Monday, state regulators unveiled their preliminary regulations outlining the proper disposal methods for hazardous oilfield waste remaining after drilling a well. The general public has been granted a one-month period to provide feedback on these new guidelines. However, documents and interviews indicate that certain industry representatives have been offering their input for over two years.
Starting in 2021, the regulations were crafted with the assistance of oilfield waste executives and consultants. The Railroad Commission of Texas, responsible for regulating the oil and gas industry, also received valuable feedback from advocates representing the business sector.
The initiative was started by a commissioner who holds investments in oilfield waste companies. Jim Wright, one of the three elected commissioners of the agency, campaigned with the intention of revising Rule 8. According to the Texas Ethics Commission, Wright possesses stocks in multiple hazardous waste management companies in Texas.
During an interview, Wright dismissed the critics who claim his role in the industry creates a biased regulatory environment. He stated that he had minimal involvement in modifying the regulations after assuming the position of commissioner. Furthermore, he added that if anything, being a part of the Commission has negatively impacted his businesses instead of benefiting them. According to Wright, not many companies are willing to take the risk of engaging with businesses associated with regulators.
“I want to make it clear that this is not my personal rule or something that I desire,” stated Wright. “Even prior to my tenure, the commission staff recognized the necessity of closely examining Rule 8.”
According to Wright, he is confident that the newly implemented regulations will bring advantages to every Texan, extending beyond just the oilfield waste sector.
Supporters of industry’s early involvement say the rules, which haven’t been significantly revised since 1984, needed to be changed to make the permitting process more efficient and to allow new waste recycling technologies to be permitted. Critics say the revised regulations would benefit the industry over the public.
According to Virginia Palacios, executive director of Commission Shift, a watchdog group that advocates for stricter financial policies for commissioners, it is evident that there is a conflict of interest when the industry is allowed to revise their own regulations to benefit themselves financially. This conflict could result in the creation of rules that not only harm public health and contaminate groundwater but also jeopardize our shared future.
Michael Lozano, a communications and government affairs representative for the Permian Basin Petroleum Association, voiced his disagreement after providing input on the draft rules to the Commission prior to their release.
He stated, “While acknowledging the importance of our environmental NGO counterparts, it must be noted that they lack knowledge of the practical implementation of our work and the daily tasks performed by operators. Our collective aim is to establish strong and effective environmental standards.”
According to an email statement from Patty Ramon, the spokesperson for the Railroad Commission, it is customary for the agency’s rulemaking process to seek early input from the industry. Ramon mentioned that they have also extended an invitation to at least one individual from the public who had previously protested a facility’s permit, to offer their feedback at an early stage.
The disposal of large quantities of waste is regulated by intricate rules. In Texas, numerous wells are drilled annually by companies who, during the drilling process, inject mud into the ground. Consequently, along with the oil and natural gas, the drilling produces rocky soil and a saline liquid called “produced water”. Therefore, there arises the need to find suitable destinations for all this waste.
That’s where Rule 8 comes in.
The Railroad Commission uses Rule 8 to decide how companies should handle that material. Unlike most hazardous waste, the toxic muck from the oilfield is exempt from federal regulations. The state regulations govern how waste can be recycled or dumped — typically in pits near the well or in commercial hazardous waste pits.
If not managed properly, the pits have the potential to release harmful chemicals and radioactive substances, causing contamination of surface or groundwater.
In recycling, the mud can be cleaned and used for more drilling, rocks and gravel can be used to build roads and some of the less-contaminated water can be removed for other uses. However, “produced water” is most often injected back into the earth under a different permit, a method that has caused an increase in earthquakes across West Texas.
According to the proposed rule change, new environmental standards would be implemented. These standards would include restrictions on the location of waste pits, as well as allowing companies to propose alternative methods for recycling oilfield waste. Additionally, there would be limitations on who can protest permits, a move that has raised concerns among environmental groups who fear it could curtail public input. However, Ramon argues that the process of filing a protest is not burdensome and claims that the changes would merely prevent competitors from filing protests.
Texans have until 5 p.m. on Nov. 3 to give feedback on the draft changes by filling out an online form or attending a meeting at 10 a.m. Oct. 26 at the Commission’s office or 9 a.m. Oct. 27 online at adminmonitor.com/tx/rrc. There will then be another formal proposal and chance for comment later.
Residents want more protections; new rules would allow industry-created pilot programs
Texans have long been engaged in a relentless struggle to prevent the establishment of oilfield waste dumps in their communities, a battle that many believe is already an arduous one.
