Texas Supreme Court to Review Approval of Injection Well Permit

Co-author Brittany Blakey

The Texas Supreme Court has granted petition for review of a 2019 decision in Dyer et al v. Texas Commission on Environmental Quality . At issue is whether rescission of a Railroad Commission no-harm letter before the TCEQ granted an injection-well permit rendered the permit void.

The Injection Well Act (Chapter 27 of the Texas Water Code) governs the permitting process for underground injection wells in Texas. The Act aims to maintain the quality of fresh water for the public and existing industries while trying to prevent injections that may pollute fresh water. Under the Act, a company seeking to construct and operate an injection well must apply to the TCEQ for a permit. The applicant must also provide a “no-harm” letter from the RRC stating that the injection well will not damage an existing oil or gas reservoir.

I’m an oil and gas guy. Why does this order concern me?

This case is about injection wells for industrial and municipal waste, not for oil and gas waste. But the court’s treatment of the Administrative Procedures Act and the effect of (dueling?) orders of state agencies could inform future actions and orders of both agencies.

The long and complicated timeline

• August 2005: TexCom Gulf Disposal seeks a permit from the TCEQ for construction and operation of underground injection control wells for the disposal of non-hazardous industrial wastewater in Montgomery County.
• September 16, 2005: RRC no-harm letter.
• December 2007: TCEQ contested-case permit hearing
• April 2008:  ALJ recommends that the permit be issued.
• December 2008: TCEQ remands the application for more modeling.
• March 2010 Denbury Onshore intervenes arguing that the wells might harm the Conroe Oil Sands.
• November 2010: After hearing on remand, ALJ recommends the application be denied.
• January 13, 2011: the RRC rescinds its no-harm letter
• + 20 days: The rescission takes effect.
• February 17, 2011: TCEQ issues an order approving the application
• April 2, 2011: TCEQ reissues the order.

The litigation

The trial court affirmed the TCEQ’s order dismissing the challenge to the permit. On appeal, the opponents of the permit argued:

• The order should have been reversed and declared void because it was issued without a valid RRC no-harm letter, and even if the Act’s requirements did not prohibit TCEQ from issuing the permits, the agency acted outside of its regulatory scope.
• The RRC’s conclusions regarding the potential effect of an injection well on a reservoir should have been determinative.
• TCEQ improperly rewrote many of the administrative law judge’s findings of fact underlying the approval of the permits and made changes not based solely on the record.

The court of appeals affirmed, engaging in a detailed analysis of the Act and the Administrative Procedure Act, which provides minimum standards of uniform practice and procedure for state agency proceedings.

A primary purpose of the APA is to allow parties to rely on the finality of agency decisions. Therefore, the court held that the Railroad Commission’s rescission of its no-harm letter did not impact the TCEQ’s administrative proceedings, which took place years before any party even challenged the permit.

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