Application Guidelines for Storage of Crude Oil In Geologic Formations Other Than Salt

Purpose

A permit may be granted for an underground crude oil storage facility in geologic formations other than salt formations as authorized by the exception granted by the Commission on May 5, 2020. This exception shall be effective as of the date of the open meeting, May 5, 2020, and shall remain in effect for one (1) year after the May 5, 2020 effective date, unless this exception is earlier terminated or continued by subsequent Commission action. Moreover, any crude oil stored in a hydrocarbon storage facility located in a geological formation other than an underground salt formation must be removed from the storage facility no later than five (5) years after the May 5, 2020 effective date, unless this exception is earlier terminated or continued by subsequent Commission action.

An underground crude oil storage facility may be created, operated, or maintained in a geological formation other than an underground salt formation in a manner that will prevent waste of the stored crude oil, uncontrolled escape of crude oil, pollution of fresh water, and danger to life or property.

This guidance is provided to assist applicants applying for an underground crude oil storage facility permit pursuant to Statewide Rule 95. This guidance in no way limits Commission staff’s ability to request information not expressly outlined herein if such information is required to complete the administrative review in accordance with Statewide Rule 95. This guidance in no way limits, curtails, or amends the jurisdiction of the Commission.

Application Guidelines

Form H-4

  1. Submit a Form H-4 for each proposed Underground Storage Facility.
  2. Item 12 is not applicable and should not be completed.
  3. Items 13–16 should be used to identify the storage reservoir(s) and/or geologic formation(s) and the depth (feet) of the top and bottom of the storage reservoir(s) and/or geologic formation(s).
  4. For the purposes of items 17 & 18, “cavity” means storage well. If there is not enough space on the form, the applicant should submit a table as an attachment, similarly formatted, describing the storage wells.
  5. For the purposes of item 19, “cavity” means the depth (feet) of the top and bottom of the injection interval. “Capacity” is not applicable and should not be completed.

Attachments Relating to Compliance with Statewide Rule 13

  1. Wellbore diagram of the subject storage injection well. Additionally, if any work will be performed on the well prior to use (injection for storage), a description of the work planned and the purpose of the work.
  2. Method of physically demonstrating that the cement bond at the shoe of the long string casing prevents migration of fluids up the backside of the casing. The proposed method is subject to Commission staff review and approval.
  3. Mechanical integrity test procedure for the proposed storage injection well.
  4. Wellbore diagram(s) of any other well(s) that will be in communication with the underground physical space used for the proposed storage operation. For any wells for which communication with the underground physical space is in dispute, staff will make the final determination regarding whether a diagram will be required.

Attachments Required by Statewide Rule 95

  1. All attachments required to demonstrate compliance with Statewide Rule 95 (c), (d), and (e).
  2. All attachments required by the instructions on the back of the Form H-4.

Attachments Relating to Formation Confinement under Statewide Rule 95(d)(1)

  1. Description of the underground crude oil storage facility, including creation, operation, and maintenance in a manner that prevents waste of the stored crude oil, uncontrolled escape of stored crude oil, pollution of fresh water, and danger to life or property.
  2. Description of the procedure to inject stored crude oil, including maximum injection pressure.
  3. Description of the procedure to withdraw stored crude oil.
  4. Relative permeability curve for hydrocarbon phase.
  5. Relative permeability curve for water phase.
  6. Inflow performance relation (IPR) of the hydraulic conduit, from wellhead to wellbore exit, that will be used for injection.
  7. IPR of the hydraulic conduit, from wellhead to wellbore exit, that will be used for withdrawal.
  8. Determination of fracture gradient of the storage reservoir.
  9. Ranges of density and viscosity values for the stored crude oil.
  10. Determination of the maximum in situ static pressure under storage conditions.
  11. Determination of current in situ reservoir pressure.
  12. Structure map of the upper confining layer of the storage reservoir.
  13. Structure map of the base confining layer of the storage reservoir.
  14. Description of the confining boundaries of the storage reservoir.
  15. An evaluation of anomalous geologic features (e.g., faulting, natural fracturing, folding, and unconformities) in terms of their potential for compromising reservoir integrity with respect to the containment of stored crude oil.
  16. Evaluation and plan for addressing the corrosive potential of the pore fluids and the potential mineralogical and fluid compatibility issues.
  17. Determination of total capacity available for storage 18. If the formation(s) proposed to be used for crude oil storage is productive of hydrocarbons, the estimated volume of existing hydrocarbons and the estimated ultimate recovery factor of the existing hydrocarbons.
  18. A determination of the estimated ultimate recovery factor of the stored crude oil after termination of injection.
  19. Determination of the total percentage of stored crude oil that would be anticipated to be immobile, relative to the standard operation conditions in place, if the storage reservoir were filled to 100% capacity with injected stored crude oil.
  20. Same information required for Item 18, but recalculated for 50% capacity.
  21. Any other information requested by Commission staff.

