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Texas Expands the Railroad Commission’s Authority Over Renewables

In the 2023 legislative session, Texas continued its pattern of expanding the jurisdiction of the Texas Railroad Commission to regulate new industries. As the Inflation Reduction Act spurs investment in these new green energy, renewable, and sequestration technologies, businesses are expanding into a new regulatory environment.

Hydrogen – Under HB 2847, recently passed in the 88th Legislature, the Texas Railroad Commission now has jurisdiction over the subsurface geological storage of hydrogen gas, reinforcing the Commission’s existing hydrogen pipeline authority under Chapter 111 of the Natural Resources Code. HB 2847 amends Chapter 81 of the Natural Resources Code.

Geothermal – Another bill from the 88th Legislature, SB 786, transfers the regulatory authority of closed-loop geothermal injection wells from TCEQ to the Railroad Commission, providing “certainty to potential operators seeking to produce geothermal energy.” SB 786 amends Chapter 27 of the Water Code and requires the Railroad Commission to promulgate rules relating to closed-loop geothermal injection wells.

Carbon Sequestration – In the 87th Legislative Session, Texas enacted HB 1284, which gave the Railroad Commission sole jurisdiction over carbon sequestration wells, and the Commission has applied for primacy from the EPA over Class VI injection wells, which encompasses wells used for underground storage of carbon dioxide from energy production, power generation, or industrial sources. HB 1284 amends the Injection Well Act, the Water Code, the Texas Clean Air Act, Health and Safety Code, and the Natural Resources Code.

Minerals Entrained in Brine - The Railroad Commission has historical jurisdiction over solution brine mining in Texas, which is traditionally used for mining salt and creating storage caverns. However, SB 1186, passed in the 88th Legislature, expands that jurisdiction by adding language to the Water Code that the Commission “may issue permits for brine production wells.” This means that any operator seeking to mine critical minerals entrained in brine - like lithium, magnesium, or bromine - will now be able to permit those production wells through the Railroad Commission. The Commission has yet to promulgate rules related to SB 1186.

Scott Douglass McConnico LLP is the leading law firm in Texas advising clients in front of the Texas Railroad Commission. Our lawyers have decades of experience in the energy industry working with the RRC to help clients with permits, hearings and regulatory compliance. And our lawyers are at the leading edge of the legal issues arising out of these new technologies that are seeing increased investment after the Inflation Reduction Act.

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