UIC Class I Application Issues and Updates Introduce yourself. Give a summary of the range of projects you’ve worked on this year (i.e., application for a new commercial facility, renewal applications for a commercial facility and several onsite facilities, a major amendment application for a captured facility, a well closure and permit revocation). This presentation is geared for facility operators and consultants who prepare Class I injection well applications. The purpose of the presentation is to provide you information that will help you prepare more complete applications. I will provide tips on what to do before you begin the application process, I will highlight common deficiencies in recent applications, and I will discuss some changes that are being made to the Class I injection well application. Dan Hannah, P.G. Underground Injection Control Permits Section Radioactive Materials Division Texas Commission on Environmental Quality TCEQ Trade Fair May 16, 2018

Starting the Application Process Class I Injection Well Application Issues First, let’s discuss what you need to do before you begin preparing the Class I application. Starting the Application Process

Starting the Application Process Download current application form from TCEQ website For renewals, update application to follow current application form Combine permits with multiple expiration dates into one application Schedule pre-application meeting to discuss questions or concerns Always use the most current Class I application form. The form is updated at least once a year. We recently updated the application form. The updated form is posted on the UIC web page. Always download the current application form from the UIC web page on the TCEQ website. Use the current form for all types of applications including new, renewal, major amendment, minor amendment, minor modification, transfer and endorsement. If you are preparing a renewal application, you may begin with the currently approved application for your facility, but the renewal application must be updated to follow the current application form. This means that you will need to update the renewal application to address changes in the application form that have occurred in the previous 10 years. Some facilities have multiple injection well permits that were issued at different times with different expiration dates. These facilities are having to go through the year long application process for each well. This requires additional time and cost to prepare and review each application. As a result of preparing and reviewing the applications individually the permit applications and permits are not always consistent. We strongly encourage these facilities to combine the permit applications for each well into one application. The single application would be prepared and reviewed together and the permits would be issued together with the same expiration date. Some of the renewal permits would be issued before their expiration dates, but the benefit of having the permits issued in sync outweighs the challenges and costs of preparing and reviewing the applications separately. As you begin planning your project and preparing the Class I injection well application, we encourage you to set-up a pre-application meeting to discuss any questions or concerns you may have about the regulations, the application requirements and the process. This meeting can include staff from the TCEQ Industrial and Hazardous Waste Permits Division to discuss the surface unit application as well.

Common Application Deficiencies Class I Injection Well Application Issues Second, let’s discuss some common deficiencies that the UIC Permits Section has found in recently reviewed Class I applications. Common Application Deficiencies

Common Application Deficiencies Lands Dedicated to the Permanent School Fund May include property and mineral rights owned by State of Texas Includes navigable waters in Texas (rivers, bays, coastal waters) Provide documentation from General Land Office that property and mineral rights are not dedicated to the permanent school fund The TCEQ is required to send notice to the General Land Office if an application may affect lands dedicated to the permanent school fund. This might include property and/or mineral rights that is owned by the State of Texas. This also includes any navigable waters in Texas. If the facility and/or adjacent property or mineral rights meet this criteria, the application may affect lands dedicated to the permanent school fund. The application provides contact information for the General Land Office. If your application may affect lands dedicated to the permanent school fund, you may contact the GLO to request a determination. If the GLO provides a determination that permanent school fund lands are not affected, provide a documentation of this determination in the application.

Common Application Deficiencies Lands Dedicated to the Permanent School Fund (cont.) Or provide location of the land that may be affected And a description of any foreseeable impact or effect the proposed permitted action may have on the permanent school fund land TCEQ will provide notice to General Land Office If you do not have a determination from the GLO that the permanent school fund lands are not affected, then the application must include a location of the property and or mineral rights that may be affected and a description of any foreseeable impact of effect the proposed permitted action may have on the permanent school fund land. The TCEQ will use the information provided in the application to provide notice to the GLO regarding the application.

Common Application Deficiencies Texas Railroad Commission “No Harm” Letter Letter from RRC stating that drilling the well and injecting waste will not endanger or injure known oil or gas reservoirs RRC reviews have been finding that waste disposal wells may endanger or injure reservoirs Provide detailed information on geology of injection zone to the RRC The Class I application has always required a letter from the Texas Railroad Commission stating that drilling the disposal well and injecting industrial or municipal waste into the subsurface stratum will not endanger or injure any known oil or gas resources. The Railroad Commission reviews are based on information provided by the applicant and upon Railroad Commission records. Recently the Railroad Commission reviews of applications for both new wells and renewal applications for existing wells have been finding that the wells may endanger or injure oil or gas reservoirs. In all cases thus far, the applicant was able to provide additional information that led the Railroad Commission to determine that the wells would not endanger or injure oil and gas reservoirs. We just wanted you to be aware of these findings and encourage you to submit detailed information on the geology of the injection zone and on proposed injection patterns.

