Vol. 7, Issue No. 1

Members,

 

We have hit the ground running in 2024 with the legislative session in New Mexico, RRC of Texas happenings, and action at the federal level. In this version of The Standard, we provide several pertinent updates including information on a joint trade letter to the Biden Administration regarding LNG permits, an update on the NM session, and produced water recycling in Texas. Our team has been hard at work advocating for the oil and gas industry in the Permian and your input and participation are highly appreciated.


Below, you will also find information on our upcoming luncheon, committee meeting schedules, and other important information. As always, we also provide details on upcoming PBPA events and other relevant community activities:


Important Updates


  • February Luncheon
  • New Mexico Legislative Session Update
  • RRC Produced Water Recycle Framework
  • TCEQ Summer Interns
  • LNG Letter to Biden Administration
  • Labor Law Update
  • RECAP: 2024 Top Hand Award Banquet
  • 2024 Spring Swing Golf Tournament
  • Committee Meetings


Community Events


  • Midland College PPDC Training Courses
  • Railroad Commission Online Filing Systems Webinar
  • Additional events can be found on the calendar in the Member-Only Center!


Regards,


Ben Shepperd

PBPA President

February Membership Luncheon

Join us on February 15th for our next Membership Luncheon featuring native Midlander and RRC of Texas Chairman Christi Craddick!


Enjoy lunch and networking at the Petroleum Club of Midland while Chairman Craddick provides candid updates about Railroad Commission initiatives and activities.


Thank you to Priority Power and Diamondback Energy for sponsoring this event!

Register

New Mexico Update

2024 Legislative Session Update


The New Mexico Legislature began its 2024 session on January 15, and it feels like we’ve been in a full sprint ever since. This session is limited to budgetary legislative proposals, any issues specially messaged by Governor Lujan Grisham, and legislation that was vetoed by the governor during the last session of the legislature in 2023. However, while the topics are limited, since the governor gave her State of the State address on opening day our industry has had a full plate. While there are a few budget-connected pieces of legislation we are following, it has been other proposals, included in the special message of the governor, which have taken most of our time and efforts in the first few weeks. Fortunately, Wednesday, January 31, is the last day bills can be filed for this session, so we will soon know all the proposed measures we’ll be contending with over the final few weeks.

 

In this section of The Standard, we provide a review of what has occurred so far during the first two weeks of the session:

 

Most bills of interest to our industry run through the House Energy and Natural Resources Committee (HENRC), and at this stage of the session that committee has seen most of our focus. 

 

On Saturday, January 20, HENRC convened its first meeting of the session. This kickoff meeting lasted six and a half hours while hearing two bills. HB 41, the Clean Fuels bill, was debated for over four hours but was finally passed out on a party-line vote 7-4. The bill then moved to House Judiciary (HJC), where a committee substitute was voted out Do Pass. HB 41 is now scheduled to be heard on the House floor on January 30. The second bill heard on January 20 in HENRC was HB 48, the Royalty Rate Increase on State Lands bill. This bill was moved out of HENRC on another 7-4 party-line vote as well. The bill then moved on to House Commerce and Economic Development (HCEDC) where it was heard on January 29. The bill was passed out of HCEDC on a 6-5 vote, nearly along party lines. Its next stop will be the House floor. 

 

For those that don’t follow the action in the New Mexico Legislature very often, unlike in Texas, bills in New Mexico often get referred to multiple committees in each chamber. Unless a bill is voted out of all committees in which it is heard with a “Do Pass” recommendation it is near impossible for that bill to make it back to the chamber floor for a final vote.

 

As to the meat at the center of the plate, the highest priority bill at this point in the session for the industry is HB 133, which proposed changes to the Oil and Gas Act. HB 133 had its hearing in HENRC on Thursday, January 25. However, while that was the first scheduled hearing on the Oil & Gas Act changes, it was not the first actual legislative conversation on HB 133.

