Proposed Texas Brine Bill: Council Draft 89R 4450

The Texas Legislature is considering Council Draft 89R 4450, a bill that aims to regulate the production, ownership, and transportation of brine within the state. This legislation, if passed, could reshape how brine is handled in Texas across the oil and gas industry, impacting pipeline operators, mineral rights owners, and midstream businesses.

As part of our commitment to keeping industry stakeholders informed, we aim to distill this complex legislative development into a digestible format. Our goal is to ensure that everyone—from field operators to land owners—has a clear understanding of the bill’s content and its potential ramifications. Here, we’ll break down the core aspects of the bill and explore its potential implications.

  1. Key Highlights of the Bill The bill proposes amendments to Section 111.002 of the Texas Natural Resources Code, expanding the definition of “common carriers” and specifying rules for brine pipelines.

  1. Key aspects of the bill include:
  2. 1. Definition of Common Carriers The bill emphasizes that any entity owning, operating, or managing pipelines for the transportation of brine or crude petroleum for hire qualifies as a common carrier. This applies if the pipeline:
    • – Serves the public for hire
  3. – Operates on, over, or under public roads or highways
  4. – Is associated with an entity granted the right of eminent domain
  5. 2. Pipeline Transportation and Ownership of Brine By focusing explicitly on brine, the bill provides clarity on the ownership and operational rights associated with its transportation. This is particularly relevant for businesses that treat or reuse brine in oilfield operations or other applications, ensuring fair and consistent access to pipeline networks.
  6. 3. Operational Compliance Entities classified as common carriers must comply with stringent regulatory standards for safety, environmental impact, and fair service. These standards aim to enhance transparency and minimize disputes between operators and the communities impacted by pipeline operations.

  1. Implications for the oil and gas industry If passed, the bill could introduce significant changes to the midstream sector, with the following potential effects:
  2. 1. Expanded Use of Eminent Domain The inclusion of brine pipelines under the common carrier definition ensures operators can leverage eminent domain in cases where pipeline construction is in the public’s interest. However, this may also heighten scrutiny from landowners and advocacy groups.
  3. 2. Increased Investment Opportunities Clearer regulations surrounding brine transportation could attract new investments in infrastructure. Midstream companies might see opportunities to expand their services, particularly in regions with extensive oilfield operations.
  4. 3. Operational Accountability With expanded regulations, companies managing brine pipelines must enhance their reporting and operational standards. This could lead to improved industry transparency but may also require additional resources for compliance.
  5. 4. Environmental Considerations Brine is often associated with produced water from oil and gas extraction. Enhanced regulation could encourage more environmentally responsible handling and re-use practices, promoting sustainability within the industry.

Preparing for potenital change, industry stakeholders should proactively prepare for the potential enactment of this legislation by:

  • 1. Assessing Current Practices: Review existing brine transportation and ownership agreements to ensure alignment with the proposed regulations.
  • 2. Engaging Legal Experts: Consult legal professionals to understand the implications for contracts, eminent domain rights, and compliance requirements.
  • 3. Investing in Infrastructure: Explore opportunities to develop or upgrade brine transportation facilities to meet the expected standards.
  • 4. Advocating for Industry Interests: Participate in public discussions or industry forums to shape the final version of the legislation.

In conclusion, Council Draft 89R 4450 represents a significant step toward regulating an often-overlooked aspect of oil and gas operations. By defining and standardizing the transportation and ownership of brine, the bill has the potential to bring both challenges and opportunities for the industry. Staying informed and proactive will be essential for businesses seeking to adapt successfully to these changes.

We’ll continue to monitor the progress of this bill and provide updates as they become available. For further insights or support in navigating these developments, don’t hesitate to reach out to our team.

