Texas Railroad Commission Heightens Scrutiny of Injection Wells Linked to Seismic Activity

Last Friday, the Railroad Commission of Texas (“Commission”) swiftly responded to a recent 4.0 magnitude earthquake in Johnson County by dispatching inspectors to the area and directing four disposal well operators in the area to conduct well and reservoir testing. The operators have agreed to temporarily shut down activities to conduct the testing. The testing will be used to determine what, if any, regulatory action will follow.

This directive comes on the heels of the aggressive response undertaken by the Commission in April of this year to initiate show cause proceedings to address a recent seismic study linking disposal well activity to recent earthquakes in the area of Azle, Texas. These formal show cause proceedings, to be held in June of this year, will require operators of two disposal wells to demonstrate that the wells should not be cancelled and shut down.

Both of these steps follow the Commission’s adoption of rules last year that incorporate requirements related to seismic events in connection with disposal well permits, monitoring and reporting and the addition of a staff seismologist to the Commission. Plainly, the Commission intends to take the issue of the effect of injection operations on pressures within subsurface formations seriously and has demonstrated a willingness to use the full measure of its regulatory authority to do so. Operators of new and existing disposal wells, but particularly those in areas where seismic activity is more likely, should take heed. In addition, companies that provide wastewater and produced water recycling services may see a growing demand for those services as operators consider potential alternatives to disposal wells.