Common Application Deficiencies Provide Correct Well Location Survey Data If application is renewal for (or includes) drilled/operational wells Make sure surveyed well location(s) used in application are consistent with surveyed well location(s) in completion report Verify latitude and longitude are correct before submitting application The Class I application form requires the applicant to provide the location of the injection well(s) relative to established surveys and to provide the geographical coordinates of the injection well(s) in degrees, minutes, seconds. For drilled and/or operational wells, surveyed locations should be found in the completion report. We have noticed recently that applicants will often re-insert coordinates from Section I.B of previous applications or coordinates from previous permits, even after a well has been drilled and/or is operational. Remind applicants to check completion report if well has been drilled.

Common Application Deficiencies Reservoir Pressure Modeling & MASIP Calibrate model with historical injection rates and measured pressures Use 100 psi safety factor when calculating MASIP If underpressured reservoir, may have a negative MASIP Consider downhole gauges/sensors to monitor flowing bottomhole pressures The application requires reservoir pressure modeling for one year and ten years from the present time, and for the operational life of a well. In an initial application the modeling will be based on many knowns and unknowns. Once an injection well is constructed and operating, we have historical injection rates and measured pressure data from the well. For a renewal application for operating wells, use the historical injection rates and pressure data from the operational life of the well to calibrate the model. Calculation of maximum allowable surface injection pressure (MASIP). Current UIC practice requires that a safety factor of 100 psi be factored into MASIP calculations. This safety factor allows for a conservative estimate of uncertainty inherent in the assumed components of both pressure measurement (surface or subsurface) and reservoir conditions.

Common Application Deficiencies Area of Cone of Influence Area where increased injection pressure could move a 9 pound per gallon fluid column Column measured from 50 feet below ground surface to top of injection reservoir Based on maximum injection rates and conservative reservoir parameters The injection well application requires a determination of the area of cone of influence. The cone of influence is based on a standard that is the same for every application for Class I injection well. The standard for determining the area of cone of influence is the area that exist where increased reservoir pressures at the top of the injection reservoir are sufficient to drive reservoir fluids into a wellbore by overcoming a 9 pound per gallon fluid column that extends for the top of the injection reservoir to a level 50 feet below the ground surface. The pressure build-up model should be based on maximum injection rates and conservative reservoir parameters. The cone of influence is not based on site specific data for each well within the cone of influence. After the area of cone of influence is determined based on the standard 9 pound per gallon fluid column, then site specific information on a specific well within the cone of influence may be considered.

Common Application Deficiencies Area of Review Either 2½ mile radius or area of cone of influence, whichever is greater Provide tabulation of condition of all wells within AOR that penetrate confining zone Provide schematic of all wells within cone of influence Once the cone of influence is determined, the outline of the area of cone of influence should be plotted on the area of review map. The area of review will be either a 2-1/2 mile radius from the injection well, or the area of the cone of influence based on the 9 pound per gallon fluid column, whichever is greater. Once the area of review is established, all wells, including injection, oil and gas, exploratory, disposal, water, etc. should be plotted on the area of review map. Each of the wells plotted on the area of review map should be assessed to determine which wells penetrate the confining zone. For all wells that penetrate the confining zone, review the completion and plugging records for these wells and provide a table compiling data on each well. The completion and plugging records and scout tickets for these well must be included in the application. For each of the wells that penetrate the confining zone that are also located within the cone of influence, prepare and submit a well schematic. The well schematic must show casings, tubings, open hole, calculated or known cemented intervals, plugs, perforations, mud weight, and an approximation of the depth of the base of the USDW, the confining zone, the injection zone and injection interval. The schematic should identify any construction or plugging inadequacies and potential problems.

Area of Review Example 1 Cone of Influence (COI) is less than 2.5 mile minimum Area of Review (AOR) radius. Would need to examine well construction records/details and prepare well schematic for all artificial penetrations inside the 1-mile circle.

Area of Review Example 2 COI equals AOR. If the calculated COI radius is greater than the minimum 2.5-mile AOR radius, the COI radius will then be the AOR radius. In this case, the COI and AOR equal 3.5 miles. All artificial penetrations within the 3.5 mile radius circle would require further evaluation of well construction details/records and preparation of well schematics.