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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 30, 2024

December 30, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

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Contact Valor Today

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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 23, 2024

December 23, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

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  1. ‘Tariffs all the way’: Trump says European Union must buy U.S. oil and gas in trade ultimatum
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  1. US drillers keep oil and natgas rigs unchanged for second week – Baker Hughes
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  • EPA and DOE Announce $850M to Cut Methane Emissions in Oil and Gas Sector
  • Summary: The U.S. EPA and DOE announced $850 million in funding for 43 projects to reduce methane pollution from the oil and gas sector. The initiative targets small operators and Tribes, encouraging the use of advanced technologies to cut emissions and improve efficiency. This funding is part of the administration’s climate goals.
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Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 16, 2024

December 16, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

  • Oil Sags on Soft Chinese Spending, Investor Pause Before US Fed Rate Move
  • Summary: Oil prices slipped 0.8% on Monday, with Brent at $73.91 and WTI at $70.71, as weak Chinese consumer spending, profit-taking, and anticipation of the U.S. Federal Reserve’s interest rate decision outweighed last week’s supply-tightening expectations.
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  1. Trump Set to Reverse Biden’s EV Support and Tailpipe Emissions Rules
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  1. Oil, Gas Groups Issue ‘Urgent Call’ to House Speaker
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  1. How AI Energy Demand in 2025 Will Put Natural Gas in the Spotlight
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Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 9, 2024

December 9, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

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  1. California Tackles Fuel Price Volatility Amid Refinery Closure Challenges
  2. Summary: California’s new fuel inventory law seeks to reduce price volatility, but Phillips 66’s refinery closure highlights ongoing supply challenges and increasing reliance on imports.
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  1. Goldman Sachs Maintains 2025 Brent Oil Price Forecast at $76 Per Barrel
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  1. US Drillers Add Oil and Gas Rigs for First Time in 8 Weeks
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  • US to Offer Oil, Gas Leases in Alaska Wildlife Refuge on Jan. 9
  • Summary: The Biden administration will auction 400,000 acres in Alaska’s Arctic National Wildlife Refuge for oil and gas drilling on January 9, balancing legal requirements with environmental considerations, while facing opposition from conservation groups.
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Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 2, 2024

December 2, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

  • Thanksgiving Perspective – What a Difference a Decade Makes
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  1. Oil Gains on Chinese Data and Gears of Israel-Lebanon Ceasefire Collapse
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  1. Impact of Trump’s Tariffs on Canada on U.S. Gas Prices
  2. Summary: President-elect Donald Trump’s proposed tariffs on Canadian imports, including oil, could increase U.S. fuel prices due to the heavy reliance on Canadian crude, particularly affecting Midwest refineries and ultimately leading to higher pump prices.
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  1. Chinese Oil Giant Launches Another Project
  2. Summary: CNOOC has launched its Huizhou 26-6 oilfield project in the South China Sea, featuring China’s first intelligent offshore drilling platform, with expectations of peak production reaching 20,600 barrels of oil equivalent per day by 2027.
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  • US Drillers Cut Oil and Gas Rigs for Third Week in a Row
  • Summary: U.S. energy firms reduced oil and gas rigs for the third consecutive week, bringing the rig count to its lowest since September (582) amid declining prices, higher costs, and a focus on debt reduction and shareholder returns.
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  • Trump Plans Energy Push to Boost Gas Exports, Oil Drilling
  • Summary: President-elect Donald Trump plans to prioritize energy policies by expanding LNG exports, accelerating federal and offshore drilling, repealing climate regulations, and reviving projects like the Keystone Pipeline.
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Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Nov. 25, 2024

November 25, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

  • Trump Prepares Wide-Ranging Energy Plan to Boost Gas Exports, Oil Drilling
  • Summary: Donald Trump’s incoming administration plans to boost U.S. energy production by approving LNG export permits, expediting drilling permits, and increasing offshore oil lease sales, while also repealing key climate policies of the previous administration.
  • Read more

