1. RAILROAD COMMISSION OF TEXAS Guidance for Filing Environmental Permit Applications August 20, 2014 Rusty Woodburn Environmental Permits & Support

2. Synopsis Review of the Surface Waste Management Manual (SWMM)* Locating the necessary information – Accessible online resources – Application information for all permits – Guidance for each application – Rules associated with permits * www.rrc.state.tx.us/oil-gas/publications-and-notices/manuals/surface-waste-management-manual/

3. What Requires a Permit? Any person who transports, handles, stores, discharges, disposes or recycles oil and gas waste subject to the Commission’s jurisdiction must have authority from the Commission Each operator must have an active P-5 (Organizational Report) All permit applications require an original signature

4. RRC Website Or go to the RRC Website www.rrc.state.tx.us/ Click the “Oil & Gas” tab Easiest way to locate the SWMM Type “RRC Surface Waste Management Manual” into a search engine (Google, Bing, etc.)

5. How to Access Permit Information “Oil & Gas” drop down menu

6. SWMM – General Information

7. SWMM – Permit Types The following pages will contain information about the links for each of these permit types

8. Waste Hauler Permits (WHP) Helpful links RRC regulates the transport of oil and gas waste A person who transports waste must have a WHP Forms WH-1: Application for waste hauler permit WH-2: Updated list of operating vehicles WH-3: RRC permitted waste receiver Disposal of Waste at Texas Commission on Environmental Quality (TCEQ) or non-RRC Facilities is authorized if the water generator submits documentation to the RRC For more information about WHP contact Candace Goodwin at (512) 463-3840

9. Hydrostatic Test (HT) Permits HT Discharges – Used to test the integrity of pipelines and tanks – When water enters the pipeline or tank, it is considered oil and gas waste – May not be discharged without a permit * HT Discharge Application – List of 15 questions – $750 application fee for discharges to waters of the state Review frequently asked questions (FAQs) – Multiple discharges at one location require multiple HT permits – Waste water analysis requirements – * Cases when HT permits are not required

10. Minor and Other Permits Minor Permits – Issued by the appropriate District Office – Review the “Guidelines for Minor Permits” Notice and Protest Guidelines Analytical Guidelines Guidelines for Disposal of Oily Waste Off-Lease Landfarming and Landtreatment Disposal of Basic Sediment and Drilling Fluid Other Permits – Methods not authorized by the RRC or not requiring a permit – Must be applied for by submitting a letter of request

11. Pit Permits Disposal or storage of waste shall not pollute surface or subsurface waters List of authorized pits in Rule 8(d)(4) List of prohibited pits in Rule 8(d)(2) washout pits emergency saltwater storage pits gas plant evaporation/retention pits drilling fluid storage pits (other than mud circulation pits) drilling fluid disposal pits (other than reserve pits pits) saltwater disposal pits collecting pits skimming pits brine pits brine mining pits reserve pits mud circulation pits completion/workover pits basic sediment pits flare pits fresh makeup water pits fresh mining water pits non-commercial fluid recycling pits water condensate pits

12. Pit Applications Form H-11 must be submitted – Complete Items 1 thru 23 – Include Instructions to Pit Application – Items A thru L – Common mistakes Missing information, blank answers Incorrect P-5 address Detailed figures and descriptions Commercial facilities Commercial Disposal Pits – Requires 21 additional questions Associated Rule 8 and 22

13. Recycling Permits RRC encourages recycling of O&G waste Texas Administrative Code Chapter 4, Subchapter B – Division 1 outlines the definitions and general requirements for commercial recycling Solid Recycling – Reuse as roadbase, drilling pads, etc. – Division 2: On-Lease solid waste recycling Limited to any on-lease location for one year – Division 3: Off-Lease solid waste recycling Limited to any location for two years – Division 4: Stationary solid waste recycling Permitted for one location for five years

14. Recycling Permits, Cont. Fluid Recycling: Reuse of wellbore fluids – Authorized On a lease associated with drilling permit, disposal well, or injection well If used in the wellbore of an O&G well (frac fluid) If reused for legitimate commercial use if water is distilled – Division 5: Off-Lease fluid recycling Limited to any location for two years – Division 6: Stationary fluid recycling Permitted for one location for five years

15. Discharge Permits HTs Gas Plant Effluent Discharges Produced Water Discharges – Inland waters – Gulf of Mexico Storm water discharges – Non-contact storm water RRC permit not required EPA permit may be required – Contact storm water Considered oil and gas waste Must be disposed of in an authorized manner Rule 93: Permits must be in compliance with state and federal laws Rule 30: RRC and TCEQ jurisdiction