Common Application Deficiencies Area of Review (cont.) Identify wells in cone of influence that might allow movement of fluids into or between USDWs Improperly constructed or abandoned Incomplete well records (assume insufficient cement and 9 pound per gallon fluid density) May consider 20 pound per 100 square feet gel strength Using the information provided on the well schematics, identify wells in the cone of influence that would allow the movement of fluids into or between USDWs due to pressures in the injection zone. First determine if the well is improperly constructed or abandoned by considering the adequacy of cement plugs and casing below the USDW. If the well is improperly constructed or plugged, considered the mud weight and compare the hydrostatic pressure of the mud to the calculated injection reservoir pressure at the top of the injection reservoir at the wellbore. If the calculated injection reservoir pressure exceeds the hydrostatic pressure of the mud, you may consider the additional factor of gel strength of the mud using 20 pound per 100 square feet gel strength. If the calculated injection reservoir pressure is still exceeds the hydrostatic pressure of the mud, the well is considered improperly plugged. A corrective action plan is required for these wells. In the alternative, the calculated injection pressure could be lowered by lowering the maximum injection rate and/or changing the injection zone.

Application Form Revisions Class I Injection Well Application Issues The Class I injection well application has been recently revised to address issues raised by the TCEQ Office of Legal Services and Office of Compliance and Enforcement, and to address issues identified during the UIC Permits Section application reviews. Application Form Revisions

Application Form Revisions Sections I & II If permittee is not facility owner, application must be signed by both the facility owner(s) and permittee (the facility includes all contiguous land, structures, other appurtenances, and improvement on the land) Provide property deed for facility legal description We recently reviewed a nonhazardous application where during the public comment period we realized that the landowner had not given permission for the applicant to operate an industrial well on the property. In response to this issue, the application has been revised to require documentation that the applicant has permission to operate the injection well if the permittee does not own the facility or the land where the facility is located. The documentation could be in the form of a lease agreement or some other legal agreement. The application has also been revised to require the facility owner and landowner to sign the application form. At the advice of the TCEQ Office of Legal Services, the application has been revised to require the submittal of the deed for the facility property instead of simply the legal description.

Application Form Revisions (cont.) Sections IV & V Demonstrate financial capability (30 TAC §305.49(c)) Only applies to hazardous waste injection wells Demonstrate sufficient financial resources to operate the facility in a safe manner and in compliance with the Class I permit and all applicable rules (different requirements for new permits and renewal permits) Assessment of potential for injection into the well to result in a seismic event - if potential for seismic event, provide plan for mitigation of this potential Financial capability requirements for Class I hazardous wells per 30 TAC 305.49(c)). Demonstrate to satisfaction of the ED that applicant has sufficient financial resources to operate the facility in a safe manner and in compliance with the permit and all applicable rules, including but not limited to, how an applicant intends to obtain financing for construction of the facility, and to close the facility properly as required by 30 TAC 305.50(a)(4)(B). Different options for new permits, permit amendments for facility expansions, and permit transfers based on one of the four categories listed below: Publicly traded entities Privately held entities with audited financial statements Entities without audited financial statements or entities choosing not to provide the information listed above Entities with a resolution from a governing body approving or agreeing to approve the issuance of bonds to satisfy financial assurance requirements (e.g. city or county) For permit renewals, including all types of applicant entities, include a financial disclosure letter addressed to UIC Permits Section signed by an applicant representative meeting the application signatory requirements of 30 TAC 305.44. Inform applicants that a more detailed study of seismicity in the vicinity of the injection well(s) is now required. Includes location of injection wells, pattern of injection (volumes, rates, time periods), thickness of sediments between base of injection zone and top of basement rocks, character of such sediments or rocks, location of and nature of faults within AOR that may provide a pathway for injected fluids to travel

Application Form Revisions (cont.) Section VI Document that 100 psi positive pressure will be maintained in the annulus along entire length of tubing and packer Document that formation fracture pressure will not be exceeded during drilling and cementing of the well Provide contingency cementing plan if 100% of annular space is not filled with cement The annulus monitoring system shall be designed and constructed to maintain at least 100 pounds per square inch (psi) pressure greater than the maximum injection tubing pressure at any point along the length of the tubing and at the packer to prevent the leak of injection fluids into any unauthorized zones and to detect well malfunctions. Refer to 30 TAC §331.62(a) for construction standards and to the Class I Injection Well Construction Guidance. Discuss procedures used to prevent channeling of the cement slurry through the wellbore mud (i.e., use of centralizers and scratchers, reciprocating the casing, maintaining pump rates, mud conditioning and gel strength, pre-flushing and wiper plugs) and to prevent downhole formations from being subjected to hydrostatic pressure sufficient to cause formation fracturing in the wellbore. Submit detailed contingency cementing plans that will be implemented if there is less than 100% filling of the annular space between the casing and the borehole or the casings. Submit cement service company recommendations. [30 TAC §331.62(a)(1)(A)(ix)&(x) & (a)(6) and §331.121(a)(2)(O)]