  1. U.S. Natgas Producers Target AI-Driven Power Demand Surge
  2. Summary: S&P Global Ratings estimates that U.S. data center power demand will increase by 12% annually until 2030, potentially boosting natural gas demand as energy needs expand.
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  1. US Natural Gas Drillers to Lift 2025 Output, Reversing Year of Cuts
  2. Summary: U.S. natural gas production is expected to decline in 2024 for the first time since 2020, with a rebound anticipated in 2025 as rising LNG exports drive a significant increase in gas prices.
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  1. Global Oil, Gas Contract Activity Sees Decrease
  2. Summary: Global oil and gas contract activity declined 35 percent quarter-on-quarter to $35.7 billion in Q3, though volumes remained stable, supported by major projects in the Middle East.
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  • US Drillers Cut Oil and Gas Rigs for Second Week in a Row 
  • Summary: U.S. oil rigs fell week-over-week and saw a year-over-year decrease of 39 rigs, or 6%, as the industry focused on reducing costs and prioritizing financial stability over output expansion.
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  • ConocoPhillips completes acquisition of Marathon Oil Corporation
  • Summary: ConocoPhillips has completed its acquisition of Marathon Oil, enhancing its portfolio with high-quality, low-cost inventory and expecting to deliver over $1 billion in synergies within the next 12 months.
  • Read more

Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Nov. 18, 2024

November 18, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

  • European Oil Giants Step Back From Renewables Path
  • Summary: BP and its rivals, Shell and Equinor, are scaling back their low-carbon initiatives to refocus on oil and gas due to profitability challenges and market conditions.
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  1. Liberty Energy stock jumps after Trump picks CEO Chris Wright as energy secretary
  2. Summary: Shares of Liberty Energy and Oklo rose after President-elect Donald Trump appointed Chris Wright, CEO of Liberty and board member of Oklo, as the next U.S. Secretary of Energy.
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  1. US Drillers Cut Oil and Gas Rigs for First Time in Four Weeks
  2. Summary: U.S. energy firms reduced the number of operating oil and natural gas rigs for the first time in four weeks, bringing the total rig count to 584, a 6% decrease from last year and the lowest since early September, according to Baker Hughes.
  3. Read more

  1. Oil Prices Tick Higher as Russia-Ukraine Tensions Escalate
  2. Summary: Oil prices increased due to intensified conflict between Russia and Ukraine, despite concerns about Chinese fuel demand and predictions of a global oil surplus affecting market sentiment.
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  • USA EIA Reveals Latest Henry Hub Gas Price Forecast
  • Summary: The U.S. Energy Information Administration has adjusted its Henry Hub natural gas price forecast, predicting an average of $2.17 per MMBtu for 2024 and $2.90 for 2025, with prices expected to rise due to increased LNG exports and strong international demand.
  • Read more

  • EPA Finalizes Methane Tax for Oil and Gas Producers Under Inflation Reduction Act
  • Summary: The Biden-Harris EPA has implemented a methane fee targeting oil and gas producers who exceed emission thresholds, with penalties ranging from $900 to $1,500 per ton from 2024 to 2026, as mandated by the Inflation Reduction Act.
  • Read more

Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Wells vs. Rigs: Key Differences in Oil and Gas

When it comes to oil and gas exploration and production, two terms that often come up are “wells” and “rigs.” While these terms are sometimes used interchangeably, they actually refer to different aspects of the drilling and production process. As of November 1, 2024, the United States has approximately 585 active drilling rigs and over 912,000 producing wells. Understanding the distinction is crucial for anyone looking to get a clearer picture of how the industry operates.

What is a Rig?

A rig is the equipment or machinery used to drill a well. Think of it as the tool or mechanism that enables the drilling process. Rigs come in various types depending on where the drilling occurs and what kind of reserves are being targeted. Some of the most common types of rigs include:

  1. Land Rigs – Used for onshore drilling, land rigs can vary greatly in size depending on the depth and complexity of the well. They are mobile and can be transported from one drilling site to another.
  2. Offshore Rigs – Designed for drilling in water, offshore rigs come in forms like jack-up rigs, semi-submersible rigs, and drillships, each tailored to specific water depths and environmental conditions.

Rigs are essentially temporary setups that are removed once the well is drilled and established.

What is a Well?