16. Landfarm and Landtreatment Landfarms – Authorized under the following conditions Written consent is required from the surface owner Wastes are disposed of on the lease they were generated Wastes are restricted to water-based drilling fluids and associated cuttings Chloride concentration is 3,000 mg/L or less – All other landfarming operations require a permit Landtreatment – Any land spreading of oil-based drilling fluids and associated cuttings requires a permit Land apply produced water Ridge and furrow irrigation Surface spreading Sprinkler irrigation Flood irrigation

17. Reclamation Plants Reclamation of oil and gas waste – Usually tank bottoms and – Other reclaimable hydrocarbons – Methods of separation Application information – Submit a Form R-9 – Attach answers to Instructions to Form R-9 – Commercial Facilities – Rule 57 Chemical Thermal Physical or mechanical

18. Waste Separation Facilities Waste is separated into solid and liquid components prior to disposal No hydrocarbons are reclaimed

19. Commercial Facilities Operating a commercial facility – Receives compensation for handling, storing, reclaiming, treating, disposing, recycling of waste – Includes the following commercial permits Pits Recycling Landfarm Landtreatment Reclamation Waste separation Statewide Rule 78 – Operator is required to provide financial security Bond – Form CF-1 Letter of Credit – Form CF-2 Guidance for the forms

20. Closure Cost Estimates Closure cost estimate requirements – Show all assumptions used for estimate Costs for transport, disposal, removal, backfill Costs for crew, dozers, welders, cleaning, etc. – Based on worst case scenario – Prepared by a Professional Engineer licensed by the state Restrictive Covenant Form – Property owner agrees material will be available for closure – Must be certified by the RRC

21. Hazardous Waste Information Hazardous Waste Manual – Hazardous waste determination – Exempt and Non-exempt wastes – Classification of wastes – Notification – Management Standards Statewide Rule 98

22. Naturally Occurring Radioactive Material NORM jurisdiction – RRC regulates activities associated with disposal of O&G NORM waste – Texas Department of State Health Service (DSHS) Regulates possession, use, transfer, transport, and storage Website NORM descriptions – Radiation limits provided in tables – State regulation discussions b/w RRC and DSHS – NORM survey requirements – Additional information Review NORM FAQs NORM Rules - Chapter 4, Subchapter F

23. Permit Applications Table Basic requirements for each application

24. Renewals and Transfers Renewals and Transfers by letter of request – Submit w/in 60 days of the expiration date or new operation – State if modifications have been or will be made to the facility – NORM surveys are required for existing facilities – Update financial security

25. Amendments Amendments by letter of request – Describe and explain the requested amendments Provide all information about any changes Submit new diagrams, descriptions, etc. – Update financial security if needed – Notice is required * All permits are subject to modification to update permit conditions

26. Applicable Statewide Rules Rule 8(3.8): Water Protection Rule 22 (3.22): Protection of Birds Rule 30 (3.30): Memorandum of Understanding between the RRC and TCEQ Rule 57 (3.57): Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste Materials Rule 78 (3.78): Fees, Performance Bonds and Alternate Forms of Financial Security Required to be Filed Rule 91 (3.91): Cleanup of Soil Contaminated by a Crude Oil Spill Rule 93 (3.93): Water Quality Certification Rule 98 (3.98): Standards for Management of Hazardous Oil and Gas Waste Chapter 4, Subchapter B: Commercial Recycling Chapter 4, Subchapter F: Oil and Gas NORM

27. Online Resources Current Environmental Permits – Permitted Commercial Disposal Facilities – Permitted O&G Waste Haulers and Disposal Wells Available permit application forms - Form H-11: Pit Permit Application - Form R-2: Monthly Report for Reclaiming Oil - Form R-9: Reclamation Facility Application - Form CF-1: Commercial Facility Bond - Form CF-2: Commercial Facility Letter of Credit - Form WH-1: Waste Hauler (WH) Permit Application - Form WH-2: WH List of Vehicles - Form WH-3: WH’s Authority to Use Waste Receiver - Form H-20: Hazardous Waste Generator Notification - Form H-21: Hazardous Waste Report

28. Online Resources, Cont. Requirements for permit applications by letter of request – Discharge Hydrostatic Test Water – Discharge Gas Plant Effluent – Discharge Produced Water to Inland Waters – Discharge Produced Water to the Gulf of Mexico – Landfarm Water-Based Drilling Fluids – Landtreat Oil-Based Drilling Fluids – Land Apply Produced Water – Operate a Commercial Waste Separation Facility – Operate a Commercial Recycling Facility

29. Questions? Environmental Permits and Support Phone #: (512) 463-3840 Rusty Woodburn Phone #: (512) 463-9928 rusty.woodburn@rrc.state.tx.us