 

From its introduction, HB 133 drew the attention and concern of not just those in the oil and gas industry, but those in the legislature who understand the industry’s importance to the state’s budget. On the first Friday of the session, members of Senate Finance (SFC), including Chairman George Munoz, grilled New Mexico Energy, Mineral and Natural Resources Department (EMNRD) Deputy Secretary Dylan Fuge over the impacts of the first proposed version of HB 133. Particular attention was directed at the setback provisions in the proposal, which have since been removed. While the bill wasn’t even on the committee agenda – instead Secretary Fuge was supposed to be pitching the requested EMNRD budget – the worrisome impacts of HB 133 on the entire state budget brought the proposed bill front and center.

 

Over the first weekend of the session, after the fated SFC hearing, a committee substitute (CS) for HB 133 was circulated with PBPA and other stakeholders as this CS HB 133 would be the bill presented in committee. For those who watched the SFC hearing live (or the archived hearing now available), it was hard not to believe the CS was a direct result of the treatment HB 133 received in SFC. 

 

The CS HB 133 presented in HENRC on Thursday, January 25, while still opposed by PBPA, along with NMOGA and IPANM, did include dramatic improvements in comparison to the originally proposed HB 133. The CS HB 133 presentation, public comment, and debate from committee members lasted nearly four hours. While valid concerns were voiced by the trades, operators, and members of the committee from both the Republican and Democratic parties in opposition to the bill, ultimately CS HB 133 was voted Do Pass on a 6-5 vote. The vote was nearly partisan except for Rep. Cynthia Borrego (D-Bernalillo), who voted against the motion to pass, joining the four Republican committee members. The bill moved on to HJC where it was originally scheduled to be heard on January 29. The bill was not brought up on the 29th, however, but has now appeared on the agenda for the January 31 HJC hearing. With a full House floor schedule and several bills in front of it on the HJC agenda, it is possible the bill still does not get heard until Friday, February 2, but we shall see.

 

While the vote in HENRC moved the bill on to HJC, discussions have continued between industry, agency representatives, and other stakeholders on critical provisions in the bill, including the need for a tiered approach to financial assurances being statutory instead of being determined by agency rulemaking, a hard cap on civil penalties, and codifying the 98% gas capture rule already in place.

 

There are plenty of other bills being tracked by PBPA, and for more information on HB 133 or any other bills of interest being followed, please reach out to us. For a full list of PBPA-tracked legislation, please join our New Mexico Legislative Committee.


Please reach out to Stephen Robertson (stephen@pbpa.info) for more information.

Texas Update

RRC Framework for Produced Water Recycle


The Railroad Commission has created a framework for a pilot program that has the potential to recycle produced water.

 

Operators will apply for authorization to conduct pilot studies, and the RRC will issue a permit or letter of authorization. They would compile data on how treated produced water can be reused in certain activities that are safe and protective of human health and the environment.


The Commission will focus attention on the effectiveness of treatment technologies and examine proper methods for gathering, storing, treating, testing, and documenting how treated water quality evolves and is controlled in each pilot facility. Treated fluid will not be allowed to be discharged to surface water during the pilot studies. 

 

The produced water recycling framework is a starting point and will evolve over time in collaboration with the work of others such as the academic community, consortia, industry, and community leaders. Treated fluid will not be allowed to be discharged to surface water during the pilot studies. 


The information obtained by these pilot studies can be used to develop more focused regulation on produced water recycling and help guide future legislation. A copy of the framework can be found on the RRC website at https://www.rrc.texas.gov/oil-and-gas/applications-and-permits/environmental-permit-types/pilot-projects/


After discussion with members, PBPA provided informal feedback to the Railroad Commission of Texas to address member concerns before this publication. While this framework exists to further efforts to treat produced water and expand beneficial reuse, each project is unique and PBPA will assist operators in addressing their case-by-case needs.


For more information, please contact Michael Lozano (michael@pbpa.info). 

TCEQ Summer Interns


TCEQ recruits dedicated, undergraduate and graduate college students to serve as interns in private sector companies, city and county government, or state agencies across Texas.

TCEQ invites you to learn about hosting (sponsoring) summer interns. You will have the opportunity to interview, select, and compensate your interns. Sponsors must have a presence in Texas.