A well is the hole that’s created by the drilling rig, allowing access to the oil or gas reserves underground. A well is a permanent structure (or pathway) created to extract hydrocarbons. Wells vary based on their purpose and design:

  1. Exploratory Wells – Also known as “wildcat” wells, these are drilled to locate and assess new oil or gas reserves.
  2. Development Wells – Once a reserve has been found and evaluated, development wells are drilled to extract oil and gas on a commercial scale.
  3. Injection Wells – These are used to inject substances like water, gas, or steam back into the reservoir to enhance oil recovery.

A well remains active throughout the production life of a reserve and may undergo various stages of completion, production, and eventually abandonment when it’s no longer economically viable to extract resources.

Key Differences Between Wells and Rigs

  1. Function: A rig is the tool for creating a well. The well is the access point for extracting oil or gas from the ground.
  2. Longevity: Rigs are temporary and are removed after drilling, whereas wells remain for the duration of resource extraction.
  3. Types and Purpose: Rigs vary by location and drilling environment, while wells vary based on their intended use and the stage of the reservoir’s lifecycle.

How Wells and Rigs Work Together

The process typically begins with deploying a rig to drill a well. Once the well is drilled, the rig is dismantled or moved, and the well is completed for production. Wells are then outfitted with equipment like pumps, pipes, and valves to allow for continuous production of oil or gas. In the case of offshore operations, a wellhead is left on the seafloor to manage production flow and safety.

Why the Distinction Matters

For companies operating in the oil and gas sector, distinguishing between rigs and wells is essential for planning and budgeting. Rigs are capital-intensive and require precise timing and management to avoid cost overruns. Wells, on the other hand, represent long-term investment and potential revenue streams. Understanding this difference is also crucial for mineral rights owners, investors, and regulatory agencies monitoring environmental impact and production rates.

In essence, a rig is the tool used to create a well, while a well is the channel through which hydrocarbons are extracted. Rigs are the starting point, wells are the long-term access point, and together, they represent the core of drilling operations. Whether you’re a seasoned oil and gas professional, a mineral rights owner, or simply curious, understanding these foundational concepts provides valuable insight into how the industry operates.

Contact

Are you ready to transform your oil and gas assets? Contact Valor today to learn how our innovative solutions can elevate your business to new heights.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Nov. 4, 2024

November 4, 2024 Edition

At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.

  • UAE Summit Eyes Energy Expansion Amid Global Uncertainty
  • Summary: The UAE’s oil-and-gas summit focuses on increasing energy output despite global volatility and recent calls for reducing fossil fuels, with officials emphasizing diverse energy strategies and avoiding U.S. political discussions as they maintain close ties with Russia.
  • Read more

  1. OPEC+ Delays Planned Oil Output Increase Amid Weak Demand and Rising Supply
  2. Summary: Citing weak demand and rising supply, OPEC+ postponed a December output increase by one month, extending existing cuts of 2.2 million barrels per day through December to support the oil market.
  3. Read more

  1. Exxon and Chevron Face Profit Dip as Oil Prices Drop
  2. Summary: Exxon and Chevron reported lower third-quarter profits as oil prices decline amid rising global supply and weaker demand, but both companies remain committed to investor payouts, relying on cost-cutting and cash reserves to weather potential long-term price pressures.
  3. Read more

  1. Canada Unveils Emissions Cap for Oil and Gas Sector to Boost Cleaner Production
  2. Summary: Today, Canada officially released draft regulations to cap oil and gas emissions, targeting a 35% reduction by 2030 and encouraging reinvestment into alternative technologies for global competitiveness.
  3. Read more

  • US Oil and Gas Rig Count Unchanged this Week
  • Summary: The U.S. rig count remained at 585 as of Nov. 1, down 5% from last year, with oil rigs dropping to 479 and gas rigs rising to 102, according to Baker Hughes.
  • Read more

  • Europe Faces Volatile Gas Prices Despite High Storage Levels
  • Summary: Despite full gas storage, Europe’s reliance on Russian supply and limited alternative sources have led to volatile prices and concerns that gas supply issues may worsen in 2025, especially if winter demand surges.
  • Read more

Contact Valor Today

Contact us today if you need help outsourcing your oil and gas operations.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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