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TCEQ Planning Barnett Shale Permitting Rule Changes

The Texas Commission on Environmental Quality (TCEQ) is considering revisions to requirements for the Air Quality Standard Permit for Oil and Gas Handling and Production Facilities, which are used to authorize oil and gas facilities in the Barnett Shale of North-Central Texas.

The revisions would remove Archer, Bosque, Clay, Comanche, Coryell, Eastland, Shackelford and Stephens counties from the applicability of the standard permit based on an evaluation of population density and density of Barnett Shale oil and gas facilities within the counties, TCEQ said Thursday.

TCEQ in the past singled out the Barnett region for more stringent permitting requirements because much of it lies in urban areas. Barnett operators are subject to more stringent requirements for the release of volatile organic compounds, for instance. However, not all of the Barnett is urban, and the counties TCEQ proposes to remove from the more stringent requirements are the more rural ones, the Barnett Shale Energy Education Council's Ed Ireland told NGI's Shale Daily.

"The fact that they kind of grouped all of the counties together didn't make sense originally. They've finally recognized that," Ireland said.

"Environmental groups, legislators and some oil and gas producers may object to the potential removal of counties...because they may see it as a relaxation of necessary regulatory requirements for oil and gas facilities," TCEQ said in a summary of the proposed changes. "Alternatively, some oil and gas producers may ask that additional counties be removed or for further elimination of distance setbacks from the Barnett Shale requirements."

New facilities within the counties must continue to be authorized using another version of the standard permit in TCEQ rules or permit by rule. The proposed revisions would also allow compliance with a local ordinance requiring a separation between an oil and gas facility and residences, buildings and other areas used by the public of 50 feet or greater to meet all state separation requirements, the agency said.

The TCEQ is proposing identical changes to the permit by rule, which is also used in the Barnett Shale region. And it is also proposing to amend the permit by rule to extend the date from Jan. 1, 2013 to Jan. 5, 2015 for owners and operators of existing facilities in the Barnett Shale region to notify the TCEQ of their location and method of authorization.

The proposed revisions are to be published in the Texas Register. TCEQ will hold a public meeting on the proposed revisions to the standard permit and a concurrent public hearing on the proposed amendments to the permit by rule at 7 p.m. July 10 at the TCEQ Dallas/Fort Worth Regional Office, 2309 Gravel Drive, Fort Worth, TX.

Barnett activity has been slumping over the last year as depressed natural gas prices push producers into more liquids-rich plays such as the Eagle Ford Shale of South Texas. According to NGI's Shale Daily Unconventional Rig Count for the week ending June 15, there were only 40 rigs drilling in the the Barnett Shale, which is down one rig, or 2%, from the previous week, and down 30 rigs, or 43%, from the corresponding week one year ago.

However, once gas prices recover, producers in the play are ready to take advantage. According to company reports analyzed by NGI's Shale Daily, the five largest net acreage holders in the Barnett Shale are Devon Energy (662,000 acres), EOG Resources (506,000 acres), Total (270,000 acres), ExxonMobil (235,000 acres) and Chesapeake Energy (220,000 acres).

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