Signal Oil and Gas - Regulations of Groundwater Conservation Districts.

In Texas, groundwater ownership rights are subject to regulation and control by the courts and the State Legislature. Groundwater may be managed individually by landowners under the rule of capture, or collectively by landowners and groundwater conservation districts (GCDs). Under the “Rule of Capture,” landowners may pump as much water as they choose, without liability to surrounding landowners who might claim that the pumping is depleting their wells. There are very few restrictions to the rule of capture. Signal Oil and Gas

The Texas Legislature authorized the creation of GCDs as the State's preferred method of groundwater management (Texas Water Code, Chapter 36). These districts are empowered and charged to conserve, preserve, protect, recharge, and prevent waste of groundwater resources within their boundaries. GCDs may be created through a special legislative act, a landowner petition process to the Texas Commission on Environmental Quality (TCEQ), a landowner petition process to join an existing GCD, or TCEQ initiative in a priority groundwater management area (PGMA).

However, it does apply to water wells, including injection water source wells (“water wells used to supply water for activities related to the exploration or production of hydrocarbons or minerals” (§36.117(l)). Signal Oil and Gas

Signal Oil and Gas - Under Texas Water Code §36.117, there are certain exemptions, exceptions, and limitations to Chapter 36. In addition to exemptions for small volume livestock and poultry and domestic water wells, there are certain exceptions for temporary rig supply wells and limitations on injection water supply wells used in association with oil and gas activity, as well as water wells associated with surface mining activity.
Section 36.117 includes a permit exception for temporary rig supply wells. A GCD may not require a permit for the drilling of a temporary rig supply well (“drilling of a water well used solely to supply water for a rig that is actively engaged in drilling or exploration operations for an oil or gas well permitted by the Railroad Commission of Texas provided that the person holding the permit is responsible for drilling and operating the water well and the well is located on the same lease or field associated with the drilling rig” (§36.117(b)(1)). However, a rig supply water well must be registered in accordance with GCD rules and must be equipped and maintained to conform to the GCD’s rules requiring installation of casing, pipe, and fittings to prevent the escape of ground water from a groundwater reservoir to any reservoir not containing ground water and to prevent the pollution or harmful alteration of the character of the water in any groundwater reservoir (§36.117(h)). The driller of a rig supply well must file the drilling log with the GCD (§36.117(i)). In addition, the GCD may require a water well originally drilled for the purpose of rig supply to be permitted by the GCD and to comply with all GCD rules if the purpose of the well no longer is solely to supply water for a rig that is actively engaged in drilling or exploration operations for an oil or gas well permitted by the Railroad Commission (§36.117(d)). And finally, the well must be plugged in accordance with GCD regulations.Signal Oil and Gas


Section 36.117 also includes a limitation on injection water supply wells. Although Chapter 36 applies to injection water source wells, Section 36.117 prohibits a GCD from denying an application for a permit to drill and produce water for hydrocarbon production activities (an injection supply water well) if the application meets all applicable rules as promulgated by the GCD (§36.117(g)).

The following tables outline the regulations relating to water wells drilled for water to be used in oil and gas activities in Texas.

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Section 36.117 also includes a permit exemption for water wells drilled in association with surface mining. A GCD may not require a permit issued by the GCD for the drilling of a water well authorized under a permit issued by the Railroad Commission under Chapter 134, Natural Resources Code, or for production from such a well to the extent the withdrawals are required for mining activities regardless of any subsequent use of the water. However, such a well must be registered in accordance with GCD rules and must be equipped and maintained so as to conform to the GCD’s rules requiring installation of casing, pipe, and fittings to prevent the escape of groundwater from a groundwater reservoir to any reservoir not containing groundwater and to prevent the pollution or harmful alteration of the character of the water in any groundwater reservoir, and the driller of such a well must file with the GCD a copy of the drilling log. Furthermore, a GCD may require such a well to be permitted by the GCD and to comply with all GCD rules if the withdrawals from such a well are no longer necessary for mining activities or are greater than the amount necessary for mining activities specified in the permit issued by the Railroad Commission.

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