Located to the southeast of San Antonio, near a small town named Nordheim, drivers transport waste to a commercial pit facility adjacent to the farm owned by Ron Pilsner’s family, which has been in their possession for 63 years. Generations before Ron, his father and grandfather were raised on this land. The property features a ranch-style home as its centerpiece, surrounded by lush grasslands, oak trees, and a herd of Black Angus cattle.
Pilsner expresses that their tranquility has been shattered due to the facility. The intense illumination emanating from it during the night disturbs them. They are constantly bothered by the beeping sound of vehicles reversing, as well as unpleasant odors like petroleum, insecticides, and a skunk-like smell. Consequently, Pilsner prefers to keep the windows shut and is concerned about potential leakage from waste pits, which could lead to groundwater contamination in the surrounding area.
Nordheim residents tried to stop a San Antonio-based developer from building the pits in 2014. Pilsner’s parents, Marvin and Bernice, joined the protesters, who put up “DON’T DUMP ON NORDHEIM” signs with a skull and crossbones. The couple went at least once to Austin to ask the Railroad Commission not to approve the project.
The agency approved it anyway; a lawsuit by residents seeking to overturn the decision failed.
Petro Waste Environmental’s construction and operations worsened the nuisance to such an extent that Pilsner’s father halted the renovation of the farmhouse, intended to be his retirement home. Despite being known for his frugality, he splurged $16,000 on new furniture, as shared by Pilsner. Unfortunately, he never had the opportunity to sleep on the new mattresses as he had to move into a nursing home. Tragically, he passed away last year.
In the blistering heat of a September afternoon, Pilsner accompanied Sister Elizabeth Riebschlaeger, an 87-year-old Catholic nun with relatives in Nordheim, as they circled the outskirts of the waste pit. Sister Riebschlaeger passionately advocated for the residents’ rights, urging the commission to grant them a greater voice in the matter.
“Although we may be defeated, we refuse to be silenced,” Riebschlaeger declared.
Waste Management, the company that acquired Petro Waste in 2019, confirmed its adherence to the existing Rule 8 and expressed no anticipation of needing to modify its operations according to the proposed regulations.
In 2021, the company announced that it had ceased accepting certain odorous materials and was actively working on minimizing truck traffic at their facility. According to the statement, the company prioritizes safety and strives to be a responsible member of the community.
The proposed regulations specify that solely individuals, such as the Pilsners, who possess land adjoining a potential waste pit or recycling facility would receive notification regarding a company’s intention to establish its facility in that area.
The new regulations propose that only individuals who can demonstrate “genuine harm or financial loss” as a result of a waste pit would be eligible to voice their opposition to a new facility permit. This definition aims to restrict the influence of environmental organizations in preventing the construction of new pits. If eligible, individuals would be given a 15-day window to file a protest, starting from the moment the company submits the application or last publicly notifies. Subsequently, the company would have 30 days to either retract its permit application or seek an administrative hearing to resolve the conflict.
The draft rules also offer companies the opportunity to establish pilot programs for their waste management. Instead of resorting to dumping or conventional recycling methods, companies can now propose alternative recycling approaches that are not explicitly addressed in the rules.
The modification aims to address the industry’s apprehension regarding the inflexible nature of existing regulations in accommodating emerging technologies. However, environmental organizations express concern that these new approaches may be granted permits expediently with minimal supervision.
The new rules otherwise update existing standards, adding detail and codifying what was internal guidance used by Railroad Commission staff. For example, under current rules the pits are required to have a plan to manage stormwater runoff, including during intense rainfall events, and cannot be located in a floodplain. Under the new draft rules, such pits also can’t be located on a beach, barrier island, or within 300 feet of wetlands, rivers, streams or lakes. Nor can they be located within 500 feet of any public water system well or intake location.
The old rules said liners for waste pits must “reasonably” prevent pollution but didn’t include specific standards. The draft rules say pits must be lined with a plastic strong enough to resist damage from crude oil, salts, acids and alkaline solutions. Critics of the commission said the new liner standards aren’t much stronger than the internal guidance used by the agency.
In addition, critics highlight the lack of clarity regarding penalties for pit leaks or violations of permit rules in the draft regulations. Ramon, the spokesperson for the commission, mentioned that further information on fines would be provided in the official rule proposal and would probably align with the current regulations.
Critics argue that allowing fines to be determined on a case-by-case basis and potentially reduced if a company shows “good faith” would provide companies with greater flexibility to challenge the penalties.