Students are typically in STEM fields, but may also be in public health, law, public administration, business, accounting, finance, liberal arts, criminal justice, and communications.


To participate, you must submit a sponsor request form by May 31, 2024. To find the form or get more information about the program, visit the sponsor webpage for the Mickey Leland Environmental Internship Program. Or, contact Juanita Baldwin, MLEIP education and outreach coordinator.

Find Interns

Federal Update

LNG Letter to the Biden Administration

 

On January 24, PBPA joined an effort with others across the liquified natural gas (LNG) value chain requesting the Biden Administration to reject calls to halt permits for U.S. LNG export facilities. We sent a letter to Department of Energy Secretary Granholm and senior administration officials discussing the critical role U.S. LNG exports continue to play in national security and the security of our allies around the globe. We also reminded the administration of the positive support the increased global use of LNG has provided in helping with global climate goals.

Read the Letter

Labor Law Update

 

On January 9, the Department of Labor issued a final rule that will force companies to reclassify some workers as employees instead of independent contractors. The rule, effective in March, will likely increase costs for industries that rely on contract labor, such as trucking and manufacturing.


Those who employ contract laborers need to make sure they are familiar with this new rule, which will require that workers be considered employees rather than contractors when they are "economically dependent" on a company. The rule also rescinds and replaces a Trump administration regulation that provided laborers who own their own businesses or are free to work for competing companies can be treated as contractors.

PBPA Events

RECAP: 2024 Top Hand Award Banquet

Thank you to everyone who attended the Top Hand Award Banquet honoring Mr. Dick Sivalls last week! It was a wonderful evening highlighting the dependability, selflessness, and kindness of a Permian Basin pillar.

 

Mr. Sivalls has contributed greatly to the industry through his many engineering feats and tremendous work ethic. Additionally, his numerous hours of service to the Permian Basin communities, specifically Odessa, TX, have created a lasting legacy and a fantastic example of selfless service.

 

We are grateful for the show of support and respect for our newest Top Hand and would like to share Mr. Sivalls’ one request from the evening: that you consider assisting in the effort of naming the UT Permian Basin Engineering Building after another PBPA Top Hand, Mr. Jim Henry. For more information about this opportunity, please reach out to Sandi Bliss, VP of Advancement at UTPB.

More Info

2024 Spring Swing Golf Tournament

Save the date for our 2024 Spring Swing Golf Tournament!


This four-man scramble takes place on Odessa Country Club's two magnificent courses with food, fun, and fellowship available to all who attend.


The Spring Swing is one of our most well-attended events, so once registration opens, don't wait to reserve your spot!

Event Flyer

Committee Meetings

  • New Mexico Legislative Committee: Wednesdays at 12 PM through 2/14/2024
  • Regulatory Practices Committee: 2/20/2024



For more information on these or any of our other committees, please contact Stephen Robertson at stephen@pbpa.info or (432) 684-6345.

Community Events

PPDC Programs

MC PPDC provides quality training programs designed to keep oil and gas industry professionals current in their areas of expertise by offering the latest industry updates, as well as providing timely and pertinent educational opportunities. Click the link below for upcoming classes being offered by the MC PPDC in the coming months.


Customized Training Available! For more information contact Midland College PPDC at (432) 683-2832 or cepetroleumtraining@midland.edu

Full Course Schedule

RRC Hosts Webinar on Form CI-D/Form CI-X Online Filing System Updates for Operators

February 7, 2024



The Railroad Commission of Texas (RRC) has launched updates to the RRC Online System used to file the Form CI-D, Acknowledgement of Critical Customer/Critical Gas Supplier Designation, and Form CI-X, Critical Designation Exception Application.

 

To help operators understand the recent updates, the RRC will host a webinar Form CI-D/ Form CI-X Online Filing System Updates from 9 a.m. to 11 a.m. on Wednesday, February 7, 2024.


The webinar is free, but registration is required. Registrants are required to register using their work email address. To register, visit the Zoom website at https://www.zoomgov.com/webinar/register/WN_OyyA_k4lRVK8jgPOFMMYMg

Register
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