Application Form Revisions (cont.) Section VI (cont.) Well history should include logging and testing results, failed MITs, permit violations, and period of no operation or temporary abandonment Engineering assessment of existing well materials should consider design and operational problems and should include recalculation of design safety factors Information on wells in temporary abandonment Include material decontamination and disposal costs in closure cost estimates The application has been revised to require a listing of permit violations resulting from TCEQ inspections on the well and to require recommendations for changes to the well design and/or operations, monitoring and maintenance plans to prevent future violations. We have seen somewhat of a disconnect between renewal permit applications and compliance histories at some facilities and would like to use the permit application process to assist facilities with permit compliance issues. A recent permit application brought to light a concern with decontamination and disposal costs for contaminated tubing that was being removed from the well at closure. In response to this concern the application has been revised to require the cost estimate for well closure to include any costs for decontamination and disposal of equipment removed from the well at closure.

Application Form Revisions (cont.) Section VII If MASIP is less than zero psi, provide the maximum flowing bottomhole pressure – will require installation of downhole gauges to measure bottomhole pressure Use historical injection rates and reservoir pressure data to calibrate pressure buildup model If the calculated MASIP is less than zero psi, provide the average and maximum flowing bottomhole pressure(s) that are being requested for the permit. Discuss the method of determination and show calculations. [30 TAC §331.63(c) §331.121(a)(2)(G)(ii)] If injection into the reservoir has occurred, use historical injection rates and reservoir pressure data to calibrate the model adjusting appropriate input parameters until a satisfactory performance match has been obtained between the model’s calculated reservoir behavior and the behavior observed in the field.

Application Form Revisions (cont.) Section IX Include detailed description of each waste stream including the process generating the waste Identify off-site facilities Provide facility name, location, RN number, and waste to be injected Recent enforcement action at several facilities that are captured facilities, led us to realize that the permit application did not solicit sufficient information regarding captured facilities and the wastes managed in wells from captured facilities. The application has been revised to require the location of captured facilities on the topographic map. The waste section of the application has been revised to require the captured facility name, RN number and waste to be injected in the well and to require a demonstration that the facilities meet the definition of captured facilities. In response, the permit language identifies the captured RN number and the captured facility waste streams authorized for disposal in the injection wells. Need to ensure that any comingled waste is non-hazardous if well is permitted as such.

Application Form Revisions (cont.) Section IX (cont.) Identify captured facilities Include captured facility boundary on topographic map in Section I Provide captured facility name, RN number and waste to be injected Provide demonstration that facilities meet definition of captured facility Recent enforcement action at several facilities that are captured facilities, led us to realize that the permit application did not solicit sufficient information regarding captured facilities and the wastes managed in wells from captured facilities. The application has been revised to require the location of captured facilities on the topographic map. The waste section of the application has been revised to require the captured facility name, RN number and waste to be injected in the well and to require a demonstration that the facilities meet the definition of captured facilities. In response, the permit language identifies the captured RN number and the captured facility waste streams authorized for disposal in the injection wells. Need to ensure that any comingled waste is non-hazardous if well is permitted as such.

Application Form Revisions (cont.) Section XII Pre-injection units used for storage of and processing hazardous waste must be authorized by a RCRA permit under 30 TAC §335.2 or by accumulation time requirements under 30 TAC §335.69 Table XII (Pre-Injection Unit Summary)- complete for each pre-injection unit that is or will be used for storage or processing of waste to be injected, or in conjunction with an injection operation If PIUs manage characteristically hazardous waste that is processed to remove hazardous characteristics prior to injection, then need to be authorized by permit under 30 TAC §335.2 (RCRA). Also check if PIUs would be exempt under the RCRA “90-Day” rule (30 TAC §335.69). We have added Table XII to Section XII of the application. Table column items include pre-injection unit name, unit number or identifier, and permit authority.

Application Form Revisions (cont.) The revised application is posted on the TCEQ website at the following web address: https://www.tceq.texas.gov/permitting/waste_permits/uic_permits/UIC_Guidance_Class_1.html/#Forms The revised application is posted on the TCEQ website at this link. Before you begin working on an application, please always first go to the website to download the current application form.

UIC Program Contacts Jan Bates, P.E. Underground Injection Control Permits Section Radioactive Materials Division (512) 239-6627 jan.bates@tceq.texas.gov Dan Hannah, P.G. (512) 239-2161 dan.hannah@tceq.texas.gov