Industry drafts the rules
The draft rules achieve a goal and campaign pledge for Wright, a Republican hailing from South Texas, who secured a position in the Railroad Commission in 2020. Previously associated with the oilfield waste services sector, Wright attempted to steer the agency’s regulations several years ago.
According to state filings, Wright held positions as the CEO and president of Environmental Evolutions, a company based in Corpus Christi. This company specializes in hauling hazardous waste and also has investments in other hazardous waste companies. Wright expressed his desire to assist the commission’s staff in ensuring a more uniform application of regulations that impact both his business and some of his customers.
At the time, one commissioner agreed to give the group access to commission staff members, according to an interview Wright did on a podcast, but none of the staff actually wanted to work with them on the rules at that time. A 2019 bill to formalize a commission-appointed oil and gas advisory group failed to pass.
Wright made the decision to pursue a position on the Railroad Commission and run for a seat.
Campaign finance reports reveal that Wright has received campaign donations from the oilfield waste industry. NGL Water Solutions Permian LLC, the oilfield waste division for Tulsa-based NGL Energy Partners, has emerged as one of Wright’s prominent donors, contributing a total of $226,000 since 2019. Furthermore, a company executive contributed an additional $2,500 to his campaign. It is worth noting that NGL Water Solutions Permian LLC has also extended their support to the campaigns of the other two commissioners, namely Christi Craddick and Wayne Christian.
During an interview, Wright expressed his view that campaign fundraising is an unavoidable aspect of politics, describing it as a “necessary evil.” However, he stressed that campaign donations do not influence his decision-making process regarding the Railroad Commission, emphasizing that he communicates this explicitly to his donors.
After he defeated the better-funded incumbent Ryan Sitton in an upset, Wright’s staff turned to the waste rules, internal documents show. An investigative watchdog group called Documented obtained copies of the documents through public records requests and shared them with the Tribune.
Kate Zaykowski, previously the director of public affairs at Wright, played a pivotal role in establishing a regulatory task force. This task force consisted of a minimum of seven individuals hailing from oil and gas as well as oilfield waste companies such as Pioneer Natural Resources and Waste Management, Inc.
Kevin Ware, an environmental engineering consultant and the chair of the task force, stated that the task force commenced their work in early 2021 by meticulously reviewing a previous effort made years ago to modify the regulations. They utilized this as a foundation to establish explicit guidelines on the approval process for permits. Subsequently, the task force presented their proposal to the commission.
Afterwards, the staff of the Commission extended invitations to influential oil and gas lobbying organizations, requesting their participation in an unofficial evaluation of the recommendations proposed by the task force. Attendees of commission meetings on the regulations included representatives from prominent corporations like ExxonMobil, Apache Corp., and Chevron. These companies, along with at least one lobbying group, provided their feedback and posed inquiries.
In August 2022, Mark Henkhaus, a consultant and former employee of the Railroad Commission, who also chaired a regulatory committee for the Permian Basin Petroleum Association, expressed his concerns via email to a staff member of the commission. He suspected that an oil waste company might be attempting to manipulate the rules in their favor.
Henkhaus wrote, “I would like to ensure that the waste handlers are not exploiting the Commission for their own business gains, if you catch my drift.” Henkhaus chose not to provide any further comments.
According to Aaron Krejci, the director of public affairs at Wright, the task force has been reactivated and their input has been requested. However, Krejci clarified that he was not personally involved in the group’s discussions or their suggestions to agency staff.
Krejci expressed in an email that the task force played a crucial role in initiating the rulemaking process. However, he clarified that the recently released rule was not developed by the task force, but rather by the Commission staff who have been diligently working on these updates internally for a significant period.
According to Wright, if the regulations were solely intended to benefit the waste management industry, they would remain unchanged. The current state of affairs is typically more advantageous for business.
On the other hand, he describes the draft regulations as a positive development in the Railroad Commission’s capacity to effectively oversee an industry that has undergone significant transformations in the past forty years, while also safeguarding water resources against contamination. He highlights that the regulations encompass updated requirements for maintaining safe distances from surface water and improved criteria for the construction of waste pit linings.
Wright stated that in his opinion, the rule is advantageous for Texas as a whole, not solely for the industry. He expressed uncertainty about how the rule was designed with the intention of benefiting the industry.
Carla Astudillo contributed to this story.
Disclosure: Exxon Mobil Corporation and Permian Basin Petroleum Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.