Area of Review (AOR)

In accordance with the instructions on the back of the Form H-4, an applicant for an underground crude oil storage facility must identify all wells and storage facilities within a quarter mile of the proposed storage boundaries. For all wells that penetrate the top of the storage zone, the operator must provide dates drilled, well statuses, and plugging records as applicable. The operator also must provide completion records for all such wells that are not plugged.

Safety

  1. Statewide Rule 95(h) contains substantial safety requirements. Provide a description of the storage facility's safety features as required by Statewide Rule 95.
  2. Indicate whether the presence of hydrogen sulfide will require compliance with Statewide Rule 36 (relating to Oil, Gas, or Geothermal Resource Operation in Hydrogen Sulfide Areas).

Notice of Application and Hearing

Hearing Required

If Commission staff administratively denies an application for an underground crude oil storage facility permit, the applicant may request a hearing on staff’s denial. Additionally, a hearing will be required if the application is protested.

Notice of Application

  1. In general, all notice must comply with Statewide Rule 95.
  2. The operator must serve notice of application to parties identified in Statewide Rule 95(e)(1). The operator must provide a service list and a statement of certification of notice.
  3. The operator must provide an explanation for how the extent of notice was determined, especially if the lateral subsurface boundaries of the underground storage reservoir(s) and/or geologic formation(s) extend beyond the surface tract where the facility is located. For any formations for which the extent of the lateral subsurface boundaries is subject to dispute, staff will make the final determination regarding required notice.
  4. The operator must publish notice of application once a week for three weeks in a newspaper of general circulation in the county in which the facility is located. Provide publisher's affidavit and copy of publications.

    PUBLICATION GUIDELINES:

    • Indicate that the formation is productive or non-productive of oil and gas.
    • Include Formation Name(s).
    • Include the Field and Lease Name(s).
    • Include the Well Number(s).
    • The direction/miles from the nearest town must be consistent with the information in the application.
    • The injection interval must be consistent with the information in the application.
    • For applications where several wells are involved, use the top of the shallowest and the bottom of the deepest injection interval for the subsurface depth interval.
    • The applicant must publish notice once a week for three consecutive weeks for an underground crude oil storage facility on or before the day the application is filed with the Commission.
    • The newspaper need not be in the same county as the well, but must have general circulation in that county.
    • The following legal authority paragraph must be included in the publication:

      LEGAL AUTHORITY: Title 3 and 11 of the Natural Resources Code; Texas Civil Statutes, Article 6053-3; and the Statewide Rules of the Oil and Gas Division of the Railroad Commission of Texas.

      Requests for more information about the application may be made to: Technical Permitting Section, Oil & Gas Division, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711, (Telephone 512/463-6760). Persons who can show they may be adversely affected by the underground crude oil storage facility may request a public hearing on the application. Such request must be received in writing within fifteen days of the last date of publication of this notice. Requests for hearing should be sent to the Technical Permitting Section at the address above.

    • The notice must contain instructions for persons who wish to protest the application or who wish to request further information concerning the application.


Commissioners